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David Raymond Amos @DavidRayAmosMethinks you and I should talk N'esy Pas?
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I enjoyed talking to Kristina Barybina but l would love to talk Rob McLister and Will Dunning Methinks sneaky Evan Siddall, the RateSpy guy and a loose canon should agree that knowledge is power N'esy Pas?
https://davidraymondamos3.blogspot.com/2020/06/td-bank-charges-30000-mortgage-penalty.html
https://www.cbc.ca/news/business/mortgage-penalty-pandemic-1.5588741
TD Bank charges $30,000 mortgage penalty to woman forced to sell home due to pandemic
Banks poised to profit from customers who must sell in coming months, mortgage expert says
· CBC News · Posted: Jun 01, 2020 4:00 AM ET
Kristina Barybina says she was stunned to learn she owed TD Bank an almost $30,000 mortgage penalty after being forced to sell her house during the pandemic. (Submitted by Kristina Barybina)
When the pandemic hit Ontario, Kristina Barybina's income as a real estate agent dried up and she knew the writing was on the wall — she'd have to sell her own house.
She also knew there'd be a penalty for getting out of her five-year mortgage with TD Bank early — she just wasn't expecting it to be almost $30,000.
"I thought my eyes were going to pop out," said Barybina. "It's insane."
A mortgage expert says people who have to sell their homes and have fixed-rate mortgages are being hit particularly hard right now, because of how financial institutions calculate penalties — and he's calling on the banks to have some leniency.
"When you lose your income from a financial crisis like we're facing now and you have to fork over tens of thousands more to your lender, it's heartbreaking," said mortgage planner Rob McLister, founder of RateSpy.com, a mortgage rate comparison website, and mortgage editor of rates.ca, an insurance comparison website.
"Ideally banks would show some compassion," he said.
- Have a story you want investigated? Contact our Go Public team
But by mid-March, she says, selling her house became a necessity, not a choice.
Almost overnight, the real estate agent based in East Gwillimbury — 50 kilometres north of Toronto — lost all her clients. "People are not listing," she said. "And nobody knows when the end of it is coming."
Compounding her problems, two tenants who had been renting rooms in her house moved home to be with their families. Income from a mortgage-helper Airbnb suite also dried up.
Scrambling to look after her elderly mother, who lives with her, and a 12-year-old son, the single mother says she started taking medication for anxiety.
"They're perfectly within their rights under the agreement, but we're in a pandemic," she said. "I'm not selling this house because I love to move."
After losing her income as a real estate agent, and income from two tenants and an Airbnb suite, Kristina Barybina could no longer make her $2,780 monthly mortgage payments on her East Gwillimbury home. (Submitted by Kristina Barybina)
Barybina requested a one-month deferral on her mortgage, but says she quickly realized that deferring it any longer would just be pushing debt she couldn't pay further down the road. She says she was fortunate to sell in April, just as the housing market started to plunge.
She was only 19 months into a five-year mortgage, with a fixed-rate of 3.71 per cent, and still owed $591,000. TD used a controversial calculation to arrive at the penalty for breaking the terms. She owed another $29,530.
All of Canada's big banks use similar methods for calculating what penalty people owe if they end a fixed-rate mortgage early.
They can either charge three months' interest or what's called the interest rate differential (IRD) — whichever is higher.
The IRD is a calculation involving the difference between the interest rate on the negotiated mortgage, the bank's current posted fixed interest rate and the length of time remaining on the contract. Banks argue they lose anticipated revenue from their client if they end the mortgage prematurely.
Mortgage expert Rob McLister anticipates that the number of Canadians forced to break their fixed rate mortgage and face hefty penalties will ‘spike’ in the months ahead. (Submitted by Rob McLister)
When the Bank of Canada lowers interest rates, the banks' posted fixed rates also drop, increasing the penalties for people breaking fixed-rate mortgages.
"TD is profiting by collecting this ridiculous amount of penalty, which is only based on the fact that the interest rate posted by Bank of Canada is so low — which was done to help people," said Barybina. "It's heartless."
