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.”
Win for monolines
Banks have advantage in 2014