Re-licensing requirements for Ontario could instantly decrease the number of mortgage professionals by as much as 10 per cent said a new agent, although the loss of young entrants discouraged by the slow economy and tight market may be a good thing.
“As an agent who’s been in the business for only 16 months, I think re-licensing requirements may be the thing that pushes a large number of new agents who have been struggling or are already inactive over the edge,” Leon Blackman, with Verico The Mortgage Practice, told MortgageBrokerNews.ca. “Having to pay for the course and having to take it may be just enough to discourage agents who are ambivalent about the industry from renewing. But that loss may be a good thing in the sense that those people are obviously not committed, otherwise, they would take the re-education.”
Blackman is pegging that possible loss at 8 per cent to 10 per cent of Ontario’s current roster of mortgage professionals. That number stood at 11,581 in April, representing a 27 per cent jump from the year-ago period. It’s from those ranks of new agents that the industry is most likely to see shrinkage, he said.
Blackman’s number is in line with the estimates of season broker Peter Majthenyi, the lead planner with Mortgage Architects telling MortgageBrokerNews.ca that the slowing, yet increasingly competitive Canadian market will not only cull the number of new entrants to the broker industry, but thin the existing ranks by as much as five per cent.
While brokers four or more years in the business have weathered the economic slowdown affecting most of the country, new agents have borne the full brunt of that tighter real estate market as originations become fewer and farther in between and young mortgage professionals find themselves without the kind of established portfolios needed to grow refis and switches.
Those challenges have exacerbated difficulties for new agents, said Blackman, suggesting many are prepared to leave the business rather than commit to a re-licensing course and pay re-licensing fees by March 31, 2012.
It also means the province may see a net loss of agents for the first time in five years.
The mandatory education requirement is designed to improve broker compliance with provincial laws, and through online or in-class courses will bring Ontario professionals in line with their counterparts in Alberta and British Columbia. They already submit to similar education requirements as a condition for license renewal in those provinces.
Still, the loss of young blood may be reduced by CAAMP’s move to offer its online course free of charge for members. Others of the three remaining course providers are expected to follow suit.
Blackman is prepared to take the course and re-license with or without that helping hand. "I'm committed to staying in the industry," said the new agent, increasingly turning to social media and the Internet to stir up leads and consumer awareness about his chosen profession.