Case Studies


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Unexpectedly Large Mortgage Prepayment Penalty

Posted on Friday, November 12, 2010 12:45 PM

Mr. W had a mortgage with his bank, and wanted to know what penalty he would be charged if he paid out his mortgage early. Mr. W was told that the penalty would be $2,300. He was also made aware that this amount could be significantly higher if five years or less were remaining on his term. At the time of this call, this second clause did not apply.

In the end, Mr. W decided to transfer his mortgage to another bank. Shortly after he did this, he received a payout statement that showed his actual prepayment...

Elderly Widow Misled into Co-Signing Mortgage and Loan

Posted on Thursday, November 12, 2009 01:00 PM

In February, 2005, an 80-year-old widowed client decided to sell her house to her daughter-in-law for $100,000, though she would continue to live in the house. As the daughter-in-law was not able to qualify for the $95,000 mortgage on her own, she asked the client to co-sign the mortgage, as well as act as a guarantor on a loan, which the client did. A few months later, the daughter-in-law informed the elderly client that she no longer wished to provide her with accommodation and asked her to move...

A "friend" took advantage of an elderly woman

Posted on Thursday, November 12, 2009 12:45 PM

An 82-year-old woman received a letter from her friend in which the friend admitted she took $1,940 from the client's bank account before leaving the country. The client immediately informed both the police and her bank.

After going through her finances with the help of her niece, the client discovered that the first fraudulent activity involved an $8,000 cheque written on her account with a credit card cheque three years prior. Her credit card statement showed the transaction, but the elderly client...

Funds Withdrawn by Divorced Individual's Partner

Posted on Thursday, November 12, 2009 12:45 PM

Due to his impending divorce, a client went to a local bank branch to remove the credit room available on a joint personal line of credit by reducing the limit to an amount just above the outstanding balance. The client was advised that it may take up to five business days for the paperwork to go through but that the changes had been made.

One week later the branch called the client and stated that over $4,000 had been withdrawn from the personal line of credit by a co-signer one day after the client's...

Misunderstanding Mortgage Prepayment Terms

Posted on Thursday, November 12, 2009 12:45 PM

One year after signing for a five-year term mortgage, the client decided to list her property for sale. At the time of closing, she discovered that a substantial penalty was charged by the bank in order to pay out her mortgage. The client had been under the impression that the mortgage prepayment penalty would equal three months' interest. She was prepared to pay that amount but was surprised to find out later that the actual penalty would be based on an Interest Rate Differential, resulting in a...

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