Broker: don’t blame the lawyers!

by |
One broker has carried out analysis of closing documents and come up with tangible reasons for why some monoline files saddle clients with extra fees.

A recent article drew attention to the fact that some lawyers are charging $100 more for monoline files, and there is good reason for that, according to one broker.

“We went through an exercise with our agents and went through the clauses that are sent to lawyers; we highlighted four or five clauses in the instructions that get sent to lawyers that they (shouldn’t have to deal with),” Daryl French of Lending Max told “The clauses contained all sorts of things that could cause a deal to fall apart.”

French says he brought these issues up with one of the channel’s leading lenders, raising the issue with his BDM as well as an executive at the company.

But the lender told him those clauses were for things that brokers don’t want to deal with.
“That was their pushback,” he said.

Those clauses were for things such as water damage and verifying the title of the property; things that French says brokers can and should be dealing with.

“Anything that could collapse a deal should be dealt with prior to subject removal and not when lawyers are sent documents a couple weeks before closing,” French says, who argues these extra document duties are the reason lawyers charge more for monoline deals because they require more work for the attorneys at closing.

French’s comments follow a investigation that identified at least one recent case where the client of a Toronto broker was charged an extra $100 “monoline surcharge” by their lawyer.

The added expense was tabbed onto to a bill for closing costs and specifically meant to compensate the lawyer for a protracted and confused closing process.
  • Victor Simone on 2015-08-28 9:11:59 AM

    Perhaps, mortgage agents/brokers may consider having a short list of lawyers at hand when we ask our clients the name of the lawyer closing their deals ? Surely, our channel could deal with, or find lawyers that may not charge this extra fee.

  • Pete Edwards on 2015-08-28 10:32:29 AM

    Can someone please tell me how a broker is supposed to determine any water damage in a house and how we are to determine title? As for the latter, we are not lawyers & isn't that the role of title insurance?

  • Jordi on 2015-08-28 10:40:03 AM

    What about the lenders that put the onus on lawyers to review and approve the strata documents.

    That is leaving a time intensive project for the lawyers that could leave them holding the bag if a issue arises after the fact with the strata.

    There should be more streamlining with the lenders also. How often are we called by the lawyers for a void cheque that we already submitted to the lender.

    This is a issue that the monolines have to review. I have had realtors talk to the clients about the difficulty of dealing with these "smaller lenders"

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions