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TagING collateral mortgage

Collateral Mortgages… a different 50 shades of grey!

handcuffs In 2010, TD announced they would begin registering ALL new mortgages as a collateral charge.  The sale pitch was that it was good for the consumer.  It would allow TD clients to borrow more, in the future, without having to incur new legal fees.  Yes, that part is true.

But they’ve left out a lot stuff, too!   For years, Mortgage Brokers and other unbiased financial professionals, cautioned the public about collateral mortgages.    And in 2013, CBC Marketplace did an expose on TD and their retail branch’s lack of knowledge and disclosure.   Is this where you want to go for your mortgage?TD

By the way, TD wasn’t the only Bank to go with collateral charge only.   ING made the same move in Dec 2011.  And they used a similar sales pitch.   But my readers have been hip to this and aren’t getting fooled.

The federal govt was pressured into taking action to protect consumers.  In Sept 2014, the federal govt announced ‘more disclosure.  But have the Banks really given us more disclosure?   Continue reading “Collateral Mortgages… a different 50 shades of grey!”

Federal govt finally takes action on Collateral mortgages.

handcuffsTD Almost 4 years ago, I reported that TD was about to make one of the biggest changes in mortgage history.   They were about to register all their mortgages as a collateral charge.    Consumer advocates spoke out against the collateral charge as they recognized it would limit a borrower’s future options.

A collateral charge is always used for secured lines of credit products.   The charge does not require an amortization which allows the credit balance to go up and down.   Using a collateral charge for ALL mortgage products gives the Banks more power.   It allows them to attach other unsecured debt to your mortgage…  Unsecured credit products such as loans, credit cards, unsecured lines of credit or other unsecured Bank debt.  I bet most people don’t know that?    Continue reading “Federal govt finally takes action on Collateral mortgages.”

Scotiabank closes ING Direct mortgage broker division… but who cares?

Scotia and ING In an email sent to Mortgage Brokers today, ING announced they will close the Mortgage Broker division February 16, 2013.   My first reaction was one of sadness.  In the mid 2000’s, ING was a strong Lender and partner with Mortgage Brokers.   They offered some great products, competitive pricing, a fair prepayment penalty calculation and had an excellent team of employees, including their senior management.

Yes, I was sad to hear they would close the Broker division… But then I asked myself how much would this affect me?  my clients? How much business was I referring to ING these days?  The answer soon made me realize that there isn’t any reason for sadness.    I soon realized that since they made the switch to registering all their mortgages as a collateral mortgage charge, back in December 2011, I all but completely stopped recommending them to my clients. Continue reading “Scotiabank closes ING Direct mortgage broker division… but who cares?”

Scotiabank to buy ING….how will this affect you?

Earlier this month, ING Groep, the Dutch financial services giant, announced they were looking to sell their Canadian and UK operations in order to raise cash.   ING received a $10billion euro bailout from the Dutch govt during the 2008 Financial crisis and they want to start paying it back.

It didn’t take long to find a buyer for the Canadian operations.  Scotiabank will buy the Canadian division of ING for around $3billion.   The press release hinted at some good news for the Canadian public.  Scotiabank will continue to run ING as a separate entity.  For mortgage clients, this is mainly good news…. but we do have some concerns… Continue reading “Scotiabank to buy ING….how will this affect you?”

ING collateral mortgage began December 10, 2011..but no media coverage?

ING made it official and announced that all new mortgage applications submitted on or after December 10 2011, will be registered as a Collateral Charge.   Here’s a copy of the circular that was released….click here.

They join TD Canada Trust as just the second major lender to take this step and put the hand-cuffs on unsuspecting borrowers.   What’s different about ING’s move is that at renewal time, unlike TD, they will re-register a new collateral mortgage charge, at ING’s expense.    Strangely, I haven’t seen any major media coverage on this subject.  hmm, does this have anything to do with ING being the largest bank in the world??

SAY GOOD-BYE TO THE ‘UNMORTGAGE’ HELLO ‘MORTGAGE FOR LIFE’

But why should you care?  And what does it matter?  Well, this is about a few things.  CHOICE… they aren’t giving you one.  A collateral charge is normally used for loans and lines of credit.   There is no amortization.  And while that might be good for some, it’s not always good for all.  ING says you can refinance without having to incur new legal fees… yes, that’s true..however, you still have to be re-approved for any increase and negotiate your rate.   And the truth is, ING, just like all banks, doesn’t always have the lowest mortgage rates….don’t get fooled by their slick marketing ads…

FUTURE OPTIONS. It’s also about your future options… when it comes time to renew, and you want to switch your mortgage to another lender, you can’t… Collateral mortgages are NOT transferable.. you will have to deal with new legal fees… and ING knows this… so do you think they have to offer you the best rate at renewal time?

And speaking of the future, let’s look at a real possible scenario…suppose you need some money in a few years..   You have a great mortgage rate with ING.. it’s 3.64%… or it’s Variable Prime less 0.75%….  and now you don’t qualify for a mortgage increase.   With a conventional mortgage, you could always seek out a 2nd mortgage, but now you can’t… No 2nd mortgage lender will register behind a collateral charge.  You’re stuck with having to refinance the entire mortgage.   You lose, The Bank wins.

For me, ING and TD Canada Trust are not the first choice for mortgage lenders…

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