A class action lawsuit has been filed against one of the largest banks in Canada in regards to calculations of prepayment penalties. The lawsuit alleges that this bank has been improperly calculating prepayment penalties since 2005.
The lawyer heading the suit has stated that "Starting in 2005, [the bank] started using language in its standard charge terms that was extremely vague regarding how its prepayment penalties would be calculated," says Kieran Bridge, lead counsel on the case, in partnership with Siskinds LLP.
The vagueness of the above mentioned language is said to make this bank's prepayment penalty unenforceable. The case was started with a single mother getting divorced had to sell their family home and ended up with a $47,000 prepayment penalty. Prepayment penalties have always been one of the main complaints amongst consumers and without some kind of change to our system that is likely to remain the same.
While most do look at Canada's banking rules and regulations regarding mortgage to be superior to many other nations, it's possible we may be lacking in progress in this area. In recent years we've seen other countries bring in legislation attempting to unify the process and calculation for these penalties, instead of letting each individual lender have full range of how they interpret an Interest Rate Differential penalty. Maybe this lawsuit will be the beginning of a change in the right direction.
By working with a Sharie Marie Mortgage Team professional, we'll keep you informed on the penalty calculation with your lender. Visit www.SharieMarieMortgageTeam.com today to set up an appointment.
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