The other day I was at home depot and overheard a young couple speaking about buying a home, the conversation quickly ended up moving in the direction of mortgages so naturally my ears perked up.
One spoke that they wanted to deal with their bank, the other spoke of wanting to use a mortgage broker since a friend had referred her to one.
“Why would you want to use a mortgage broker? The bank will get us a great rate and we have a relationship with them…plus remember Mark’s (name changed) deal with their mortgage broker?” This isn’t what I like hearing about my profession, especially in this day and age, so I gracefully went over and apologized about overhearing their conversation then politely defended our profession.
They kindly accepted my explanation and I offered my card should they have any questions, and gestured it wasn’t in any way to take away from the referral that they already had, so as not to seem overbearing and greedy, but if their experience was like their friend’s previous incident they had my info to obtain a different perspective and experience.
Our industry has come a long way since the late 70s and 80s whereas mortgage brokers were engendered as Herb Tarleks, often called sleazy, greedy, Guido-like loan sharks. As time has passed our industry has changed drastically, organizing professional associations, both federally and provincially and we’ve also brought on regulation to our industry, likening ourselves to the insurance profession.
Since the mid 80s, our industry has gone from organizing only 2-3% of the mortgages in the country to well over 30% in the most recent years.
Mortgage brokers have access to almost every large bank in the country (exceptions being BMO, CIBC, RBC, even though many of them are indirectly funding many ‘non-bank lenders’) plus we have credit unions, and mortgage lenders like Dominion Mortgages, Merix and First National that holds over $50 billion in Canadian mortgages.
Everyday our associations ensure that mortgage brokers and agents are kept up to the industry’s highest standards, by showing integrity and ethics in every mortgage transaction and conversation one has with the public.
In every profession there’s going to be a few bad apples that will try and rot the core. And now with over 95% of our clientele having great credit, they come to us for the convenience of having almost all banks/lenders at their fingertips, where they know that they’ll get professional advice along with a great rate.
On the flip side we can still help those that are struggling with credit issues and obtain private mortgages to help save their home, but those private lenders don’t pay a referral fee like the banks so the mortgage broker then has to charge a fee so that he/she can feed their family.
There are mortgage brokerages that only deal with these types of clientele and in the last year we had a client come to us for help after visiting one such brokerage that was charging a total fee of 70% of the mortgage loan.
Charging such a high fee is called usury, it’s illegal therefore we reported them to RECA- our governing body – as we don’t want these brokers hurting the consumer nor our long built reputation.
There are over 14,000 mortgage brokers and agents in Canada, and only 8,000 of them registered at least one transaction last year.
These figures alone should tell you that unprofessionalism can creep into our industry as there’s over 6,000 mortgage agents out there parading like they are mortgage professionals because they have a mortgage license and didn’t do a single transaction, not that doing one makes you at all capable.
Just like anything else, if you are searching for a mortgage professional, ensure that you are getting a good one – to me that would mean that you have a few years’ experience and have handled at least 30 transactions in a year.
Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres.