“The implications are pretty significant because it will pressure brokers to buydown more business,” Samantha Gale
, MBABC CEO, told MortgageBrokerNews.ca. “Because the whole concept is for brokers to disclose and break down commissions, it will put more pressure on them to take lower commissions.”
Not only that, argues Gale, but the big banks could potentially exit the broker channel due to the increased level of competition.
“The banks will move to protect their branches because they won’t be able to compete with the broker bought-down rates,” she said.
The Mortgage Broker Regulator’s Council of Canada recently released its autumn newsletter, and in it mentioned FICOM’s plans to change detailed disclosure for mortgage brokers.
“FICOM is preparing to require brokers to provide more detail regarding compensation,” the council said in the newsletter. “The additional information is intended to shed light on the incentives and compensation structures for mortgage brokers.”
Gale says FICOM has not yet released any information about what the change would actually constitute.
MortgageBrokerNews.ca is working with FICOM to attain further information.
A rumoured rule change around fee disclosure will eat away at broker commissions and lending options, argues the MBABC.