Harry lives with his mom. They own a multi-family unit in centre town. Some years ago, Harry hurt his back at work. He was off work for two years. During that period, many doctors looked at his back but none could come up with a proper diagnosis. So for two years, the insurance company and CPP refused to pay out. Harry had some savings but two years is an eternity when there is no money coming in. His Banker decided to give him a mortgage for a small amount. Soon that money was depleted. Back he went to his banker who offered a "gold" card with a sizeable credit limit for him, and a smaller limit for the mom. Soon all that money was gone. His banker could no longer help! He was forced to either sell the property or get a second mortgage. The latter was sensible because no matter where they relocated, they would have to pay rent.

Finally after two years of unemployment and no money coming in, the insurance company and CPP started to pay. During that time period, the credit cards fell behind. Harry had always lived up to his obligations, prior to this injury. He would call the credit card people and plead for some latitude. Two of the "gold cards" refused to listen and sued, won judgment, and registered against the asset....the house. The first mortgage came up for renewal, and even though he had never missed a payment on the house, they would not renew the mortgage. He asked why! " As long as one of our cards is in default, it is Company policy not to renew." But it was their idea to fund by way of credit card, and he always advised them when he could not pay! It made no difference. They will not renew!

Harry is in his 60s, while his mom is in her 80s. Their income is based on a disability pension for him and Old Age Security for her. Ever try to qualify for a mortgage at 60 & 80 years old? Ever try to qualify for a mortgage when your credit has taken a beating? Ever try to qualify for a mortgage when your credit cards are maximized? Ever try to qualify for a new mortgage when the day to day maintenance on your home gets deferred for lack of money to fix things up? It certainly wasn't easy for Harry either. All he could focus on was that he had never missed a

mortgage payment. He tried other Banks but the answer was always the same..."due to lack of income, poor credit on your cards, and poor maintenance, we can't help."

The amount of money he needed was small compared to the value of the home, but nobody would look beyond his age, credit, and property shape. Where does one go? Some lenders will bypass all of the above criteria....for a price. Private individuals who have money will risk lending their money at a premium price. The going rate for a private first mortgage with the above scenario is about 12%. There also exists some institutional money for these people from "equity lenders." The rate is a little cheaper (10%) but they make it up by charging a fee. These lenders do not follow the norm. They will actually look at why the situation happened, and the likelihood that the clients will pay. They don't much care about qualifying standards, as long as the property will resell if things go bad.

Harry has virtually no choice but to deal with these lenders or sell the property. He doesn't want to displace his mother who has live there for 60 years, so he will deal. Once you take out a mortgage with these lenders, returning to a normal lender within two years is rare. Your credit must get re-established and since you are paying nearly twice the going rate, it is difficult to save enough money to pay down the debt.

You really don't want to deal with such lenders, but if the situation presents itself, as it did for Harry, I want you to know that these types of lenders do indeed exist. Don't despair.