Had the bank used the option of charging three months' interest, Barybina says she would only have owed $3,000.
Penalties exceed losses
McLister says banks incur costs and risk when borrowing money to cover a customer's mortgage so they need to recover that lost income. But he says mortgage penalties often exceed their losses."Most of the time bank mortgage penalties are bigger than they need to be," he said.
According to Mortgage Professionals Canada, 74% of all mortgages have fixed rates.
TD Bank declined an interview request. In a statement to Go Public a spokesperson said the bank takes care to make sure customers understand mortgage penalties and that Barybina was offered an additional five-month mortgage deferral.
The statement did not address why — after Barybina filed a complaint — the bank didn't negotiate reducing the $30,000 penalty, but did say the bank had "discussed options that were available to reduce the charge."
Barybina denies she was offered any helpful options.
The bank also cited options — for example, deferrals and financial advice — it is offering to customers hurt by the pandemic.
Penalty shoots up
Flora Kenari and her husband Mohammad Mehdiour say they, too, are paying an unfair mortgage penalty because of the pandemic.The couple found a house in Gloucester, east of Ottawa, and 15 months ago obtained a five-year fixed mortgage with a rate of 3.56%.
But when they returned to the bank in January to discuss moving their mortgage to a new house, they were told they'd have to break the mortgage and pay a penalty — of $8,000.
Flora Kenari and her husband Mohammad Mehdipour say they lost sleep, watching their Scotiabank mortgage penalty increase 50 per cent in just two months (Submitted by Flora Kenari)
In the weeks to follow, the Bank of Canada kept dropping the interest rate, driving up their penalty.
"Every time that we heard that the prime is going down there was more and more stress," said Kenari.
By March, the penalty had climbed to $12,000.
"The money didn't return to our pocket, it went to the bank's pocket. It reminds me of the Sheriff of Nottingham," she said, referring to the villain in the legend of Robin Hood, who mistreats people and subjects them to unaffordable taxes.
After they complained to the office of the bank's president, Scotiabank offered to reduce the penalty to the original $8,000. But the couple feels that fee shouldn't exist at all, as they say they were told the mortgage could be transferred to another property.
Scotiabank did not address the allegation that they were misled about transferring the mortgage.
Longtime controversy
Penalties for ending a fixed mortgage have long been unpopular. A decade ago, growing calls to cap mortgage penalties and make them easier to understand prompted the federal government to require more transparency about mortgage penalty regulation.A 2010 study by the Quebec Federation of Real Estate Boards found that the IRD penalty for breaking a fixed-rate mortgage was often 200 per cent higher than the actual loss incurred by the bank. The author of the study says since the report, there've been no significant changes.
McLister predicts the coming months will see a spike in the number of people "blindsided" by penalties as they're forced to sell their homes.
"We're already seeing a big jump in refinance requests as people try to restructure their debt ahead of potential income loss," he said.
It's hard to know how many Canadians will face hefty mortgage penalties due to the COVID-19 crisis, but Canada Mortgage and Housing Corporation (CMHC) CEO Evan Siddall expressed concern before the federal finance committee two weeks ago.
Siddall said thousands of Canadians who have deferred their mortgage payments during the pandemic will face a "debt referral cliff" once the payments come due this fall.
The CMHC estimates that as many as one-fifth of all mortgages will be in arrears at that time — and a large percentage of those homeowners will be faced with stiff mortgage penalties.
'Government must act'
Such extreme penalties generally don't exist in the U.S., which frustrates homeowners like Barybina."The government must act," she said. "It cannot force banks [to end mortgage penalties] unless it has a legislative framework. So go ahead and pass a law."
Go Public requested an interview with Finance Minister Bill Morneau, which was declined.
In a statement, a spokesperson said banks are required to be transparent about mortgage penalties and that Canadians facing financial difficulties should contact their lender "to learn what options are available."
