Lenders take action against Fortress affiliates

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Mortgage lenders are wasting no time taking legal action against real estate developer Fortress Real Developments Inc.

Lenders have filed applications against the developer to begin foreclosure procedures on land that was to be utilized for development projects, the Globe and Mail reports.

Actions come after recent payment defaults of at least four Fortress affiliates including Fortress Brookdale Inc., involved in a condo project in Toronto; Brookhill Holdings Inc., which has plans to build a single-family housing project in Bowmanville and Fortress Collier Centre Ltd., developers of a commercial tower in Barrie. Legal warning has also been filed against Glens of Halton Hills project, a residential development planned northwest of Toronto.

Fortress has indicated new financing deals are in the works to replace lenders in the Halton Hills project and the company is working on resolving other claims.

The Fortress website indicates the company is involved in upwards of 50 projects across Canada. Fortress began to experience legal troubles after an RCMP investigation in April of this year in connection to syndicated mortgage fraud.
Meanwhile, in April, Ontario’s financial regulator applied to the court to have a receiver take control of the company’s subsidiary mortgage company — Building & Development Mortgages Canada Inc. That affiliate has raised in excess of $600 million from 11,000 investors in five years. Those funds have primarily been used to finance Fortress projects.

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