Mortgage Broker

CMB MAGAZINE cmba-achc.ca summer 2016 | 11 letters to the editor Unreal (estate) advice I read an article on the blog REMonline that encourages real estate agents to give their clients mortgage advice. e article starts off: By definition, real estate professionals are on the front line of the home-buying process with their clients… [Real] estate agents may also be an informal source of information and guidance to their clients on related topics as well. Advising on mortgages is one common example. A client may depend on his or her agent to assist with finding the right mortgage. is is an important role, because the client's commitment to the right (or wrong) mortgage is one that can last for years and can have a serious impact on his or her finances – and by extension on their ability to meet their other obligations and to maintain a suitable quality of life. It concludes: Mortgage shopping has its complexities… So if your clients are relying on you, even just informally, to help them make this decision, make sure you completely understand the advice you are giving." is concerns me greatly, as real estate agents should clearly not be giving mortgage advice. e mortgage broker industry should speak out about this. James Shinners Mortgage Consultant, Mortgage Managers Hammonds Plains, N.S. Reply: ank you, James, for bringing this article to the attention of the Canadian Mortgage Brokers Association. We followed your suggestion and wrote a letter to the editors of REM that addresses your concerns. We explained that the faulty information in the article misinforms the public about obtaining mortgage advice and exposes real estate industry members to the unnecessary risk of facing disciplinary measures with regulatory authorities or civil liability for providing poor mortgage advice. Our letter is partially reproduced below: We do agree that mortgage shopping is complex, but it is pure folly – perhaps even negligent – to urge real estate agents to provide mortgage advice. All provinces in Canada, with the exception of P.E.I., regulate mortgage brokering with licensing regimes. Just as no one other than a licensed lawyer should dispense legal advice, and no one other than a licensed real estate agent should provide advice relating to buying and selling real estate, only licensed mortgage brokers should provide consumers with advice on obtaining a mortgage. Real estate regulators, such as the Real Estate Council of British Columbia, even provide strong caution to realtors not to provide mortgage advice. For instance, the Professional Standards Manual for B.C. realtors states: When a [real estate] licensee refers a client to a financial institution or a mortgage broker, the Registrar of Mortgage Brokers has determined that the licensee will be considered to have arranged the mortgage if the licensee does anything more than provide a name and contact information. If the licensee has any discussion with the client regarding mortgage terms, amounts, interest rates, etc., the licensee may be considered to have arranged the mortgage. If the licensee is found to have arranged mortgages and, in any one year, the licensee has received $1,000 or more in fees, the licensee may be found to be in violation of the registration requirements of the Mortgage Brokers Act. Perhaps the author of the article and editorial staff are unaware of the role of mortgage brokers in assisting the public with mortgage financing. Here are some statistics that readers may find of interest: n Mortgage brokers funded over $70 billion across Canada last year. is includes residential, commercial and private mortgages n Over 55 percent of first-time homebuyers used a mortgage broker in 2015 n Among first-time buyers switching financial institutions, 72 per cent arranged their mortgage through a mortgage broker We urge readers to learn more about what mortgage brokers can do for homebuyers and owners by talking to a member of the Canadian Mortgage Brokers Association. Look up members at cmba-achc.ca/locate.html. Please send letters to the editor to: info@cmba-achc.ca

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