The Mortgage Broker Regulators Council of Canada (MBRCC) which is an association made up of mortgage broker regulators across Canada, released a press release on their findings that mortgage brokers are doing a mostly good job in determining the right mortgage products to get for clients.
From the release:
The report indicates that most mortgage brokers work to direct their residential clients toward suitable mortgages. However, the report also notes that there is still room for improvement in a number of areas.
Canada’s mortgage broker regulators have identified mortgage suitability as a priority and a concern that is shared across the provinces. “Unsuitable mortgages can have a devastating financial impact on borrowers and their families,” MBRCC Chair Kirk Bacon said. “We’ve also seen national economies around the world suffer when too many households are stuck with unsuitable mortgages.” The report confirms that mortgage brokers have an important role in ensuring that the mortgages Canadians receive are suitable.
Mortgage brokers doing the “right thing”
The mortgage broker industry in Canada has at times been somewhat tainted by mortgage brokers in the United States and by implication of lenders in Canada that mortgage broker mortgages are riskier than bank mortgages. It is good to know that there is an independent report verifying that we, as mortgage brokers, generally try to do the “right thing” for our clients.
Although I am not a mortgage lender, I have personally always found assertions of broker mortgages having greater fraud rates unmerited. Compared to major banks, it seems that the major difference is that mortgage broker fraud gets reported more than bank mortgage fraud does, and according to one colleague, chartered banks keep such a great rating with mortgage insurers because these banks will pay the costs of mortgage fraud out-of-pocket instead of filing a claim with the insurer of the mortgage. From my experience, this has allowed chartered banks to approve mortgages when the mortgage is not even within their guidelines. It appears there is little outside review of these mortgages.
This should also help our mortgage lenders who are not large chartered banks to cement their reputation as reputable and solid institutions to arrange mortgages with, even if the public awareness of these brands is not strong. I am proud of the body of work I have done for clients in getting them solutions and I am pleased to have many excellent lending options to help my clients with.