Broker: Lender amended contract after client signed

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Brokers advise clients to diligently read the fine print but what happens if the contract is changed after the client signed?

“My latest exercise is the collateral mortgage issue and I’m not a fan of it,” Don Blair of Mortgage Tech Corporation told “I had discussed a traditional mortgage with a client and the client signed for a traditional mortgage and when the paperwork got to their lawyer the lawyer pointed out they were signing for a collateral mortgage.”

According to Blair the document was altered by an employee at the lender’s head office.

“I advised the client to sign and that I would resolve it with the lender,” Blair said. “The lender has agreed it is their error and they will get the client to re-sign … I had to push a little bit but they got back to me within 48 hours.”

The experienced hasn’t soured Blair’s opinion of the particular lender and he still plans on sending them business in the future, despite what he feels was a mistake. Especially because the issue was rectified in a timely manner which, as many brokers can attest, is not always the case.

“With all the back-and-forth we have to go through with lenders, they’re making it really hard on us,” Domenic Luciano of Verico Premier Mortgage Centre told “They often don’t explain the details about their products to clients.”
  • Steve on 2014-07-08 11:59:35 AM

    "They often don’t explain the details about their products to clients.” That's what you're there for. If you want the lender to expalin the product, then why does the client need to come to you, they should just go to the lender. Your job as a broker is to advise and educate, not just process.

  • Jerry Quigley on 2014-07-08 12:29:26 PM

    Well said, Steve!

  • John Woods on 2014-07-08 12:31:47 PM

    I am guessing that this may have been a bank as they are the main lenders who register collateral mortgages. I hope you got your clients a good rate oh and you did explain that along with the good rate came an increase in their potential penalty obligations as per Steve's comment that your obligation is to advise not just process.

  • AM on 2014-07-08 12:40:12 PM

    Yes I agree that the broker must provide detailed information about the mortgage that the borrower is getting, but not all of the commitments we receive contain all of the detail with respect to the terms and conditions of the mortgage offered, including some lenders omitting the fact that their mortgages are all registered as a collateral charge and the borrower has no option to decline a collateral charge. Knowledge of course is the key.

  • M. Robertson on 2014-07-08 3:06:35 PM

    Hold on a second...

    The story contradicts itself... a commitment is not the final registered mortgage document, hence the need for the customer to attend a lawyer or notary to SIGN the documents. A commitment letter is just that, a commitment from the lender to grant the mortgage. Blair is claiming that an employee of the lender altered a document that was already signed, it could only be the commitment letter. "According to Blair the document was altered by an employee at the lender’s head office." That is a VERY serious accusation Mr. Blair…

    I HIGHLY doubt that an employee of the lender thought… “I am going to be really devious and I am going to commit document fraud and risk losing my job, and potential criminal charges.” After all, what possible personal or financial gain would a document administrator earn for doing such a thing? Was there an opportunity to make a large sum of money?

    It sounds to me that the more likely scenario is that there was a simple error made and the documents that were prepared for the lawyer were not correct. For anyone who has been in this industry for more than five minutes, they know that the commitment and loan documents are not the same thing. The commitment was not altered, the loan documents were incorrect. But then… God forbid someone make a mistake, especially if they work for a lender. I mean, they aren’t human… are they? Give me a break.

    This story is just stupid and an attempt by a broker to sensationalize something that is in truth a non-story. Does Mr. Blair realize that because of his need to his 15 minutes of fame he could potentially be ruining someone’s career? He is accusing someone of deliberately committing fraud… in a public forum! No names give, but does he really believe that no lender reads CMP? Or is he so callous that he simply does not care?

    Disgusting. That is all this is.

  • Angela Wong-Liao - Invis Inc on 2014-07-08 5:54:38 PM

    I fully agree that it is the responsibility of the mortgage professional to review and ensuring our clients fully understand the content of the mortgage commitment that includes the lender's policy. Some lenders do not provide Standard Mortgage Charge, ie: TD Canada Trust, while others, ie: Scotiabank offers two options, Standard or Collateral subject to the mortgage products that clients want. A mortgage professional should communicate all the pros and cons to the clients up front. Lenders can make mistake when they send solicitor instructions and that can be rectified quickly if the mortgage professional is monitoring the deal closely.

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