Have you received a large bill from your mortgage holder before, during or after power of sale proceedings? Many fees and charges included on these statements may be offside the law. The federal Interest Act includes provisions that operate to protect consumers from excessive interest on defaulted mortgages, and Canadian case law has further clarified which charges should and should not appear on your statement. A mortgagee that attempts to collect these fees may be properly subject to recourse through the courts.
Most often, mortgagors are liable to pay for some legal costs associated with a power of sale proceeding conducted on their property. However, mortgagees frequently will include fees, charges and interest that are offside the Interest Act or else have been ruled to be illegal.
The Ontario Mortgages Act provides a provides a mechanism for mortgagors to assess a mortgagee’s bill of costs in a power of sale or re-financing situation. In many cases, mortgagees have charged more than double or triple the amount that they were properly entitled to recover from a mortgagor.
The fees and charges that prompt further evaluation include, but are not limited to:
- Legal fees;
- Mortgage discharge fees;
- Administrative fees;
- Property inspection fees;
- Property appraisal fees;
- Property tax fees; and
- Penalty interest charges.
Many of these types of fees can be challenged. For instance, mortgagees will typically include excessive administrative fees relating to NSF charges, where the courts have ruled that these types of “paper charges” are uncollectible.
Some mortgagee’s inflate their bills with these types of charges intentionally, and others will do so by mistake, but no matter the reason, many individuals are often pressured to accept the statements and fees provided as is.
While we encourage all mortgage holders to carefully review these types of fees, navigating this process can be overwhelming and difficult. Our firm has the expertise to help.