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