The Fitzgerald family should be thrilled: They’ve finally achieved their lifelong ambition of owning a horse farm. But a mortgage mishap has turned his dream into a nightmare.
In early June, the couple fell in love with a 17-acre farm a few hours north of Calgary. They had decided to follow a simpler lifestyle after a health problem, and the property seemed like the perfect place for a fresh start.
They had an existing mortgage with Scotiabank, on which they still owed approximately $370,000, but had heard that the bank was not an expert in managing acreage.
Instead, they got pre-approved for a new mortgage at a local credit union. They would have to make a 20% down payment and take out a small loan to buy farm equipment, but financially it was feasible.
With tentative preapproval in place, the Fitzgeralds approached Scotiabank about breaking up their pre-existing mortgage.
To their pleasant surprise, the financial advisor they spoke with suggested that instead of getting a new mortgage at a higher interest rate, Scotiabank could transfer the existing mortgage to the new property.
They could keep their 1.9% interest rate, only have to make a 5% down payment, and have enough money left over from the sale of their current home that they don’t need a loan.
“He told us, ‘It’s such an easy process, we do it all the time.’ It really seemed like a no-brainer, so we went with it,” they told Daily Hive. “We had no reason not to believe him.”
The couple submitted the necessary information, including financial records and proof of employment, put their home on the market and made an offer on the farm property.
As part of the deal with the acreage owners, the Fitzgeralds needed to sell their house within three weeks. With no deals in the second week, they lowered the price. The Scotiabank advisor assured them that doing so would not affect the transfer of the mortgage to the new property.
An offer finally came, but at an even lower price and the buyers wanted some of the Fitzgeralds’ new furniture. In order not to lose the surface, they agreed. Once again, the advisor assured them that there would be no problem.
As they prepared to waive the conditions of the purchase and sign the sale, the couple asked the advisor for a letter confirming that they had been approved for the mortgage port, something he had been telling them through emails and phone calls for almost a month.
“This is where the story takes a trip through literal hell,” the Fitzgeralds said.
When asking for confirmation, it came to light that the adviser had not yet verified whether the couple qualified for the mortgage port. When he finally did, a five-year default on his credit raised a red flag, and the Fitzgeralds felt their dream home was slipping away.
The assistant branch manager was able to resolve the issue (Scotiabank had become aware of the problem when the couple initially took out their mortgage in 2020), but now the acreage needed to be assessed.
The initial appraisal from the Canadian Housing and Mortgage Corporation (CMHC) was $90,000 below the sale price, and Scotiabank said it could not finance it. The administrator intervened once again and arranged for a third party to revalue the property.
The second appraisal came in at $20,000 less than the price of the house, a value that Scotiabank said was “workable.”
However, with such a significant discrepancy between the valuations, CMHC was left in the middle, with the Fitzgeralds on the hook for the remaining $70,000.
When all was said and done, the couple was left with less than $10,000 from the sale of their home, which isn’t enough for farm equipment, new furniture, or even moving.
“We had a gun to our heads at the time. We had already made arrangements to move there with two children and nine animals,” the Fitzgeralds said. “We didn’t have a backup plan. It was this place or no place, even though it was going to finish us off financially.”
The couple have questioned how the process was allowed to go so far without a more experienced or senior staff member noticing the problem and intervening.
The assistant branch manager apologized for his plight and blamed the advisor’s mistake on lack of experience. According to the couple, the manager thanked them “for the opportunity to work on their knowledge gaps” and offered them a year of free banking.
“They destroyed our life for a learning opportunity. We should be happy. We have the property of our dreams. But we’ve been crying the whole time we’ve been living here. If we had known this was going to happen, we would have left,” they said. “This has been hell.”
“[The advisor] He kept telling us how easy it was and we took it at that. He is supposed to be the expert. Why wouldn’t we trust him? This is not a small bank, this is scotiabank. There is power behind that name. You should be able to trust him.
Daily Hive’s attempts to contact the financial adviser and deputy branch manager went unanswered. Interview requests were redirected to a communications spokesman, who said the bank “cannot comment on individual customer situations for privacy reasons.”
“Our advisors strive to provide the right advice and solutions to meet people’s unique needs, and in this case, we continue to work directly with the client,” the Scotiabank spokesperson said in a statement provided to Daily Hive.
“We encourage customers to carefully review the recommendations and agreements provided, and our teams are committed to answering any questions you may have about your options.”
However, according to the Fitzgeralds, they “haven’t gotten anywhere” with Scotiabank. The bank was unable to approve a loan for the couple, although they said they could within a few months. Meanwhile, the couple sleeps on a mattress on the floor and their dining table consists of a butcher block on top of a kennel.
In “an ideal world,” they said, Scotiabank would compensate them for the money they lost by lowering the sale price of their home or providing a loan for furniture and farm equipment.
“Financially, they could fix the situation a little bit,” the Fitzgeralds said. “But emotionally? This has been traumatic. They really can’t fix that.”