An Ontario court has found an unwitting mortgage co-signor liable to RBC for over $108,000.
The loser in the case was a regular working mom with three kids. Her mistake was accepting payment of $6,000 from strangers to co-sign a mortgage that later turned out to be fraudulent.
Moreover, the court ruling showed that she barely read the mortgage documents she was asked to sign, and allowed fraudulent income documents to be used in her name.
Madam Justice Anne Molloy of the Ontario Superior Court of Justice summed up her decision by saying:
- “She (the defendant) was foolish to sign documents she did not read and did not understand,”
- “She was foolish to rely on strangers to the extent she did.”
- “She had the opportunity to tell the Bank the true nature of her involvement, but did not do so.”
- “That is her own responsibility, not the fault of the bank.”
Apparently there are still plenty of oblivious accomplices willing to take money for use of their own good name and credit. Court rulings like this are a reminder that free lunches still don’t exist—especially when it comes to helping someone you don’t know get a mortgage.
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Here is the full case decision.
Here is analysis by the Toronto Star’s James Daw.
While this lady is to blame, shes not 100% to blame, other parties made mistaked in this case, yet this lady is the only one to suffer from it.
This lady is liable for the $108,000, however by co-signing is she not the (co) owner of the home ? In otherwords does this lady have any way of recovering (some of) her losses ?
I agree, the decision seems a bit harsh and I’m sure a good sales job was done on her since she did eventually come around to signing.
and how implicit was the RBC rep in this whole thing?
RBC is a harsh FI. I have been stung by them and their employees before but not to this extent. One thing I learned about RBC is they are never wrong and punish/crush the little guy to prove it. Anyone who thinks RBC is great hasnt seen their true face yet. Notice what RBC did to Issacs but no mention of what punishment happened to RBC employees involved or the mortgage broker or lawyer or RE agent, who made “exceptionally large fees”. Yes I agree she was incredibly naive and stupid, but I think desperate too.
not if she was a guarantor only and not on title of the property
This woman took a stupid risk for money. Anyone who doesn’t read what they sign deserves what they get in return.
Hi Anna,
RBC is a highly reputable bank. I understand you had a bad experience with them and I’m sorry for that. There will always be exceptional cases with any lender that does thousands of mortgages a year.
Regarding the RBC employee(s) involved, internal disciplinary action rarely makes the papers so you’d never know how RBC dealt with it–but you can be sure they did.
Rob
Hi Lorne,
Based on the court documents, RBC appears to not have performed sufficient due dilligence (like verifying employment).
It seems that did not sway the judge, however, because the borrower’s actions had a much greater contribution to the fraud.
If I got 6 THOUSAND from a “stranger,” I wouldn’t know it was fraudulent either. I am so naive and foolish.
Again…too good to be true. A good name and credit history is priceless.