“If you’re going to introduce legislation, it should truly benefit clients,” Dustan Woodhouse
, a broker with Dominion Lending Centres
Canadian Mortgage Experts, told MortgageBrokerNews.ca. “But this proposed change could force thousands of brokers out of the channel, which would result in the elimination of some lenders, and lead to fewer options for clients.”
It’s an interesting angle, and one that could very well play out if the requirement has the kind of impact on the industry many are predicting.
FICOM is putting forth a new interpretation of a regulation that would require mortgage documents to explicitly state how much brokers are compensated.
And the effects could force some brokers out of the space, according to one leading network head.
“What happens on April 1, 2016 (when the proposed change goes into place) – on that day, instantly, it could be almost the beginning of the end for our industry,” Gary Mauris
, president of Dominion Lending Centres
, recently told a packed room at this year’s CAAMP
national conference in Toronto.
Mauris argued the rule change – which would require brokers in B.C. to disclose all income made on transactions – could erode broker market share from 30% to 15%. He argues bank specialists, who still won't be required to disclose their commissions, will use it as a way to sway clients.
Brokers across the country have also expressed concerns that once the precedent is set in British Columbia, it could spread to other provinces as well.
A pending rule implementation that will require all broker compensation to be explicitly stated to clients could actually harm homebuyers and result in fewer lending options for purchasers, according to one industry player.