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Mortgage Broker News | 07 May 2013, 12:00 AM Agree 0
Brokers love liberal underwriting rules, but that makes for a possible conflict of interest if those mortgage professionals then take on the role of gatekeeper at a MIC, warns one mortgage expert.
  • Ottawa Broker | 07 May 2013, 07:38 AM Agree 0
    Magenta talking about integrity and ethics??? That is very interesting.........LOL
  • Anonymous | 07 May 2013, 08:38 AM Agree 0
    Make no mistake, there is an ironic hypocrisy here. For years, there was no separation of church and state at Magenta, and probably still isn't. I wonder what their true motivation is in helping brokers build internal MIC's. If you build a private MIC, you play the role of both sheriff and outlaw. Until you have scope, there is no other reasonable alternative, especially where investors would be concerned. They want you to man the helm.
  • ON Broker | 07 May 2013, 02:27 PM Agree 0
    The Mortgage Summit could have chosen a better MIC to speak at the seminar. Just because Magenta is a larger MIC, doesn't mean integrity and ethics are a value they possess. Might be worth my time to attend the seminar just to ask some "ethic" questions and see how Magenta responds, considering the responses I have recieved when dealing with them directly on behalf of clients, has been less than ethical.
  • Leigh Graham | 08 May 2013, 05:15 AM Agree 0
    While it is possible that some mortgage originators disagree with Magenta's pricing, underwriting decisions, and costs of borrowing, especially in this market, these constitute neither moral nor ethical issues.

    Also, it is worth noting (via the Mortgage Summit program available via the link in the article) that Ms. Lancione is moderating the panel, rather than speaking on it.
  • Ottawa Broker | 08 May 2013, 09:47 AM Agree 0
    None of the Magenta issues I have dealt with involve their underwriting decisions, pricing or cost of borrowing. It deals with ethical procedures and the habit of taking advantage of clients taht are in a tough position. Most of this happening after the Magenta mortgage has funded or when it comes time for the client to leave Magenta as they are in a better position credit wise and can be place with a sub prime lender like Equitable or Home Trust. Take a look at Magenta's full mortgage charge and review it closely, you will be surprised, as are most brokers/agents when they do look at it.
  • Leigh Graham | 08 May 2013, 11:49 AM Agree 0
    I submit that a mortgage broker or agent who is surprised by Magenta's charge terms is one who did not read them prior to recommending their products to a borrower.
  • Susanna Penning, AMP | 08 May 2013, 12:11 PM Agree 0
    I am shocked at some of this running commentary. As an Ottawa agent, never once have I felt that Magenta's integrity was misaligned. In fact, as a niche lender for tougher deals...they have been instrumental in leading many of my clients to a road of recovery. Perhaps this negative commentary speaks more to the agents' ability or understanding of the alternative space? Magenta makes every effort to fully disclose their conditions, fees, pricing and policies, and have always been available for further review and discussion. It is the agent's responsibilty to ensure a suitable fit for the client, as well as discuss exit strategies. MIC's serve a role in our industry, how they price to ensure a sustainable/profitable model for their shareholders is not a question of ethics.
  • Ottawa Broker | 08 May 2013, 01:34 PM Agree 0
    Did you know that if a client doesn't notify Magenta 60 days prior to renewal that they are not renewing with Magenta, they will be assessed a "non renewal" fee???? did you know that if the client changes their banking info, they are assessed a fee in the hundreds of dollars???? a lenders commitment does not list all the fee's and charges a client will encompass when dealing witha lender. I ahve been in the iundustry for over 18 years, adminster private money for numerous clients, and i know that 95% of broker/agents do not take the time to read a lenders full mortgage documentation, if they have even ever seen the mortgage charge. Contact a lawyer that has done a Magenta mortgage, ask for the a copy of the full documentation, I am sure you will be VERY surprised.
  • Leigh Graham | 08 May 2013, 02:02 PM Agree 0
    @Ottawa Broker - I submit once again that a 'surprise' exists only when one does not examine fine print ahead of time. While I concur (with disappointment) that it is possible that 95% of brokers/agents do not read a lender's full mortgage documentation, this does not constitute an ethical issue on the part of that lender.

    To be clear - I have been faced numerous situations with Magenta over many years of lending their money, where costs were higher than I would have preferred to see my clients pay. This cannot be considered a moral or ethical failing on their part. To agree with Ms. Penning - Magenta (as an example) has been instrumental in improving the financial circumstances of many people.

    We are not debating the expenses, nor are we debating even whether the expenses are appropriate. Magenta does not force people to borrow their money. This conversation originated with questions regarding Magenta's integrity and ethics. Fully disclosed costs of borrowing & costs of doing business do not constitute moral or ethical issues, as high as those costs may be.
  • Ann T | 10 May 2013, 12:23 PM Agree 0
    Magenta has a fiduciary duty to its investors not to those taking mortgages. Too many agents are blaming things such as unexpected fees on lenders due to their own lack of due diligence. Many FIs' standard charge terms are available on the internet to easily review. If you can't get a copy of the standard charge terms online or from the lender directly, there's nothing stopping you from requesting a copy from the lawyer's office.

    We are the ones with a fiduciary duty to our clients. Just because we may get a deal approved, doesn't mean it's in the clients' best interests to move forward. Plan an exit strategy when placing clients with alternate lenders with high rates and fees so that clients know what they need to do to improve their situation in the future if they do opt to proceed.
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