Brokers will chalk this one up as a win for the industry against flighty mortgage shoppers.
Over a year ago, a client contacted Graeme Moss, a broker with Verico
Fair Mortgage Solutions to arrange a second mortgage.
“I knew he had gotten a quote from another broker. He said mine was a lot better but [that he] needed it done quickly; we got him the commitment, we got the full sign-back, so the lawyer had gone through a lot of work, and the lender went through quite a bit of work,” Moss told MortgageBrokerNews.ca. “From start to finish we aimed for a week to close a quarter of a million dollar second mortgage. On the Friday, he emailed asking me to call him.”
And that’s when things went south.
“He said the first mortgage that was cancelled came through. It was miraculously rejuvenated. The broker fee [for my deal] was $2,911 for a 250,000 second, which is very cheap,” Moss said. “He said to me, thanks for all the hard work, we’re going with the other guy.”
Moss explained to the client that, due to the work put in by himself, the lawyer, the lender, and all parties involved, the broker fee still needed to be paid.
The client refused and the matter was taken to small claims court in late June.
“The judge basically said to him, you’re going to lose. This guy is thinking I’m wrong, he’s innocent. The court case was June 21,” Moss said. “It went from 10-5:30. I testified for at least two hours. He self-represented and he got eviscerated by the judge.”
Moss won the case and was awarded the original broker fee as well as legal fees. He credits the contract put together by his legal team with helping him enforce the fee.
“Contracts, if done correctly, are enforceable,” Moss said. “The judge said the wording was bulletproof.”
According to Moss, the ordeal is indicative of the lack of respect many people have for brokers and the time they put into each deal.
“I felt very, very used and we did a lot of work,” Moss said. “I don’t think the industry has the respect it deserves; a good broker is a quasi-lawyer, trustee and I don’t think it’s … valued that much. I thought there is no way this guy is going to get away with that.”
Moss shared the “bulletproof” wording of the contract, which can be seen below.