The other day, I was chatting with a colleague about the state of the private mortgage market in Ontario. The conversation took me back to something my father told me just weeks before he passed away.
My father was a banker through and through. His career wasn’t just a job—it was part of his identity. He took immense pride in his work, and in his final days, he tried to pass on some wisdom. At the time, I was twenty and had decided to take a break from university. I had just landed a job as a Loans Clerk at Canada Trust; despite having sworn I’d never follow in his footsteps. Funny how life works.
I remember my father working as a branch manager in Montreal’s garment district—back when managers actually had decision-making power as a lender. He’d come home with gifts from clients—fur coats for himself, new clothes for us kids—something that was, believe it or not, an acceptable practice in the 1970s. By 1977, he was transferred to head office in Toronto, where he spent the rest of his career in commercial lending, commuting daily on the GO Train.
Like many father-son relationships, ours had its fair share of head-butting. I thought I knew everything; he, in my view, didn’t have a clue. But when I told him I was leaving school, his reaction surprised me. Instead of lecturing me, he encouraged me to treat my new role as if it were my own business. He took pride in the fact that, in all his years of lending, the bank had never lost a cent on the deals he approved. He treated every decision as if it were his own money, always ensuring there was sufficient collateral and a clear exit strategy.
Despite my youthful arrogance, that lesson stuck with me. Now, after 35 years in the mortgage business, I’m proud to say I’ve upheld the MacDonald tradition—zero losses for my private mortgage clients.
The Market Today: Risk in Plain Sight
Fast forward to my conversation with my colleague. We were discussing the sharp increase in Power of Sales and the growing number of private mortgage investors who have unknowingly taken on far more risk than they realize. Over the past several years, many investors have been chasing high yields while ignoring the fundamentals of risk management.
In a booming market, mistakes are easy to overlook because rising property values cover them up. But now, with real estate correcting, those mistakes are laid bare. Investors who once assumed they were on solid ground are realizing just how exposed they’ve become.
There is still money to be made in private mortgage lending, but now more than ever, managing risk is critical. Working with people who prioritize capital preservation over aggressive returns is the key to navigating this changing market.
A good lender doesn’t just focus on potential gains—they ensure there’s a solid plan in place to protect the investment. It’s a lesson my father lived by, and one I’ve carried with me throughout my career.
Now is the time to reassess your portfolio, understand your risks, and make sure you’re working with experts who put your capital’s safety first.