Last October a class action was launched against CIBC Mortgages Inc. alleging, among other things, “extremely vague” and “unenforceable” prepayment clauses in customers’ mortgage contracts.
(See: CIBC mortgage penalty class action)
Here is the latest on that case from the plaintiff’s lead counsel in B.C., Kieran Bridge.
Says Mr. Bridge:
- “There have been hundreds of contacts from CIBC/FirstLine/President’s Choice mortgage customers (wishing to join the class action).”
- “We are getting our Certification Application materials into final form, and expect to have them signed next week.”
- “We will schedule a hearing before the B.C. case management Judge in the early fall, to set a date for the certification hearing.” (Bridge notes that, “Until a case is certified, it is only an “intended” class action…It is not a class action until it is certified as such.”)
- “The parallel Ontario and Quebec actions are still proceeding…but it is likely that the first certification hearing will be in B.C.”
- “We hope to have the certification hearing in B.C. in late 2012 or early 2013.”
- “Once the case is certified, it’s hard to predict how long any resolution might take.”
- “The defendant has not yet filed a statement of defence or any affidavits, so their position on the substantive issues is unknown at this point. In a class action, the defendant does not have to file a defence until after the certification hearing.”
We’ll check in on this case again as developments merit.
Robert McLister, CMT
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Last modified: April 26, 2017
In your experience, has CIBC changed its prepayment penalty language since the lawsuit was filed?
Could be a case against any of the major banks that use posted rates and ‘discounts’ as the calculation.
The government should step in and require penalties to be based on contract rate and lowest rate for the remaining term given by the lender in the previous 30 days, or something to that effect. This posted rate calculation is nonsense.
Posted rates are such a scam. The government should definitely step in on this one.
For the IRD, they could base it on the monthly average of the actual contracts they’ve signed… but then the banks would have to divulge it!
http://www.greaterfool.ca/2012/02/16/careful-what-you-wish-for-2/
It’s sad that one of these big banks will probably buy ING Canada.
CIBC Mortgages recently introduced amended pre-payment terms, to be compared with the provisions in their older and existing mortgages.
Does anybody know any good source of Mortgage Penalty Information from lenders? Or it is just a one by one research?
I hope cibc gets whats coming to them, they wanted to penalize me $11,000 to end our mortgage 1 year early even though we would renew with them. Thankfully it Worked out for us that we did not renew.
Wow. Is that akin to admitting its previous prepayment terms were bogus?
WFM said:
To answer MortgagePenalty’s question, I would suggest http://www.teraview.ca/ereg/ereg fidocs.html Mortgage Schedules. Not all lenders are listed but it’s very helpful…
I had two years left on a 7 year term mortgage with cibc, I paid out mortgage end of october 2012 and was charged over $22,000.00 early payback penalty. I borrowed $225,000.00 in 2007 I apid on loan for over 5years leaving a payout balance of $202,000.00 and with penalty total came to over $224,000.00 what then did I pay on during prior 5 years??
If you paid the loan for “over 5 years” as you say, they cannot legally charge you an IRD Penalty as I believe the law limits all banks to penalties equal to 3 months interest – after 5 years..
No Bank is allowed to charge an IRD penalty after 5 years. You should go back to CIBC and dispute this.
I’m in Quebec, and we had to pay a 10K+ penalty with the CIBC when we decided to sell our first house to get a new one. We contacted someone in Quebec, but completely lost track and haven’t received a single update since. What should we do?
I’m in Quebec, and we had to pay a 10K+ penalty with the CIBC when we decided to sell our first house to get a new one. We contacted someone in Quebec, but completely lost track and haven’t received a single update since. What should we do?
I’m in Quebec, and we had to pay a 10K+ penalty with the CIBC when we decided to sell our first house to get a new one. We contacted someone in Quebec, but completely lost track and haven’t received a single update since. What should we do?
I had my mortgage with CIBC for 15 years and wanted to buy a new house and renew for 25 years, they want a $10,233.00 penalty to do it. I have told I am moving banks and will never deal with them again. Just lost $10,233.00 to a thief. I will join the civil action. This is bad business practice and should be stopped.