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Oct 17, 2021


In the previous Post LX I continued a review of mortgage statements and gave a real life example of how a bank’s error in a discharge statement can be saved from having catastrophic results. This post takes a turn away from discharge statement errors and looks at how privacy legislation (PIPEDA) affects mortgage statements.

We must remember that the information typically set out in a discharge statement is private under the PIPEDA (privacy) legislation. And as we all are keenly aware, a mortgagee cannot release private information to a third party without the consent of the home owner/mortgagor.

The parties who usually ask for discharge statements tend to fall into a few categories. First, there are the home owners themselves, who want to refinance or sell their property and need to know how much is owing to her or his existing mortgagee. Of course, here are no privacy issues with this type of request.

Then, there are the new lenders who are considering a refinancing of the home owner’s property. These new lenders stand in the shoes of the home owner and of course can easily get the home owner’s consent to release the otherwise private information.

Lastly, there are subordinate mortgagees and execution creditors who want to know the amounts owing under a prior registered charge in order to ascertain whether the home owner has any equity in the mortgaged property. If there is equity, it may make good sense for the subordinate mortgagees or for the execution creditor to try to sell the mortgaged property in order to collect on the debt owing. But in order to see if there is any equity, a mortgage statement for information purposes must be received from the prior ranking mortgage.

In the next blog I’ll look at the privacy issues that a prior mortgagee faces when it receives a request for a mortgage statement from a subordinate mortgagees or from an execution creditors (when the home owner has not consented to the release of the private information).

As always, this blog is intended for information purposes only. It is not legal advice and cannot be relied on as such. Nor is it a substitute for hiring your own legal counsel, who will be an essential member of your power of sale and mortgage default team. And lastly, this blog is just my opinion. I reserve the right to change my mind. And I reserve the right to be wrong.

Be well and stay healthy.