Prime Minister Justin Trudeau has called on the banks to "do more" to help customers during the pandemic, but when Go Public asked whether that included easing hefty mortgage penalties, he did not offer specifics.
"There's always more to do and we're going to make sure our financial partners are part of the solution to making sure Canadians get through this," Trudeau said Friday.
But without more specific direction from Ottawa, the banks seem mainly to be offering only deferrals and financial advice.
McLister says calls to scrap mortgage penalties could have unintended consequences.
"There is no free lunch," he said. "You could have the government mandate a $1 penalty for all the banks and all that would do is encourage banks to increase interest rates, increase fees and make back that profit another way."
He says dozens of lenders, including many credit unions, don't require "horrendous penalty calculations" — so people should shop around, bearing in mind that the big banks can often offer lower interest rates on a mortgage.
Barybina says she's resigned to paying the $30,000 penalty, but wants to call out her bank's behaviour during a time when she says everyone is being asked to support and accommodate one another.
"That's why I think it's unconscionable and unethical to proceed this way."
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About the Author
With files from Enza Uda
2823 Comments
Commenting is now closed for this story.
David Williams
It is a sad situation, but why would these people not take the "defer" option until they were able to get back on their feet?
Mark Stine
Reply to @David
Williams: The economy being effected will last more than 5 months.....
these fee's are unreasonable. Even if the first person pays 3000 and
the second 1000 that is pure profit for the bank. Administration to
finalize their paperwork with the bank doesn't cost 500 or more an
hour... they pay someone $20-$35.00 an hour. And their is a pandemic...
the banks should take hugely reduced fee's and let people sell,
otherwise bankruptcy costs us all a lot more.
tony
thomas
Reply to @Mark Stine:
I live within my means, her going bankrupt has zero effect on me, Or
you for that matter unless you are a co-signer on her debts.
Mason Hood
Reply to @tony
thomas: an avalance of bankruptcies would affect you. Bank would take
hits everywhere, tighten lending, and that crunch will affect payroll
payments. You might think it doesn't affect you, but it will. Whatever
happens to the least, no matter how distant, has a great possibility of
affecting you, if the injustice is widespread, and it is.
Mike McDonald
Reply to @tony thomas: Whats your point
David Amos
Reply to @Mason Hood:
I Concur Methinks much to Morneau's chagrin I will call Kristina
Barybina and introduce myself because everything political is always
about the money N'esy Pas?
David Amos
Reply
to @David Amos: Well i called the lady and left a message but the dude i
would like to have an long talk with is Rob McLister Methinks the
RateSpy guy should understand that knowledge is power N'esy Pas?
https://www.homelifeeagle.com/node/697583
Kristina Barybina
Sales Representative
416-834-5011 905-773-7771May 27th, 2020
Comment from TD
We take care to help our customers understand the terms and conditions of their mortgage
agreement, which include specific details about the term, the interest rate, prepayment options
and applicable prepayment charges for lump sum payments or early payouts.
When a customer is experiencing financial challenges or an unexpected change in
circumstance, we encourage them to contact us to discuss their options before they discharge
their mortgage. In some cases it is possible to port a mortgage or to make a pre-payment to
help lower prepayment charges. In light of the challenges Canadians are experiencing from
COVID-19, we're providing additional relief options, including up to a six-month payment
deferral for mortgages. And, for customers directly impacted by COVID-19 who are experiencing
financial hardship, our TD Helps advisors are providing assistance through personalized advice
and solutions. Additional information regarding our TD Helps Financial Relief Programs is
available at TD.com/covid19 and our TD Ready Advice Hub.
CBC Questions:
1. Ms. Barybina says TD Bank is legally allowed to charge her almost $30,000 in a
mortgage penalty but says it is not ethical, given that she is forced to sell her home to prevent
further mounting debt. A mortgage expert says most IRD penalties are profit-makers for the
bank and could be reduced. Why did TD not provide a financial break on the penalty? The
customer was granted a 1 month mortgage deferral upon request and was approved for an
additional 5 months deferral. Unfortunately, the customer did not approach the bank again until
after she sold her home and discharged the mortgage.
