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How to perform property review by underwriters? 

Purpose

The Property Review process ensures that all relevant property details are accurately documented and verified before underwriting a mortgage. This process helps mitigate risk by validating property ownership, condition, financial obligations, and regulatory compliance.

1. Initial Review (HS)

In MA

  1. Identify the Property Being Mortgaged:

    • Understand the deal structure and borrower’s plan for the property.

    • Review Sales notes on the HS Deal and Property listing

    • Ensure the correct property is being assessed for underwriting.

  2. Review broker-submitted documents:

    • Agreement of Purchase and Sale (APS)

    • MLS Listing

    • Tax Bill

    • Mortgage Statement

    • Appraisal Report

2. Cross-Referencing Property Information

  1. Confirm the Property Address:

    • Use Canada Post's Address Complete tool for verification.

    • If there are discrepancies, use the address listed by Canada Post.

    • New Builds: If not listed on Canada Post, verify with Google Maps or the builder’s Statement of Adjustments (SOA).

2. Purchase & Refinance Reviews (HS)

For Purchase Deals:

  • Review the following documents:

    • MLS listing (if resale property)

    • Agreement of Purchase and Sale (APS) and variations

    • Firm Closing Date letter/email (if new construction)

For Refinance Deals:

  • Review the first mortgage statement (if NHMC is handling a second mortgage).

3. Check existing mortgages

  1. Check for Existing Mortgages (MA):

    • Search for property address and borrower name.

    • NHMC allows a maximum of 2 properties per building or per borrower (excluding collateral deals).

  2. Land Registry Office (LRO) Identification:

4. Property Tax Review

  1. Ensure property tax information is complete in MA.

  2. Cross-reference tax details with:

    • MLS Listing

    • HouseSigma

    • Tax Bill

    • Statement of Adjustments (SOA)

  3. Confirm if property taxes are paid up to date:

    • If not, they must be cleared from the mortgage proceeds and recorded as a debt in MA.

5. Condo Fees Review (If Applicable) (MA)

  1. Verify condo fee details using:

    • MLS Listing

    • Condo Certificate

    • Statement of Adjustments (SOA)

  2. Ensure condo fees are entered into MA correctly.

  3. Confirm if condo fees are paid up to date:

    • If unpaid, they must be cleared from proceeds and recorded as a debt in MA.

  4. Identify if Condo Common Expenses (CCE) per square foot exceed $1/sq ft:

    • If above threshold, escalate for further review.

    • Use Condos.ca to verify included expenses.

6. Super Priority Lien Coverage – GST/ HST or Personal Taxes (MA)

As equity-based lenders, we do not verify income, and FCT confirms that we retain super priority lien coverage as long as we are unaware of any GST/HST or personal taxes owing. We follow a "don't ask, don't tell" approach, meaning we do not have to inquire if taxes have been filed or if any taxes are owed unless personal taxes, GST, or HST are being paid from the mortgage proceeds—in which case, a CRA payout statement must be obtained, and the amount owed directly paid.

  • Fulfillment Specialist must obtain a statutory declaration from the borrower confirming they owe no personal taxes or GST/HST to the CRA.  

  • Upload statutory declaration into HS documents associated to record.

7. Occupancy Review (MA)

  1. Cross-reference the occupancy status with:

    • Appraisal Report

    • Broker Notes

    • Email Threads

    • APS & MLS Listing

  2. If the property is NOT Owner-Occupied:

    • Register a Notice of Assignment of Rents (NOARs)

    • Collect leases (unless it's a second home)

    • Conduct an openroom.ca search

    • If negative information is found, escalate as needed.

  3. If the property has rental potential (e.g., finished basement unit):

    • Register NOARs as a precaution.

8. Self-Build & Major Renovations Review (MA)

If the property is self-built or recently renovated (e.g., additions, secondary unit):

  1. Obtain occupancy permit/final permit.

  2. If permits are not available, decline the deal due to possible illegal construction.

  3. If the property has failed an inspection stage, decline the deal by changing deal stage to Closed Lost and filling in closed lost reasons when prompted.

Note. No Tarion warranty is required -- whether they are OO, rental or intended for sale. As long as the final occupancy permits are in place and the home is built to code. Loan can be approved.