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Poll results: The industry is worried about potential changes by Justin da Rosa | 17 Dec 2015

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The majority of the industry is concerned about an upcoming disclosure rule change and, perhaps, rightfully so, as one company already trying to take advantage.

MortgageBrokerNews.ca recently held a poll to determine what percentage of readers are concerned about a FICOM-proposed change to disclosure, which will require all brokers to clearly demarcate on documents how much they earn in commission. Not only did a record number of readers take part; the results show the majority of brokers are worried.

 
 

Poll results: The industry is worried about potential changes

by |
 
The majority of the industry is concerned about an upcoming disclosure rule change and, perhaps, rightfully so, as one company already trying to take advantage.

MortgageBrokerNews.ca recently held a poll to determine what percentage of readers are concerned about a FICOM-proposed change to disclosure, which will require all brokers to clearly demarcate on documents how much they earn in commission. Not only did a record number of readers take part; the results show the majority of brokers are worried.

Of those who took part, 57% said they are worried about the proposed disclosure rule. 16% said they are unsure. 27%, meanwhile, said they aren’t worried.

A number of industry players have already expressed their concern.

In an open letter to the industry, DLC President Gary Mauris pointed to the fact that players outside the channel will take advantage of the disclosure in a bid to sway potential clients.

“Imagine this: FICOM continues with this mandate and regulates that all mortgages originated via the mortgage broker channel have to disclose their exact compensation, where the bank staff and their MMSF (and other lenders) do not,” Mauris said. “Instantly there becomes a significant advantage to the banks in Canada as their staff and mobile mortgage sales force start advertising and start saying ‘why would you use a mortgage professional and pay a fee when you can get your mortgage through us and it’s free?’”

And it seems that fear has become a reality.

MortgageBrokerNews.ca recently received an email from a DIY mortgage company that mentions broker commissions while trying to promote its services.

“I was surprised to recently learn just how much mortgage brokers get as commission,” a PR rep for doyourownmortgage.com wrote to MortgageBrokerNews.ca in an email. “In a move to save both lenders and home-buyers thousands, Do Your Own Mortgage (DYOM), a one-of-its kind new service, is helping Canadian mortgage seekers save money and actually get paid to ‘DIY.'"

The company claims to allow clients to become their own broker – by gaining access to “50 competing institutions” – and earn their own commission on mortgages they originate for themselves.
  • Blair Anderson on 2015-12-17 10:45:04 AM

    “I was surprised to recently learn just how much mortgage brokers get as commission,” a PR rep for doyourownmortgage.com wrote to MortgageBrokerNews.ca.

    Really? This so-called DIY mortgage company, is the product INVIS. Mortgage brokerage license #10801. At least they are compliant with the regulations and disclosing that little tid-bit at the bottom of their website. Just how naïve do you think consumers are?

  • Jacob on 2015-12-17 4:44:54 PM

    As I recall, Gary's open letter and appointing himself as a spokesperson for the industry were soundly trashed. Attributing a widely-held belief to one person is not great journalism. The industry and MBN can do better. Many brokers have the concern expressed.

  • Blair Anderson on 2015-12-17 10:25:08 PM

    I apologize for any misunderstanding. My comments above are more accurately directed at the INVIS mortgage agent, Lionel Khoury (License# M08002500). The apparent founder of doyourownmortgage.com. Not INVIS, the brokerage. Having said that, perhaps INVIS compliance and Lionel should have a chat about the message they are both sending.

  • Nick Bachusky on 2015-12-18 12:26:24 AM

    Thank you Blair for pointing that out. That right there lacks integrity and trust and that is unfortunate.

  • Blair Anderson on 2015-12-18 10:08:36 AM

    There is nothing wrong with getting the consumer more engaged in the process. In fact, I encourage it. But don’t discount, or even worse, misrepresent, the valuable service you contribute to the process as a financial intermediary. Good job Lionel, you just need to tweak your message.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

 

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