CIBC Mortgages Inc. is facing a class action suit from borrowers who say they have been seriously overcharged on prepayment penalties.
Lenders charge prepayment penalties when borrowers change the terms of a closed mortgage, and this is happening a lot right now. Homeowners who renegotiate their mortgages to take advantage of historic low interest rates, or who sell and downsize to live mortgage free, face prepayment penalties.
But penalties, and the way they're calculated, are not standardized. Every lender has its own rules.
This has led to abuses, according to the Toronto law firm Siskinds LLP, which has begun the class action against CIBC, FirstLine Mortgages and President's Choice Financial. Lead counsel is Vancouver lawyer Kieran Bridge. He says, "We believe that through this lawsuit CIBC's practices with respect to how they calculate mortgage prepayment penalties will be found to be unenforceable."
If you believe that you were charged unfair and unanticipated prepayment penalties on refinancing a mortgage from CIBC, FirstLine or President's Choice Financial, you can visit www.classaction.ca or call 604 687-5546 to join the class action.
