With the ongoing COVID-19 pandemic situation and subsequent negative economic impact, Peoples Trust has received numerous inquiries from multi-family borrowers with respect to CMHC’s Mortgage Payment Deferral program. Peoples Trust is working closely with our borrowers to ensure all cases of hardship are quickly addressed. These are our guidelines, for you, our valued borrowers and provide answers to your probable questions and guidelines on how you can proceed.
What does “payment deferral” mean?
A mortgage payment deferral is when regularly scheduled mortgage payments are postponed for a defined period of time. On approval by the lender, the payments will be deferred for six months and the deferred amount will be added to the outstanding mortgage balance, with interest accruing on this balance. Following the payment deferral period, the lender will increase the mortgage payment to amortize the deferred amount over the remainder of the loan term. Tax components of monthly payments will not be eligible for deferral.
Who has final approval authority on a payment deferral request?
CMHC has drafted specific guidelines that all lenders must abide. The final approval for a specific payment deferral request is up to the lender. The reason for default and the lender’s assessment of the borrower’s financial capacity to repay the deferred payments should be noted in the lender’s loan file.
Who makes the request to CMHC for the payment deferral?
Peoples Trust will make the request to CMHC on behalf of the borrower’s that advise us they require a payment deferral.
What information is required to request a deferral?
- Borrowers need to provide a written request with complete details on their situation and why they need to have payments deferred. They need to stipulate the length of time for which they would like the payments deferred and their plan on how they intend to make up the deferred payments at the end of the deferral period.
- The lender will require the current month and the previous two months’ rent roll, showing the occupancy history of the property with an explanation for missed rental payments on suites in which tenants are in arrears. For example, if a request for a payment deferral is made on April 5, rent rolls for February, March and April would be required.
- Borrowers must also provide the most recent two months bank statements for the building operating account, to show monthly income received and monthly operating costs.
- All borrowers and guarantors must submit financial information including income and assets.
- Finally, borrowers need to submit confirmation about any other mortgages or charges registered against the property. Details on the balance outstanding, interest rate, payment amount, maturity date, proof that payments are current, and details of any payment deferral arrangements that may have been granted by those applicable lenders.
Who to contact to start the process?
All inquires should be sent to CommercialMortgageDeferrals@peoplestrust.com
Please include your loan number and property address.
Upon receipt of your email, a representative of Peoples Trust will be in touch with you shortly.