2. What are the drawbacks/long-term effects of reducing a mortgage penalty from the
bank’s perspective, and under what terms would TD consider a mortgage penalty reduction?
We work with mortgage customers on a case by case basis to discuss their options, including
how they might be able to reduce charges if they decide to make an early payout.
3. A mortgage expert says the interest rates plunging has caused posted fixed interest
rates to also decrease. This is adversely affecting Ms. Barybina and others with fixed mortgage
contracts who must sell their homes. What do you say to her contention that TD is ‘heartless’ for
not reducing the penalty? We empathize with the challenges of her situation. While the
customer unfortunately waited until after she sold her home and discharged her mortgage to
notify us that she was exiting the agreement early, we discussed options that were available to
reduce the charge.
4. Another bank featured in our story has offered to reduce a customer’s mortgage penalty is a reduction something TD might consider for Ms. Barybina? When the customer raised her
concerns, her case was given additional careful review. If she is unhappy with the outcome of
this review, she has the right to take her matter to the TD Ombudsman .
No customer situation is the same. Cases are assessed on a case-by-case basis. In this
instance, the customer with strong knowledge of mortgage agreements as a former legal
professional and a real estate agent, put her house on the market to sell it in November 2019,
months before COVID-19 surfaced.
Alicia Johnston
Corporate and Public Affairs, TD
Ratespy.com – The Kanetix Ltd. Family
Ratespy.com is part of the Kanetix Ltd. family, the
largest online insurance and financial comparison company in Canada.
Also within the Kanetix Ltd. family are:
- KTX Insurance Brokers Ltd.
- KTX Insurance Brokers Inc.
- KTX Financial Ltd.
- intelliMortgage Inc.
Our offices are located at 360 Adelaide St.
W., Toronto, Ontario M5V 1R7, but you can call us too at 1 (888)
854-2503 or reach us by email at support@kanetix.ca.
Contact the Spy
Give us a call at: 1-855-569-0762 (see below)Please note, this number is for corporate and media inquiries only. RateSpy is a rate news publisher and not a broker or lender. It does not provide mortgage advice, recommendations or referrals to individual consumers by telephone, or by any other means.
News Masthead
- Editor/founder: Robert McLister
- Managing Editor: Steve Huebl
- Copy Editor: Gina Fusco
- Data Validation: John Novielli
- Contributors: Various
- Publisher: McLister Media Inc.
Somebody Called on Behalf of McLister
514-261-7228 is a Cell Number phone number operated by Rogers Communications Partnership (Wireless) and is located in the city of Montreal in QC.https://intellimortgage.com/learningcenter/the-mortgage-process/mortgage-lender-customer-service-phone-numbers/
| TD Canada Trust | (800) 722-3098 |
| TeachersPlus Credit Union | (800) 598-2891 |
| Test | (514) 261-7228 |
https://www.wdunning.com/about
About Will Dunning Inc.
Will
Dunning has been developing his economic research and market analysis
skills since 1982, and is now one of the most respected housing analysts
in Canada.
Since 2000, Will Dunning Inc. has provided housing market analysis
services to a wide variety of clients in the private, public, and
not-for-profit sectors.
From 1982 to 1997, he worked in various market analysis capacities at
the federal housing agency, Canada Mortgage and Housing Corporation.
From 1991 to 1997, he was the manager of CMHC's survey and market
analysis functions in the Greater Toronto Area. From 1997 to 2000, Will
was second-in-command at a Toronto-based real estate consulting company.
Since 2005 Will has also acted as Chief Economist for Mortgage
Professionals Canada.
Will has a Master of Arts degree in Economics from the University of
British Columbia (1981) and A Bachelor of Arts degree (Economics) from
McGill University (1979).
https://www.cmhc-schl.gc.ca/en/about-cmhc/speakers-bureau/evan-siddall-speaker-profile
Canada Mortgage and Housing Corporation
700 Montreal Road
Ottawa, Ontario
K1A 0P7
Reception/Main number: 613-748-2000
Atlantic Business Centre
Barrington Tower
1894 Barrington Street
9th Floor
Halifax, Nova Scotia
B3J 2A8
Toll free: 1-800-668-2642
700 Montreal Road
Ottawa, Ontario
K1A 0P7
Reception/Main number: 613-748-2000
Atlantic Business Centre
Barrington Tower
1894 Barrington Street
9th Floor
Halifax, Nova Scotia
B3J 2A8
Toll free: 1-800-668-2642
Evan Siddall
President & CEO
Canada Mortgage and Housing Corporation
Evan is President and CEO of Canada Mortgage and Housing Corporation (CMHC), a role he has held since 2014. Evan leads a team of housing experts who share a single goal: that “By 2030, everyone in Canada will have a home that they can afford and that meets their needs.” As CEO, Evan is especially passionate about growing leaders, and the merits of both a diverse workforce and the mental health of his colleagues.
Expertise
National Housing Strategy, Housing and the Economy, Financial Stability, Housing Markets and Indicators, Organizational Transformation, Housing Affordability
Canada Mortgage and Housing Corporation
700 Montreal Rd.
Ottawa, Ontario K1A 0P7
Phone: 613-748-2000
Fax: 613-748-2098
Email: chic@cmhc-schl.gc.ca
Evan Siddall
President and CEOCanada Mortgage and Housing Corporation
Evan is President and CEO of Canada Mortgage and Housing Corporation (CMHC), a role he has held since 2014. Evan leads a team of housing experts who share a single goal: that “By 2030, everyone in Canada will have a home that they can afford and that meets their needs.” As CEO, Evan is especially passionate about growing leaders, and the merits of both a diverse workforce and the mental health of his colleagues.
Expertise
National Housing Strategy, Housing and the Economy, Financial Stability, Housing Markets and Indicators, Organizational Transformation, Housing Affordability
EDUCATION
- Osgoode Hall Law School, York University (LL.B., 1990)
- University of Guelph (B.A., Management Economics, CSS 1987)
- Young Presidents Organization Presidents’ University, Harvard Business School (2011–2018)
Follow Evan on his social media feeds:
https://twitter.com/ewsiddall
https://www.linkedin.com/in/evan-siddall-b98a7416/
Request Evan or another CMHC representative as a speaker at your event: speakers@cmhc.ca
https://twitter.com/ewsiddall https://www.linkedin.com/in/evan-siddall-b98a7416/Request Evan or another CMHC representative as a speaker at your event: speakers@cmhc.ca
"I have often said that this is the best job
I’ve ever had – the most exciting, most challenging and most fulfilling.
I am both thrilled and honoured to continue working with CMHC’s
dedicated and talented staff across the country as we strive to make a
difference in the lives of Canadians."
Evan Siddall
works as President and Chief Executive Officer
for Canada Mortgage and Housing Corporation.
Evan can be reached at 613-748-2904
Evan can be reached at 613-748-2904
Evan Siddall's team
| Anik Génier | Chief of Staff | 613-748-2932 | 700 Montreal Rd. | Ottawa | Ontario |
| Annick Pépin | Executive Office Manager | 613-748-5538 | 700 Montreal Rd. | Ottawa | Ontario |
| D Portt (2019) | Administrative Assistant | 613-748-2843 | 700 Montreal Rd. | Ottawa | Ontario |
| Daniel Lortie | Driver | 613-748-2520 | 700 Montreal Rd. | Ottawa | Ontario |
| Jonathan Lefebvre | Deputy Chief of Staff | 613-748-2714 | 700 Montreal Rd. | Ottawa | Ontario |
| Melissa Portt | Administrative Assistant | 613-748-2843 | 700 Montreal Rd. | Ottawa | Ontario |
CMHC head Evan Siddall announces departure, says he won't seek term renewal
In a letter seen by the Financial Post, Siddall did not set a firm leaving date, but his term expires at the end of this year
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