Advanced Fee Loan Brokers

The Better Business Bureau of Windsor & Southwestern Ontario has received hundreds of telephone enquiries from area residents who have been promised loans up to $15,000.00 - even if you are a bad credit risk. These companies, known as advance fee loan brokers, advertise in our area but are usually based in Toronto, Detroit, New York and Los Angeles. Upon calling the company, you are asked to fill out some application forms that will be mailed to you. Upon receipt of your application, you are informed that the company acting as a broker, has found lenders and will send you the money once you have forwarded a $520.00 processing fee. Once the company cashes your cheque, you never hear from them again. All phone calls and mail go unanswered.

The bureau is warning residents not to deal with these companies because you will never get your money back nor will you receive the loan. These companies are illegal in Ontario and are operating in contravention of the Loan Brokers Act.

So how do you know if you are dealing with a legitimate mortgage broker? It is our recommendation that you deal with local companies where you can actually speak to a representative face to face. Another way of knowing that you are dealing with a legitimate firm is that you will not be asked for any fees in advance. No mortgage broker is allowed to charge an advance fee under the Mortgage Brokers Act. Finally, a legitimate mortgage broker will present you with a Statement of Mortgage. All fees are outlined in this statement and you have three days from the date of presentation to confirm your intentions of proceeding. The only cost you may be liable for is the appraisal fee that is paid directly to the appraiser. The cost of approximately $235.00 is payable even if you decline the mortgage.