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/505959
MortgageBroker mbabc.ca spring 2015 | 7 report from the CEO The MBABC CeleBrATed its 25th anniversary at our silver-screen themed conference and trade show in February. e conference was our occasion to mark this milestone and it also provided an opportunity to look back at where we came from and forward to where we are going. e Hansard (Debates) is the official record of what our political representatives say in the legislature. A lot was said about the fledgling mortgage broker industry in the early 1970s when our current Mortgage Brokers Act was being introduced and hotly debated. One politician said, a mortgage broker "is a fellow who just goes ahead and trots around the community and arranges either first, second or third mortgages and receives a kickback or a percentage for doing that type of a thing." A politician undeniably in support of the new registration regime said, "I would like to give you an illustration here, to show you how shocking certain things can be". He goes on to describe a situation with a "dreadful man" – "I'd hate to tell you his name, the dreadful man." He describes a lender who insisted on taking ownership of three of the borrower's properties, and then charged a $ 6,000 fee for a $7,500 loan. e politician's hope, which might appear wistfully naïve with the wisdom of hindsight, was that the new disclosure provisions in the Mortgage Brokers Act would "cure this type of thing." Less than a year later in 1972, the politicians are back in the legislature talking about mortgage brokers. We can glean from their conversations that the regulator had needed an entire year to print the necessary registration application forms for mortgage brokers to fill out. At this time, there were 160 mortgage brokers and 240 subs ready for registration under the new Act. It also dawned on the policy makers that they needed a disclosure form to disclose the commissions and bonuses charged by brokers – hence the creation of the Form 6 and the 48-hour rescission clause for borrowers, which some of our industry members may remember. is offers you a glimpse into the thinking around these new concepts and the discussions in the 1970s that led to the enactment of our current Mortgage Brokers Act. It created a registration system for mortgage brokers combined with disclosure requirements. It was hoped that this would resolve the problem of predatory mortgage lending practices, which were proliferating in this new age of rapid societal change. is was such a novel and progressive approach back then, one politician argued that the new Act's offence provisions, which if breached could result in fines and imprisonment, were akin to treating mortgage brokers like criminals having their civil rights being suppressed! e world has certainly changed at an exponentially rapid rate since the 1970s. It goes without saying that the government no longer takes a year to print paper forms for mortgage broker registration. In fact, FICOM has clearly entered the digital age with its MB E-filing system. But curiously enough, some of these core issues still seem to be at the heart of our discussions on mortgage broker regulation: appropriate disclosure rules and forms, predatory lending practices and how to abate them, broker fees, etc. As the industry matures, increases in numbers, and develops its own expectations around appropriate practices, its appetite for industry self-regulation also evolves. FICOM CEO Carolyn Rogers spoke on this important subject at our conference. Her speech is an essential read for anyone who missed the in-person version (see page 14). In our quest for a greater degree of self-regulation over our industry, the MB logo can potentially play a significant role. e MB logo can signify membership in a mortgage broker profession, which is self- regulated with a set of practice standards and an ethical code of conduct administered by a broker centred organization. Adoption of the MB logo by the MBABC ,and perhaps other organizations, is clearly a critical step for mortgage brokers to not only enhance the public recognition of their industry but to define their own expectations of the broker profession. It was hoped that this would resolve the problem of predatory mortgage lend- ing practices, which were proliferating in this new age of rapid societal change. Celebrating our milestone anniversary Some of the core issues identified in the 1970s still seem to be at the heart of our discussions Samantha Gale CeO MBABC & MBIBC samanthagale @ mbabc.ca