Table of Contents

BUSI 221 - Real Estate Finance in a Canadian Context

Baxter, D, Stanley W.H, and Daniel D.U. 2018. Real Estate Finance in a Canadian Context. Vancouver, BC: UBC Real Estate Division.

  • CHAPTER 1: Introduction to Mortgage Finance – Past and Present
    Why Mortgages?
    History of Canadian Mortgages
    Mortgages and Monetary Policy
    Functions of The Bank of Canada
    Considerations in Establishing Interest Rates
    The Mortgage Market
    Characteristics of Mortgage Loans as Investments
    Conclusion
    Appendix 1.1: Mortgage Data Tables

  • CHAPTER 2: Mortgage Finance Market Participants
    Chartered Banks
    Credit Unions and Caisses Populaires
    Trust Companies
    Mortgage Loan Companies
    Insurance Companies (Life Insurance)
    Mortgage Investors and Dealers
    Pension Plans
    NHA Mortgage-Backed Securities
    Private Lenders
    Mortgage Brokers
    Mortgage Fraud
    Conclusion
    Appendix 2.1: Mortgage Data Tables

  • CHAPTER 3: Real Estate Finance and Government Policy
    History of Housing Policy in Canada
    Role of The Canada Mortgage and Housing Corporation (CMHC)
    Mortgage Loan Insurance
    Mortgage Rate Insurance
    Conclusion

  • CHAPTER 4: Property Law and the Law of Contract
    Sources of Law and the Law of Property
    Sources of Our Laws
    Categories Within Our Legal System
    Real Property Law
    Estates
    Interests in Land Less Than Estates
    The Extent of Ownership in Land
    Co‑ownership of Land
    Land Registration Systems
    Corporate Ownership of Real Estate
    Common Items Appearing on Title
    Subdivision of Land
    Condominiums
    Law of Contract
    Void, Illegal, Voidable, and Unenforceable Contracts
    Offer
    Acceptance
    Consideration
    Legal Intention
    Capacity
    Legal Object
    Genuine Consent
    Termination of a Contract
    Remedies
    Conclusion

  • CHAPTER 5: Mortgage Law
    Basic Mortgage Concepts
    Implementation and Enforcement of Mortgages
    Conclusion

  • CHAPTER 6: Mortgage Math Review
    Interest Rates
    Interest Accrual Loans: Future and Present Values for Lump Sums
    Annuities: Introducing Payments into Financial Calculations
    Financial Calculations for Annuities
    Constant Payment Mortgage Loans
    Investment Analysis: Net Present Value and Internal Rate of Return (IRR)
    Conclusion

  • CHAPTER 7: Mortgage Underwriting and Residential Borrower Qualification
    Five (5) Cs of Credit
    Pre-Approved Mortgages
    Lender Risks
    Information Collection
    Lending Policy
    Mortgage Loan Insurance
    Financial Terms of the Mortgage Contract
    Conclusion
    Appendix 7.1: Sample Credit Reports, Equifax (www.equifax.ca)
    Appendix 7.2: Sample Credit Reports, Transunion Canada (www.tuc.ca)

  • CHAPTER 8: Commercial Mortgage Underwriting
    The Role of Financing in Commercial Real Estate Markets
    Application for Commercial Loans
    Cash Flow Analysis
    Lending Constraints
    Nature of Covenants
    Conclusion
    Appendix 8.1: Summary Sheet for Loan Application
    Appendix 8.2: Supplementary Checking Sheet - Estimates of Income and Expenditure

  • CHAPTER 9: Mortgage Loan Repayment Plans
    Borrower and Lender Objectives
    Interest Accrual Loans
    Interest Only Loans
    Straight Line Principal Reduction Loans
    Constant Blended Payment Repayment Schemes
    Payment Frequency
    Partial Amortization and Outstanding Balances
    Variable Rate Mortgages (VRMs)
    Graduated Payment Mortgages (GPMs)
    Sinking Fund Assisted Mortgages (SFAMs)
    Reverse Mortgages or Reverse Annuity Mortgages (RAMs)
    Participation Mortgages
    Addressing Inflation Directly in Mortgages
    Conclusion

  • CHAPTER 10: Loan Management and Refinancing Options
    Prepayment and Irregular Payments on Mortgage Loans
    Arrears and Default
    Refinancing the Property
    Loan Pricing: Valuati
    Conclusion

  • CHAPTER 11: Development Financing
    Overview of the Land Development Process
    Development Financing
    Construction Financing
    Alternative Development Financing Arrangements
    Conclusion
    Appendix 11.1: Take-Out of Construction Financing
    Appendix 11.2: Construction Loans Without Prior Long-Term Commitment

  • CHAPTER 12: Leasehold Finance
    Types of Leases
    Appraisal of Leasehold Interests
    Conclusion