Are referral partners to blame for broker missteps?

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A recent case of alleged fraud involving several mortgage brokers has one seasoned pro speculating as to the influence of some of the industry’s most important referral partners.

Paul Mangion, a principal broker with The Mortgage Centre in Mississauga, says a few real estate agents sometimes mislead new brokers with the promise of a cornucopia of deals.

“You have an agent who says, ‘I can send you 20 deals a year but I need this one done,’” he says. “I would guess, and there’s no statistics behind this, but for 95 per cent of the frauds being done in mortgages on a purchase, the agent may have been aware of it.”

Mangion’s comments come on the heels of Home Trust’s suspension of 45 mortgage brokers who it argues were falsifying income documents. Regulator investigations are ongoing, although there’s no indication real estate agents were involved.

Still, Mangion maintains that real estate agents are usually aware of how much home their clients can afford. But the temptation to close a deal for a “happy client” and the commission that’s often 10 times that of the mortgage broker can result in pressure being place on that originator.

“Those types of agents rank their mortgage agents based on how much they can push through the system,” he says. “At the end of the day, they’re the first point of contact for these clients and RECO doesn’t do enough to get rid of them.”

But that’s not to say that brokers should get off scot-free.

“It’s always the broker (who is faulted), and they should be because they’re the ones who say they can do it,” he says.

 

 

 
  • Tony Piattelli on 2015-08-04 2:33:54 PM

    All I have to say is you're responsible for your own integrity and if you're going to give that away for a couple of thousand dollars then you don't deserve to be in the industry as this industry is based on trust and self regulation, and these brokers make it harder for the rest of us to do our jobs.

  • Erma on 2015-08-04 2:41:25 PM

    I totally agree. These agents know the difference between right & wrong. It is no one else's fault. It is unfortunate that they give the rest of us who do act with integrity a bad name.

  • Blair Anderson on 2015-08-04 2:59:35 PM

    Well said Tony.

  • james on 2015-08-04 3:01:43 PM

    corrupt individuals will almost always be corrupt. why blame someone else? o yea...the nature of the beast.

    no excuse for brokers like these...

  • marvis olson on 2015-08-04 3:17:07 PM

    I don't think new agents would know how to falsify doc's---I would say experienced agents who know the system are doing it

  • Tomas on 2015-08-04 3:25:16 PM

    You can't cheat an honest man.

  • my comment on 2015-08-04 7:55:40 PM

    This industry or shall I refer to it as economy is flooded with the fraud, no question about it. One shall refuse all risk that this behavior poses and including participation in any capacity as a lender or investor, unless the objective is to commit fraud or hide money from committing fraud. Home Capital is just a tip of an iceberg. Don't forget Chinese money launderers snapping up Canadian real estate because of lenient border laws and loose regulations. Mortgage fraud is no less of an offense than money laundering, both equally serious and with impunity. I will certainly look for "less stable banking system" but one without wool being pulled over my eyes or caused by incompetence of our regulators. The system worth to invest time and money. No wonder why our real estate is a world class joke. And the worst is yet to come unless of course you are in denial.

    http://www.theprovince.com/travel/Money+launderers+snap+local+real+estate/11262931/story.html

  • Victor Simone on 2015-08-04 10:17:12 PM

    Which mortgage channel has more problems with mortgage fraud, Banks with dedicated mortgage specialists or Independent Lenders ?

    I would love to see some data on this.

    Personally, I would guess -- Banks.

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