Is more regulation coming for the mortgage industry?

by |
Three industry insiders give their views on this contentious issue.

Enza Venuto, Owner/broker, Centum Streetwise Mortgages:

“Looking at the mortgage industry through my 45 years of experience, I have seen many changes. If more changes are to come, I would hope to see them appear in the form of higher standards of education. Education in this industry is vital. Like Realtors, who are required to learn particular aspects of their industry, such as mortgages and appraisals, we too should have a regulation to provide mandatory courses in financial planning and realty, for example. A large part of the broker industry is helping to assess our clients’ financial needs. Countless times I’ve found myself cleaning up financial errors and decisions made by a bank or broker due to their clear lack of understanding about what the client’s true needs are.”

Jared Stanley, Business development officer, Alt Mortgages:

“History suggests that yes, more regulation is coming for the mortgage industry. Whenever there has been fear that housing markets are overheated, the Department of Finance and OSFI have implemented tighter mortgage rules and regulations to cool the markets. When new rules were announced in 2008, 2010 and 2011, there was a mass ingress of anxious market participants worried about never owning a home, which increased demand and drove up prices. Once the new rules were implemented, demand dropped, supply increased, and prices dropped or approximately three to six months before rebounding. Mortgage regulations are one of many levers the government can use to cool the housing market.”

Michael Jones, President and CEO, Equity Financial Trust:

“One potential cause of additional regulation is the incidence of fraud for shelter. Federally regulated lenders (such as Equity) recently were asked by OSFI to fill out a detailed survey on the topics of mortgage fraud and money laundering. In our view, this is a strong indication of how seriously the federal government takes the subject, and it raises the possibility that additional regulations may be under consideration.

To help in dealing with any new regulations, we are working closely with our broker partners to improve fraud detection and mitigation programs, and to ensure they are sufficient to the needs of today. If change does come, we will be able to deal with it more effectively if we prepare for it in advance.”
  • Paul Mangion on 2016-07-12 9:37:33 AM

    Venza, I don't think education will solve the problems that the broker industry has. Agents with low integrity need to be weeded out and serious enforcement and fines is the way to do this. The real estate industry has the same problems and one bad agent will eliminate the good will of of 20 great agents!

  • David O'Gorman on 2016-07-12 11:32:31 AM

    Educational standards need to be significantly increased,specifically mandatory continuing education.More hours, industry & topic specific, and NOT lender driven dog & pony shows.

    However I agree with Paul, education is not the sole solution. Lawyers, usually require an under grad degree & 4 years of law school/articling to become a lawyer. Most would think that is a hell of an investment in education to blow. However if you go to>Ontario>mortgage fraud you will find that 19 of the first 25 cases that appear are "The Law Society of Upper Canada v. A lawyer", LSUC trying to legally remove a lawyer 's ability to practice. Their own "trade association" attempting to clean house.

    As an expert witness I often see the sordid underbelly of our industry.The part that few in the industry, the public & often the regulators, ever see. I see our associations give awards to companies/indivuals who cost the E&O insurers 10's of millions of dollars, because of lax supervision, non-compliance, incompetence, negligence. & fraud. Ultimately that cost is past on to every brokerage license holder.I don't see any of our associations "cleaning house".

    I don't pretend to have the definitive answers as to what the industry needs.I would require increased regulatory accountability, where the provincial equivalent of the Principal Broker is required to be a director of the brokerage. How can you change policies & procedures if you are just a paid employee? Yet that is the corporate structure of one of the larger brokerages in the country.

  • Ron Butler on 2016-07-12 11:47:32 AM

    David, great comments, it is amazing when you come to learn about some of the litigated matters that major brokerages have lost and the total lack of any real supervision of their agents and brokers.

    Just a note, law school in Canada does not absolutely require an undergrad degree in all cases and some law students can take the Bar Exam in Ontario after about 26 months of law school depending on the chosen course load.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions