Mortgage Broker

12 | winter 2015 mbabc.ca MortgageBroker update Scams target consumers looking for easy access to loans British ColumBia's regulator of mortgage brokers is warning consumers to watch out for scams targeted at people looking for easy access to mortgage funds. e Office of the Registrar of Mortgage Brokers at the Financial Institutions Commission ( FICOM) recently identified companies promoting their services through classified advertising that are not registered to do business in this province. Companies will oen offer easy credit and use a toll-free number rather than provide a local contact or office. ey may ask for fees up front and can use high-pressure tactics to encourage clients to advance the money. In one case, a B.C. woman was convinced to pay over $2,000 in "mortgage insurance" to a company advertising loans through a toll-free number. Aer a request for another fee, she went to a registered mortgage broker who advised her not to provide any further payments. "Fees can run in the thousands of dollars and usually cannot be recovered," says Carolyn Rogers, registrar of mortgage brokers. "We advise people seeking mortgage funding to work with a registered mortgage broker and to use our website to determine if a lender is registered to operate in B.C." e Office of the Registrar has posted a consumer alert warning that two companies have offered loans and are not registered to provide mortgage broker services in British Columbia. Details can be found at: www.fic.gov.bc.ca. FICOM's website contains a searchable list of entities and individuals who are registered to conduct mortgage broker activity in British Columbia: www.fic.gov.bc.ca/web_listings/MBSBListing.aspx. Consumers and industry are encouraged to contact the Office of the Registrar with information about unregistered mortgage broker activity. For more information: Office of the Registrar of Mortgage Brokers 604-660-3395 1-866-206-3030 (toll-free) Email: mortgagebrokers@ficombc.ca Brokers By the Numbers the mBaBC partiCipated in the Mortgage Broker Regulators' Council of Canada (MBRCC) meeting with industry stakeholders in November 2014, where the MBRCC presented the results of its mortgage product suitability survey. While the goal of the survey is for regulators to better assess mortgage broker practices to see if brokers provide suitable mortgage options for consumers, the survey also provides some interesting statistics relating to the broker industry. e MBRCC chose to survey mortgage brokers in Alberta, Ontario and Newfoundland and Labrador. Unfortunately, B.C. did not participate in this survey. However, the three selected provinces do reflect jurisdictions with different licensing regimes: Alberta with self-regulation and a long history of industry licensing; Ontario with a relatively new government licensing regime; and Newfoundland with a more basic registration regime. Of the three provinces, Ontario stands out with less than half of its licensed brokers depending on brokering as a main source of income, leading to the conclusion that the majority of Ontario mortgage brokers are "part timers." By contrast, 89 per cent of Alberta brokers and 75 per cent of Newfoundland brokers appear to be full time mortgage brokers. While this is a startling statistic, the good news is that 95 per cent of all brokers reported that they "always gather information from borrowers to assess their financial situation and personal circumstances." Ninety six per cent reported that "they always use the information obtained from borrowers to determine their mortgage needs and ability to qualify for a mortgage," and 89 per cent reported that they "always prepare mortgage option(s) based on the needs identified and in consideration of the borrower's financial situation and personal circumstances." e results also show that 95 per cent of respondents said they "always disclose conflicts of interest," 85 per cent reported that they "always assess the borrower's financial literacy" and 97 per cent reported that "their role is to educate their clients on mortgage products in general." Percentage of brokers with mortgage brokering as a main source of income Alberta 89% Ontario 45% Newfoundland 75% 0 10 20 30 40 50 60 70 80 90 100

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