Mortgage Fund in Canada Halts Payouts Amid Liquidity Crunch
- Repayment activity from borrowers is ‘suppressed’: Romspen
- Fund is trying to expedite asset sales to free up cash
A house under construction in Brampton, Ontario. Canada’s real estate market has been roiled by aggressive interest-rate hikes this year.
Photographer: Mark Sommerfeld/BloombergThis article is for subscribers only.
Canadian real estate lender Romspen Investment Corp. has halted redemptions on its largest fund after a number of borrowers stopped making payments.
The Toronto-based firm will “temporarily defer payment” of redemptions until it has more clarity on when borrowers will repay loans and the fund can get cash from asset sales, according to a letter to investors dated Nov. 8. “Loan payoff activity remains suppressed.”