Small town Atlantic location for 2nd mortgage debt consol of major derogatory credit causing beacons of 479 and 531

Request: Applicants recently took out a truck loan with large payments causing other trades to fall into major arrears (R5). Application was seeking consolidation of all consumer debts to lower total monthly payments, prevent collections and prevent existing 1st mortgage to be called.


  • 75% 2nd mortgage was required to fully meet objective in a very challenging lending area due to small population of approx. 13,000 and in a province with very limited B lenders
  • Subject house was located directly across the street from a cemetery causing marketing concerns with lenders
  • Beacons very low
  • Approx. $36,000 of credit card debt all showing derogatory payment history both prior and present…ranging from R3 to R5
  • Much of the active debts in arrears are from the same lender as the existing 1st mortgage (Scotia). To ensure bank will offer renewal on the 1st come maturity, the credit card and personal loan accounts were required to be paid out so relationship with 1st mortgage lender is not tarnished
  • 2012 tax return not processed yet so no NOA available but prepared T1 generals show that CRA will be owed a balance


  • Mortgage agent referred deal to Plan B on a Monday morning
  • Private lender was sourced out the very same day by with an expression of interest in doing the deal subject to appraisal and providing rough quote
  • Best suited appraiser was sourced out and ordered right away to confirm equity
  • Appraisal came in 22k lighter than expected but existing 1st mortgage also came in 5k lower
  • Approval was officially granted for a 2nd mortgage of 75.50% LTV with condition to pay all debts from proceeds
  • It was determined there was not enough funds to satisfy all debts paid in full so Plan B negotiated with lender to allow all debts paid off but to leave one Visa with balance so clients not short at closing
  • Referring agent elected to remain involved in the approval process and was a huge asset in facilitating the transaction. The agent even offered to front the lawyers $500 deposit in order to keep file moving along quickly
  • A true team effort by the client, the referring agent, Plan B and the mortgage lender
  • Clients obtained the required consolidation while maintaining a positive relationship with 1st mortgage lender
  • Approval terms finalized at 15.99% rate (lower than debts being consol’ed) with 7.50% lender fee. Approval terms on par for the lending location and credit situation
  • Referring agent to receive 260bps commission from funded transaction