A Second Mortgage Approval Hinged on One Accountant's Signature

The situation

Yaa called our office two weeks before a scheduled closing, and the first thing she said was that she did not understand why a purchase that seemed simple on paper had suddenly become complicated. She and her husband Marek already owned one rental property in the area, bought a few years earlier without any trouble. This second purchase was meant to be similarly straightforward: a modest house in Picton, close to the college their son would be attending in the fall, bought so he would have stable housing instead of relying on a rental market with limited student units.

Yaa worked as a dental assistant and Marek as a factory technician. Their combined income was modest, and qualifying for a second mortgage on top of their existing rental property required careful structuring. Their mortgage broker had proposed a bare trust arrangement: Yaa and Marek would hold legal title and carry the mortgage, since their income was what the lender could underwrite, while their son would live in the home and, once he had part-time income, contribute toward costs. For tax reporting purposes, and to satisfy the lender's condition that the true economic relationship be documented, the arrangement needed a written trust declaration setting out who held beneficial ownership and why.

The property itself, in the $400,000 to $600,000 range, was not the problem. The agreement of purchase and sale was signed, financing was conditionally approved, and the closing date was set. The difficulty was narrower and, at first, seemed like a formality: the lender's underwriting conditions specified that the bare trust declaration had to be prepared and signed off by the family's accountant, Chidi, who had done their tax filings for years and understood how the arrangement needed to be characterized for reporting purposes.

Chidi was not a party to the purchase, had no stake in whether it closed, and was, by the time Yaa called us, unreachable. He had been dealing with a family health matter and had stopped responding to calls and emails from both Yaa and the mortgage broker. The lender would not fund without the signed declaration in the specific form Chidi had discussed with the broker weeks earlier. Yaa was not looking for a legal opinion on trust law. She wanted to know whether the closing, and the housing plan built around it, was still possible.

What the documents showed

We asked Yaa to send us everything connected to the arrangement: the agreement of purchase and sale, the mortgage commitment letter with its conditions, and whatever draft or correspondence existed from Chidi about the trust declaration. The commitment letter was specific. It required a bare trust agreement confirming that Yaa and Marek held legal title as trustees, that the beneficial interest and any future contribution arrangement with their son was documented, and that the declaration be reviewed by a professional accountant to satisfy the lender's internal reporting requirements. That last condition was unusual in its precision. Most lenders accept a trust declaration prepared by a lawyer. This one specifically wanted the accountant's confirmation attached, because the broker had told the underwriter that Chidi would be handling the tax-reporting side.

There was an earlier email chain between Chidi and the broker from about a month before, in which Chidi had outlined, in general terms, how he intended to structure the declaration for tax purposes. Nothing had been finalized or signed. It was a draft understanding, not a document. The lender's condition, however, referred to Chidi's involvement as though it were already settled, because the broker had represented it that way to move the file forward. In other words, the underwriting condition had been built around an assumption of cooperation from someone outside the transaction who had never formally committed to a deadline.

This mattered because it changed what we were actually solving. The legal question, on its own, was manageable. A bare trust declaration is not a complicated document, and we could have drafted one that accurately reflected the arrangement between Yaa, Marek, and their son within a day. The obstacle was that the lender's condition specifically required the accountant's sign-off, and no one could compel Chidi to produce it on a timeline he was not aware he was bound to. He was not being difficult. He simply had no idea a closing date depended on him.

We also found that the closing date itself had little flexibility. The sellers had their own move scheduled and had already made clear through their lawyer that they would not agree to an extension without a deposit increase and a fee for the delay. Yaa and Marek's ability to close on time now rested on a document controlled by someone outside the deal entirely, on a schedule he had not agreed to, while the two sides who had negotiated the purchase itself, the buyers and the sellers, had nothing left to negotiate with each other.

