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Registering Mortgages Without a Lawyer

Every once in a while a client will come my way and the following factors will prompt me to register the mortgage myself and get the deal done. For the record it’s legal in Ontario to do as long as a licensed broker is involved.  The problem with registering without a lawyer is the lender cannot get a legal opinion of title.  Without the lawyers opinion of the title, the lender will not be able to get title insurance for the mortgage.  

Why Do It???

Some people do not have an established relationship with a lawyer.  What I see happen is I get the borrower approved but then they can’t find a lawyer to represent them.  And this can delay the deal for weeks while we wait for the borrower to get a lawyer.  Lawyer’s often decline to represent borrowers (they don’t know) in transactions that they view as being risky.  Typically construction loans can be very complicated and appear to the lawyer as high risk.  Remember, lawyers are not underwriters.  Lawyers can read the contract and recommend changes but lawyers are not trained to adjudicate risk.  They don’t see the appraisals, credit of the borrower etc.  and they may not know the lender.  In these cases we will consider registering without a lawyer.

• The deal is less than $50,000.00 and is relatively easy and straight forward to do.
• If I am the Lender and Broker on the deal.
• The title is clean and I can see that the investor and borrower have no issues with title.
• The borrower can’t afford to pay huge legal fees.

Disclaimer: I don’t recommend that anyone engage in this unless they are experienced or under the direct supervision of someone who knows what they are doing. Its always best to use a lawyer and I always recommend it, BUT it is legal in Ontario to register or discharge without a lawyer and if the broker knows what they are doing its OK but PLEASE BE CAREFUL, and make sure you get independent legal or professional advice from a trusted advisor.