Comments for CanadaMortgageNews.ca

Comment on Mortgage Penalties exposed…. an in-depth study reveals unjust penalties. by Steve Garganis

Steve Garganis — Fri, 11 May 2012 22:28:53 +0000

Hi David,

I wish more people got together and took a stand…I truly believe the current prepayment penalty calculation formulas that are used by the BIG SIX Banks, and some of the Lenders, is wrong.. I question the ethics behind making someone pay for a discount for the duration of the mortgage term…. this just isn’t right…

Current mortgage penalties are not a true reflection of the BANK’S cost or loss… CIBC has a Class Action lawsuit pending regarding penalties… I’ve had another reader tell me he is trying to find other TD Bank clients that may have been a prepayment penalty… he wants to take it further… I applaud you all.

And the part that is most frustrating is that the small lenders.. the one’s that people think are not as safe…they are NOT making borrowers pay for the discount for the entire term when calculating prepayment penalties… keep up the fight.. let me know if I can help…

Steve

Comment on Mortgage Penalties exposed…. an in-depth study reveals unjust penalties. by David Hewlett

David Hewlett — Thu, 10 May 2012 03:56:01 +0000

I am currently fighting with the RBC bank over my mortgage IRD calculation. I had 3 years left on a 5 year term. I asked the bank to allow me to renew the mortgage early to a 7 year term as I was expecting interest rate to go up just as I was hitting the renewal date.

I was offering them more business at a higher interest rate. Their response was to insist on a $12000 penalty. What other business in the world would charge you a penalty to give them more business at a higher rate.

I am trying to get the Alberta Government to go after them under the Alberta Fair Trade Act. I do not know if this will work but I want to work at getting this issue out in front of the media. If you have been a victim of this unfair practice please contact me as I am working on a putting together a list of people who have this issue and develop a strategy to take this issue on.

The only hope to resolve this is to get enough people and lot of attention on this issue.

Please email me at david . m . hewlett @me.com I have added extra spaces to stop robo spam just take them out.

Comment on CMHC, Genworth double charge…. did you pay twice and not know it? by Steve Garganis

Steve Garganis — Tue, 01 May 2012 22:04:22 +0000

Bill,

You should not have been charged full CMHC fees again.

Send me an email with your contact info I will try to help you get an adjustment.

Steve.

Comment on CMHC, Genworth double charge…. did you pay twice and not know it? by Bill

Bill — Tue, 01 May 2012 21:39:59 +0000

I ported an existing mortgage that I paid full CMHC fees on less than two years ago, I was charged 5600 by the bank for dropping my mortgage by 156000.00 which I can understand, but then was charged an additional 7300.00 by CMHC again, on a mortgage that I already paid full fees on. This is now, and I am raising as much hell as possible! If anyone can help me ,please let me know!

Comment on $4k penalty on a $109k mortgage… $8k penalty on a $213k mortgage. by Steve Garganis

Steve Garganis — Wed, 25 Apr 2012 21:50:16 +0000

Michael,

$34k for a $520k penalty! wow! You might want to join in on the Class Action lawsuit against CIBC for their prepayment penalties… check this out.. http://bit.ly/zxIrkn

Hey, give me call or send me a note… I’d like to review that penalty..

Steve

Comment on $4k penalty on a $109k mortgage… $8k penalty on a $213k mortgage. by Steve Garganis

Steve Garganis — Wed, 25 Apr 2012 21:48:02 +0000

Hi Kevin, the language of the prepayment calculation has been an issue for many years.. but the BIG SIX Banks are powerful and the media doesn’t dare challenge this.. but this is a next generation. It’s the social media era… info is getting out more easily… people are talking… and they’re catching on. We don’t need to lose our leverage when negotiating with banks… there are several other lenders out there that offer better products and great rates…

Steve

Comment on $4k penalty on a $109k mortgage… $8k penalty on a $213k mortgage. by Kevin Ross

Kevin Ross — Wed, 25 Apr 2012 15:39:31 +0000

Thanks for continuing to focus on the immoral penalties that the BIG SIX Banks are imposing on their clients. I hope that the facts surrounding this action can be made more widespread.
Q: If I look at my mortgage contract, will I see a provision which tells me how my lender will calculate a penalty should I wish to refinance my mortgage before the Term is up? If not, I guess I have to state the obvious then… Is this even legal?

Comment on $4k penalty on a $109k mortgage… $8k penalty on a $213k mortgage. by Michael

Michael — Wed, 25 Apr 2012 00:04:27 +0000

I wish my penalty was this size. I have a penalty quote in hand that is $34,000 through Firstline. Locked in at 5.55% – 4 years remaining… around 520k left on the mortgage. In fact, it’s gone down. It has been as high as 39k. And the mortgage contract doesn’t elaborate on how the penalty is calculated… just says something along the lines of “we decide on how it is calculated and can change from time to time”–in the body of the contract. it’s crazy.

Comment on OSFI’s latest proposals will affect every mortgage and line of credit.. by Laverne

Laverne — Mon, 23 Apr 2012 08:28:48 +0000

You are stupid if you think rates should stay at emergency rates forever. Canada’s in a bubble and if they don’t regulate soon, we are headed for the biggest crash in history.

Comment on CBC news reports Scotiabank slams client with $30,000 penalty! by Steve Garganis

Steve Garganis — Sun, 22 Apr 2012 18:38:24 +0000

Hi Annie, that’s a great interest rate for a 5 yr fixed term… You really can’t do anything to avoid Scotia’s penalty calculation… If rates go up over the next few years, then you probably won’t have to worry about a penalty like we saw with the borrower in this article… But if rates were to remain flat or didn’t go up too much, then you could be faced with a similar penalty….

Scotiabank, like all the other BIG SIX banks, Scotia adds the discount into your penalty… For example: If you have a $500k mortgage at 2.90% and the posted rate was 4.99%, then your discount was 2.09%… But let’s fast forward 2 yrs… and for some reason, you need to pay this mortgage out… let’s assume that rates remain the same as today…and your balance is $490k. Your penalty would be 3 months interest or Interest Rate Differential, whichever is greater.. Scotia would the then current posted 3 yr fixed rate of 3.99% less the discount your were given, 2.09%, and use this figure to calculate your penalty… 3.99% – 2.09% = 1.90%. they would then take your rate 2.90% less 1.90% = 1.00% and use this as your Interest Rate Differential…. so your penalty would be approximately $14,700..

If you think there is a chance that you may have to pay this mortgage out before the 5 yrs is up, then I would consider other options…. feel free to contact me for some other alternatives… And by the way, not all lenders calculate their penalties this way.. they are other options… drop me a line at steve@mortgagenow.ca if you want to talk.