“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.”
It’s about time, say brokers upon hearing the news that more transparency will be required of their major bank competitors going forward.