Scotiabank hit injured soldier with $7K mortgage penalty
A decorated soldier who fought in Afghanistan is going public about how Scotiabank slapped him with a $7,000 fee for breaking his mortgage, because he had to sell his house after being medically discharged.
Master Cpl. Martin Pitre's story, told exclusively to CBC News Go Public, has prompted Scotiabank to apologize and cancel the fee.
“I don’t understand why the bank and the military can’t work together to make our final move happen without me losing money,” said Master Cpl. Martin Pitre, from Pembroke, Ont.
“I served this country. I went to war for this country. Heck, I almost lost my life for the country.”
Pitre, his fiancée and their 11-year old daughter are moving back to their home town of Woodstock, N.B., because chronic injuries in his arm and shoulder caused by a decade of service make him no longer fit for duty.
“I’d rather stay, but my body won’t let me do it anymore,” he said. “I just love the military environment. I like serving.”
Pitre and his family are entitled to a final move, paid for by the military, but that doesn’t include bank penalties for breaking his mortgage early. The government cut that coverage for all Armed Forces members in 2012.
Cut to save money
The change could affect any of the estimated 14,500 members relocated by the military every year if they sell a home in the process.
“The provision of comprehensive and fair compensation to our CAF members and their families must be balanced with the requirement for responsible management of public money,” said the Department of National Defence, in a statement explaining the change.
Pitre’s Scotiabank branch in Pembroke told him the bank does offer assistance for military personnel facing penalties, but only for active soldiers sent to new postings.
“With our military clients, we are able to reduce the penalty to three months' interest when posted, whereas in Martin Pitre's situation he is being released, which does not allow us to reduce the penalty,” said a letter Scotiabank wrote to him earlier this month.
His branch also told him it would not make his mortgage portable so he could apply it to his new house in Woodstock, even though he is also financing that purchase through Scotiabank.
“I’m not changing banks. So I don’t understand why there is a penalty in the first place,” Pitre said.
“I am going back to pretty much nothing. I have to start over. So losing close to $7,000 to me is a big deal.”
Would trade medal for more help
Pitre joined the military in 2003. He earned the Sacrifice medal in 2007, when he was hit in Afghanistan with shrapnel from a bullet that narrowly missed him.
“We got ambushed and our vehicle was hit,” he said. “The round missed me by two inches. It’s a memory that I will never forget for sure.”
Pitre said he would “definitely” trade that medal now, though, for more help moving into civilian life.
“What we are going through now emotionally is not worth medals,” added his fiancée Dawn Ouellette, who works at Wal-Mart. “We spent years building our mortgage and our equity and the little we have — the little bit we have. I work really hard.”
“I feel like I’m being thrown to the garbage, pretty much,” said Pitre. “I shouldn’t have to pay money to move back home.”
Pitre and his fiancée are also upset because the military wouldn’t pay to ship their pets. They said they can’t afford any extras, so they drove their cat and dog all the way from Ontario to New Brunswick in advance of their move.
'Tip of the iceberg'
“I am stunned at how [the government] treats military members,” said Ouellette.
Veterans’ advocates call this another example of the government quietly nickel and diming soldiers and veterans, without Canadians knowing about it.
“This could be very well the tip of the iceberg,” said Mike Blais of Canadian Veterans Advocacy.
“Many of our wounded from Afghanistan have now gone through the transition period — where they have been on temporary categories for their medical issues — and those medical issues have been defined as a situation where they cannot meet the universality of standards. And they will be released.”
Blais said his group wasn't even made aware the benefit had been cut.
"All these cuts, when you get down to it, are very petty."
The Department of National Defence said it now advises military members not to lock in their mortgages, even though locking in provides a more favourable rate.
“Our military members are strongly encouraged to select portable mortgages because of the possibility that they may be called upon at any time to relocate for operational requirements, and career progression and development.”
Pitre locked in his mortgage before the reimbursement for penalties was cut in 2012, however, and he said he didn’t anticipate being medically released.
Scotiabank steps up
As a result of Go Public’s inquiries, Scotiabank has apologized to Pitre and waived the entire fee his branch was expecting him to pay.
“After looking into this situation, we believe we erred in not offering Mr. Pitre the option to port his mortgage. We understand this has caused frustration and we have worked with Mr. Pitre and found a solution, which does not include a mortgage prepayment charge,” said Scotiabank.
“We are a proud supporter of our Canadian Armed Forces and we have the utmost respect for veterans and their families.”
BMO and TD Canada Trust told Go Public it’s their policies to avoid charging prepayment penalties for military personnel when they sell their homes for relocation.
RBC said in approved military cases, it will port (transfer) mortgages within Canada and it waives fees for soldiers moving overseas. CIBC said "in many cases" it will reduce or fully waive the penalties.
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