Stop Power of Sale and Defaults with a Tembo mortgage!

We at Tembo want to introduce a brand-new proprietary term for the vast world of real estate: “stigma equity.” Our President and CEO Arryn Greenspan’s extensive experience helping clients led him to coin the term, based on outcomes he was seeing on a regular basis.

Stigma equity refers to a situation where a home in a power of sale or default situation is sold off by a bank in a knee-jerk way, as opposed to a homeowner selling on their own terms, and crucially, on their own timeline. The difference in the sale price of a home essentially being purged and liquidated ASAP by a bank and a home being sold thoughtfully by a homeowner is stigma equity. And it can amount to hundreds of thousands of dollars down the drain.

Banks see a home in a power of sale situation as a number on a computer ledger, they just want to liquidate and make themselves whole as quickly as possible. They are not going to comb through the home carefully to consider all the possibilities, they won’t explore renovation options for better resale value, they likely won’t opt to transform the home into a rental property for long-term cash flow. Their sole overriding goal is to dump the house, and fast. We’re talking about a couple of clicks of a mouse. Most homeowners looking to sell will do the exact opposite. They’ll consider ALL their options. They’ll time the sale well. They’ll spice up a kitchen for attractiveness or finish up a basement into a rental property to increase the home’s income. The possibilities are endless.

A homeowner facing the daunting prospect of a default or power of sale doesn’t have this flexibility. Consider the following scenario. Imagine living side by side with a neighbour, owning identical houses, yet when it comes to selling, your property fetches $200,000 less simply because it’s labeled as a power of sale property the bank wanted to dump quickly. This is exactly what we mean by stigma equity—a loss of perceived value due to assumptions buyers make when a property is rapidly sold under distress. It happens across southern Ontario and the GTA every day.

When a house is sold under power of sale circumstances, buyers often presume they can strike a better deal, assuming distress or urgency on the seller’s part. This perception, though often untrue, leads to lower offers and a substantial decrease in the property’s sale price.

The Tembo Solution: Empowering Clients

We are a private mortgage lender offering unique solutions to mitigate the impact of stigma equity and to empower clients to regain control of their financial situations. Tembo recognizes the predicament homeowners face when caught in a power of sale scenario.

Our innovative approach involves stepping in to buy out the mortgage and putting the homeowner in good standing.

By doing so, Tembo provides homeowners with a lifeline to navigate their financial challenges without sacrificing the equity and value of their property. In this situation, the bank is happy and out of the picture.

Rather than succumbing to the loss incurred due to stigma equity, Tembo’s solution allows homeowners to sell their property on their terms. This means listing the property at its true market value, eliminating the negative perceptions associated with power of sale, and ensuring that homeowners can maximize their property’s worth.

Let’s revisit the scenario of the neighboring houses—one listed at $1 million and the other a power of sale property fetching $800,000. Suppose the homeowner facing a power of sale situation opts for Tembo’s solution. In that case, they can avoid the stigma equity loss and sell their property at the actual market value of $1 million, aligning with the neighbor’s sale price.

By choosing to work with Tembo, homeowners regain control, ensuring they aren’t penalized by assumptions tied to power of sale listings. They maintain the equity and value they’ve built in their property, avoiding a downward spiral of financial distress.

Stigma equity isn’t just about the difference in sale prices—it’s about empowering homeowners to preserve the value of their property and their financial stability. Tembo’s innovative approach to buying out mortgages in default or power of sale situations offers a lifeline for homeowners, enabling them to sell their properties on their terms and avoid the detrimental effects of stigma equity.

In essence, Tembo doesn’t just provide financial assistance; we restore confidence and control to homeowners, allowing them to secure fair market value for their properties and pave the way towards a more stable financial future. Please do not hesitate to give us a call at 1-844-238-6717 to explore how we can help you avoid Stigma Equity and maximize the value and financial bounty of your home!

Higher rates are coming, consolidate your debts today with Tembo

Rates keep going up and the expectations are that rates will only start coming down again in late 2023 to get us out of a potential recession. How fast rates go up and how quickly will define our economy and politics for years to come. Individuals and families who will head off the higher rate environment and minimize their costs will thrive and prosper in the coming years. Through this higher interest rate environment, please don’t hesitate to keep Tembo’s ability to offer rapid, creative, and innovative lending solutions in mind – whether you’re looking to renovate and increase equity values, or you need to consolidate and simplify your debts, or you need a quick second mortgage for a deposit on a new or additional property. Higher interest rates means greater risks and costs for banks which means slower processing, greater scrutiny, and more limited options.

