The client
A homeowner in London, Ontario, is consolidating a $260,000 first mortgage and an $85,000 private second into one $345,000 refinance, on a home valued at $460,000.
Existing first mortgage
$260,000
London
Private second
$85,000
Repaid in substance, never discharged
Home value
$460,000
Private lender
A numbered Ontario corporation
Voluntarily dissolved before the discharge registered
Combined household income
$8,100/month
The problem
The private second was repaid in every practical sense, but the discharge itself was never registered on title before the numbered Ontario corporation that held it voluntarily dissolved -- articles of dissolution filed, the company gone. A dissolved corporation has no legal personality left. It cannot sign a discharge, a release, or anything else, no matter how straightforward the underlying debt was.
Why a dissolved corporation can't simply be asked to sign
- ▸Dissolution ends a corporation's legal existence -- there is no director, officer or signing authority left to act on its behalf
- ▸A dissolved corporation's remaining assets and rights, including a mortgage it still holds registered on title, generally escheat to the Crown if the dissolution isn't addressed
- ▸No amount of correspondence or persistence produces a signature from an entity that, legally, no longer exists
The refinance's own numbers were never in question -- the entire obstacle was getting a valid, legally executable discharge onto title.
The numbers
Once the discharge mechanics were resolved, the refinance itself was routine, sitting alongside the broader lender-type market-share data that shows how much of Canadian mortgage lending private capital represents.
| The consolidation refinance | Amount |
|---|---|
| Existing first mortgage | $260,000 |
| Private second (being paid out) | $85,000 |
| Combined refinance | $345,000 |
| Loan-to-value | 75.0% |
| Total debt service | 39.2% |
| Qualifying the refinance | Figure |
|---|---|
| Minimum qualifying rate on a 5.20% contract rate | 7.20% |
| Payment at the qualifying rate, 25 years | $2,459 |
| TDS (payment + tax + heat + car loan) ÷ $8,100 income | 39.2% |
39.2% TDS confirms the refinance was always going to clear on the numbers -- the corporation's dissolution was the only real obstacle to closing.
The solution
A mortgage agent licensed under Ontario’s Mortgage Brokerages, Lenders and Administrators Act treated the dissolved lender as a corporate-law problem for the file's lawyer to solve, not a signature to keep chasing -- exactly the kind of thing a real private exit strategy has to plan for.
First, confirmed directly with a corporate search that the private lender had in fact filed articles of dissolution, and that no revival had already occurred. Confirming the actual corporate status, not assuming it from a returned letter, is what set the correct next step.
Second, had the file's lawyer apply for the corporation's revival under the Ontario Business Corporations Act, restoring its legal existence specifically to execute the outstanding discharge -- the same kind of exit strategy planning any private file needs before it's ever relied on. Revival was faster and cheaper here than pursuing a court order or involving the Public Guardian and Trustee over escheated assets.
Third, had the revived corporation execute a proper discharge and confirmed it was registered on title before the new A-lender was asked to fund.
The outcome
The revived corporation executed a valid discharge, and the refinance closed at $345,000 with 39.2% TDS, with the revival itself -- not the underlying debt or the ratios -- having been the entire obstacle.
This is an uninsured refinance -- there is no CMHC ratio ceiling; the 39.2% TDS figure is informational.
What to take from this file
- 01A dissolved corporation cannot sign a discharge, no matter how simple the underlying debt. Dissolution ends its legal existence entirely.
- 02Revival under the OBCA restores a corporation's legal existence specifically to complete an outstanding act like a discharge. It's often faster and cheaper than a court order.
- 03Confirm the actual corporate status through a proper search, not by assuming from unanswered correspondence. A returned letter isn't proof of dissolution, and dissolution isn't proof revival hasn't already happened.
- 04A private lender's discharge mechanics are a completely separate risk from the loan's own numbers. This file's ratios were never in doubt; the corporate status was the entire obstacle.
- 05Whether revival, a court order, or another remedy applies depends on the specific facts. Confirm the right path with a lawyer rather than assuming one approach fits every dissolved private lender.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸5.20% contract rate — rates move daily; not a quote.
- ▸the TDS figure — this is an uninsured refinance -- there is no CMHC ratio ceiling; the number is informational only.
- ▸whether revival, a court order, or the Public Guardian and Trustee is the right remedy for a given dissolved corporate lender — the correct remedy depends on the specific facts (how long dissolved, whether assets already escheated) and should be confirmed with a lawyer on every file, not assumed.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.