The Fitzgerald family should be thrilled – they’ve finally achieved their lifelong ambition of owning a horse farm. But a mortgage incident turned their dream into a nightmare.
In early June, the couple fell in love with a 17-acre farm a few hours north of Calgary. They had decided to pursue a simpler lifestyle following a health issue, and the property seemed like the perfect place for a fresh start.
They had an existing mortgage with Scotiabank, on which they still owed about $370,000, but had heard that the bank was not suitable to handle the acreage.
Instead, they got pre-approved for a new mortgage from a local credit union. They would have to put 20% down and take out a small loan to buy farm equipment, but financially it was doable.
With the tentative pre-approval in place, the Fitzgeralds approached Scotiabank to break their pre-existing mortgage.
To their pleasant surprise, the financial adviser they spoke with suggested that rather than getting a new mortgage at a higher interest rate, Scotiabank could simply transfer their existing mortgage to the new property.
They could keep their 1.9% interest rate, just deposit 5%, and have enough money from the sale of their current home that they wouldn’t need a loan.
“He told us, ‘It’s such an easy process, we do it all the time.’ It really seemed like a no-brainer, so we went for it,” they told Daily Hive. “We had no reason not to believe it.”
The couple sent in the necessary information – including financial records and proof of employment – put their home on the market and made an offer on the rural property.
As part of the deal with the landowners, the Fitzgeralds had to sell their home in three weeks. With no offers in the second week, they lowered the price. The Scotiabank adviser assured them that this would not affect the transfer of the mortgage to the new property.
An offer finally arrived, but at an even lower price and the buyers wanted some of the Fitzgeralds’ brand new furniture. In order not to lose surface area, they accepted. Again, the counselor assured them that there would be no problem.
As they prepared to waive terms of purchase and close the sale, the couple asked the adviser for a letter confirming they were approved for the mortgage transfer, which he told them over emails and phone calls for almost a month.
“This is where the story takes a trip through literal hell,” the Fitzgeralds said.
When asked for confirmation, it emerged that the adviser had not yet checked whether the couple qualified for the mortgage port. When he finally did, a five-year blip to their credit raised a red flag, and the Fitzgeralds felt their dream home slip away.
The assistant branch manager was able to resolve the issue – Scotiabank was aware of the issue when the couple secured their mortgage in 2020 – but the acreage now had to be assessed.
The initial valuation from Canada Mortgage and Housing Corporation (CMHC) came in at $90,000 less than the sale price, and Scotiabank said it could not finance it. The manager once again stepped in and arranged for a third party to re-appraise the property.
The second appraisal came in at $20,000 less than the price of the house, a value that Scotiabank called “attainable.”
With such a large gap between appraisals, however, CMHC settled in the middle, with the Fitzgeralds responsible for the remaining $70,000.
In the end, the couple ended up with less than $10,000 from the sale of their home – not enough for farm equipment, new furniture or even movers.
“We had a gun to our heads at that time. We had already made arrangements to move up there with two children and nine pets,” the Fitzgeralds said. “We had no backup plan. It was this place or not this place, even if it was going to wipe us out financially.
The couple wondered how the process had gotten this far without a more senior or experienced member of staff noticing the problem and intervening.
The assistant branch manager apologized for their plight and blamed the adviser’s error on lack of experience. According to the couple, the manager thanked them for “the opportunity to fill in their knowledge gaps” and offered them a year of free banking services.
“They destroyed our life for a learning opportunity. We should be happy. We have our dream property. But we cried the whole time we lived here. If we knew this was coming, we would have left,” they said. “It’s been hell.”
“[The advisor] kept telling us how easy it was and we took him in there. He’s supposed to be the expert – why wouldn’t we trust him? It’s not a small bank, it’s Scotiabank. There is power behind that name. You should be able to trust him.
Attempts to contact the financial adviser and deputy branch manager by Daily Hive went unanswered. Interview requests were redirected to a communications spokesperson, who said the bank “cannot comment on individual customer situations for confidentiality reasons.”
“Our advisors strive to provide the right advice and solutions to meet the unique needs of individuals and in this case we continue to work directly with the client,” the Scotiabank spokesperson said in a statement provided to Daily Winter.
“We encourage clients to carefully review the recommendations and agreements provided and our teams are committed to answering any questions they may have about their options.”
According to the Fitzgeralds, however, they “got nowhere” with Scotiabank. The bank was unable to approve a loan for the couple, although they said they could do so in a few months. In the meantime, the couple sleep on a mattress on the floor, and their dining table consists of a butcher block above a kennel.
In “an ideal world,” they said, Scotiabank would compensate them for the money they lost by lowering the selling price of their home or giving them a loan to buy furniture and accessories. agricultural equipment.
“Financially, maybe they could straighten it out a bit,” the Fitzgeralds said. “But emotionally? It was traumatic. They can’t really solve this problem.
#hell #Scotiabank #mortgage #mistake #wipes #couple #financially #Urbanized