An audit has revealed customer misrepresentations in millions of dollars of mortgages sold by Laurentian Bank to another company.
The Montreal-based lender says it will buy back potentially problematic loans totalling $180 million which were inadvertently part of a portfolio of mortgages sold by its B2B Bank unit to a third party firm.
The bank’s audit also found $76 million of insured mortgages that were not eligible for insurance, Bloomberg reports.
Laurentian says that the loans in question had “documentation issues and client misrepresentations” but there is no suggestion of any wrongdoing by its staff.
There will however be a review of practices including underwriting procedures.
The loans being bought back are all performing in line with the lender’s overall portfolio.
In its annual report Laurentian says that its total residential mortgage loans book stood at $18.5 billion as at October 31, 2017, an increase of $1.7 billion or 10% year-over-year.
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