Do I need lawyer now?

[LillianHo]

Hello REIN experts and investors, I have a problem now that really need your advice and experience. I lend some money to a guy to do his business, I registered a second mortgage on his investment property located in New Westminster, BC which is not far from my home. The problem now is that he had stopped paying me the loan payment for 3 months now. He got cash flow problem because of something happend to one of his business. ( fire, waiting for insurance claim, etc.)

Do you have any lawyer in Vancouver area that I can ask for help? What's the best way to do this now?

 

[Tina Myrvang]

Hello Lillian,
You need to serve them with a Demand Letter, giving them 30 days to pay you out. After the 30 days are up, you start foreclosure. Who is the first lender? Are they getting paid? Be very careful to address this immediately. You are in second place, so the first lender will be paid out first. I was a private lender and I waited waited waited. In the end there was not enough money to pay off the first and second mortgages. We never received a dime and put out a lot of money for legal fees. Don't leave it, hire a lawyer NOW!!! A bank would have started foreclosure after one month of non payment.

 

[LillianHo]

Hi Tina,
Thank you for your information. First mortgage is with Royal Bank. From what I know, he has enough equity on the house, he is owing $460k for the first mortgage, and his house value is over 1 mil (BC Assessment around 900k). He is planning to apply for subdivision and then build or sale. But it didn't go through. If I find a lawyer and win, will he cover the legal fee?

 

[Tina Myrvang]

Hello Lillian,
There are steps. First you must do the demand letter for 30 days. If they have not responded then you must have a lawyer file in court and Order for Sale. It's an order allowing you to sell the property. There are many factors, but the amount for the foreclosure will have your fees factored in.
I'm serious that you must not wait, I waited and it ended up bad for me and my husband.

 

[LillianHo]

Tina, thanks a lot! Do you have any lawyer in Vancouver area that REIN recommend?

 

[Thomas Beyer]

You need a tough litigation lawyer with foreclosure expertise. If under 50,000 you can use small claims court.

 

[LillianHo]

Thomas, thanks. It is much larger than $50k, so I need a lawyer.

 

[Thomas Beyer]

Settlement is usually better than forced legal process. Is the mortgage enforceable i.e. was it part of the loan ? Show all dox to a lawyer, then take it from here. Might be 6-12 month if all paperwork in order. 36+ months if paperwork is poor. Budget $30,000 in legal fees until resolved.

Talk to borrower and recommend to him to get a LOC, private second or higher first mortgage as that is far cheaper to him and faster for you. Talking and maybe taking a haircut on your interest is often cheaper, and certainly faster than a long drawn out civil servants based legal system designed by lawyers and civil servants for lawyers and civil servants.

 

[LillianHo]

Thanks Thomas. Today I met borrower, and he is talking to another private lender and trying to take over my loan. I know his house has enough equity, but I just want to get it out. He doesn't want to sell now because after rezoning he will get more money. I will see how it goes.

 

[Thomas Beyer]

Yes, best to talk and get a clean break without lawyers.

Plenty of vulture lenders out there that lend at 12-20% in second position to take you out.

Does the mortgage provide enough security as going slow might be in your best interest if it accrues at a healthy clip ?

[also see private message]

 

[borisdavenport]

yes, really need assistance. I recommend you to consult a branded one. I do have bad experience not only from clients but also from a lawyer who is emigrated from PAK.
I have a good suggestion, they helped me to claim our insurance and charged me after settlement.
Campisi is a good man and really very professional, hope he will help you.

 

[borisdavenport]

This is their site https://www.campisilaw.ca