Mortgage Broker Act under review

The Ministry of Finance recently announced that the Mortgage Brokers Act is being reviewed and that feedback is being solicited from stakeholders. A public consultation document has been published, which you can read here.

Your perspective and opinions as Mortgage Brokers are vital to this review process. CMBA-BC is gathering comments from our Members and will be making a formal submission on behalf of our community shortly.

Please leave your signed or anonymous comments in the section below.

  • Anonymous

    I’m a broker that works with private investors, receiving my deals from other members of the industry as well as having prospective borrowers coming directly to me for private funds.

    If the lender and borrower had to be taken care of by differing brokers, the borrowers would end up paying higher fees, as currently when a borrower comes directly to me they only pay 1 fee. If they had to be represented by another broker, that broker would take a fee and so would our company. In bigger loans, I can save borrowers thousands of dollars.

    How would MICs operate? They represent the investor so they could never accept a direct client again? Once again that potential borrower would get charged the MICs fee along with their brokers fee.

    There are brokers that gouge no doubt but this would cause unnecessary costs to borrowers trying to save every penny they have.

  • Larry Carter

    As a pure commercial broker for over 30 years, I have long felt that a restricted, commercial only license category should exist across Canada. I originate new commercial mortgages, bridge loans, convertible debentures secured by first mortgages and, years ago, did preferred equity deals secured by first mortgages. I also help financial institutions to more pools of whole loans off balance sheet in true sales. I’d like to see such transactions restricted to those licensed in this narrow niche. I maintain a minimum of $1 million of errors and omissions insurance and have a history seeking out courses at UBC to enhance my abilities in this area such as appraisal courses, hotel valuation courses, business valuation courses, etc. I also always complete all the mandatory courses for a license in BC & Alberta however I’d strongly suggest a homogenization of the standard course requirements, especially in AML and fraud detection.

    Finally, given the scale of transactions involved (I’ve completed loans well in excess of $100 million each) and the benefit to owners, I strongly believe that commercial broker services should have the ability to either lien properties for non-payment by borrowers or have some other ability to show an interest in land where failure to pay fees earned can be shown.

  • Noel

    Form 10- Conflict of Interest Disclosure – I think that requiring mortgage brokers to disclose this is unnecessary for those brokers that does not collect fees from clients and paid 100% by lenders. The fixed credit disclosure should be enough . The realtors does not have to disclose compensation to buyers of real estate but only to sellers. Insurance advisors does not have to disclose commissions paid by insurance companies to them.

  • Doug

    If I properly understand the proposals of the Expert Panel on Money Laundering in BC Real Estate., I believe those proposals that deal with regulation of lenders separately from Mortgage Brokers to be a positive step. We have been private lenders for many years. Under the current regime, we are required to be registered as Mortgage Brokers with all that entails, including reporting to FICOM, taking professional development courses, having annual trust account audits and so on. Ironically, we do not provide any services thought of as services of a mortgage broker (i.e., borrower advisory services), yet the regulatory regime is geared to those traditional mortgage broker activities. While this fits the bulk of true mortgage brokers, it is of dubious regulatory effectiveness in our situation and that of other private lenders.

    It is for that reason that I support the recommendation to have a separate regulatory regime for mortgage brokers than for lenders. Hopefully this will result in a more meaningful regulatory regime as it relates to lenders.

    From a practical point of view, we (and others) have been examined and regulated by FICOM for many years. If we switch to a new regime, it would be refreshing to have that history taken into account with some sort of grandfathering provisions for those previously regulated by FICOM. It is right that new entrants should be subject to higher level of scrutiny since they do not have that history.

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