Help! TD Mortgage Discharge Fees

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melody
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Help! TD Mortgage Discharge Fees

Post by melody »

Hi,

I took out a very small 5 year variable rate mortgage with TD Canada Trust last year June 2010. My final bi-weekly payment was made this week July 2011 (balance of $134.56). During that time, I took advantage of the prepayment privileges (increased payments up to 100% of the original amount, and each calendar year paid a lump sum up to 15% of the original mortgage amount toward the outstanding balance). I never made any prepayments over those limits.

I went into TD last week and then again yesterday to try to get my mortgage discharged. They said the following fees were applicable:
- $260.00 Discharge Fee
- $71.30 Registry Officer Charge for registering electronic discharge (Ontario only)
- $300.00 Reinvestment Fee

I told them I was disputing the $300.00 Reinvestment Fee as the mortgage agreement stated:

Prepayment Privilege
WIthout paying compensation you may:
- increase your monthly payment by 100% of the original payment, and
- each calendar year pay a lump sum of up to 15% of the original mortgage amount toward your outstanding balance

Prepayment Charges
You will be charged compensation on the full amount being prepaid if you pay more than the prepayment privilege allows in an amount equal to three months' interest.


In addition, there is a Reinvestment Fee of $300.00.


I spoke with different people at TD (since I went there twice and was having problems with them - long story). One staff said the $300.00 Reinvestment Fee must be paid as I made prepayments (eventhough I never went over the allowable limits), another staff member said the $300.00 was an administrative fee for discharging the mortgage (in addition to the $260.00 + $71.30), and another staff said "that was what the system said you had to pay and" she couldn't do anything about it...she then said the internal website said it was because I paid off the mortgage within the first term (there was nothing in the mortgage agreement stating a penalty for doing so). There was no one in authority there to discuss this issue as they said the Manager went home.

I called the Ombudsman office on my cell phone while in the TD office since the TD staff member would not call when I asked her (she just gave me the Ombudsman pamphlet for me to call when I left TD). The Ombudsman office said I had to deal with the Branch Manager first, however, I was able to lodge a formal complaint and the Branch Manager would get back to me next week. I know the Branch Manager and the person who was insisting on charging me the $300.00 Reinvestment Fee (and the Mortgage Broker who told me to take my loan there although it was not my home branch) were friends outside of work (I found out last year when I took out the mortgage with this branch).

I was also trying to discharge my secured Line Of Credit (which I used as another loan to pay towards my house which had both my elderly parents and I on the mortgage title) with TD for which they charged me $260 + $71.30 to discharge the secured LOC yesterday. I told them that when I spoke with the TD rep. on the phone, the TD rep told me that I would only be charged one discharge fee if I discharged both the mortgage and the secured LOC on the same day....that is why I waited until this year to do so (since I paid off the LOC last year). The TD branch said that was incorrect, and I would be charged two separate fees for each discharge. So I discharged the LOC yesterday and paid a total of $331.30.

Now TD wants to charge me another $631.30 to discharge my mortgage.....I am disputing the $300 Reinvestment Fee and, therefore, I did not discharge my mortgage yesterday. I am awaiting the Branch Manager's call back next week.

Could you please assist as I am frustrated. Thank you for your help.
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Bylo Selhi
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Re: Help! TD Mortgage Discharge Fees

Post by Bylo Selhi »

Welcome to FWF!

ISTM your best course of action is to wait for the Branch Manager. Each branch has a discretionary fund for such situations. Assuming you have other business with TD they may decide to waive part or all of the fees.

Failing that you should proceed up the escalation chain to the Ombudsman's office. And failing that you could contact someone like Ellen Roseman (consumer affairs reporter for the Toronto Star.) She's written often about these sorts of discharge fees and has had some success in getting them reduced or waived. Banks tend to pay more attention to the media than they do to their customers.
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melody
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Re: Help! TD Mortgage Discharge Fees

Post by melody »

Thank you, Bylo!
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Re: Help! TD Mortgage Discharge Fees

Post by fundamental »

Please let us know how you make out, melody.

I just recieved similar dischage documents from TDCT and am not excited about paying nearly $700 to close this out.
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melody
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Re: Help! TD Mortgage Discharge Fees

Post by melody »

Hi fundamental,

The staff person I dealt with at TD called me today and said the Branch Manager agreed to waive the $300 Re-investment fee. Bylo had indicated they do have such a discretionary account for such situations. I believe it was because I called the Ombudsman office and launched a formal complaint, because the TD staff person said they would now have to reply back to the Ombudsman office confirming that the formal complaint has been dealt with and there were no other issues.

The only other fees I was left to pay were the $260 discharge fee and the $71.30 registry officer charge fee = $331.30 in total. Although I had to pay the discharge fee, that was in the agreement. Not too happy about the $71.30 charge which was not listed in the agreement nor mentioned to me from the onset, but I kind of understand why that was being charged in the end.

However, I vehemently refused to pay the $300 re-investment fee since my agreement stated that would only be charged "if you pay more than the prepayment privilege allows...", which I did not.

Bylo's suggestions above were dead on correct.
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Re: Help! TD Mortgage Discharge Fees

Post by newguy »

melody wrote:Bylo's suggestions above were dead on correct.
And free :!:

newguy
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abose
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Re: Help! TD Mortgage Discharge Fees

Post by abose »

I'm resurrecting this thread just to state that my recent experience with TD on a similar matter was quite different. Recently I went to my local TD branch to discharge our mortgage. It was approaching the end of our second term (10th yr) and we had routinely taken advantage of the generous annual prepayment options to retire the mortgage early.

