A mortgagebrokerNews.ca investigation has 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.
That kind of extra billing isn’t just happening in Toronto.
Kent Farnsworth, an Atlantic-based broker with Mortgage Alliance
Simply Mortgages has had to assemble a stable of lawyers he knows charge the same regardless of lender type, after numerous frustrating instances of extra fees.
“I try to take control of who the solicitor is; there are several lawyer that are fine with dealing with monolines but there are some that charge more, which gives brokers and lenders a bad name,” he told MortgageBrokerNew.ca. “It happens pretty frequently.”
It’s a trend MortgageBrokerNews.ca originally reported on last year, when an Alberta-based broker called for lenders to better streamline their documentation process.
“I’ve been hearing from lawyers’ offices that they are having difficulty with some of the instructions that are being sent by non-bank lenders in Edmonton and some other areas in Alberta,” Connie Graham of Axiom Mortgage said at the time. “Many of the lawyers are actually starting to charge clients an additional fee if the mortgage instructions are from a non-bank lender because it makes more work for them at closing.”
According to Graham, the length of the instructions are sometimes seven times as long as a bank’s instructions. They also often lack specific funder contact information, forcing lawyers, in some cases, to call a 1-800 number and wait on hold before reaching someone who may or may not have the answer.
And that process is increasingly bogged down by monolines who outsource the paperwork, which adds another step in the origination process, argue some brokers.