Mortgage Broker is the magazine of the Canadian Mortgage Brokers Association and showcases the multi-billion dollar mortgage-broking industry to all levels of government, associated organizations and other interested individuals.
Issue link: http://digital.canadawide.com/i/354755
report from the CEO MORTGAGEBROKER mbabc.ca summer 2014 | 9 You might ask why Parliament, with the presumed wisdom and thoughtful debate which it should impart prior to passing legislation, created Canada's new anti-spam legislation. A GOOD MANY OF US WILL REMEMBER watching Monty Python skits many years ago – actually we are talking about the early 1970s here. e skit about the café which served everything with Spam luncheon meat – the word "spam" was used 132 times in three and a half minutes, and spawned our modern day concept of "spam". e Oxford English Dictionary, which is generally an accepted and reliable source of word meanings, defines "spam" as "Irrelevant or unsolicited messages sent over the Internet, typically to large numbers of users, for the purposes of advertising, phishing, spreading malware . . ." So you might ask why Parliament, with the presumed wisdom and thoughtful debate which it should impart prior to passing legislation, created Canada's new anti-spam legislation – a terribly misguided and cumbersome new law, that is sure to tax businesses by prohibiting genuine commercial messages while doing little to curb the real spam. On page 39 we tackle the problems with this legislation and explain why it is doomed to fail. It seems mortgage lenders are under siege from more than one corner. e association is aware of some recent cases involving Canada Revenue Agency super priorities, a shocking scenario where the CRA can pursue mortgage lenders for a borrower's unpaid GST debts and unremitted employee source deductions long aer a mortgage has been repaid and discharged. is is not a new CRA power however, it is now closer to the forefront due to some aggressive CRA collection tactics. is is a narrow and arcane area of law, but one where we need to gain a better grip to avoid any potentially ruinous impact on our mortgage lenders. Read Ralph Yetman's article on super priorities on page 16, and stay tuned for some MBABC action on this issue. We had our first Private Lender's Council meeting in April, which was attended by more than 100 mortgage lenders and brokers. We discussed potential changes coming down the pike in terms of standards and expectations from regulators. Of particular interest was a discussion about the joint securities regulator between Ontario and B.C., and some changes to the exempt market rules proposed by the Ontario Securities Commission. e OSC proposal, if forced on B.C. through the joint regulator, will have a devastating impact on mortgage investment corporations. It seeks to impose a $30,000 cap on the amount that investors can invest in any given year under offering memorandum exemptions that are commonly used by MICs and some syndicators. What ensued over the last several months was a flurry of non-stop letter writing, meetings and discussions tackling this issue. On page 14 we have printed some letters to the editor on this subject as well written about the challenges the OSC proposal would present to the mortgage investment industry in B.C. (page 29). ere is one more issue that may impact mortgage lenders. Currently the BC Law Institute ( BCLI) is consulting the public on what the required threshold should be to terminate a strata corporation. Under the Strata Property Act, the owners in a strata corporation must approve of its termination by passing a unanimous resolution AND all of the registered chargeholders who are secured against the title of each strata lot must also consent to the termination. Mortgage lenders therefore have a high degree of control over the current strata corporation termination process. However, this inordinately high threshold has led to very few strata corporation terminations, and the concern is that many buildings constructed in the 1970s have deteriorated to the point where the strata corporation would be better off with a wind-up and sale to a land developer than to continue with arduous and sometimes futile repair and maintenance obligations. e BCLI is proposing that the owner voting threshold for strata corporation termination be dropped to 80 per cent and that the chargeholder consent requirement be dispensed with altogether. Alternatively, chargeholders would receive notice of the intended termination and be given a 30-day window to take court action for any necessary resolutions. is would appear to be a reasonable compromise. One concern, however, might be that the bulk sale of a single parcel of land will result in a significantly lower value than a collection of individual strata lots, leaving mortgage lenders with less security than they initially bargained for when approving the mortgage loans against the original strata lots. Perhaps if this proposal proceeds into legislative amendment, mortgage lenders will take a much more cautious approach to providing financing for older strata units. Mortgage lenders and brokers can review the proposal and respond to it by September 30 on the BCLI website: http://www.bcli.org • Mortgage lenders are under siege Samantha Gale CEO MBABC & MBIBC samanthagale@mbabc.ca