“local NEWS photo lan Smith NORTH VANCOUVER: resident Jean Allen spreads out a portion of the legal document blizzard that began to fall on her three years ago when she walked unsuspectingty into a real estate con. Allen was given an unexpected crash course in B.C. mortgage law, but lost a condominium aid a duplex in the process. SWIMMING HAS always been a part of Joan 'Parnell’s life, The North Vancouver resident displays a photo of her humble swimming beginn- ings and the medals she. won at the recent World Masters tournament. \ and lost everything. Allen, a nurse at Lions Gate Hospital, learned about B.C. real estate and mor- tgage laws the hard way. She innocently walked into a deal similar to the one tried in West Vancouver without benefit of prior personal mortgage education and without benefit of a knowledgable real estate agent. Allen paid the price. In September 1982, she had clear title on a con- dominium in the Okanagan’s Big White ski mountain complex, which she had purchased for $28,000. She then took out a $95,000 mortgage to buy a $126,000 duplex in Kelowna. Allen, who had bought the duplex at the height of the real estate market, said she had planned to sell the con- do and re-invest the money in her duplex. However, the Tecession wound up and hit Allen in the solar plexus. Unable to sell her condo, she Struggled with the high mor- tgage payments on her duplex. TAKES OFFER Riding to what she thought was her rescue on the wings of an advertisement in her paper came a man from Edmonton. His ad of- ’ fered to assume mortgages thereby saving personal credits and staving off per- sonal bankruptcies threat- ened by those mortgages. Allen bit and the Edmonton ‘man reeled in the line. She was told by a local Teal estate agent, acting for the Edmonton buyer, that. the man was buying up mor- 3 - Sunday, August 18, 1985 - North Shore News rouse lost in real estate con THE REAL ESTATE scam that recently surfac- ed in West Vancouver is a con with a long history and equally Jong tentacles; North Shore resident Jean Allen got caught in one of those tentacles By TIMOTHY RENSHAW tgages ali over B.C. and had already bought 20 such pro- perties that fall. Permission was given by both Allen's mortgagors, one a private individual, the other Credit Foncier Trust, for her to allow her mor- tgages to be assumed. Though the lawyer who looked the deal over men- tioned a mortgage assump- tion agreement in passing, Allen says its importance was not emphasized. In B.C., unless the origi- nal property owner is releas- ed from his or her personal covenant in a mortgage, he is liable for that mortgage if a subsequent buyer fails to make payments on the assumed mortgage. CAN'T FORCE DEBTOR Reasoning behind that law, explains a spokesman with B.C.’s Law Reform Commission, which has recently produced a working paper on B.C. mortgage laws, is to protect the cred- itor ‘‘because you can’t force a debtor on to a cred- itor.” The spokesman futher. explained that mortgage laws in Alber- | ta prevent mortgagors from pursuing original mortgagees if a subsequent buyer defaults on mortgage pay- ments. Alberta, therefore, has been the spawning ground of the so-called dollar mortgage _ buyer, who would salvage homeowners from beneath’ ‘mortgages worth more than properties by buying their NEWS photos Terry Peters law reform: ‘made homes for $1, assuming their mortgage, and subsequently renting out the property without making mortgage payments. Recourse for the Albertan mortgager is restricted to foreclosure on the property. Blissfully ignorant of such mortage intricacies, Allen signed over her mortgage to the man from Edmonton and moved to Fort St. John. In December of 1982, a sheriff arrived at her home with a summons from her second mortgage holder seeking $65,000 plus interest. Allen’s man from Edmonton had made no payments on the mortgage he had assum- ed and had instead been satisfied to collect the rent from Allen's former proper- ties. He continued collecting rent for the next eight mon- ths. VALUE DROPS In the meantime the ap- praised value of Allen’s duplex had dropped from $126,000: to $79,000. Upon her return to Vancouver one year later, Allen was ‘served with a further judgement against her condominium. The second mortgagor even- tually settled for Allen’s duplex and her con- dominium. Allen was left with the desperate option of either sueing the man from Ed- montor, -who had long since disappeared, or the real estate company who had led ‘her into the deal. She elected: the latter and wound up with $6,000, ‘“‘which covered my two years’ worth of court costs,” “T learned a very expen- sive lesson,"’ says Allen, ‘‘I learned that it.is footish just to rely on real estate people and lawyers, everyone in the sition to buy or sell prop- erty should have a basic knowledge of mortgage law and should have some idea of what they are getting in- to.” Besides her financial loss and the loss of her property, Allen says her credit rating has been torpedoed: ‘‘I’ve had to start from the bottom ’ again. That condo was all I had. Before, I was able to - come up with $95,000 mor- tgage, and now I can’t even _ borrow $2000 to buy a car. I’ve had to do without one. for the past two years.”’ VANCOUVER UNIQUE The rapid rise and fall of Vancouver’s real estate market, explained the Law’ reform spokesman, has the Vancouver area unique in that a lot of mor- tgages have come: to be worth more than the proper- ties they are covering, there- by increasing foreclosure ac- tioninthe area, . Milan Stastny of West , Vancouver says Credit Fon- cier came back oa him two and a half years after he had_ sold a North Vancouver property asking for $150,000. Foncier claimed the party that had assumed his mortgage and subse- quently negotiated a new mortgage had defaulted on payment of that renegotiated mortgage. “The law is crazy,’’ says Stastny, ‘‘I am being held responsible for something | have nothing to do with. The original mortgage had lapsed and they had worked out a new mortgage which was the one defaulted on.’ See Woman Page 9 ”