New ratesheet.ca features rile brokers

by |

The new feature of a lead generation website – where rate shoppers submit applications to site administrators, who then decide which broker to give them to – is raising eyebrows and legal questions among brokers.

“To our knowledge, this complies with provincial regulations,” Vik Palan, president of ratesheet.ca, told MortgageBrokerNews.ca. “This is one of the avenues for mortgage brokers who really believe in generating leads online.”

ratesheet.ca’s new Mortgage Rate Comparison features, trod out this fall, add a new dimension to  the online lead generation process as an increasing number of Canadian brokers now rely on to bring in business.

As an alternative to just providing rate shoppers a list of interest rates and the contact information for the mortgage brokers, ratesheet.ca will now collect application details and then handpick a specific broker to give the deal to. Brokers pay an additional fee for the privilege.

“We get the lead to fill out a mortgage quote form, with credit history, property details, etc,” said Palan, “and then we go to our database and match up those clients with the appropriate broker, based on location and our feedback and assessment of individual brokers based on their high customer service abilities and the number of mortgage professionals they have to service the client.”

The new feature has already riled some brokers, telling MortgageBrokerNews.ca that the service “undervalues” what mortgage brokers do for consumers.”  

Ottawa broker Robert Stanfield also has some misgivings about the ratesheet.ca feature, recently sharing those qualms with Palan in an email.

“I’m not against these sites – everyone has a right to do business as they choose, although I just don’t think that they promote the professional image and knowledge of broker,” the Invis agent told MortgageBrokerNews.ca. “I do question the experience of the people running this website, and what is their ability to vet a broker on behalf of the client?

"Just because a guy can put together a deal quickly doesn’t mean that he’s a licensed or professional broker."

Palan, not a mortgage professional, argues the new service provides a select number of his broker partners with stronger leads and takes some of the time-consuming vetting process off their plates.

It’s also fairly applied, he told MortgageBrokerNews.ca, in that broker selection is performed on a rotational basis, ensuring all appropriate brokers for particular types of deals are considered.

Broker demand for Palan’s more conventional rate comparison features has significantly grown since the site’s launch last December. ratesheet.ca now has more than 400 broker-partners listing rates on its site.

That practice is itself controversial given many are buying down rate in order to better attract rate shoppers.
 

  • George on 2011-12-13 4:02:03 AM

    These sites come and go. Posting your lowest price on the web is a terrible and desperate way to run any business.

  • Liz on 2011-12-13 4:39:51 AM

    This is driving a behaviour that we need to stop. It ISN'T about the best rate people. Stop selling rate! The consumer needs to understand so much more with respect to mortgages. Any Tom, Dick or Harry can sell rate.

  • Steve the broker from burlington on 2011-12-13 4:55:38 AM

    It's a bait and switch game... I'll show you 2.99% for 5 yr fixed... I do have access to it... but how many clients do I really sell that product to? NONE.. and why? Because it is more than just rate... a mortgage is about the prepayment privileges, the payment options, the PENALTIES to get out of the mortgage... can you pay the mortgage out without selling the home?...are you comfortable the Lender will be there in 5 yrs to renew?... customer service levels of the lender... Is this mortgage a COLLATERAL CHARGE OR A REGULAR CHARGE?? does the average consumer even know the difference...? etc, etc... these sites will be popping up more and more... but it's up to Broker and the Broker associations to educate the consumers... Goodness knows the Banks and Lenders won't do it... Just look at ING and TD offering collateral mortgages... KNOWLEDGE IS POWER.... spread the knowledge...

  • Liz on 2011-12-13 6:27:06 AM

    Steve the broker from Burlington - just an FYI. National Bank, ICICI, HSBC also register everything as collateral. Any HELOCS including RBC, BNS are also collateral and the FLM matrix is NON transferable. There are also numerous mortgages out there with various lenders that are NON transferable.

  • VERSICO Financial Inc. on 2011-12-13 6:32:38 AM

    It would appear that this group is acting as a financial intermediary while not registered under the MBLA Act.
    If - “We get the lead to fill out a mortgage quote form, with credit history, property details, etc,” said Palan, “and then we go to our database and match up those clients with the appropriate broker, based on location.
    It would appear that the mortgage quote form is in fact a mortgage application and therefore regardless of who they send the application to, this group is engage in unlicensed mortgage brokerage activity since they are soliciting clients who wish to finance real property.

  • MBCCSN.ca on 2011-12-13 7:01:01 AM

    This website is definitely not compliant with the Ontario provincial requirements.
    The first non-compliant item is the fact that all these brokers and agents are not prominently displaying their brokerage entity name and their license number.
    Secondly, any entity that wants to deal or trade in mortgages (see definition in the act) requires to be licensed with FSCO.

    Karim Talib

  • TV on 2011-12-13 8:51:45 AM

    Quote from FSCO: "Disclose to the borrower in writing whether the Mortgage Brokerage has paid, may pay, or will pay a fee to another person/entity in connection with the mortgage, the name of person/entity receiving the fee, and the basis for calculating the fee or other remuneration. If it is a benefit other than money, disclose the nature of the benefit. Obtain written acknowledgement from the borrower." Therefore, as long as there is disclosure, it's compliant.

  • Bob on 2011-12-15 2:07:01 AM

    Sorry TV...
    This company is not a Licenced Brokerage (at least in Ontario) so the Disclosure stmt you refer to is irrelevant. FSCO will determine one way of the other providing someone submits a compalint to them. My feeling is that they have evolved from a lead generation site to a firm that is now dealing in mortgages.

  • Complain to Regulators on 2011-12-15 9:02:20 AM

    Someone please make a formal complaint to your respective provincial regulators. They are definitely "dealing" in mortgages without the proper license.

  • Steve on 2011-12-17 6:43:23 AM

    The broker community as a whole needs to focus on more than rate. Lenders are increasingly frustrated by the generally low funding ratio of the broker community. This dramatically impacts their profitability, and as a result means that there is less and less attraction to the broker channel. It is why TD has hired over 1000 new road reps in 2011, and why FirstLine is priced out of the market, and why other lenders in our channel are struggling. Yet we as brokers still demand higher VB, higher Finders fees, and faster Turn Around Times!! When will the industry wake up and understand that lenders are our partners - we have to work with them - they need us to be successful just as we need them to be successful. If we do not pull up our socks then the broker industry in Canada is in some serious trouble.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions