Broker gets last laugh on REDX

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One broker’s victory over REDX marks an end to the kind of long battle too many industry professionals say they’re fighting because of AMP memberships.

 “I got my lawyer to write a letter to REDX,” Shawn Allen of Matrix Mortgage Global told “Pretty much to the effect that the inquiries were detrimental to my business and we needed them correct them and they ended up updating the REDX and removing the reports.”

The reports were created when Allen took out his AMP membership and then again when he cancelled his membership. However, all lenders were privy to was the fact that these reports were created – not why.

“Lenders looked at the REDX report and if they see inquiries, they don’t want to do business with you,” Allen said. began following the story in June of this year when Allen, frustrated by the detrimental effect the REDX reports were having on his business, reached out to vent that frustration.

“I don’t really like turning to the media, being a part of the story, like this – but I don’t know where else to turn,” he told in June. “But come July 3, if these reports haven’t been removed from my record, I will file papers and sue CAAMP and REDX.”

Thankfully, it didn’t come to that as the mere threat of legal action against REDX was enough to have the reports removed.

“I reached out to REDX on my own (to no avail) so I had to get my lawyer involved,” Allen said. “The letter said I would take legal action if they aren’t removed.”

Now that the debacle is finally put to bed, Allen has advice for brokers who may find themselves in a similar situation: Pay the nominal fee a lawyer charges for a similar letter.

“It was pretty inexpensive to get the lawyer to draft the letter -- $600 but it was worth it because I can get back to business.”

  • Paul Mangion on 2013-10-16 9:34:14 AM

    Good for you. It upsets me that CAAMP has not taken action on this matter. Why do they have to report this at all? Is it not enough to be listed on there website? Maybe agents need to take a hard look if they even want to be an AMP. I have never found the program to be of any value. Real world experience is the value. Our agents know they can piggy back on our experience because we are there for them when they need us.

  • John Bargis, Mortgage Edge on 2013-10-16 9:48:17 AM

    A classic case of David vs a perceived Goliath....The industry needs to be smart about these issues and band together to deal with the irresponsible reporting agencies who don't confirm facts, and those who report defamatory statements to them expecting no consequences...They both need to be held accountable for their negligent actions....Good for you for challenging them Allen....I did the same a few years back.

  • George Dannewald on 2013-10-16 9:57:50 AM

    I 100% agree with you Paul. I've been a mortgage broker since 1978, long before CIMBL/CAAMP came to be and had been an AMP for many years as well. I have never been asked if I were an AMP, and the mickey mouse allowances that were made in the beginning to become an Accredited Mortgage Professional with the AMP designation allowed anyone who stood behind a bank counter to receive it. Anyway, in 2012 I decided not to renew and I still dont get asked!
    Yes, if CAAMP were properly representing us, they would be working with REDX on this matter instead of the individuals having to take them on!

  • Paul Mangion on 2013-10-16 10:04:54 AM

    Don't forget CAAMP was the one who approached Teranet with the idea of REDX. Now you have a site that members can post anonymously about anyone. The membership fee I believe is $4000.00 per year. Too bad because I for one would love to post anonymously about a few bank employees. Rest assured there will be a site very soon that will allow us to do the same.

  • Laurel P. on 2013-10-16 10:30:38 AM

    When I dug deeper into my RedX I found out that CAAMP does NOT actually REPORT to RedX. RedX pull/scrapes the information from the publicly available member database, the SAME way it scrapes the information from the FSCO website about whether you have a licence or not.

    I'm not saying good or bad, I'm just saying that before you jump on the "big bad wolf" band wagon, you get your facts straight.

  • Paolo Di Petta | on 2013-10-16 10:36:05 AM

    a) It's sad someone had to pay $600 to remove a fake blemish on his report.

    b) It's sad that neither CAAMP nor REDX have done anything about this until threatened with legal action. Especially since CAAMP is supposed to be sticking up for us, and REDX is supposed to be about integrity.

