Brokers call for license crackdown

Brokers call for license crackdown

Brokers call for license crackdown The case of 45 mortgage brokers facing suspension in the wake of allegedly falsifying documents is leading industry players to call for more ethics-based broker training.

“I think they need to work more on the ethics side when it comes to licensing,” Walid Hammami, a Montreal-based broker with Dominion Lending Centres told MortgageBrokerNews.ca. “Most of these guys feel pressure to get clients and compromise themselves as a result; they are under pressure and want to make money as fast as possible.”

Home Capital announced Thursday it had severed ties with 18 independent brokers and two brokerages – a total of 45 brokers – after an investigation pointed to falsified information about borrowers’ income.

The contracts were suspended between September and March and the lender attributes these suspensions to a loss in mortgage originations.

Some believe ever-tightening guidelines may have encouraged these brokers to bend the rules.

“You can give everybody education but you can’t change their values,” Tony Piattelli of Verico Quantus Mortgage Solutions told MortgageBrokerNews.ca. “The education should be much more focused on fiduciary duty but brokers aren’t making as much money as they once were and I’m not sure if some people are retaliating against the mortgage tightening because they don’t agree with it.”

The lender has not determined whether the brokers, themselves, were responsible or if it was the clients who falsely reported income.

“We have no proof brokers were responsible themselves, but business flows through them, so we held them accountable,” said Martin Reid, president of Home Capital.

Yet, certain players are calling for the regulators to strip the licenses of the brokers if they are proven to have knowingly included incorrect information.

“If it’s proven that they knowingly passed on fraudulent information then they should have their licenses stripped,” Piattelli said.
Added Hammami: “It’s not only up to the lenders – the brokerages have a part to play as well. The onus is on both of them and the regulators; if brokers are caught forging documents their licenses should be taken away.”
 
24 Comments
  • Ron Butler 2015-08-05 2:31:16 PM
    I like Tony's comments, the truth is you can NEVER legislate away bad intentions. Whether you add layers and layers of fraud education to our business (which is fine, the info is useful) or you expand investor disclosure to 12 pages or 50 pages it has little or no effect on the people who WANT to do fraud. Those bad folks will find a way no matter what barriers are built. So better to really pursue the evil doers relentlessly.
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  • Cinzia 2015-08-05 3:49:17 PM
    aggressive focus on meaningful, front line mortgage training - ie, how to package a file, how to find solutions for clients who don't fit into the new restricted govt/lender boxes may also reduce the level of fraud overall; it's getting harder to get files approved, this is a fact. For those brokers whose mainstay has been vanilla AAA deals, I'd imagine their income has taken a serious down turn. The easy road to fix that for some, if they're so inclined, would be fraud. the best solution is mandatory MEANINGFUL training. Better ability to find a solution to more files, means a greater % of your deals with fund, means you're not desperate to find ways to get around seemingly impossible barriers. we all have families to feed, and while this is not a solution for brokers who HAVE committed fraud, it would perhaps help keep more brokers away from it. I would respectfully suggest the mandatory training brokers must take to renew their licences could be revamped/greatly enhanced by some 'real, plain english, with real examples' training. Another suggestion would be to have mandatory mentorship (ie, 1 yr, seasoned broker must provide to new broker - with CAAMP formulating a list of required issues to be addressed and also matching the brokers up, as part of regulatory licensing requirements).
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  • Cinzia Dalgarno 2015-08-05 3:50:25 PM
    aggressive focus on meaningful, front line mortgage training - ie, how to package a file, how to find solutions for clients who don't fit into the new restricted govt/lender boxes may also reduce the level of fraud overall; it's getting harder to get files approved, this is a fact. For those brokers whose mainstay has been vanilla AAA deals, I'd imagine their income has taken a serious down turn. The easy road to fix that for some, if they're so inclined, would be fraud. the best solution is mandatory MEANINGFUL training. Better ability to find a solution to more files, means a greater % of your deals with fund, means you're not desperate to find ways to get around seemingly impossible barriers. we all have families to feed, and while this is not a solution for brokers who HAVE committed fraud, it would perhaps help keep more brokers away from it. I would respectfully suggest the mandatory training brokers must take to renew their licences could be revamped/greatly enhanced by some 'real, plain english, with real examples' training. Another suggestion would be to have mandatory mentorship (ie, 1 yr, seasoned broker must provide to new broker - with CAAMP formulating a list of required issues to be addressed and also matching the brokers up, as part of regulatory licensing requirements).
    Post a reply