One broker has a beef with a lender after a number of his mortgages were not honoured following a policy change.
“I had a self-directed mortgage account with the lender and I complied with all the rules and I started underwriting mortgages with my RRSP,” David Marco of Art Mortgage Camp told MortgageBrokerNews.ca. “They changed their rules and they originally grandfathered mortgages that were up for renewal but this year I had an interest-only mortgage up for renewal and I got a call telling me to either change the mortgage to a blended rate or move it to another lender.”
Marco elected to move the mortgage to another instruction so he could continue to offer mortgages through his self-directed RRSP. However, the original lender continues to refuse to waive the fee to close the account, according to Marco.
“I’m wondering if I’m the only one outraged and stuck paying these bills,” he said. “It’s possible it’s legal (for the lender to do this) but it is unfair.”
Self-directed RRSPs are becoming a dying breed, with all major banks having exited the space in late 2013. Currently, there are only a handful of lenders who will allow the practice to continue.
“People used to be able to use their RRSPs to fund mortgages – whatever kind of mortgage they wanted to fund,” David O’Gorman, president and principal broker of MortgageLand Inc. told MortgageBrokerNews.ca in October. “And now (they) can’t do that through the bank; there are only three companies that allow you to do it: Home Trust
, Community Trust and Great Western.”