    Also, it's not clear if REDX fixed their whole system, or just the one report. If they only fixed one record, this isn't that much of a victory.

  • John Bargis, Mortgage Edge on 2013-10-16 10:48:24 AM

    Fair comment Laurel P. - If CAAMP was unaware of this activity. The reality is they were, and have made no effort to address this unacceptable practice which puts them in the same category as REDX....There is no reason to put anyone in a predicament of having to engage legal counsel, to correct something that should never have been reported in the first place.

  • Blair Anderson on 2013-10-16 11:06:48 AM

    CMBA (Canadian Mortgage Brokers Association). There's one answer. Maybe one day we'll seek effective representation on a national level. Way to go Shawn.

  • @kiltedbroker on 2013-10-16 7:54:02 PM

    Well played Shawn. No one can call you toady to the man.

  • Andrew Ramdeholl on 2013-10-17 6:15:38 AM

    From what I have been able to gauge from industry lenders, fewer and fewer lenders are actually relying on REDX as accurate information. But never-the-less it is good to see a broker take a firm stance and is willing to follow a certain recourse through.

  • Laurel P. on 2013-10-17 8:58:04 AM

    @John Bargis
    does that mean that FSCO is in the same category because RedX shows whether you have a licence or not? That information is just as public as any other...

  • John Bargis, Mortgage Edge on 2013-10-18 8:57:58 AM

    Lauren P. - Please allow me the opportunity to educate you with the facts...FSCO is a regulatory body, extends the courtesy of notifying the allegations against a broker/agent, and allows the opportunity for one to defend their position at a hearing if necessary....REDX for your information does none of the above, nor are they or CAAMP a regulatory body, thereby permitting them to make unfounded public statements....I hope this helps you get a better understanding of the facts.

  • M. Robertson on 2013-10-22 3:47:52 PM

    Where to start... REDX is supposed to be a reporting agency, much like the credit bureau, however UNLIKE the credit bureau they scrape some information from the internet – accurate or not. They have to do this because lenders have not run to the front of the line to start reporting broker activity. The reason? Lenders are not fools, if they report a negative report about a broker they are required by law to have proof. If the report is about an illegal or questionable activity, they must report to the authorities – the burden of proof becomes theirs, and that is a significant burden for a lender to take on. They must also be willing to provide that proof to the broker which the report is about upon request. It is why the few lenders that use REDX only report funding ratios, and even then there is an issue because of pooling.

    The credit reporting agencies in this country are governed by legislation and the lenders are mandated about what they can and cannot report. REDX does not have this same level of accountability and thus the information that they present is not as reliable. One of two things will happen… (A) They will improve their level of accountability and provide true value to the industry. (B) They will cease to exist.

    As for CAAMP… I will NEVER understand why brokers continue to be surprised or disappointed that CAAMP is not advocating for brokers properly or as much as they would like to see. CAAMP is NOT a broker association, they are a mortgage association and represent brokers, lenders, service providers, etc. They are trying to be all things to all people, and that is a huge mistake. Yes mortgage brokers make up the vast majority of their membership, but since when has that mattered? Never. They also do not represent all brokers equally either. In Ontario? CAAMP is your best friend. Other provinces… isn’t Canada only Ontario? Don’t forget that CAAMP is trying to become the national body for mortgage brokers in terms of licensing… which given that the banks control the purse strings makes for an interesting proposition, yes?

    If mortgage brokers want an organization that truly stands up for brokers first then there needs to be a broker association. One that partners and actively engages with all brokers equally, independents, networks and brands alike. CAAMP spends a lot of time being nice to some and not so nice to others. It has always been “support us and do what we say or we will treat you like crap” – just ask some of the top brass at a few of the big brands what their relationship is like with the brass at CAAMP.

