$140,000 is one heck of a prepayment penalty, charge members of an Ontario co-operative, pointing to CMHC’s demand it pay that sum in order to break a mortgage and seek refinancing throught a credit union.
“We are prepared to pay a reasonable prepayment penalty," said Nadine Wisdom, president of the 78-unit Mondragon co-operative housing complex in Brampton. "We are asking Minister Diane Finley, our Member of Parliament Parm Gill and Brampton Mayor Susan Fennell to help us in our fight for fairness to reduce this bureaucratic roadblock in our pursuit to maintain financial independence and housing security for all of our members.”
That call for intervention comes after CMHC reiterated its demand Mondragon pay the $140,000 penalty in order to retire the mortgage. CMHC holds that loan under its Direct Lending program, with the penalty representing the interest it would have collected on the remainder of a five-year term only recently started.
Mondragon is also on the hook for the outstanding amount on its principal, some $1.8 million.
CMHC argues that the penalty jives with market standards and also reflects the preferential rate offered under its lending program.
Still, Mondragon is hoping the Crown corp. will step back from its demand, allowing the co-op to avoid the expense of tabbing that $140,000 bill onto its refinanced mortgage.
Last October, the mixed-income housing complex received engineering studies identifying the need for $2.3 million in renovation and retrofit work over the next five years.The co-op is now prepared to begin negotiations with a new private sector lender toward a new first mortgage totalling about $4 million.
That, of course, is dependent on first winning a less-costly freedom.
“We are prepared to pay a reasonable prepayment penalty," said Nadine Wisdom, president of the 78-unit Mondragon co-operative housing complex in Brampton. "We are asking Minister Diane Finley, our Member of Parliament Parm Gill and Brampton Mayor Susan Fennell to help us in our fight for fairness to reduce this bureaucratic roadblock in our pursuit to maintain financial independence and housing security for all of our members.”
That call for intervention comes after CMHC reiterated its demand Mondragon pay the $140,000 penalty in order to retire the mortgage. CMHC holds that loan under its Direct Lending program, with the penalty representing the interest it would have collected on the remainder of a five-year term only recently started.
Mondragon is also on the hook for the outstanding amount on its principal, some $1.8 million.
CMHC argues that the penalty jives with market standards and also reflects the preferential rate offered under its lending program.
Still, Mondragon is hoping the Crown corp. will step back from its demand, allowing the co-op to avoid the expense of tabbing that $140,000 bill onto its refinanced mortgage.
Last October, the mixed-income housing complex received engineering studies identifying the need for $2.3 million in renovation and retrofit work over the next five years.The co-op is now prepared to begin negotiations with a new private sector lender toward a new first mortgage totalling about $4 million.
That, of course, is dependent on first winning a less-costly freedom.
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