Laurentian Bank of Canada says it found “client misrepresentations” in $89 million worth of mortgages it sold to a third party earlier this year, and will as a result buy back the loans where it found documentation issues.
The lender revealed the news in its annual report on Tuesday, in which it separately announced quarterly profit more than doubled to $58.6 million from $18.4 million a year earlier.
Laurentian, Canada’s seventh largest bank in terms of assets, also hiked its dividend by a penny per share.
But in a subsection of its annual report, the Montreal-based bank revealed that it will repurchase a chunk of mortgages it sold to an unnamed third party which were found to have what the bank is calling “documentation issues” after an audit.
All in all, the affected mortgages which will be repurchased were worth $89 million. That’s almost five per cent of all the mortgages the bank sold to the unnamed buyer.
In the summer of 2015, Home Capital announced it had cut ties with about 45 mortgage brokers for fudging the numbers as to how much prospective borrowers were earning when they applied for a mortgage.
Then this year, Home Capital faced an investigation by the Ontario Securities Commission into how the company informed investors about issues at the time, followed by a run on deposits as investors pulled out their money.
Read the full story over at the CBC.