Monoline docs reveal reasons for higher legal fees

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A mortgage professional has shared with in-depth details around the extra work monoline deals require of lawyers.

“Below is an example of the issue we discussed and the comments we received from a local lawyer,” Daryl French of Lending Max wrote in an email to “The lender should have already received the full contract prior to removing subjects so why ask for it again at closing?  If it is needed, get the mortgage agent to supply it to the lawyer reducing the client’s work.”

Below is a sample of a closing document French says a lawyer working on a file this summer received from a monoline.
  • "Assignment" clause to be removed from page 8 from the purchase contract
  • Solicitor to confirm that clients own no other properties other that those disclosed on the application by way of signed affidavit by borrowers
  • Solicitor to ensure receipt of a fully signed and witnessed copy of the Offer to Purchase including all addendums. Where electronic signatures are used, the Solicitor is to provide written confirmation the signatures meet the requirements of the Electronic Transactions Act.
  • Where it has been determined that a condominium is experiencing (or has in the past) water penetration problems, will require the following documents: an Engineers Report which details the repairs required and an estimate of the costs; a copy of the Strata Council Minutes describing the Special Assessment and indicates, either in the Minutes or the Engineers Report, that the Special Assessment represents a complete rather than a  partial fix of the problem; and verification of which party is responsible to pay the Special Assessment.

“How is a lawyer to know if a condo has experienced water penetration?” French wrote. “The lender requires Strata/AGM minutes, depreciation reports, as well as financials prior to subject removal, so this has been dealt with.”

French also provided correspondence he says he received from a lawyer, detailing some of the issues the attorney had to deal with prior to closing.

Addressing those conditions caused a great deal of back-and-forth between French, his attorney and the loan fulfillment company and resulted in higher legal fees.

A recent article drew attention to the fact that some lawyers are charging $100 more for monoline files and since then, many brokers – including French – have shared similar experiences. A common thread throughout these cases is the use of loan fulfillment companies, which could be exacerbating the problem.
  • Broker on 2015-08-31 11:50:43 AM

    Monolines can cause more work for us as brokers as well but we use them in order to find the CLIENT the best option. It has nothing to do with them paying us more but rather a better rate or product for the CLIENT.
    Everyone loves to talk about the stress and work that they had to go through and they forget why we are even in this business, we are here to help families become home owners and if that involves an extra hour of work, pull up your big boy pants and work through it.

  • Broker in Victoria on 2015-08-31 1:05:51 PM

    Sounds like a file wherein outstanding conditions were made to be solicitor conditions to redirect the work the broker should have done.

    If the broker had indeed satisfied the conditions that were put back onto the lawyer, then the monoline needs to be called out on this.

  • james on 2015-09-01 9:44:26 AM

    Assuming Broker did their job. ONE phone call solves this.

    But why bother when an extra charge can be levied right?

  • Underwriter in Victoria on 2015-09-02 6:47:01 PM

    It is the underwriters responsibility to do due diligence on every file. I am surprised that they would instruct solicitor with strata docs and title searches. That could break the deal at the last moment.

  • Jamie Joseph on 2015-09-24 10:51:44 AM

    A recent 'straight up' refinance transaction completed by a local Notary firm (in the same town as Daryl), saw my clients being charged and additional $500.00 for the preparation of the doc's because the lender was 'a non-standard lender'. I obviously queried and was told unless it was one of the big 5, (in other words a non mono line) this was the cost because of the extra work involved. Lender in this case was Fnat which from my years of dealing with conveyances etc, is not one of the erroneous types to deal with. In querying another local solicitor, I was quoted $950 all in compared to the $1543 we were charged. A true slap to the broker community and our clients. Obviously they (the Notary firm) has lost my referral business!!!! Daryl good call for bringing this to the attention of others.

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