What we did

1. Reached Chidi directly instead of relying on the broker as intermediary, since two levels of relayed messages had likely contributed to the confusion about deadlines; a direct conversation let us explain exactly what the lender needed, when it needed it, and why the family's plan depended on his response, in plain terms he could act on without needing to parse mortgage jargon he had never had reason to learn.
2. Drafted the bare trust declaration ourselves based on the arrangement Yaa described, covering who held legal title, who held beneficial interest, and how the son's future contributions would be treated, rather than waiting for Chidi to produce one from scratch; that way, once he was available, he would only need to review and confirm the tax characterization rather than build the whole document under time pressure.
3. Called the lender's underwriter to ask whether an alternative form of confirmation would satisfy the condition, since the specific requirement for an accountant's sign-off, rather than the more common lawyer's certificate, was unusual and worth testing directly rather than assuming it was fixed; the underwriter confirmed some flexibility existed if the substance of the condition was still addressed some other way.
4. Proposed a lawyer's certificate confirming the trust arrangement's legal structure, paired with a written undertaking that Chidi would provide the tax confirmation within a set period after closing, giving the lender the legal certainty it needed immediately while accommodating the accountant's unavailability without asking the lender to simply waive its own condition; the undertaking specified a concrete deadline and named who was responsible for meeting it, so the lender was not being asked to accept a vague promise in place of its usual paperwork.
5. Negotiated a short bridge financing option with the mortgage broker as a fallback, in case the underwriter would not accept the undertaking, so that the purchase could still close on the scheduled date regardless of the accountant's timeline, at a modest additional cost the family would only pay if the primary plan failed; we asked the broker to hold the offer open rather than commit to it, so nothing was locked in before it was needed.
6. Communicated clearly with Yaa and Marek about the tradeoff at each stage, since accepting the interim financing meant a real, quantifiable cost if it became necessary, and we wanted them making that decision themselves, with the numbers in front of them, rather than discovering the expense after the fact; we set out what the bridge financing would cost per week it was outstanding, so the choice was concrete rather than abstract.
7. Followed up with Chidi once he returned to work to finalize the tax-compliant version of the declaration, walk through his recommended changes, and correct any characterization in the interim documents that did not match his eventual professional advice on how the arrangement should be reported; we scheduled the call for his first free week rather than pressing him immediately, since the underwriting condition had already been satisfied by then.
8. Confirmed in writing with the lender that the amended declaration satisfied the original underwriting condition, closing out the file properly rather than leaving an outstanding requirement sitting on the mortgage record where it could resurface at renewal or refinancing time; we kept a copy of that confirmation with Yaa and Marek's closing documents so the file would answer any future question on its own.

The outcome

The underwriter accepted the lawyer's certificate and undertaking, which meant the interim bridge financing was not needed, but the closing still could not happen exactly on the original date. Preparing the certificate and coordinating with the underwriter took a few extra days, and the sellers, who had already made clear they would not simply absorb a delay, agreed to a short extension only once their lawyer saw the lender's confirmation letter in hand. They required a modest fee for that accommodation, paid by Yaa and Marek as part of the compromise. It was not the clean, on-schedule closing the family had originally expected, and it cost them a few hundred dollars they had not budgeted for going in.

Chidi returned to work about three weeks after closing and reviewed the interim declaration we had prepared. He recommended two changes to how the beneficial interest and the son's future contributions were characterized for tax purposes, changes that did not affect who owned the property but did affect how the arrangement would need to be reported to the tax authorities going forward. We prepared an amending declaration reflecting his advice, walked Yaa and Marek through what had changed and why, and confirmed with the lender in writing that its underwriting condition was fully and finally satisfied, so nothing was left open on the file.

Yaa and Marek closed on the Picton property and their son moved in before the fall term began, which was the outcome that mattered most to them day to day. But the process left them with a clear lesson about how much a purchase can end up depending on someone who is not a party to the transaction and never agreed to its timeline. The arrangement worked in the end, but it worked because there was room to negotiate an alternative path when the original one stalled, not because the original plan held together on its own merits.

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