Realtor referrals challenge consumer protection

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Complaining about one bank’s Realtor referral program goes deeper than just cutting into potential broker business, according to one industry player. 

“It’s a free economy and you can’t stop people from doing business; the problem is innocent homebuyers – often first time homebuyers – are being advised to go to the bank,” Ad Lakhanpal of Mortgage Alliance told MortgageBrokerNews.ca. “Bank penalties are never explained to clients and you need to be a chartered accountant to figure these penalties out. The issue here is consumer protection.”

One of the Big Six has come under fire, once again, for an email campaign targeting Realtors for client referrals.

That email, which was originally sent to B.C.-based real estate agents, was obtained by MortgageBrokerNews.ca last week.

“From the standpoint of supporting someone and then finding out that they’re going over your head or trying to cut into your business it just doesn’t make sense,” Mark Fidgett of Verico NotaPennyDown, told MortgageBrokerNews.ca at the time. “I hope as an industry we can respond as a group because one-offs just don’t do it; they won’t care.”

And several brokers are frustrated that the broker channel bank is actively pursuing leads and undercutting broker business.

“My office stopped using (that lender) a few years ago when their road reps figured out a way to manipulate their system and offered discounting far beyond what was available anywhere and high referral fees to Realtors,” George Christopoulos of The Mortgage Centre wrote on MortgageBrokerNews.ca. “This is a free market but why do business with a company that clearly does not treat the brokers on a level playing field?”
 
  • Tony on 2015-05-20 9:53:14 AM

    I'm not sure of any lender that treats brokers on a level playing field against their other channels... and if you think otherwise then you are probably just being fooled.

  • Ron Butler on 2015-05-20 10:53:34 AM

    I am with Tony, mortgage brokers need to forget about complaining about things that will never change. We are just another distribution channel to banks. Make the most out of the good products the big banks offer and also support monolines and broker oriented banks because they dedicate themselves to our channel. Work for the consumer to deliver the best value and quit worrying about perceived "fairness" life and business is never fair.

  • George Christopoulos on 2015-05-20 11:03:01 AM

    Tony and Ron that is a given.
    Every lender looks after themselves first.

  • Walid Hammami on 2015-08-11 8:46:09 PM

    Lucky you guys.. Here in Quebec all Banks offer referral fees to realtors, financial planners, insurance agents and even general contractors.

    Add to that we have one third of the lenders you have access to. Because here in Quebec most of the monolines you have access to did not comply the french language rules so they can't operate here.

    We adapted somehow each with a different strategy.

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