Brokers react to FICOM decision

Brokers react to FICOM decision

Brokers react to FICOM decision Despite months of fighting, brokers feel they have lost following FICOM’s decision to change mortgage disclosure rules.

Brokers in British Columbia will soon have to disclose to clients exactly how much they make on a deal. Many argue this puts them at a competitive disadvantage.

“I agree with the industry sentiment we’re competing with the banks, which have about 65% market share, and they will have an advantage because they don’t have to disclose (what they make on the products they sell),” James Laird, principal broker at CanWise Financial, told MortgageBrokerNews.ca. “I’m OK with disclose but everyone who writes mortgages in any capacity should have to disclose or none of us have to.”

It’s an opinion shared by many in the mortgage industry. However, similar rules will likely never be required of bank mortgage specialists due to the fact that banks are federally regulated. FICOM is a provincial regulator.

For similar rules to be passed on the bank side, OSFI would need to step in.

Still, that hasn’t stopped brokers from crying foul.

“There should be similar reforms in place for the bank originators including the points and perks that are paid the referring realtors for sending their clients to the Big Five,” Matt McKillen, a Toronto-based broker, wrote in the comments section of MortgageBrokerNews.ca.

FICOM announced Wednesday it is tweaking disclosure rules for mortgages originated by brokers, despite heavy criticism from the industry.

The B.C.-based regulator shared the information with MortgageBrokerNews.ca via email.

“My office is proceeding with plans to implement improved disclosure measures for mortgage brokers in British Columbia,” Carolyn Rogers, Registrar of Mortgage Brokers at FICOM, said in the email. “We have reviewed feedback received from industry in response to the open letter sent in January and appreciate all the comments.”
9 Comments
  • Victor Simone 2016-03-31 8:34:14 AM
    So when FICOM requested feedback from it's stakeholders, it seems all they were really doing was trying to appease folks and pad their files. Peccato.
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  • James 2016-03-31 10:01:18 AM
    Ummm... the banks do not disclose how much income they make from a mortgage? Really? The fact that anyone in our industry would say that baffles me. The banks disclose every penny they make on every product they sell.

    As for bank reps... they are EMPLOYEES of the bank, and as such they are not required to disclose their incomes, commission or not. Why? Because they sell only their employers products and, unlike brokers, do not make the claim that they work for the customer and not the bank.

    Realtors... ARE already required to disclose the exact amount that they make from the referral when they send it to the bank. That change was brought down years ago.

    If anyone wants to know why the regulator is going ahead with this, you only have to look at the commentary made: "It's unfair", "How come the banks don't have too", etc. etc.

    Not one credible argument that offers an alternative or addresses the regulators concerns. Not one.
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  • Victor Simone 2016-03-31 11:26:10 AM
    Question for James : Why do you think disclosing your revenue on the sale of a product helps the customer ?
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