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Posted 2 Comments on Condo fraud allegations grows to 9 properties Mortgage News

Condo fraud allegations grows to 9 properties

As reported last week, a property management company near Toronto has been linked to an alleged fraud on a massive scale.   Channel Property Management’s President, Manzoor Khan, has been charged with numerous counts of mortgage fraud and construction fraud that may total more than $20 million.

The Toronto Star has reported that the list of properties affected has grown from 4 to 9.    As more facts emerge, it seems like Mr. Khan’s lifestyle involved having 2 wives that are in Bangladesh.   It is also reported that Mr. Khan has fled the country and is also in Bangladesh.

The real victims are the individual condo owners.   We are talking about real people and families that have been crushed by this.  Their property values have dropped and their condo fees have skyrocketed.   The govt needs to step in now to help.

And what about other condo buildings… Could this be happening with other property management companies?   Right now, there should be a quick and fast audit being done by all condo corps.    This is probably an isolated incident but it would good to see the other Property Managers and condo corps make a public statement to calm the fears of current and prospective condo owners.

We will be following this story as it does not appear to be over yet… Channel Property Management said they managed around 40 properties, according to The Toronto Star.   And again, for the record, Mr. Khan and Channel Property have denied the allegations and have filed a statement of defence.

Posted 3 Comments on $20million condo fraud in Toronto shows need for more regulation. Mortgage News

$20million condo fraud in Toronto shows need for more regulation.

Reports have surfaced about a Property Manager that allegedly obtained fraudulent mortgage funds on behalf of 1,000 unsuspecting condo owners.   The Toronto Star reports that Manzoor Moorshed Khan, president of Channel Property Management, borrowed millions against at least five condo buildings, without the owners knowing about it.

Equitable Trust, a Canadian financial institution, says they were taken for $14million worth of fraudulent mortgages.  The Star reports that Khan falsified a series of legal papers to obtain the loans fraudulently.

In another situation related to the same property management company, it is alleged that Khan siphoned off some money through construction fraud.   Apparently, he tendered a bid for some construction work on one of the buildings he was managing through Canali Engineering, a company he created.  He submitted the lowest bid at $1.2million.  Then he inflated the bill to $1.3million… but his company never did the work.. he hired a sub-contractor to do the work at half the cost.

It should be noted that a statement of defense has been filed by Khan denying the allegations.

CBC.ca reports that condo fees in one of the buildings managed by Khan’s company has gone up from $340/mth to $780/mth….and the values have gone from $152k to $70k.

They say fraudsters cannot be stopped, only discouraged through regulations and laws.   Clearly, some more regulations need to be put in place.  CBC.ca quotes Dean McCabe, president of the Association of Condominium Managers of Ontario (ACMO), saying “there is no licensing or regulation of condo property managers.   Khan could manage condos next week, next month or next year”.   ( Yikes!  That’s a scary thought.)  Mr. McCabe is calling on the government to enforce licensing or regulation.

Channel Property Management manages upwards of 40 buildings….. We’ll report more on this story as it happens…

Posted Interest rates

Variable rate increases again..

Lenders have begun to raise their Variable rate mortgages again…. The second increase in less than a month.  A look at the Bank websites and you will Variable rate pricing is now at Bank Prime less 0%….  that’s 3.00%…   And although ‘3.00%’ sounds like a good rate, a Variable rate at Bank Prime less 0% is not good.

The Banks have gone from an advertised rate of Prime less 0.65% to Prime less 0% in about one month’s time.   Of course, the best wholesale rates through mortgage brokers now sit at Prime less 0.50% and will probably go to Prime less 0.40% after the dust settles.

So what’s causing the Banks to increase their Variable rate mortgages?   They tell us there are “profitability concerns”.   In simple talk, that means they simply want to increase their profit margins now that rates are expected to stay low for some time to come.   They also want to force us to take the much mortgage profitable 5 year fixed rate mortgage, now sitting at 3.99% (RBC website special rate)..    Keep in mind, there are better rates to be had in the wholesale market…. 3.49% seems to be the best 5 year fixed rate today.

But even 3.49% is too high.  The spread between the 5 year govt of Cda bond (1.45%) and 3.49% is still over 2.00%.   Historically, this spread has been between 1.10% and 1.40%..    It’s simply math…. the Banksters are saying ‘ka-ching, ka-ching”.

Posted Money saving tips

A look back at Oct 2008 and the Bank’s kool-aid..

October 2008 will be remembered for a few reasons….. First, it was Obama’s rise to the presidency… the first black American president…. next, it was also the end of Lehman Brothers investment bank and the beginning of one of the biggest global recessions in modern history…

That’s how most of us will remember October 2008….. but  there was also another very memorable event that took place.  You see, it was around this time that I heard some borrowers were getting calls from their Bank to lock-in their Variable rate mortgages…. or to take a long term fixed rate mortgage to ‘protect themselves from the uncertainly’ that surrounded the markets at the time…. I warned mortgage borrowers to expect a call  from their Bank offering a ‘safer mortgage option’ or some ‘special offer’ to lock into a fixed rate or a long-term rate…and NOT to take such offers or deals….

Can you imagine a Bank advising or recommending that you lock in your Variable rate or to take a long-term Fixed rate at that time?    At the time, Variable rates were are at around 3.35% and 5 year fixed rates were at around 5.75%.   Uh, no thank you… I’ll pass on the bank kool-aid.

The funny thing about uncertainty is that it usually brings us lower interest rates…..not always, but during this time we knew the World Banks would work together to lessen the economic impact of the Lehman Brothers collapse.   Unfortunately, there were far too many borrowers that listened to their banker and locked into the much higher Fixed rates…

The moral of the story is that Bankers and their ‘Mortgage Specialists’ work for one company, one Bank… they can only offer you one set of products and MUST do what’s in the BEST interests of their BANK…. They have to drink the Bank koolaid….   Mortgage Brokers can offer the products from dozens of lenders and can also compare the benefits and differences between Banks… Remember to ask questions and opinions from neutral, unbiased professionals.

Don’t drink the kool-aid…

Posted 2 Comments on Your mortgage is paid? Beware of mortgage fraudsters…. Mortgage News

Your mortgage is paid? Beware of mortgage fraudsters….

“You’ve worked hard all your life… your house is finally paid off.  You decide to it’s time to get a smaller house, maybe a condo or you just want travel.  Does this sound like someone you know?  You sell your home but discover that someone has registered a mortgage on your house without you knowing it.  Sound impossible?  Guess again… this is Mortgage Fraud and it’s happening now.”

I wrote that back in 2006.  Since then we have seen some provincial governments step in with laws to protect unsuspecting homeowners….  You can also purchase Title insurance to protect you as well.    But once you have been victimized by the crooks, you still need to make a claim and go through the hassle of clearing things up…. Who wants to go through making a claim? This takes time and can be a big paid in the rear. 

What if there was a way to make yourself less of a target?   The good news is there is a better way to protect yourself….. The criminals go after homes that have no mortgage.  This is PUBLIC information.  Anyone can find out if you have a mortgage just by going to the Land Registry Office and doing a search.   So what should you do?

The solution is to register a mortgage on your home.  This doesn’t mean you need to borrow money.  By getting a secured line of credit you will have a collateral mortgage registered.  The criminals will not know if you have a balance on that mortgage or if it’s $0.   And they will probably go searching for the next home that has no mortgage.

What makes this product unique is that it is available to both salaried and self-employed individuals that cannot prove their income.  If you don’t use it, it doesn’t cost you anything.  

Let me know if you would like more details about this.