If Emili is the baby, rogue banks are the bathwater, say brokers pointing to ethical lapses by transitory mortgage specialists using the valuation system.
“I like CMHC’s Emili valuation system, but like anything else it is subject to abuse and in my experience, the bank branches are abusing it, not brokers.” Michael Mullis, president of Mortgage Teacher Inc., told MortgageBrokerNews.ca. “At the bank, because of the turnaround in branch employees, they seem to be a little loose and a mortgage specialist who uses Emili to get an inflated valuation may not be there when it comes time to face the consequences.”
The assessment jives with that of other brokers responding to the release of federal documents outlining industry concerns about overvaluation of property assessment through the automated program. CMHC is now defending the system as are a number of mortgage brokers, fearful the criticism will see the industry return to on-site appraisals, and “ultraconservative valuations.”
While the banks are among the biggest critics of Emili, Mullis suggests their own lack of accountability has jeopardized a significant number of broker clients.
"I had one lady who bought a house for $100,000 and then eight months later, with the branch getting approved on Emili, she did a refi for $180K," he said. "Now she owes $164, through a refi and line of credit on a house that’s really valued at $124,000."
It’s the kind of tinkering few brokers would attempt, he said, pointing to their licensing and the accountability that comes with it.
“We’re simply not going to jeopardize our business,” said Mullis. “We’re more accountable.”