Over the phone we were quoted a discharge fee of $95. In the branch we were quoted only $75, which they then offered to waive in consideration of being long-standing customers. The waiving of the fee was offered voluntarily. I did not have to negotiate. I was expecting some additional fees on top of that and asked several times about this but was told each time there were no other fees and that the discharge fee included the cost of removing the bank from title on our property (in BC).

All in all I continue to be impressed with customer service at TD but I did get the impression the employee was inexperienced at discharging mortgages. She even mentioned she'd been working for the bank for 5 years and has setup many mortgages, but only ever discharged one before now :shock: I think I will try and confirm independently about the change in title registration however, just to be on the safe side.
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Re: Help! TD Mortgage Discharge Fees

Post by twa2w »

Some provinces have regulations in place that limit discharge fees charged by mortgage lenders. I believe in Alberta the banks are not allowed to charge a discharge fee other than the cost to register it land titles. I know there are a couple fo other provices where it is regulated - Ontario is not one of them AFAIK but I believe IIRC BC, Manitoba, Sask are the others.
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Re: Help! TD Mortgage Discharge Fees

Post by optionable68 »

abose wrote:......In the branch we were quoted only $75, which they then offered to waive in consideration of being long-standing customers. The waiving of the fee was offered voluntarily. I did not have to negotiate. I was expecting some additional fees on top of that and asked several times about this but was told each time there were no other fees and that the discharge fee included the cost of removing the bank from title on our property (in BC).

All in all I continue to be impressed with customer service at TD....
I'm not having similar success. Which TDCT branch did you use?
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Re: Help! TD Mortgage Discharge Fees

Post by biker »

A family member will be selling her home and moving to a rental. Once the home is sold and the mortgage discharged are there any fees the bank charges now that they have lost the next 25 years of interest?
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Re: Help! TD Mortgage Discharge Fees

Post by Insomniac »

In this neck of the woods, the banks usually waive the discharge fees when a property is sold. A real estate agent told me that it they expect the new owners will probably have a mortgage so they aren't really losing business. Check with your agent.
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Re: Help! TD Mortgage Discharge Fees

Post by biker »

Insomniac wrote:In this neck of the woods, the banks usually waive the discharge fees when a property is sold. A real estate agent told me that it they expect the new owners will probably have a mortgage so they aren't really losing business. Check with your agent.
Are you saying that her bank would expect the new owners to get a mortgage from them?
What if they go to their own bank.?How much approx are discharge fees?
Thanks
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Re: Help! TD Mortgage Discharge Fees

Post by max88 »

It's usually specified in the mortgage document. Mine was $225 at HSBC. It's $260 at TD.
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Re: Help! TD Mortgage Discharge Fees

Post by Insomniac »

biker wrote:
Insomniac wrote:In this neck of the woods, the banks usually waive the discharge fees when a property is sold. A real estate agent told me that it they expect the new owners will probably have a mortgage so they aren't really losing business. Check with your agent.
Are you saying that her bank would expect the new owners to get a mortgage from them?
What if they go to their own bank.?How much approx are discharge fees?
Thanks
I screwed that up... should have said...
When you buy a new house, the bank will usually waive the mortgage discharge fee on the old house, since they expect to get the mortgage on the new one. Since your relative is not buying a new house, they may not waive it. If the rental is only a temporary measure while searching for a new place to buy, they might waive the fee.

Mortgage discharge fee in BC is $75. However, when I paid this house off, my CU waived it. They asked if I wanted to leave it registered in case I wanted to borrow some money in the future. I told them I preferred a clean title.
http://www.fic.gov.bc.ca/pdf/mortgagebr ... 07-003.pdf
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Re: Help! TD Mortgage Discharge Fees

Post by OhGreatGuru »

FYI: Latest fee schedule from RBC says their mortgage discharge fee is increasing from $250 to $300 effective June 1, unless provincial law requires it to be less.
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Re: Help! TD Mortgage Discharge Fees

Post by MaxwellMcGee »

Has anyone ever tried converting a paid off mortgage into a HELOC?

I'm with CIBC and am expecting to pay off my mortgage when it comes up for renewal in July. I asked them about converting to a HELOC and they told me that I'd have to first pay a discharge fee on the mortgage, and then a new set up fee on the HELOC.

I told them they were encouraging me to find another lender, since there was absolutely no incentive to continue doing business at CIBC. They agreed.
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Re: Help! TD Mortgage Discharge Fees

Post by twa2w »

What you have registered on your house is likely a conventional or high ratio mortgage. It does not support a heloc. In order to secure the HELOC a collateral type mortage has to be registered hence the discharge and new mortgae registration. CIBC occasionally has specials where they will pay the fees for registering a HELOC.
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adrian2
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Re: Help! TD Mortgage Discharge Fees

Post by adrian2 »

twa2w wrote:CIBC occasionally has specials where they will pay the fees for registering a HELOC.
IIRC, those specials tend to run summertime, ending in September/October. It may be worthwhile to wait, if the discharge is scheduled for July.
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Re: Help! TD Mortgage Discharge Fees

Post by freedom_2008 »

When we set up our HELOCs (for two houses) with TD, there was no any fee at all as they used their in-house lawyer; but when we sold one house, they did charge $50 (or $75) to discharge the HELOC against the house. I am quite sure if we remembered about the (not used and forgotten) HELOC and asked them beforehand, TD would have waived the small discharge fee.

BTW, our TD HELOC rate is prime + 0.5% (was +1% when setup in 2009, they dropped the rate when we asked later on). Since we haven't use it since, so not sure what is the current best.

2nd BTW, there is a theory that having a HELOC against your house is a good way to prevent mortgage/tile fraud, even you are not using the money.
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