September 13, 2011
National Bank refuses to fund mortgage because of "Big Screen TV"
Here is an interesting bit of information for the home buyer and seller.
I was informed yesterday of the National Bank recently refusing to fund a mortgage for a buyer who they had approved for a purchase based on the purchase contract stating it included a “Big Screen TV”.
Their reasoning is there is no ‘value’ attached to this TV and would not mortgage it. Understandably - hopefully it was included as part of the sale at no additional cost as who would want to mortgage a tv anyway?
We do see chattels included on a regular basis that are not part of the ‘normal’ chattel list - this is the first time I’ve heard of a lender taking this position.
There is an easy work around for this issue - simply not including the chattel in the original purchase contract and having a bill of sale at $1.00 for the item(s) signed by both the seller and the buyer. This along with a clause stating that the items listed in the bill of sale are only to be sold at that price if the property sale proceeds and title is successfully transferred. By doing this, you completely omit these items from the purchase contract, thus eliminating any concerns by the lender.
Will be curious to know if other lenders follow this lead?
Definitely filing this one away in the folder "Things that make you go 'hmm' "