Ask a Lawyer: Insolvency, Bankruptcy, and Foreclosures
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In 2005 I had money for a down payment but not enough time on the job for a mortgage. My ex's mother bought my place on her line of credit and gave her the 5000 down payment money. I subsequently obtained a mortgage to buy it. This was a non-arms length transaction. She gave me a gift letter as we needed enough to pay her capital gains. Servus Credit union, after receiving an appraisal of 231,000 had me change the amount of the sale to $165,000 and increase the gift letter to make the mortgage conventional but then needed to do a 40 year amortization to make the numbers fit my income and debt. They had me insure the loan bringing the loan to purchase value to about 76%, however the alberta law of property act states fair market value. Would the fair market value in a non arms length transaction be valued at the appraised value for the alberta law of property act. Would it be bad faith for the bank to apply for a rice order claiming it to be a high ratio mortgage when they are aware of the fair market value and non-arms length transaction nature.
After the mortgages (first and second) went into default I made arrangements to pay "everything at servus". Subsequently to this with the first payment I sent a note and an email that specifically referenced first mortgage, second mortgage, legal fees, and condo fees. After trying wriggle out of the agreement unsuccessfully and having received enough to pay off the first mortgage, condo fees, and started lawyer's fees the bank decided to proceed on the second mortgage. Am I protected by promissory estoppel? Is it bad faith to proceed on the second mortgage now? I should note that although maintaining to me and to the court that he was not proceeding on the second mortgage, the lawyer filed a default note on the second mortgage when he began to act on it. Is that bad faith?
Would applying for a rice order at a value where the appraiser specifically mentions taking the lowest priced sales in the last six months, ignores all recent sales in my complex except one a year ago that was nicer than mine but ignoring the actual lowest sale 3 months prior that had 1970's tile on it and sold for 28K more than she valued my property act as well as misstatements about market conditions and using a foreclosure as a market value comparable without making an adjustment for it and attempting to proceed with the rice order at that value even after having the errors detailed be considered bad faith if the judge agrees with my assessment of the value?
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