Brokers are of two minds when it comes to cancellation fees, with the industry appearing divided on whether or not they think such requirements are the best way to recuperate time lost on flighty rate shoppers.
“I think these fees are just a money grab from greedy brokers; brokers who just deal on line and create no relationship as they never meet the client and listen to them,” Mike Maguire of Mortgage Wise Financial said in the comments section of MortgageBrokerNews.ca. “Then they are shocked when another broker walks away with the deal.”
We asked brokers
who use rate site to vote on whether they would consider charging cancellation fees and 68 per cent voted yes.
"When (brokers) send an application through Filogix the lender is charged 10bps and then there is the resources allocated to the deal to make it happen (Analyst, compliance, IT, legal department etc..) that's about at least $500,” Walid Hammami said. “So yes charging a fee is a good thing to do and will probably filter some clients for the agent.”
Still, some aren’t sure which side of the fence they fall on.
“It is partly a question of human nature and buyer's remorse; every time you buy a consumer good, be it a car or smartphone, you know that it is only a matter of time before something better comes along,” said commenter Patrick Smith. “With a mortgage, there is that lengthy gap between commitment and funding but, once funded, there is no return period for store credit. Therein lies the risk. Who should bear it?
“There really is no satisfying answer here.”