Coquitlam man fails to overturn ‘predatory’ $1.3 million mortgage in foreclosure dispute

A Coquitlam homeowner’s attempt to nullify a $1.3-million private mortgage as “predatory” has been rejected by the B.C. Supreme Court, clearing the way for foreclosure proceedings.

In a decision released March 17, Justice Barbara Norell found the mortgage between Morteq Lending Corp. and Abbas Kashani was neither unethical nor improperly structured, dismissing allegations that the former engaged in unfair or deceptive practices.

The case centres on a foreclosure petition involving a Coquitlam property, where Kashani argued the lender exploited his financial vulnerability and imposed excessive interest, fees and undisclosed terms.

But the court concluded the mortgage was the result of a fair bargaining process and that Kashani understood the key terms when he agreed to them.

Kashani claimed the mortgage, issued in May 2023 at 9.75 percent interest, was part of a “predatory lending scheme,” alleging inflated loan amounts, hidden fees and undisclosed secondary financing.

Justice Norell rejected those claims, finding they were unsupported by evidence and contradicted by the written record.

“The uncontradicted documentary evidence establishes that the petitioner did not add undisclosed fees and that the respondent was aware of and agreed to those fees,” she said.

The court found the loan amount, fees and interest rate were clearly disclosed in the commitment letter and credit disclosure documents, all of which Kashani signed.

It also found a portion of the loan being funded by a related entity did not amount to a hidden second mortgage, nor did it result in additional costs beyond what was agreed.

Central to Kashani’s argument was that he was in a vulnerable financial position, with the property already in foreclosure under a previous lender when he sought financing.

However, the court found that financial pressure alone does not establish an imbalance of bargaining power.

“Merely needing to borrow money does not mean the respondent was unable to protect his interests,” Norell said, noting Kashani had access to both a mortgage broker and legal counsel.

The ruling also highlighted Kashani’s prior experience with private lenders and acknowledged he did not qualify for lower-interest loans from traditional banks due to issues such as unfiled taxes.

While Kashani argued the terms were excessive given the property’s equity – valued at over $2 million – the court found the mortgage reflected market conditions for a higher-risk borrower.

The judge noted Kashani had previously taken out private mortgages that also went into default and had been offered similar or higher interest rates.

“There is no evidentiary basis to conclude that the interest rate, fees, and security . . . significantly departed from the market price for someone in the respondent’s position,” Norell said.

Kashani, who represented himself in court, had sought to reduce the interest rate and challenge the enforceability of the loan, but ultimately failed to meet either legal threshold.

Although the court dismissed the broader challenge, it did make a small adjustment to the amount owed under the mortgage.

Norell reduced the redemption amount by $500 plus interest, after the lender conceded one post-default charge had no contractual basis. 

An order nisi (the first stage of foreclosure) had already been granted in December 2024, setting the amount required to repay at approximately $1.38 million.

The court confirmed there were no grounds to revisit the validity of the mortgage, allowing the foreclosure process to continue.