Brokers react to FICOM decision

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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 “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

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 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.”
  • Victor Simone on 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.

  • James on 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.

  • Victor Simone on 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 ?

  • James on 2016-03-31 12:02:34 PM

    Victor, I never said that it does help the consumer. My comment was that the arguments being used are not valid because they are not wholly based in reality.

    If someone is going to make an argument either in favour or against something it must be made with thought and accuracy pertaining to the commentary/feedback. To do otherwise instantly invalidates it.

  • Lior Hershkovitz, Invis on 2016-03-31 12:45:15 PM

    Normally I stay out of these debates but I agree with what the brokers interviewed have said. If we are to do proper benefit to all consumers then it has to be a level playing field for all originators. I know a number of real estate Brokerage Owners who go on some nice all expenses paid trips every year courtesy of Big Banks for allowing mortgage specialists to sit in their office. Technically that's being compensated. Is that clearly disclosed to clients who are referred? I run a very transparent business and having clearly disclosed my finder's fee to clients for years I don't see it as a disadvantage. I may be one of the few here who holds the contrarian view that it adds credibility and builds trust because I tell them straight up: look, by law I don't need to disclose it but it's important that you see what I make on this and the work that's being done for that payment and the level of service that I'm committed to providing you before and after closing.

  • Clare Duncan on 2016-03-31 3:04:00 PM

    I'm a person who got mortgage through a broker in Vancouver, and found out after-the-fact when my brother became a mortgage broker that the rate I was given was higher because the broker opted to get paid more. According to him, I'm as clean as it gets and could qualify with anyone - a teacher, never missed a payment, and we don't have any debt. But my rate was higher than it should have been.

    This makes me happy because if I had seen that he was getting paid more to put us with his preferred lender I would have questioned it or got another option.

  • Walid Hammami on 2016-04-03 8:33:14 AM

    I just want to let you know about a fallacy @James said about banks disclosing every penny they make on a mortgage, I had a prospect who chose to stay with RBC for his renewal, so I looked up his name in RBC financial statements to see how much RBC made in his mortgage and to my surprise his name was not there /sarcasm

  • kac on 2016-04-12 4:08:52 PM

    @clare, i as well would have been disappointed that i was given a higher rate to earn a higher commission ie the firstline mortgage days which of course firstline was a division of CIBC as is presidents choice all at different interest rate levels,firstline is now gone and really this option has disappeared from the broker channel. I do remember a time however when i worked for the banks and credit unions,i was always taught when a mortgage came up for renewal to offer the posted rates even though the client that came in next got a fairly good rate discount because he threatened to shop the market. No i didn't pad my earnings by selling him the higher rate but you can guarantee the bank increased their earnings and no where disclosed the added profit they made. I think very simply we all just ask for a level playing field as we are dealing with other peoples money and should have their interest at heart firstly while realizing a profit needs to be made to keep in business.

  • Ruth on 2016-04-18 10:40:41 AM

    For years and years brokers had the advantage over the banks of lower rates, and for years and years brokers have sold the consumer a line that the banks do not care about the customer.

    Broker market share has continued to grow - at the expense of the banks. And yet as with every other article on this site, the commentary always goes back to that brokers think they are being treated unfairly and that the banks have an unfair advantage.

    News flash for the brokers. First of all - this change has nothing to do with the banks because they are not earning money from a third party whom they claim they do not represent at all in the transaction.

    Second, when it comes to banks competing on rate and service... it's OK for you to do that and not the bank? You have been taking their clients for decades, and that's OK. But they compete with you, and it's complain complain complain.

    Given that the big banks fund 90% of the lenders you use - I would think again about so much whining.

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