Inside Toronto’s heartbreaking surge of forced home sales

RiverRock Mortgage Investment Corp. took legal possession, as the sign on the door said, after she missed a mortgage payment.

Morrish was “in complete disbelief and shock, and then she crashed,” she recalls.

It almost felt like death.

“Grieving over something whose outcome you can no longer change.”

Nick Kyprianou, president and CEO of RiverRock Mortgage Investment Corp., said he could not discuss details of the Morrish case due to privacy laws.

But he confirmed that she had a mortgage with the company and that she had missed a payment at the end of 2024.

“A mortgage is the simplest contract in the world. If there's a lawsuit, it's because you're not making payments and we couldn't come to a resolution,” he said in a telephone interview.

What happened to Morrish is called a right of sale: when a borrower defaults on their mortgage and the lender takes it upon themselves to sell the house and recover the amount they are owed.

Once very rare, sales opportunities are growing in the Greater Toronto Area, especially in suburbs like Brampton, Brock and Scarborough. According to MLS data provided to the Star by John Pasalis, president and broker of record at Realosophy of real estate.

The Highland Creek neighborhood in north Scarborough, which borders Morrish's home, tops the list of GTA neighborhoods, with 9.9 per cent of listings being for sale from January to September this year – or about 1 in 10 new listings.

More lenders are repossessing homes, a process they can begin after just one missed mortgage payment as homeowners find it harder to pay their mortgage.

Thousands of people are seeking renewals at higher interest rates as unemployment rises, the cost of living soars and overleveraged owners who bought at the height of the pandemic see their property values ​​fall.

The increase is a sign that more owners are under pressure in a troubled market.

Morrish, a single mother who has battled chronic health problems, said she invested in her three-bedroom home over the past 15 years to start a couple of small businesses that eventually failed.

“Everything here means so much to me. I know it's just a small thing, but it's so heartbreaking. I wish I didn't end up in a situation like this,” the 63-year-old said.

Before joining RiverRock around 2022, she worked with several lenders. RiverRock is a mortgage investment corporation (MIC), meaning the lender is funded by investors' capital as well as borrowers' repayments.

Most people get private mortgages in middle-income countries, which often lend to those rejected by banks.

Morrish said that after she failed to pay her mortgage of about $6,200 in December 2024, the company tried to claim her home as abandoned, which would have allowed them to change the locks more quickly.

RiverRock's Kyprianou reiterated he couldn't discuss details, but said it was “not true” that the house wasn't abandoned.

“When it comes to legal action, we never back down,” he said. If a home is “deemed abandoned” by law, the company can change the locks, he added. “It's a whole process.”

Kyprianou said the company always tries to work with people to find a solution.

They “take care of everything” for borrowers, including hiring movers and helping them find another place to live, even paying the first and last month's rent.

He said their sales authority has actually declined over the past couple of years due to their borrower strategy, and they currently only have “five or six” ongoing projects in Ontario.

Morrish was able to return to her home with the help of her realtor, Jonathan Alfonso, who said he guessed the code to the safe that RiverRock had taped to the door.

She still lives in this house – on the advice of her lawyer, who told her that while she was there, it could not be considered abandoned.

The pool in the large backyard is filled with yellow leaves because she couldn't afford to fix the liner.

But the bungalow was lovingly decorated with quirky antiques, a dramatic dark accent wall and an updated kitchen flooded with light from a large skylight.

One of her two birds, Rainbow, flies from room to room while her five dogs run around.

“It has a lot of history, a lot of memories,” she said.

Morrish is “embarrassed” to share her story, but knows she's not the only one in this situation.

“Our homes mean something to us,” she said.

As of January, she owed about $792,000 on the house, including interest and miscellaneous fees, and now owes even more, according to court documents.

Morrish is unsure what will happen next and faces a trial on the matter next month.

Under the right of sale, the borrower remains the owner of the property and can receive any profit after the debt is repaid.

In the best of times, a forced sale might give someone like Morrish some money to get back on his feet. But in the modern real estate market there is often no money left.

While Morrish's case is complicated by a number of personal factors, Realosophy Realty's Pasalis said the surge in forced sales is partly due to people facing much higher interest rates when renewing their mortgages, as many had very low rates five years ago during the pandemic.

He also suspects that many owners in this situation are “overextended” investors.

He calculated the percentage of new MLS listings in the GTA that sold from January to September this year, which he shared with the Star.

He found that sales surged across the city, accounting for almost one percent of new listings in Toronto.

It has no data on what they were in the past, the MLS database is only available to Realtors and requires searching for the term “selling strength” in listings.

But a few years ago this would have been “negligible” and “extremely rare,” he said.

The entire range of real estate objects is affected: from apartments (0.67 percent) to private houses (1 percent).

It is particularly high in suburbs such as Brock (2.87 percent), Stouffville (1.52 percent), Milton (0.94 percent), Oshawa (1.42 percent) and Brampton (1.38 percent).

“All of these areas have generally seen a massive boom during COVID,” Pasalis said, noting that all of these areas have seen significant drops in average home prices since 2022, up to 30 per cent in Brampton, according to the Toronto Regional Real Estate Board.

“Brampton is probably a little more vulnerable because they had a lot of investors buying houses to use as student housing and the situation really fell apart,” he added, referring to the federal government. I put on my hat for foreign students in 2024.

In terms of neighborhoods, Highland Creek ranks first, followed by West Shore in Pickering (4.9 percent) and Beaverton in Brock (4.5 percent).

Pasalis warned that the low number of listing permits could push up interest rates in areas where there aren't many new listings, and some could end up being duplicates if the homes don't sell and are relisted.

But for every 1,000 sales permits, there are likely 2,000 or 3,000 households who are behind on payments and trying to sell their homes on their own, he said.

In his experience, “virtually every lender” wants to work with owners to keep them in their homes.

Canadians will do anything to avoid defaulting on their mortgages, including allowing credit card and car loans to accumulate, he added.

“People hang on as long as possible.”

More Ontarians More people are missing mortgage payments than at any time since the credit agency Equifax began tracking them in 2012, according to June data.

Some large banks are seeing an increase in mortgage delinquencies of 90 days or more. BMO mortgages where borrowers were behind on payments more than doubled in two years to 0.37 percent in the third quarter of 2025, up from 0.15 percent in the third quarter of 2023.

Scotiabank has 0.25 percent, down from 0.14 percent two years ago; and CIBC is 0.36 percent, up from 0.17 percent over the same period.

He worked with Morrish earlier this year to try to sell her home.

She said she accepted offers twice, but both sales fell through.

If a borrower misses a mortgage payment, the lender is allowed to file for sale in about two weeks, Alfonso said.

Large banks, which are heavily regulated by the government, typically wait three months and work hard with borrowers to try to keep them in their homes.

But private lenders don't have the same rules.

Like Morrish, RiverRock's Kyprianou also compared losing a home to death.

He pointed out the five stages of grief: denial, anger, bargaining, depression and acceptance.

In this metaphor, homeowners are the ones who must accept what is happening before the situation gets worse.

“They're going through the same stages, right? So you have to be very sensitive to that and get them to stage five as quickly as possible to solve the problem so they don't blow up their capital.”