Chilliwack man says life ruined by unsolicited home-equity loan
Cliff Forrest readies for another lonely winter in a sparse inlaw suite at the back of a house owned by former Chilliwack neighbours, cursing those who persuaded him to take out a home-equity loan.
“It’s awful,” he said. “I have no money. I haven’t gone anywhere or done anything for years.
“Pretty well my only, the only thing I do, is I go back and forth to the horse — Mr. Mulliner. That’s about all I can really do. I don’t have any money to do anything. I haven’t had a Christmas in six years.”
Crippled with severe depression and anxiety, Forrest has lived most of his life on support and is suing the Toronto-Dominion Bank and Manulife Securities Investment Services Inc. for misleading him.
“I’ve lost about 90 per cent of my independence,” he said.
“I need handouts, rides and
assistance from charities. When this grenade exploded under my life, it didn’t just take the cash. The collateral damage is hideously widespread.”
The 70-year-old embodies the risk of home-equity loans, and his ordeal exemplifies the difficulty of obtaining timely resolution from the courts.
At a time when many are house-rich but cash-poor, tempting them to tap their equity, Forrest said beware.
He grew up in Burnaby and graduated high school, but he was an unsophisticated man who never found a vocation and didn’t have a credit card until 2004.
Plagued by chronic depression that can leave him bedridden, he lived on welfare for many years.
Between 1996 and 2002, he made a stab at self-employment with a cleaning company franchise, but his disability and lack of business skills resulted in a predictable failure.
“It got to be horrible,” Forrest said. “It was nights all the time, I never saw anyone, and I think it was the worst work possible.”
When his mother died in 2000, he used his inheritance to move to Chilliwack, where he bought a home on Coote Street for $210,000.
In early 2005, at 57, Forrest took out a $25,000 mortgage arranged through the TD Bank’s John Vriend.
From January 2005 through 2007, Forrest attended the University of the Fraser Valley on disability payments supported by Gastown Vocational Services.
He worked in the summers at the Agri-Food Canada research centre, and did a five-month practicum with a provincial bee inspector.
In February 2006, Forrest claims Vriend arrived unsolicited at his house and told him a line of credit secured against the home and invested in mutual funds would relieve his financial straits by providing $670 in monthly income.
Forrest alleges Vriend said there was no risk, and it was a suitable financial strategy in his circumstances, adding: “Don’t worry, you’ll be fine.”
“They were saying I was going to get a certain amount of spending cash, plus the money I would get from the mutual funds would cover the interest payments at the bank, and all this kind of stuff,” he said in an interview. “It never did.”
In a statement of claim filed in B.C. Supreme Court, Forrest said the loan application completed by Vriend was a sham — bearing inaccurate information about his income, his employment status, a purported life insurance policy which did not exist, and the length of time he had lived in Chilliwack.
Still, TD approved Forrest in May 2007 for a $185,250 line of credit, of which roughly $25,000 was used to erase the first mortgage and $100,000 used to purchase mutual funds from Manulife’s Daryl Martz.
“I didn’t have any income, so there was no way I would have qualified for the line of credit,” Forrest said.
Regardless, the global market collapse of 2008 made mock of the financial advice.
“I was losing my shirt,” Forrest said. “The money was almost on fire at my account.”
He admitted he had “no idea what I was doing.”
By February 2009, Forrest was bailing — using the line of credit to pay the mutual fund interest payments, and his bills. The money ran out in July 2012.
In the end, he lost much more than his shirt — TD foreclosed on the house in 2013 and sold it in 2014 for $267,500. Forrest was left homeless.
His neighbours took him in and he has lived on welfare since, his depression exacerbated.
A friend who heard of his plight helped him find lawyer Allan Macdonald of Vancouver, who launched the litigation in 2013.
“I got pretty suicidal at one point,” Forrest confided. “I had friends actually send over the RCMP to do checks to keep me out of the rope department at Home Depot. It was pretty awful. I don’t know how many winters I lived without heat in the house. The food bank, welfare, oh, God, it was…”
He was choked by tears. “Man oh man, it’s so embarrassing. I feel bad because the money was an inheritance from my mother, and I feel like I screwed it all up. It’s horrifying.”
TD and Manulife deny any wrongdoing, and all of Forrest’s claims.
The bank said in its response to the civil suit that Forrest chose to apply for the line of credit, and provided the information that led to its approval.
It added that he was not under any duress, influence or legal incapacity when he signed the documents and the bank exercised its option after he defaulted on a binding contract.
Manulife also denied Forrest’s claims and said that he relied on his own judgment and his own review of information.
A trial date will be set next spring.