  • Blair Anderson on 2013-10-23 7:57:37 AM

    The time has come for mortgage brokers to get organized on a national level. As M. Robinson clearly states, CAAMP is no option. Too many interest groups. Like our provincial associations, we need one at the national level, with exclusive representation for the broker channel. Perhaps we don’t need to look any further than the model used by the Canadian Chamber of Commerce. They represent a network of over 420 chambers of commerce and boards of trade, representing 192,000 businesses of all sizes in all sectors of the economy and in all regions. I would like to propose the Canadian Mortgage Brokers Association (CMBA), and there needs to be equal representation between regions, and small and large brokerages. Once we have established a unified front, only then we can tackle the problems like REDX, imposed minimum volume requirements, an advertising fund, exclusivity contracts, etc... No one will fight harder for brokers than brokers. We just need to get organized.

  • Paolo Di Petta | on 2013-10-23 9:09:56 AM

    @M. Robertson
    I'm not surprised at CAAMP. And I'm only slightly disappointed. They're just trying to monetize every way the can.

    That being said, you can expect me to be vocal about it. I'm not looking out for them, I'm looking out for my industry. And I will make EVERY effort to point out their inadequacies.

    Also, I'm MOST disappointed in the brokers who stick up for CAAMP. Many hide behind the need for a national association - which, in principal, I'm not against. They need to learn to separate the desire for a national association from our current option, which is taking advantage of us.

    If we don't do something soon, we're not going to have any other options left.

  • Ottawa Broker on 2013-10-23 11:48:41 AM

    @ Blair,

    Why should there be an imposed advertising fund? Just join DLC if you want that. What about the $15,000 I spend a year on marketing and advertising? Why would I want to pay into a generic advertising fund that does not promote my business personally? A brokers marketing should not be left to a governing body. Regarding your minimum requirements, are those personally or by office/team? a proposed minimum is an idea that is not able to be enforced and two, each regions business available is different. I think you are looking more for something that suits your requirements, not the best for the industry as a whole. An organization could never enforce these guidelines.

  • John Bargis, Mortgage Edge on 2013-10-23 1:04:18 PM

    Dear @Blair....I strongly suggest you take a close look at the Insurance Broker industry which is very much like ours, but light years ahead....It's not about any one company's advertising, rather it's about the success of the industry as a whole....The problem that we are faced with is that there are too many self interest groups with your attitude that don't care about promoting our industry.... How tragic that you're choosing to look at our business through such a narrow scope. Wow!!!

  • Blair Anderson on 2013-10-23 2:42:42 PM

    Apparently I wasn’t clear on what I was trying to say. I was agreeing with the previous writer who said that “CAAMP is NOT a broker association”. As for minimum volume requirements, advertising fund, REDX etc, those are examples of what an association, purporting to represent brokers, might take on. For example, like the insurance industry, could we not use some advertising to promote the broker channel, or are you satisfied with the public’s perception of mortgage brokers?

    I agree John, the insurance agency is more evolved than mortgage brokers, but then they have been around longer. Also, insurance companies almost exclusively work with brokers. They don't deal directly with clients. We unfortunately we have but a few mono-lines to work with. Last I checked, mono-lines represent only 36% of the business originated through mortgage brokers. Why are we supporting the other guys? To start, as a minimum effort toward securing our future, mortgage brokers should be throwing the lion share of their business to mono-lines.

    Let me be 100 per cent clear, all I care about is promoting our industry, not any special interest groups. If we have an industry association that only represents the broker channel, then in my opinion, this will happen.

  • John Bargis, Mortgage Edge on 2013-10-23 2:45:58 PM

    Good to hear you understand the importance of promoting the industry as a whole...I do agree the barriers are high, hence the reason CAAMP who we all know is driven by special interest groups is not the answer.

  • Blair Anderson on 2013-10-23 4:36:26 PM

    Truth that!

