For now I’m going to spare my ‘financial institution’ the bad press they deserve. I’m going to remove their name from this and I’m going to give them about six months to one year to see how they treat me as a prime borrower. If they goof up any major (or minor) thing I’m going to come back to this post and put in their brand and shout it out to my home boys online all over Van City.
First of all, I had a kind of expectation that a non-major financial institution would be less likely to do scammy moves but I’m not sure why I thought that. Is a smaller mechanic shop less likely to scam you than a major car dealership? Maybe… that’s kind of what I was thinking.
My Notary or the Highway, Boy.
Before purchasing our second home with the same financial institution I had built a relationship with a great Notary Public named Jacqueline Kinsey (look her up if you need one). She was both a personable and lovely person but also was going to give me a small benefit in pricing because of the previous business I had given her. Oh, and she’s professional and efficient, too. Everything was set up and ready to go. The dates of subject removal (‘Subject to Financing’) were upon us and we sat down to finalize the transaction. At that point they asked me who my notary or lawyer was. I told them it would be Jacqueline Kinsey. They paused and said “We don’t see her on our approved list of notaries”. I said ‘You don’t need to see her on your approved list. She’s a notary in BC. She’s legit, certified, and I’ve used her in the past successfully. I know and trust her.” They said “Well… actually…. she has to be on our list to proceed.” I was in disbelief but I had no time left to dispute it. I contacted Jacqueline who confirmed that they were within their rights to force this on me. She also informed me that it would be very expensive to be on everyone’s ‘list’. So apparently, each financial institution has their own ‘approved vendors’ list just like a nasty Franchise model where Franchisees are forced to order from expensive and sub-par vendors just because the Franchisor makes more money!
I should also note that the very first thing the lawyer did was disclose the fact that he is acting on behalf of both sides which is, as he said, oftentimes not in the best interest of one side. But, as he said, “We do this all the time with mortgages and if you needed to sue later, you just couldn’t use us.”
Scammy! Unacceptable! Restrictive! Wrong!
Oh, Right! Here are the Disclosure Documents…
On April 23rd, a fax was sent from my mortgage lady at my financial institution to their ‘approved lawyer’. It was a “Disclosure Statement – Fixed Credit Limited Prepayment”. But this document was not sent to me. Let me review that for you. A disclosure statement designed to protect me, the borrower, was sent to the lawyer on April 23rd, but not to me… This document outlines the details of the mortgage, what kind of interest set up you have, and that kind of stuff. I actually read this stuff because I learned a hard life lesson that the devil is in the details in law. Within this document, while sitting in the lawyer’s office, I learned that I didn’t have a ‘skip-a-payment’ option (I thought I had). In section #4 ‘Security’, it says that this debt is secured against real property (the house). It also says ‘Waiver of Time Period, Form CCS Loan 151, must be attached’. The waiver that was sent to the lawyer’s was also dated April 23rd. The waiver says, in short, “For my protection, I have the right to see this disclosure statement 2 business days before entering into the loan but I am giving up those rights by signing this waiver.”
Did my financial institution not have a scanner on premises to send me – their customer – these disclosure documents on April 23rd when they sent them to the lawyers? If they did, they wouldn’t have needed the waiver and I would have actually had time to read the disclosure statement properly (2 full business days).
But what ended up happening was the lawyer explained to me that I was out of time, and the only way to get the financing done is to sign the waiver. It went something like this: “Time’s up, Bucko. If you’d still like the financing that will make sure you are not going to lose your $28,000 deposit to the sellers, you might want to sign the waiver.”
Granted that the contents of the disclosure statement were not super surprising, but that’s not the point. The point was that I was put into a high pressure environment and handed a pen by a lawyer (the Bank’s lawyer) to sign a waiver. The amount of pain that I stood to face if I didn’t sign was great.
Scammy! Unacceptable! Abusive!
I’m Your #1 4Eva, Baby!
The lawyer also drew my attention to what he said is ‘becoming standard practice with mortgages’. On the Form B for the Land Title people, the financial institution entered *more than double* the amount of the actual loan amount under ‘Principal amount’. So, essentially, they are giving me, say, a $400k loan, but they are registering on the title a debt of 1 million dollars! Anyone who has been involved in lending knows that this is important should the borrower default. When collection needs to happen, the courts will give them rights to collect based on their position on the title. When my financial institution registered nearly three times the amount of debt on title, they essentially forced themselves as ‘first position’ forever. Why does this matter? Let’s say you were with RBC and they did this. You decide one day that you want to get a Home Equity Line of Credit (HELOC) with TD because they have some kind of promo. TD would immediately look at the real estate title to see what other debts are owed and they would see *one million dollars* owed to RBC. Would you give a HELOC to someone like this who makes less than six figures per year? No.
So, by means of slipping me a pre-populated Form B document and without *ANY* discussion with me beforehand about this practice, my financial institution made me their financial go-to centre for no less than the next five years.
Scammy! Unacceptable. Wrong. Total Crap.
And one more thing.
Shame on you.
Oh, and one more thing: I have my finger on the edit button and I’m itching to expose your brand and share this story. The people will be quite surprised to learn about who this is.