On Jun. 15th 2022, the Fed raised rates by 75 basis points. This was the highest increase for the U.S. central bank since 1994. Expectations of the BOC doing the same are rising, especially on the heels of the May inflation number set to be released on June 22nd. Looking at our interest rate history, rates are still historically low. From June 2004 to August 2007 when economic conditions were excellent and inflation low, rates increased from 2% to 4.25%.  Always keep in mind that the historic norm since the early 1960s has been rates of some 6%, we’re only at 0.50% right now. From 1997 to late 2000, rates increased from 3% to 5.75%. From 1987 to May of 1990, rates jumped from 7.3% to 13.8%. This was in the aftermath of strong inflation and the popping of the late 80s real estate bubble that Tembo has written about many times. Keep an eye on inflation and the BOC and always keep Tembo in mind for a second mortgage, debt consolidation solutions, an equity advance for a renovation loan, and so much more.

So, the conclusion is that when the bank starts to shift to higher rates, it generally sticks to that trajectory over a number of years. There are usually at least a handful of rates over the higher rate period. Increases have historically been .25 basis points, but even in good economic conditions, rates have been occasionally boosted by .50 basis points. In periods of high and growing inflation rate increases are stronger and the ‘higher rate period’ is shorter than in periods of healthier macroeconomic fundamentals. Take advantage of your increased housing equity to consolidate your debts, pay down liabilities fast, and simplify your payments – please visit and give us a call at 1-844-238-6717!

On Real Estate Predictions for Spring 2019

It’s hard to predict real estate trends and long term changes. Experts, economists, and real estate watchers will all have their views. Southern Ontario and GTA residents are generally positive about the long term fundamentals.

They believe that immigration, a stable economy, and a sound financial system will all facilitate long term growth and general real estate stability. This positivity comes from the fact that since the early 1990s, the real estate market has been on a positive upswing. Only two brief periods saw prices and demand ease, in the early 2000s with the popping of the dot-com bubble, and in 08-09, with the Great Recession.


Overall, given the data we now have and the trends we’re aware of, there is little that suggests there will be drastic changes to the real estate market. Expectations suggest that the price growth we saw in the last few years are unlikely to return. Interest rates will remain stable. While the BOC will want to raise rates when necessary, there is the dual pressure of not overwhelming consumers with higher borrowing costs and managing economic expectations.


Demand will continue to be strong. Experts are predicting stable or increased demand for luxurious apartment and detached home units as international money shifts out of Australia, the UK, and New Zealand in favour of Canada and the U.S. Condo prices and demand are likely going to trend higher, as detached home prices are still too high for first time buyers. As for prices and sales, both are expected to trend upwards in the Spring. A 30 year fixed rate mortgage is trending at 4.375%.



Mixed Real Estate Conditions and a Potential BOC Rate Cut


The Greater Vancouver Real Estate Board released rough real estate stats earlier this week. Reports showed that year-over-year Feb. residential home sales fell over 30%. This represents the worst Feb. sales total since 1985, over 40% below the last decade’s average.

Detached homes lasted roughly 55 days on the market before sale, while townhouses averaged 39 days and apartments and condos at 40. Prices also fell by over 6% year-over-year, while at the same time, inventories are piling up. Total listings rose by over 48% year-over-year to almost 11,600.

In Toronto, prices rose by 1.6% while listings fell 6.2%, sales fell by 2.4%. Canada’s banks are also feeling the heat of an inconsistent real estate market. Credit losses rose by double digits at the big 5. The same credit losses were seen in the Australian banking and real estate markets as well and in other countries dependent on real estate.

Economic stats have dipped into such negative territory so quickly that news is spreading of the possibility that the BOC may cut rates soon. Tembo has consistently made the point that the BOC will stick to an aggressive and consistent rate hike trajectory until economic conditions change. While most experts believe that rates will stay put, the potential for a cut will grow if economic conditions continue to worsen. As we previously reported, the economic recently contracted by a very narrow margin.

On an additional note, the City of Toronto will convene on Thursday, March 7th to pass its 2019 budget. The budget outlines a massive drop in land transfer tax revenues because of stalling real estate conditions. The City has become addicted to the previously perpetually rising land transfer tax which financed large increases in city spending. That era has come to a close.