Brokers rejoice over policy change

Brokers rejoice over policy change

Brokers rejoice over policy change It’s about time, say brokers upon hearing the news that more transparency will be required of their major bank competitors going forward.

“Transparency is very important to the consumers as they can make an informed decision of whom they would like to conduct business with,” Angela Wong-Liao of Invis the Money Lady said on MortgageBrokerNews.ca. “Our broker channel has been bombarded with so many disclosure forms since January 2009 and I believe that the lenders -- whether it is a bank, credit union, trust company, investment firms -- should have similar disclosures when they are dealing directly with consumers as it is their fiduciary duties to do so.”

Canada’s eight largest banks recently promised to provide more information about collateral mortgages; including online educational resources and better training for bank employees to help them better explain the difference between collateral charge mortgages and their conventional counterparts.

“Our government is standing up for consumers and saving Canadians money,” Finance Minister Joe Oliver said of the voluntary policy.

And brokers believe the move signals one small step to better protecting clients – especially those who may encounter financial trouble.

“In this economy you never know when you may be downsized, laid off or some other unforeseen life event may happen; you need to have all your options available,” Gale Tracey of Mortgage Architects said. “The clients I have talked to had no idea that when they signed their collateral mortgage agreement they gave up 100 to 125 per cent of the value of their home.

“If they had needed to obtain a second mortgage to get them through a financial set back they would not have the equity or freedom to obtain a second mortgage.”
 
24 Comments
  • Christine 2014-09-08 12:10:14 PM
    If the original registration was set up for an amount higher than the current mortgage, the customer may be able to take advantage of increasing their lending amounts without having to re-register.
    Not sure why you have suggested they can't get more money in this instance. What they can't do is have a broker flip flop them all over the place in the name of paycheck.
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  • Toronto Broker 2014-09-08 12:17:23 PM
    I think first and foremost the branches need to be trained better on mortgages. Coming from the bank, there are so many branch staff and even mortgage specialists that don't even know their own documents nor can they explain them and yet they're being entrusted with most client's largest assets and debt. One large bank specialist told me he had been there for 3 months and was knew to the industry. His answer to their training was he got a user name and password to access some online training. Wow! From there, yes it is great that the banks will have to disclose more.
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  • SWO Broker 2014-09-08 12:23:43 PM
    Hi Christine, Banker?
    A 2nd mortgage is not a new 2nd mortgage, it is in 2nd position. As you may or may not know a refinance is limited to 80% LTV. If a bank has registered to 100% or 120% that home owner can no longer place a 2nd mortgage behind the first to help them get out of debt. So it is actually a good strategy saving the clients from paying a penatly early on their 1st mortgage.
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