Brokers may be no less interested than their clients in a class action filing against CIBC given a growing number of inquiries ahead of the bank's deadline to respond.
“The Court has also set a hearing date for the Certification Application of August 19-23, 2013,” Kieran Bridge, with the Construction Law Group in Vancouver, told MortgageBrokerNews.ca. "The B.C. Supreme Court has ordered that the defendant, CIBC Mortgages Inc., must fiile its Response, including any Affidavits, to the Notice of Application for Certification by April 5, 2013."
That hearing submission will represent the next major step in a suit alleging the banking giant's “vague prepayment terms” have unfairly penalized mortgage clients, including FirstLine borrowers brought to the lender by mortgage brokers.
Aside from what Bridge terms “uncertain and unenforceable language” in contracts dating as far back as 2005, he also points to the mathematical formula CIBC used to determine those prepayment charges, calling them “invalid,” or in legal speak a “miscalculation.”
The suit, filed in last 2011, has yet to win certification.
But that hasn't dampened interest on the part of both clients and mortgage brokers, said Bridge.,
"We served our Notice of Application for Certification of the B.C. Action and the supporting Affidavits on October 5, 2012," he told MortgageBrokerNews.ca Monday. As for interest "I cannot quantify it other than to say that there have been hundreds of inquiries from borrowers and a lot of ongoing interest among mortgage professionals."
The latter -- brokers -- have already begun to speculate as to how exactly CIBC will defend itself in its response to the charge, suggesting that a new voluntary protocol around penality disclosure and introduced by the federal government last year have helped reinforce the charge that those terms are, indeed, confusing.
"I think the federal government has actually helped borrowers in this case," said one former FirstLine broker Tuesday.