Ontario’s private lenders association began to take shape recently and without saying it out loud, it is about time. Private lenders, not to be confused with B lenders, are exactly that, they lend private individuals money. Whether it is in the form of a Mortgage investment Company (MIC) or whether they are a syndicated lender who brings two or more individuals together to form a mortgage or in some cases they are just private individuals lending their own money.
Given the talk lately about the grey area lending from the federal government it is wise for these lenders to band together to stand up to the government regulators who say that perhaps they are getting to big. The private lending sector is already reported to be over 5% of all mortgages in Canada. It is a hard area to track as any private individual in Canada can legally lend their own money to fund a mortgage. So while MIC’s and Syndicators are governed by either the Real Estate board or the security commission of each province, private individuals really only have a responsibility to report to revenue Canada the amounts they earn in interest and pay tax on it of course.
BC has had their BC Mortgage Managers Association (https://www.bcmma.org) for going on 5 years and they hold yearly forums on lending to educate the mortgage broker world on how and what type of deals they will look at for our clients. Alberta has a group within the Alberta Mortgage Brokers Association called the Private Lenders Forum. Both these organizations meet regularly and have formal boards that cover everything from the daily issues of lending private money to the ethics issues of their world.
With more and more private lenders looking to expand their business’s across many provinces and with different rules in each province I can’t see it being long before there is a national Private lenders organization. This will need to emerge so that they have a united voice or perhaps they will join forces with CAAMP to have access to the solidarity of a 12000 member organization that many of them belong to already. One way or the other as a company licensed in 5 Canadian provinces it’s good to see this coming together as unity will be needed in the future.