Frustrated Canadians looking for mortgage deferrals from big banks facing delays, denials

Some Canadians looking to defer mortgage payments due to COVID-19 say they are facing delays, confusion and outright denials from the country's big banks.

"My wife called the 1-800 number for Bank of Montreal, talked to an adviser on the line to see what we are eligible for," said Evan McFatridge of Dartmouth, N.S., whose family is down to a single income because his wife has been laid off from her job at a restaurant.

"She was told that our mortgage was too new to qualify for a deferral," he said.

As part of the government's pledge to help Canadians suffering financially due to COVID-19, Finance Minister Bill Morneau asked the heads of Canada's big banks to allow people to defer mortgage payments for up to six months.

The banks responded by issuing a statement saying they "have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges such as pay disruption due to COVID-19; child-care disruption due to school closures; or those facing illness from COVID-19."

But some Canadians looking for relief from mortgage payments say they're encountering a confusing, opaque and seemingly arbitrary process that is only adding to the stress of illness, isolation and lost income. 

"I called in yesterday, spent two hours on the phone, and they required a full credit check and credit application in order to even see if I was qualified [for a deferral] and then didn't even give me a time frame," said one former BMO branch manager.

CBC has agreed to keep his name confidential because of his concerns that his comments could jeopardize his current employment situation.

"So, they had to speak to both me and my wife over the phone, get all our income, our jobs, our assets, our liabilities, said they had to send it to the credit department for review and that someone would contact us," he said.

"They had no criteria for what they're looking for. If they said to me, 'One of you has to be laid off. One of you has to be in isolation. You have to sign a disclosure statement.' Fine."

The man's wife is on reduced hours at home because she has to care for their kids, whose schools have been shut. Facing the loss of a large chunk of their family income, he said ,he wanted to get ahead of the problem and defer two or three months of payments.

"Even if I had to pay the interest payments during that time and they deferred the principal amount so the balance stayed the same, so be it, that's fine," he said.

"I've been through things in Alberta like the Fort McMurray fires where basically [all that was required then] was a call in to defer payments."

Questions for banks unanswered

CBC News asked each of the big five banks for more information on the criteria for the case-by-case-based decisions on mortgage and credit deferrals.

We asked:

• Who would qualify?
• Is there an application process?
• Does the entire household have to be off work?
• Will they require documentation?

None of the banks answered any of those questions.

TD, CIBC and Scotiabank all responded by repeating their commitment to work with personal and small-business banking customers on a case-by-case basis. Each encouraged customers to contact their call centres directly or visit their websites.

BMO and RBC did not respond to emails from CBC News.

'My family will run out of money'

RBC customer Elsie Mamaradlo of Edmonton said she was also denied a deferral because her mortgage was too new.

"I got so frustrated and at the same time worried," said Mamaradlo, who lost her job when the public recreation centre she works at was shut down due to coronavirus concerns.

Mamaradlo said that without the mortgage deferral, she faces a grim future.

"My family will run out of money for food and essentials," she said.

Mamaradlo's mortgage is insured with the Canada Mortgage and Housing Corporation (CMHC). The government is purchasing up to $50 billion of insured mortgage pools through the CMHC, which says that stable funding for the banks and mortgage lenders is meant to ensure continued lending to Canadian consumers.

In a tweet, CMHC said it "will support lenders in allowing deferral of mortgage payments for up to six months for those impacted [by the coronavirus]."

Alyson Whittle of Cochrane, Alta., said her bank, B2B, which is a subsidiary of Laurentian Bank, told her she could defer her next mortgage payment but then the following payment would be double. 

"I was super frustrated," she said.

Whittle, who works in sales for a home builder, and her husband, a utilities driller, are both out of work. 

"My mom came to visit us and she had just come back from Las Vegas and developed a respiratory illness," she said.

After that visit, Whittle says both she and her husband started feeling similar symptoms. They're now both off work in isolation but haven't been tested yet.

Laurentian Financial Group's assistant vice-president of communications, Hélène Soulard, said it's possible Whittle called before they were able to inform their call centre representatives about the deferral options.

"Rest assured we are committed to helping our customers who are facing hardships if they are not able to work due to illness, job loss or other reasons related to the COVID-19 crisis," she said.