FAAN Mortgage Administrators Inc. (“FAAN Mortgage”) has been engaged by Building & Development Mortgages Canada Inc. (“BDMC”), in consultation with the Financial Services Commission of Ontario (“FSCO”), to assume responsibility for the management of all BDMC’s mortgage administration duties in respect of the syndicated loans for which BDMC acts as Administrator under Ontario’s Mortgage Brokerages, […]
On April 20, 2018, pursuant to an order of the Ontario Superior Court of Justice (Commercial List) (“Appointment Order”), FAAN Mortgage Administrators Inc. (“FAAN Mortgage”) was appointed as trustee (“Trustee”) over all of the assets, undertakings and properties of Building & Development Mortgages Canada Inc. (”BDMC”). The Appointment Order was issued following an application made by the Superintendent of Financial Services pursuant to section 37 of the Mortgage Brokerages, Lenders and Administrators Act, 2006, as amended, and section 101 of the Courts of Justice Act, as amended.
Please note that since February 2018, FAAN Mortgage has been engaged by BDMC as part of a settlement between the Financial Services Commission of Ontario and BDMC to assume responsibility for the management of all BDMC’s mortgage administration duties in connection with certain syndicated mortgage loans (“BDMC SMLs”). As a result of the Appointment Order, FAAN Mortgage will continue to manage the administration of the BDMC SMLs, however now it will be in its capacity as Trustee.
For clarity, the Trustee is not appointed over any of the projects with syndicated mortgage loans administered by BDMC (“Projects”). FAAN Mortgage, as Trustee, continues to review the status of the Projects and the BDMC SMLs, and to communicate with the developers/borrowers to understand project timelines and potential outcomes for the BDMC SMLs. As relevant information becomes available, the Trustee will continue to keep lenders apprised of the status of their BDMC SML, including the underlying Project, by sending notices and other communications directly to lenders and/or by posting notices to this website, as appropriate.
On June 20, 2018, the Trustee served materials in connection with its motion that was heard by the Court on June 26, 2018. Included in the materials filed is the Trustee’s first report to Court (“First Report”), which describes the Trustee’s activities since the date of the Appointment Order and provides information to support the Trustee’s request for an order (“Stabilization Order”), among other things:
(a) approving certain interim stabilization measures, including in respect of funds held by BDMC as at the date of the Trustee’s appointment and the funds received by the Trustee since the date of its appointment; and
(b) appointing counsel to represent Investors in these proceedings.
The Court issued the Stabilization Order on June 26, 2018 and a copy is accessible at the link below.
The Stabilization Order clarifies and confirms the Trustee’s rights and responsibilities under the Appointment Order in respect of certain funds held by the Trustee that are subject to Court-ordered priority charge and puts temporary restrictions on the Trustee’s rights with respect to these funds during the stabilization period in order to provide clarity to BDMC’s numerous stakeholders.
During the stabilization period, the Trustee intends to continue to analyze the remaining 43 projects that are subject to syndicated mortgage loans administered by BDMC. The Trustee will report back to the Court prior to the conclusion of the stabilization period, which ends on October 31, 2018, to give the Court, Investors, borrowers, brokers and other stakeholders further information regarding BDMC and its business and affairs and the proposed next steps in these proceedings.
Investors will be receiving a letter sent on behalf of representative counsel, Chaitons LLP, informing them of its appointment and providing contact information.
Below are links to questions frequently posed to the Trustee regarding its mandate and BDMC: