# Fortress Syndicated Mortgages



## Berubeland (Sep 6, 2009)

There was a thread a few weeks back about this...

http://www.macleans.ca/economy/real...-mortgages-and-the-coming-condo-market-crash/


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## canabiz (Apr 4, 2009)

I attended one of their sales pitch in Ottawa a number of years ago and did not get a good vibe. They are financing a project here with Lamb (SoBa) and it has taken quite a while to get things off the ground


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## Berubeland (Sep 6, 2009)

I have letters from some of the Brad Lamb Projects that they are "accruing interest" apparently all Brad Lamb projects investors are not getting paid. 

I am quite upset at this Macleans article.

First it is a matter of court record that investors in the Barrie deal have lost $17 million. What comfort is it to small investors that Laurentian's mortgage got paid and that the building will be built? Fortress may end up building the project, but the failure involved wiping out the first round of investors. 7 million of investor money cannot be accounted for by the monitor Grant Thornton. 

This is very misleading "Fortunately for syndicate investors, they may never have to find out. Fortress agreed to bail out Collier Centre project last year and see it through to completion. Construction is now scheduled to be completed in about a year." 

This point is also misleading "Lenders are also offered free, independent legal advice." Lawyers do not work for free, in this case the borrower pays for the legal fees. There is a clear conflict and the Law Society of Upper Canada and any lawyer would agree. If your exhusband offered to pay for your divorce lawyer, you'd probably want your own anyways. 

Macleans also mentions the suit against Ben Rabidoux. They've threatened to sue countless people, one right in the comments of an article on the FSCO website (Ron Butler) 

They have a history of failed/slow/winterized projects. Their "Partners" seem to fail as well, and no wonder, the terms of their agreements and the cost of financing with them is exorbitant. But you know for developers who tend to specialize in the funky math that makes 400 square foot condos look cash flow positive, that may not be bothersome. 

Unfortunately as Brad Lamb is discovering any developer is responsible for paying back the investors' capital, Fortress's tranche and fees, and interest of 8%. Only time will tell if this turns into a First Leaside, or League REIT style debacle. There are definitely a lot of similarities. Regardless of any regulator action or inaction, it's the small investors that get screwed in these deals.


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