Can a Private Lender Register a Mortgage on My Home in British Columbia?
This answer covers the law of British Columbia.
If you borrow against your British Columbia home from a private lender, the protections you get depend on the lender, and some that apply to federally regulated lenders do not bind private ones. Registration is only part of the picture, though, because the terms are what put you at risk.
Private lenders set their own terms, and some protections that apply to bank borrowers do not bind them. A federal guideline asking federally regulated lenders to contact borrowers at risk and discuss relief does not bind private lenders. The prepayment Code also does not apply to mortgages entered into for business purposes. Whatever the lender, a mortgage cannot impose a fine, penalty or interest rate that increases the charge on arrears beyond the rate payable on principal not in arrears.
If you default, foreclosure must be started by petition in the Supreme Court under Rule 21-7, and where a default makes payment due earlier than it otherwise would be, the court can relieve a person from the consequences of that default or direct a sale instead of foreclosure. Add up the real cost, including any prepayment charge, before deciding. Have a lawyer review the terms before you sign.
Key takeaways
- Registering a mortgage involves legal documents, so have a lawyer review the terms and the paperwork before you sign.
- Protections such as the federal guideline on relief for at-risk borrowers do not bind private lenders.
- No mortgage can impose a fine, penalty or interest rate that increases the charge on arrears beyond the rate payable on principal not in arrears.
- If you default, foreclosure starts by petition in the Supreme Court, and the court can direct a sale instead or, where a default makes payment due earlier, relieve a person from that consequence.