Their Ported Mortgage Fell Through Nine Days Before Closing

The situation

Baruch reached our office on a Sunday evening, which told us something about how the previous few days had gone. He and his partner Arman had been counting down to a closing date on a rural lot outside Milton where they planned to build, and until that Friday, everything about the deal had looked routine. Baruch worked as a transit operator and Arman as a hotel front-desk supervisor, and between them they had put together a modest but workable budget, anchored by a mortgage port carried over from the sale of their previous home. Porting lets a buyer move an existing mortgage, with its existing rate and remaining term, onto a new property instead of breaking it and starting over, which usually saves the borrower a penalty and keeps a favourable rate in place.

The port had been approved in principle months earlier, not long after they signed the agreement to purchase the lot from its owner, Shirin, who was selling the property herself without a real estate agent or a lawyer involved in negotiating the deal. Baruch and Arman had found that unusual but not alarming; it kept the price a little lower, and Shirin had seemed straightforward to deal with. The agreement of purchase and sale had been drafted from a generic template Shirin found online, with some terms filled in by hand, and neither side had thought to have a lawyer review it before signing, since the port approval had made the financing side feel settled.

That confidence lasted until the Friday before closing, when the lender's underwriting team called to say the file needed a second look. A port is conditional on the new property meeting the same lending criteria as any other mortgage application, and something about this one had triggered a closer review. By the time Baruch called us two days later, the lender had confirmed in writing that the port would not proceed. Their mortgage broker had not yet found an alternative, closing was nine days away, and Shirin, unrepresented and increasingly anxious herself, was calling Baruch directly to ask what was happening.

There was no time to be leisurely about any of it. We took the call that Sunday and asked Baruch to send everything he had: the agreement, the port approval and its conditions, and the lender's letter explaining the refusal, so we could see by Monday morning exactly what had gone wrong and what could still be salvaged.

Where it went wrong

The lender's letter, once we read it against the file, pointed to two problems layered on top of each other. The first was the property itself. Porting a mortgage still requires the new property to satisfy the lender's own lending criteria, and rural properties are treated differently than a standard resale home in a serviced subdivision. This lot had no municipal water or sewer connection, relied on a private well and an as yet uninstalled septic system, and sat on an acreage that pushed past the threshold some residential lenders use to route a file to different underwriting rules entirely. The port approval issued months earlier had been done on preliminary information; the fuller review triggered closer to closing looked harder at the acreage, the absence of services, and the fact that construction had not yet started, and concluded the property did not fit the residential lending box the port relied on.

The second problem was the agreement itself. Because Shirin had drafted it without legal help, it did not contain the kind of financing condition a lawyer would normally insist on, one that lets a buyer walk away or renegotiate if approved financing falls through for reasons outside their control. Baruch and Arman had a firm, largely unconditional agreement to buy a property their financing could no longer support, with a hard closing date and, buried in the template's default terms, a deposit that was described as non-refundable in the event of the buyer's default.

That combination is what made the file urgent rather than merely disappointing. Losing a mortgage port is a setback that can usually be managed with enough lead time to shop for replacement financing on comparable terms. Losing it nine days before an unconditional closing, with a deposit at risk and a seller who did not fully understand her own leverage, was a different kind of problem entirely. Shirin, for her part, was self-represented throughout, which cut both ways. She had less patience for delay because she did not have a lawyer advising her on the risks of pushing too hard against buyers whose financing had failed for reasons outside their control, but she was also more open to a direct, plain-language conversation about what had happened than a represented seller's counsel might have been, since there was no adversarial posture already built into the relationship, and nothing yet in writing that treated the buyers as being in default.

What we did

1. Reviewed the lender's refusal letter against the agreement the same day it arrived, comparing the underwriting objections against the property's acreage, its private well and septic status, and the absence of municipal services, to identify precisely which criteria the property had failed, because a replacement lender needed to know in advance what the last one had objected to rather than discovering the same problem a week later.
2. Contacted Baruch and Arman's mortgage broker directly the next morning to coordinate an urgent search for alternative financing suited to a rural, unserviced property, since not every residential lender treats acreage limits and private services the same way, and a handful of lenders in the market routinely underwrite exactly this kind of rural file when a mainstream lender will not, even on less favourable terms than the ported mortgage would have carried.
3. Opened a direct, plain-language conversation with Shirin rather than sending a formal demand letter, explaining calmly that our clients' financing had collapsed through no fault of their own and that an abrupt default would likely help neither side, since she would be left re-marketing an unserviced rural lot on short notice with the same financing obstacles waiting for her next buyer.
4. Negotiated a short closing extension in writing over several days of back-and-forth, giving Baruch and Arman roughly three additional weeks to secure replacement financing, in exchange for a modest increase in the deposit that compensated Shirin for the delay and gave her some assurance the deal would not simply collapse a second time. We put the extension in a signed amendment rather than an email exchange, so neither side could later argue the new date was only a courtesy rather than a binding change.
5. Reviewed the replacement mortgage commitment line by line once the broker secured one, at a rate higher than the ported mortgage would have carried, confirming the new lender's conditions, appraisal requirements, and funding timeline were all realistically achievable within the extended closing window before Baruch and Arman signed on to it, and flagged the higher rate to them plainly so they were making the decision with full knowledge of what it would cost over the term rather than discovering it later.
6. Corrected the closing documents to reflect the new financing terms, the revised closing date, and the increased deposit, and walked Shirin through each change directly by phone, since she had no lawyer of her own reviewing the amendments, to make sure she genuinely understood what she was signing before she did. We kept a written record of that call as well, so there would be no later suggestion that an unrepresented seller had been rushed into terms she had not actually followed.
7. Closed the purchase within the extended window, coordinating title searches and financing details directly with the new lender's solicitor in the final days, to avoid the kind of last-minute surprise, on either the title or the funding side, that had derailed the original closing date in the first place. We confirmed funds were unconditionally available two full business days ahead of closing, rather than relying on same-day wire confirmation, given how little tolerance remained for a second delay on this file.

The outcome

The purchase closed, roughly three weeks later than originally planned, on a mortgage that carried a higher rate than the one Baruch and Arman had ported from their previous home. The difference was not dramatic on a monthly basis, but over the life of the loan it added up to a real cost, one that would not have existed if the original port had gone through as expected. This was a contained loss, not an avoided one; the port itself could not be salvaged once the lender's underwriters had made their decision, and no amount of negotiation with Shirin could change what a different lender was willing to underwrite.

What the negotiation did accomplish was keeping the deal alive at all. Without the extension, Baruch and Arman would have faced a closing they could not fund, a seller entitled to treat their deposit as forfeited, and the very real possibility of losing the property entirely while still owing obligations under an agreement neither side had built enough flexibility into. Instead, they closed on the lot, at a higher deposit and a costlier mortgage, but with the land they wanted and a relationship with Shirin that had not curdled into a dispute along the way.

Baruch told us afterward that the hardest part had not been the extra cost, which they could absorb, but the realization that an approval they had treated as settled months in advance had never actually been guaranteed until the day it funded. That is a lesson that stayed with them into the build itself, where they now asked more questions of their lender before assuming anything was final, and where they made a point of getting financing conditions written into every subsequent contract, including the construction contract with their builder, rather than relying on a verbal assurance that things would work out.

What you can learn from this