While FirstLiine’s BasisPOINTS settlement is a hot topic, some brokers are saying the actual demise of the program is good for the industry’s integrity.
“I thought they were very unethical,” Paul Mangion, with The Mortgage Centre in Mississauga, told MortgageBrokerNews.ca. “I am happy to see them go.”
Mangion is, in fact, voicing the concerns of many brokers, who objected to the FirstLine program, and to a less extent, others like it.
The beef centres of the idea that the program encouraged brokers to give higher rates to some clients in order to secure points for themselves or better deals for subsequent clients. Points were also once awarded for BFS deals, outside of that controversial rate incentive.
“Brokers should be working to get all their clients the best deal or best rates,” said Mangion. “This system tended to subvert that.”
While other lenders offered reward points as well, they were structured differently from FirstLine’s, said the broker.
“Other lenders offer reward programs as well,” Mangion said. “But they are just points generally offered as an option and not offered the way CIBC does.”
In an earlier interview with MortgageBrokerNews.ca, he also said that clients need to be told when their broker is providing them a ceiling rate rather than a floor rate.
“When we, as brokers, receive an extra benefit in the form of points from a lender for offering the high end of our rate range to an unsuspecting client, that has to be disclosed,” he said.
This week other brokers expressed disappointment with CIBC for discounting the value of the BasisPOINTS they have accumulated in its settlement offer. Kevin Power, president of Power Mortgages Inc., complained that the bank is offering 5 cent per point as opposed to the original price of 8 cents per point.