Bloomberg Law
Nov. 9, 2022, 8:05 PM

Mortgage Fund in Canada Halts Payouts Amid Liquidity Crunch (1)

Layan Odeh
Layan Odeh
Bloomberg News

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.”

The move underscores the growing stress in the nation’s real estate market as a sharp rise in interest rates changes the economics of commercial projects and disrupts the housing market.

The firm, which is backed ...

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