ComplaintsforCanadian Mortgages Inc (CMI)

• Initial Complaint

  31/10/2022

  Complaint Type:

  Billing Issues

  Status:

  Answered

  More info

  Oct 27, 2022 CMI charged fees upon fees or threat to do a power of sale on my property. I paid all fees and interest owed but they charged an additional fee for 3 months AND another $8000 fee for a mortgage extension that never happened. We paid the fee in disagreement to save our home from being taken away. We never signed this agreement to renew as we were trying to get another loan elsewhere, which they were fully aware. Regardless they made it extremely difficult to pay off the loan as they kept adding fees upon fees almost as if their intention was not only to get what was owed to them, but also any other fees they could extract from clients who have literally nothing left to give. Outside of the original loan and interest charges we were charged an additional $17.000 in fees that were not just. **** ****** ** *******! If you do business with this company be prepared to lose your home.

  

  Business response

  21/11/2022

  This mortgage was funded on August 26, 2021. It had a term of 12 months with prepaid interest-only payments and a maturity date of September 1, 2022.
  The borrowers signed the Mortgage Commitment on August 10, 2021. All fees were outlined in this commitment. This included fees, penalties and accrued interest charged in the event of any payment default, including default in repayment of the mortgage principal.

  On September 1, 2022, the mortgage matured. We did not receive payment from the borrower. As a result of the default, under the terms of the Mortgage Commitment,      interest at the mortgage contract rate began to accrue and was payable on all amounts in arrears. In addition, the default in repayment of the mortgage principal triggered a repayment fee.      
  On September 28, 2022, we offered the borrower a 50% reduction on the repayment penalty, provided the mortgage principal was repaid on or before October 4, 2022. We did not receive payment by this date. As a result, on October 4, 2022, the file was transferred to our default recovery division. 

  On October 18, 2022, we received an updated payout request from the borrower. We issued a statement of account for enforcement purposes, effective October 21, 2022, which included only those fees that were clearly outlined in Schedule ‘A’ of the original Mortgage Commitment signed by the client on August 26, 2021. To confirm, there was no mortgage extension fee charged. Instead, the additional fees and accrued interest levied to the borrower were a result of the borrower defaulting on repayment of the mortgage principal at maturity, and the subsequent late payout of the mortgage on October 21, 2022 – 51 days past the original maturity date. The legal fees resulted from the need to take enforcement action on the property, as the mortgage was more than one month past maturity without a payment or communication from the borrower.

  In keeping with our commitment to complete fee transparency, all borrowers are advised upfront of all fees, as well as all terms and conditions of the contract, at the time they sign the Mortgage Commitment with their mortgage broker. All fees and interest charged to these particular borrowers – including all fees and accrued interest associated with the payment default, as detailed above - were levied in accordance with the terms of the Mortgage Commitment signed with their mortgage broker on August 10, 2021.

  Customer response

  21/11/2022

  
  Complaint: ********
  
  I am rejecting this response because:

  I know we were ALWAYS/CONSTANTLY in communication with them, and making us pay for 3 months mortgage fees to December AND an additional - another $8K  on a document we never agreed to is wrong.  The repayment penalty can often be construed as contrary to section 8 of the interest act, which is what happened here. 

  We paid all the extra fees as they stated in their response; interest fees, late fess, lawyer fees, however this was ON TOP OF, based on an offer if we were going to sign the document (which we never did) to hold the mortgage for an ADDITIONAL 3 MONTHS to Dec)

  In short - We paid all the late fees upon not signing for the 3 month extension.  But they ALSO charged us the penalty for the 3 month extension as if we signed it.  That is 3 months of mortgage payments PLUS $8k. 

  
  Sincerely,
  
  ****** *****

  

  Business response

  01/12/2022

  As per CMI's documentation and contract with the borrower, the facts pertaining to the file are as follows: 

  - The borrower failed to repay the mortgage at the time of maturity (September 1, 2022). CMI provided a generous grace period and offered a 50% penalty reduction if it was repaid on or before October 4, 2022. CMI did not receive payment until October 21, 2022.
  - The additional fees and accrued interest levied to the borrower were strictly a result of the borrower defaulting on repayment at maturity, and the subsequent late payout of the mortgage on October 21 (51 days past the original maturity date). These fees were individually itemized in a clear and transparent manner in the account statement issued to the borrower on October 21 (*** ** ******** ** *** ** ******************). 
  - There were absolutely no fees or penalties associated with the cancelled renewal, and none were charged. 
  - All fees and interest charged to the borrower – including all fees, penalties and accrued interest associated with the payment default - were levied in accordance with the terms of the Mortgage Commitment signed with their mortgage broker on August 10, 2021 (*** ** ******** ** *** ** ******************). 
  - By signing the Mortgage Commitment, the borrower agreed to and accepted all mortgage terms, including rates and fees, as well penalties and accrued interest charged in the event of default.

  Customer response

  01/12/2022

  
  Complaint: ********
  
  I am rejecting this response because:

  The three month repayment fee amounts to a penalty.  Section 8 of the interest act prohibits a mortgagee from levying a penalty or fine against any arrears in principal or any interest payable on principal money not in arrears.  The three months repayment amounts to a penalty because it is a form of “punishment” for not paying on maturity.  ** ** ******** ********** ** *********** *** ** ** ** ********* ** *l. This fee was triggered by default ie not paying on due date.

  The only reason for the repayment fee is to impose an additional fine which increases the burden on the borrower beyond the rate of interest that was agreed upon in the mortgage.  This penalty offends section 8 despite being clearly set out in the mortgage documents and is ********

  
  Sincerely,
  
  ****** *****

  

  Business response

  02/12/2022

  All fees charged were in accordance with the mortgage commitment that the borrower signed with their broker and their legal counsel. Both would have reviewed the mortgage commitment with the borrower in detail at the time of signing, including all terms, conditions and fees. If the borrower feels the legal advice they received at the time of signing was not adequate, they reserve the right to address that through the proper channels.

  Customer response

  21/12/2022

  
  Complaint: ********
  
  I am rejecting this response because:

  As usual it seems like he big companies with the big pockets are no match for the consumers.  Even with the BBB the organizations get away with keeping their reputation intact despite the proof that was provided in this case.  Still the big organizations watch out for each other.  How can we say that this is resolved?  I do not agree with the final verdict that the business has responded to complaint, this does not let consumers know to beware of shady contracts/agreements with this organization.  Is there another  option rather than making it appear that this is an open/shut case?

  
  
  Sincerely,
  
  ****** *****

*Some consumers may elect to not publish the details of their complaints, some complaints may not meet BBB's standards for publication, or BBB may display a portion of complaints when a high volume is received for a particular business. ↩