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Who’s Responsible for Disclosing Mortgage Fees and Charges?

4 February 2013

CBC’s Marketplace is a good resource for consumers who want to make sure they’re getting a good deal, and that the bargain they heard about isn’t too good to be true. This applies to everything from vacuums to complete home gyms. Last week, Marketplace turned to the biggest purchase a consumer will typically make in their life – a mortgage. And they looked behind the scenes of one particular TD mortgage to shed the light on whether or not customers are getting a good deal. Or to see if they’re even being told the full truth upon signing.

Just as with most other Marketplace reports, an undercover reporter went into TD to inquire about obtaining a mortgage. The reporter, knowing full well that TD offers collateral mortgages only, gave the representative at the bank plenty of opportunities to disclose all the fees and conditions pertaining to the loan. Never once did transfer fees, or even the word “collateral” come up, until the issue was really pressed. Then at that time the bank rep did admit that only collateral mortgages were offered at the bank, as well as saying,

“This could be considered a con for clients who want flexibility to have the choice of transferring out to another lender.”

Whether or not you think collateral mortgages are a good idea (and it is a debate that rages on today,) it can’t be denied that in this case, one of the Big 6 in Canada did a disservice to their customer by not providing full disclosure.

TD you would think, would be appalled at the poor light their business was being cast in. But if they were, it was unknown to anyone but themselves. It wasn’t until brokers from CMT phoned TD personally to inquire about the CBC Marketplace report, and to ask if they did in fact have a defense for it. Interestingly, they didn’t really.

Farhaneh Haque, TD Canada Trust’s Director of Mortgage Advice, made the statement that, “The CBC Marketplace piece omitted to include the benefits of a collateral charge. A collateral charge provides future flexibility by letting customers refinance without having to incur additional fees.”

However she omitted to include the fact that that’s if you refinance with the same lender, and if that lender approves you for the refinance at the time. Ms. Haque does also put the onus on CBC when really, shouldn’t it be on the bank to include both the benefits and the negatives of this type of mortgage from the very beginning?

The report did in fact give the bank every opportunity to do so; it was just not taken.

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