Broker frustrated by auditing double standard

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One broker is frustrated by what he perceives to be a double standard when it comes to how brokers are audited compared to their banking counterparts.

“They’re not necessarily audited … at the bank level," Steven Brouwer of Dominion Lending Centres Entrust Mortgage told MortgageBrokerNews.ca. “When (we) send a file into Scotia or TD or a monoline lender they are analyzing every document, they’re looking at everything; which they should. Why is there at a double standard at the branch level (that doesn’t require the same auditing)?”

Brouwer’s complaint comes on the heels of a deal a bank was able to execute after his broker failed. And according to him, it has more to do with lack of oversight on the bank's part than the particular mortgage specialist’s execution on the file.

“One of my brokers called me the other day complaining, (saying) ‘worked on this file back in November of last year, I just found out the client was able to do their mortgage with (a big bank and) there is no way they qualified for that mortgage but (the bank) pushed some paperwork through and somehow got it done,’” Brouwer said. “I think at the bank level a lot of times the people who are handling the mortgages and looking at the documents either don’t ask for the right documents or just kind of close their eyes and go ‘I got a pay stub here, it’s probably not what I need or I shouldn’t be submitting but I can push this one through.'”

There are currently no standards for auditing a bank file, according to Brouwer, who is calling for the federal government to “level the playing field.”  However, he isn’t optimistic.

“A monoline such as Street Capital, are constantly getting audits whether it’s from their investors, the mortgage backed security company, in-house, CMHC or Genworth,” he said. “Whereas if I’m (a big bank) who is doing the audit? CMHC is not doing the audit. The only one who might do an audit is their internal. Might.”

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  • Joe on 2014-02-27 1:41:26 PM

    Banks are regulated under OSFI and have much more rigorous requirements then a brokerage company or a Monoline Lender would across a number of different levels rather than just relating to mortgages. I don't think there is any fear that one of the Top 5 banks could close their doors but we have seen it happen to Monolines before. You cannot reasonably argue a consumer is as protected in dealing with a broker or a Monoline than a bank (IE Ombudsman Office and Customer Care) with groups like this within their own organization. Different rules apply because they are different period. Protect the consumer the way the banking industry does...then we will have a voice to argue with on a level playing field.

  • Observer on 2014-02-27 1:45:48 PM

    Well Steve Brouwer you may have to change who you refer to on the monoline side as Street Capital have applied for their bank status. Maybe they were tired of the audits.....or maybe they want to go direct to clients in the future.

  • Angela Wong-Liao - Invis Inc on 2014-02-27 1:47:15 PM

    I agree that there may be certain degree of double standard for adjudicating broker deals versus branch deals by the big banks. As a former bank branch manager, I also understand the importance of maintaining a core bank branch client. The branch level may have better leverage than the broker channel because if the clients have other dealings with the branch or related to a very important core branch client, ie: investments, commercial dealings, etc, the branch may approve the mortgage deal on exception basis. Food for thought, Angela

  • Ron Butler on 2014-02-27 1:59:35 PM

    @ Anthony C.

    I already know I am fat, put your real name on your pointless, mean spirited posts and I am sure I can make my comments about you much more specific. The fact is lawyer jokes (which all of your list was stolen from) are okay because lawyers are almost entirely a group of self employed professionals that can easily deal with the ridicule. The vast majority of bankers are medium income salaried people who show up everyday including weekends and work very hard for their respected companies.

    So when you ridicule bankers masked as "jokes" the pure nastiness does shine through.

  • Myer Betel on 2014-02-27 2:15:04 PM

    Same reason Banks require a NOA to prove income from Brokers and an employment letter for internal Bank mortgage reps.
    Saves a lot of Commissions.

  • Anthony C. on 2014-02-27 2:52:20 PM

    @ Ron

    Your fat...? I did not know that...nor does it interest me since on this platform I am interested solely in one's opinion and I do enjoy commenting on those which I am either in favour of or opposed to...and from time to time I think we all need to tell a joke or be the butt of one to keep us a little humble...

    Now I have to get back to work...you perhaps should spend some time on recalling or researching why banker jokes are so prevalent...rather than being their mouthpiece...

  • Ron Butler on 2014-02-27 3:03:48 PM

    @ Anthony C,

    Just to let you know I saw the "no pun intended" that came after the "lighten up a little" part of your post before it was edited out so actually you did make the fat reference. So your jokes are in bad taste and you are also a liar.

  • Barb on 2014-02-27 4:26:59 PM

    Anyone who thinks bank audits are easy, has never been through one. No one from a bank likes to see the "suits and briefcases" heading towards their branch door, knowing it means a team of auditors is about to dissect every piece of paper in hundreds of files over the next two weeks. Branches may have discretionary limits, but the auditors will certainly note too much risk taken in any branch and their score will suffer along with the managers career.

  • Lola M. on 2014-02-27 5:08:18 PM

    Even Steven.......not sure that you should have a tantrum about this...after all the banks are the lenders and you are just a middle man.....unfair? maybe...but that is the game!...I know lots of brokers that make things happen when the banks don't and for the same reasons that you mention....
    Lola

  • Jerry on 2014-02-27 6:55:52 PM

    Yes same happened to me today....With TD.
    clients got the approval from the branch and i got the decline yesterday.

  • Lior on 2014-02-28 9:46:06 AM

    Branch staff and mortgage and specialists have more flexibility in some cases but not always.

    We were able to get files approved through credit unions at best rates when the branch was not able to do the mortgage including a file when the client had an existing mortgage with the bank. You win some, you lose some. I agree with Ron Butler on this one, move on to the next deal.

    For cases that are NIQ or AltA the bank will look at the assets a client has with the bank which they can offset in case of default. However just because a client has assets this does not necessarily mean the mortgage will be approved. The file goes to risk and they decide if an exception should be made.

  • Marc on 2014-02-28 10:28:09 AM

    Anthony C, I read your comments and take great offence. I have had a career in banking for over 15 years, and yes I am now in the brokerage industry. For you to insult so many people that are hard working, good at their jobs, who have clients that love working with them is so juvenile. Your attitude and presence is exactly what the brokerage industry is trying to shake. Just to remind you, the banks are not going away, they will always control the market, employ thousands of Canadians, and be profitable investments for people's investment portfolios or retirement funds. You sir, need to watch what you say, becasue you never know when you are going to need help from a bank, as we all do at sometime or another. On behalf of many of my friends and colleagues, who work their tail off at banks across the country, I say that we feel bad for you, and that you should grow up and act like the professional you say you are, but obviously are not.

    Ron, I totally agree with everything you have said in this comment string.

  • John Van Driel on 2014-02-28 10:38:34 AM

    Why is any broker still sending ANY deals to TD??

    Lets stop "ragging" on eachother, and start spending more productive time establishing creative strategies to improve our businesses.

  • Steven Brouwer on 2014-02-28 3:05:33 PM

    Folks, my quotes were not intended to start a bashing of banks in any way. I send in lots of deals to banks and credit unions and there are great people at them all. In fact I respect most of them and am friends with many of them. My comment was meant to say that 'some' bankers bend the rules to get a deal done. This is like in any business, there are certain competitors that do business differently than I would. We don't have that option (which is good!) but I think we should all be on a level playing ground. Regards.

  • Dave on 2014-02-28 4:16:07 PM

    I dont understand why people still send deal to TD & Scotia, I mean come on, they are the worse banks for mortgage broker. Double standard, so-call branch fulfillment (stealing client for fact), higher rates, low bps. Why people still even bother ? Do something together!!!

  • enough on 2014-02-28 6:31:06 PM

    I've said this before... one broker's opinion is NOT MortgagebrokerNEWS. What a waste of time reading this article and the subsequent bickering of so-called professionals. I have clients to service. Unsubscribe.

  • Bank Mobile Mortgage Specialist on 2014-03-01 7:25:49 PM

    First of all I second to the thoughts of “Deanna L.” …..I’m a banker for last 10 years and a bank mortgage specialist for last 8 years (now thinking when to become a broker).....Underwriter's grill my file same way as they would do a broker file. Have to bring in back up for each and every income used and down payment. No exceptions.... I'm sorry to read this article for bashing banks and specially TD. You cannot generalize your thoughts for all the bankers in same way. There are many brokers who don’t even provide quality service and don’t even pick their customers phone ....what about those brokers who lie to their customers....there are bad apples everywhere. No one is perfect.

  • Paul Mangion on 2014-02-27 11:49:36 AM

    For as long as I remember it has been that way and it will not likely change any time soon. At one point I new somebody that sat on a committee at one of the big banks and they would determine if they could go ahead and claim the loss with CMHC because the files were so bad.

  • John Van Driel on 2014-02-27 11:50:10 AM

    AMEN!!

  • Dave , Broker on 2014-02-27 11:59:37 AM

    Banks get away with all kinds of stuff at the branch level especially. Meanwhile FSCO is only concerned with what brokers are doing. Ridiculous system in Canada.

  • Anthony C. on 2014-02-27 12:09:57 PM

    go figure...a banker who lies for the sake of the deal...who would have thought...?

    and now for some comedic relief (which is desperately needed for our fellow brethren having to deal with this f*#!ed up system):

    Q. What’s the difference between a banker and a haddock?

    A. One’s cold and slimy, the other’s a fish

    Q. How do you stop a banker from drowning?

    A. Shoot him before he hits the water.

    Q. What’s the difference between a banker and an onion?

    A. You cry when you cut up an onion.

    Q. What does a banker use for birth control?

    A. His personality.

    Q. What’s the difference between a dead snake in the road and a dead banker in the road?

    A. There are skid marks in front of the snake.


    ....and last but not least....


    Q. Why did the post office have to recall a series of stamps depicting famous bankers?

    A. People were confused about which side to spit on.

  • Ron Butler on 2014-02-27 1:00:38 PM

    @ Anthony............ really not appropriate for a forum like this. Bad taste and mean spirited.

    As Paul said this has been going on for as long as there has been mortgage brokers.

    The branches and road reps have different rules but that may be as simple as someone who has $500K of investments at the bank and we should not cry about it. Move on to the next deal.

  • Deanna L. on 2014-02-27 1:06:24 PM

    Well doesn't everyone love to hate banks!
    That is correct, at the branch level lenders have their own discretionary limits and can approve deals accordingly. But, don't paint us all with the same brush, as a Mortgage Specialist with a major FI I have to back up everything on the deal with clear documentation. When it comes to income we typically have to provide minimum 2 types of confirmation. I too have lost deals to branch lenders at other FIs.

  • Big Bank on 2014-02-27 1:21:33 PM

    Well said Ron Butler

  • Anthony C. on 2014-02-27 1:37:19 PM

    @ Ron Butler

    Really...for a forum like this...? How typically moderate of you to say that...and furthermore, they are jokes...you need to lighten up a little...

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