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By the time desperate borrowers — and they are always desperate — find Allan Sadler, they have already been turned down by banks and credit unions.

Mortgage brokers like North Vancouver-based Sadler deal in the private lending market, sometimes called the shadow lending market, and specialize in arranging loans for borrowers with very poor credit history and little proof of income.

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Usually the lenders make loans to home buyers or other residential or commercial borrowers for a short period of time, such as 12 to 18 months, and at higher rates, which range from five to 15 per cent, depending on the level of risk (weighing such factors as whether it is a first, second or third mortgage and how much of the house has already been paid off).

Recently, Sadler’s clients, a 53-year-old woman and her 55-year-old husband, were facing the foreclosure of the Tsawwassen home they share with their 16-year-old son. They had bought, renovated and sold a few homes through their own small renovation company. They had also borrowed and lost “almost $2 million” when a 19-unit town home project they were developing in Langley “didn’t sell for as much as we thought it would,” said the woman, who agreed to speak to Postmedia News, but didn’t want her name published.