The borrower was a middle-aged gentleman who owned a condo in downtown Calgary with a small first mortgage through a major bank. He had become unemployed due to the poor economy and was receiving Alberta Works Social Assistance, only a fraction of what he was earning while working. He was living off minimal income, was relying on credit, struggled with payments and depleted his savings.


He continued to apply for jobs but could not obtain work. He could not refinance with his current lender as his credit score of 486 was too low and his income was not sufficient to service his debts.


The borrower struggled to make his payments, owed two years of property taxes and condo fees, and his credit continued to suffer. He had defaulted on his utility payments; cable bills had been sent to collections and his electricity had been shut off. There was an urgency to come up with a solution quickly as his main goal was to avoid further collections and foreclosure.


He made the decision to sell his condo. This wasn’t an easy solution as he had no electricity and his condo was cluttered and in minor disrepair. The state of his condo made it difficult for his Realtor to market the property at top dollar.


The Realtor approached a Mortgage Broker to come up with a plan. Together they realized that there was sufficient equity in the property (59% LTV). Their challenge was finding a lender who would be willing to lend in a situation like this, private lending was the best solution. The Broker approached Calvert Home Mortgage for a short-term loan with the following request for the borrower:

1) Payout his Bills/Collections

2) Payout his First Mortgage (collaterally charged on title)

3) Get his electricity turned back on

4) Clean up the condo

5) Put larger items in storage

6) Fresh coat of paint on the walls

7) Provide the Borrower with enough money to live for 6 months to allow for a sale


The property sold after being listed for approximately 3 months. It had gone through some price reductions likely due to an oversupply of condominiums on the market as well as total inventory in the neighbourhood. The sale price of the condo $278,000, was 5% higher than what he would have received had he not done the repairs to the condo. More importantly, the borrower was able to maintain his bills while waiting for the sale and it is probable that his credit score had increased through this process.

The Mortgage Broker helped the Realtor get a stronger and more marketable listing that is now sold. The Mortgage Broker also helped his borrowing client maximize his sale price in a very difficult situation and avoid foreclosure.