Meet the broker who agrees with FICOM

Meet the broker who agrees with FICOM

Meet the broker who agrees with FICOM He has his issues with the proposal, but on a fundamental level this broker agrees increased disclosure is a good thing.

“I’m like the only guy in Canada who agrees with FICOM,” Ron Butler, broker with Verico Butler Mortgage, told MortgageBrokerNews.ca. “And it will come to pass, sooner or later. It will come to pass in every province eventually.”

Never one to mince words.

However, Butler does have his issue with the proposed interpretation change to FICOM’s Form 10, which would require mortgage documents to explicitly state how much brokers are compensated.

“I only have one problem with FICOM and I’ve said it openly on a number of occasions: The only difficulty I have is it’s very difficult to give a perfect answer (about commission earnings),” Butler said. “The difficulty I have is I don’t really know at the time; I probably know 95% of the income but I probably don’t know 100. Because some of that stuff is at the end of the year – I don’t know what I’m going to get until then.”

Butler said he doesn’t want to be held under a microscope but that he thinks full disclosure of the total gross income of a file is fair.

He also disagrees with one main argument that has been put forth by many mortgage brokers.

“Because in other businesses people have to disclose what they make. I know broker like to say, ‘well, they have to disclose because they’re actually charging the client for (their services), so of course they have to disclose. Our clients aren’t giving us any money, so we shouldn’t have to disclose that,’ Butler said.

“Well, wait a second. Shouldn’t you have to disclose what influenced you to go where?” he continued. “If lender A pays you $5,000 and lender B pays you $7,000 for a small rate difference, shouldn’t I be able to see the basics of that?”
28 Comments
  • Walid Hammami 2016-02-01 10:44:15 AM
    Here is a fact, Ron cuts about 20bps on a 5 year deal.

    Using a rate buy down calculator for a 5 years fixed you will see that he makes 0$ commission.

    His earnings are coming from just the bonus volume and other small perks . So for him showing the real commission as 0$ is certainly not a bad idea at all. He will take on more business because to the client it is a fair deal.

    Now for a mortgage agent that has to pay his agency 15-20% of his total compensation, there is no way he can compete against Ron or any online discount broker or any agency/brokerage owner that brokerage deals himself.

    Ron Tricked mortgagebrokernews into doing his bidding.
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  • Neil Wilson 2016-02-01 10:51:09 AM
    The last paragraph would be a protection to the 'client' but it won't happen even under FICOM. You will have to disclose how much you made not how much YOU COULD HAVE MADE. ie no comparison of lender A to lender B. What a mess that would be to put down all the possible choices you had but didn't take. This disclosure will be like the APR - what does that mean to the average client?
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  • Broker A 2016-02-01 10:52:22 AM
    Ron Ron Ron..... You are all by yourself in this one... You just don't get it!!
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