  • David O'Gorman on 2013-10-24 6:05:47 AM

    Glad to hear talk about a REAL national organization for mortgage brokers, but would love to see some ACTION. A suggestion....have the provincial/regional organizations have a meeting, specifically excluding CAAMP, and agree on a process of formation of national organization, where representaion is from the provinces up, as opposed to CAAMP's dictate down organizational design. i.e. a Member of MBABC, AMBA IMBA etc would vote for an individual to be a director of the national organizatio. This would truly be representative of the industry. Some things need to be done on a National level, others could be done to reach economies of scale. As much as CAAMP & the banks want to make this a NATIONAL business, 90% of the laws that we deal & must comply with on a daily basis are provincial. In my personal opinion a strong provincial or regional association should be a priority, working towards a National organization.

    On a side note:REDX is owned by Teranet, which in turn is owned by Borealis, a subsiduary of the Ontario Municipal Employees Retirement System (OMERS) every Ontario municipal cop/firefighter/sanitary engineer's pension plan is benefiting from the brokerage industry's aggrevation.Maybe a little publicity directed at the "head" would make the "feet" move a little faster.

  • Blair Anderson on 2013-10-24 7:27:28 AM

    Now we're getting somewhere. Thanks for your comments David. You're bang on. Action is what we need. I like your sugggestion since the provincial associations have to be on board in order for this to fly, and in fairness to the hard work they have done already. We just need representation sometimes at the national level.

    Lets keep the momentum going. Everyone write to your provincial association and request the aforesaid meeting David suggested. If they get enough pressure from ALL of us, the meeting will take place. From there, with the right people elected, we will have our united voice to represent brokers on a national level.

    My next email is to the newly elected president of IMBA, Raj Babber. Lets see where this goes.

  • Paolo Di Petta | on 2013-10-24 8:55:57 AM

    @Blair, John, David.

    I agree wholeheartedly - we do need to band together and do something, but at the end of the day, the problem is the apathy of other brokers.

    I can count on two hands the emails I received from other brokers/agents regarding the MBLAA, and that was our chance to speak to the guy in charge of the rewrite and make ourselves heard.

    The sad reality is most people don't care about something until it's too late and that something slaps them in the face. That's part of the reason why CAAMP is such a disaster - they needed to be propped up by lenders and banks because brokers didn't get behind them. And now it's too late - we're being represented by a group who's only interest is to bleed us dry.

  • Blair Anderson on 2013-10-24 9:07:32 AM

    I hear you loud and clear Paolo. But have some faith. With the right people involved, and a good and viable alternative in place, things will get done.

    I fired my letter off to IMBA a few minutes ago. We have to start somewhere.

  • Paolo Di Petta | on 2013-10-24 9:15:37 AM

    @Blair - Didn't mean for that to sound hopeless or discouraging = it was more just to call out brokers on their apathy. Maybe some of them will answer the call.

  • M. Robertson on 2013-10-24 10:08:26 AM

    If mortgage brokers want to have a broker exclusive association, I say GO FOR IT! I think it is an amazing idea and one that is long overdue. I also suggest that we look at what has been happening in the world of accountants. For years there were several national associations – the two big players – CGA, CMA. Now there is one, CPA, and they exclusively represent accountants and accounting firms. They do a remarkable job of promoting the profession to consumers and they spend the vast majority of membership dues doing that marketing and promotion. They also have the role of setting standards for the industry; standards that are so well respected that it is used as a model in other countries around the world. This is where we want mortgage brokers to be, and if the effort is made, could easily get there. CAAMP had the opportunity and they blew it, it is time for brokers to take control of their own destinies.

    I would suggest that there needs to be some support or buy in from a brand leader as well. I can think of one or two that I think would definitely support and who CAAMP has essentially black listed.

  • Paolo Di Petta | on 2013-10-24 10:16:55 AM

    @M. Robertson

    Totally agree - we can look into all sorts of industry associations - Actuaries, Doctors, Engineers... even the insurance industry has a better model than we do.

    What we must avoid at all costs is the same fate as some real estate boards.

  • M. Robertson on 2013-10-24 10:28:18 AM

    Yes, you need someone on the team who has some idea of real estate boards and what they have done to the industry... at an executive level...

    There is only one brand in this country that is owned by a company that owns both a major real estate company and a mortgage company so has experience in this area.

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