Update on Mortgage Penalty Standardization
In March, the government promised to “bring forward regulations” to standardize the calculation and disclosure of mortgage pre-payment penalties. This was a welcome gift for consumers who are fed up with large and confusing IRD penalties.
As we speak, theDepartment of Finance(DoF) says it is “working on new regulations.” Those regulations are “aimed at bringing greater clarity to the calculation of mortgage pre-payment penalties.”Details are sketchy at this point, and the DoF says it cannot “speculate on specific measures at this time.”
It says, “The next step in the regulatory process will be the publication of the draft regulations for public consultation.”
Those draft regulations are expected to be published “before the end of the year.”
The changes would only apply to federally-regulated lenders. However, it’s possible that other lenders will conform to federal guidelines to remain competitive.
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