"This has been hell": Scotiabank mortgage mistake financially wipes out couple
The Fitzgerald family should be ecstatic — they’ve finally achieved their lifelong ambition of owning a horse farm. But a mortgage mishap has turned their dream into a nightmare.
In early June, the couple fell in love with a 17-acre farm a few hours north of Calgary. They’d decided to pursue a simpler lifestyle following a health scare, and the property seemed like the perfect place for a fresh start.
They had an existing mortgage with Scotiabank, on which they still owed roughly $370,000, but had heard that the bank wasn’t adept at handling acreages.
Instead, they got pre-approved for a new mortgage at a local credit union. They’d have to put 20% down and would have to take out a small loan to buy farm equipment, but, financially, it was doable.
With the tentative pre-approval in place, the Fitzgeralds approached Scotiabank to break their pre-existing mortgage.
To their pleasant surprise, the financial advisor they spoke with suggested that rather than obtain a new mortgage at a higher interest rate, Scotiabank could just port their existing one to the new property.
They could keep their 1.9% interest rate, would only have to put 5% down, and would have enough money left over from the sale of their current home that they wouldn’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 sent through the necessary information — including financial records and proof of employment — put their home on the market, and put in an offer on the rural property.
As part of the deal with the acreage owners, the Fitzgeralds needed to sell their home in three weeks. With no offers at week two, they lowered the price. The Scotiabank advisor assured them that doing so would not affect porting the mortgage to the new property.
An offer finally came in, but at an even lower price and the buyers wanted some of the Fitzgeralds’ brand-new furniture. So as not to lose out on the acreage, they agreed. Again, the advisor assured them that there would be no issue.
As they were preparing to waive the conditions on the purchase and go firm on the sale, the couple asked the advisor for a letter confirming that they were approved for the mortgage port, something he’d been telling them via emails and phone calls for nearly a month.
“This is where the story takes a trip through literal hell,” the Fitzgeralds said.
When asked for confirmation, it came to light that the advisor had not yet checked if the couple were qualified for the mortgage port. When he finally did, a five-year-old blip on their credit raised a red flag, and the Fitzgeralds felt their dream home slipping away.
The assistant branch manager was able to resolve the issue — Scotiabank had been aware of the blip when the couple initially got their mortgage in 2020 — but the acreage now needed to be appraised.
The initial appraisal by the Canada Mortgage and Housing Corporation (CMHC) came in at $90,000 under the sale price, and Scotiabank said they couldn’t finance it. The manager stepped in once again and arranged for a third party to reappraise the property.
The second appraisal came in at $20,000 less than the price of the home, a value that Scotiabank said was “workable.”
With such a significant discrepancy between the appraisals, though, CMHC settled 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 — not nearly enough for farm equipment, new furniture, or even movers.
“We had a gun to our head at that point. We’d already made arrangements to move up there with two kids 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 financially wipe us out.”
The couple has questioned how the process was allowed to go so far without a more senior or experienced staff member noticing the issue and stepping in.
The assistant branch manager has been apologetic about their plight and blamed the advisor’s mistake on a lack of experience. According to the couple, the manager thanked them for “the opportunity to work on their knowledge gaps,” and offered them one year of free banking.
“They destroyed our life for a learning opportunity. We should be happy. We have our dream property. But we’ve been crying the entire time we’ve been living here. If we knew this was going to happen, we would have walked away,” they said. “This has been hell.”
“[The advisor] kept telling us how easy it was and we took him at that. He’s supposed to be the expert – why wouldn’t we trust him? This isn’t some little bank, this is Scotiabank. There’s power behind that name. You should be able to trust it.”
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Attempts to contact the financial advisor and assistant branch manager by Daily Hive went unanswered. Interview requests were redirected to a communications spokesperson, who said that the bank “cannot comment on individual customer situations for privacy reasons.”
“Our advisors strive to provide the right advice and solutions to meet individuals’ unique needs and in this instance, we are continuing to work directly with the customer,” the Scotiabank spokesperson said in a statement provided to Daily Hive.
“We encourage customers to thoroughly review the recommendations and agreements provided and our teams are committed to answering any questions they may have about their options.”
According to the Fitzgeralds, though, they “haven’t gotten anywhere” with Scotiabank. The bank was unable to approve a loan for the couple, although they’ve said they may be able to in a few months’ time. In the meantime, the couple is sleeping on a mattress on the floor, and their dining table consists of a butcher block on top of a dog 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 them with a loan for furniture and farm equipment.
“Financially they might be able to make the situation right a little bit,” the Fitzgeralds said. “But emotionally? This has been traumatic. They can’t really fix that.”