Realtors seeking mortgage broker licenses

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A growing number of real estate agents are taking out mortgage broker licenses as a way of better guiding clients and protecting property deals increasingly susceptible to financial turbulence.
 
“As a Realtor, I see a mortgage agent license as an asset for my clients, in helping them secure a home as well as the most appropriate mortgage,” said Idalia Batson-Grazette, a real estate agent with Right At Home realty in Toronto and now a mortgage agent with Matrix Mortgage. “I saw becoming a mortgage broker as a natural progression.”
 
The 35-year veteran of real estate took that step two months ago. She’s not alone with a growing number of Canadian real estate agents taking provincial licensing exams and signing up with mortgage brokerages looking for well-connected professionals, according to several industry insiders.
 
Likely driving the trend are new mortgage rule changes meant to lower Canadian household debt but that have made it more difficult for homebuyers to win financing at the Big Five. Forecasts predict increasing demand for mortgage brokers as more and more Canadians, out of necessity, explore borrowing options available through the broker channel.
 
The Canadian debt-to-income ratio, in fact, rose from 93 per cent in 1990 to 148 per cent in 2009, according to a new study by Statistics Canada. First-time buyers, in particular, have been affected, with younger Canadians taking on more debt to own a home and then steadily paying it down as interest rates began dropping and credit flowed.
 
 Among those Canadians carrying debt, unattached individuals had a total average debt of about $69,000, compared to $102,000 for lone parents, and $147,000 for Canadians in couples with children.
 
Those kinds of pressures haven’t killed the dream of homeownership, although they have made many Canadians more cautious about sharing their financial information. That sensitivity will likely accrue to the benefit of Batson-Grazette and others offering her kind of dual expert services.
 
“Everyone has an aversion to filling out forms and sharing information with various professionals,” she told MortgageBrokerNews.ca. “In dealing with me as a real estate agent and a mortgage broker, a client is limiting any loss of privacy.”
 
An increasing number of his own clients are now relying on him to fulfill that same dual role, said Michael Tepper, a real estate broker and principal mortgage broker with Nadlan Realty Ltd. He acquired both designations in 2008, with his brokerage focused on residential and commercial real estate and financing. Another mortgage broker/real estate broker works on his team.
 
Still, Tepper doesn’t foresee a glut of Realtors looking to expand their businesses by becoming mortgage professionals, even in Central and Eastern Canada where home sales are expected to slow. The country’s aging population further limits the number of first time homebuyers in both the short- and long-term.
 
The learning curve for real estate agents looking to make the jump may also slow further migration.
 
“It’s a very hard transition and I think real estate professionals have to ask themselves if they have the time to become a professional in both industries,” said Brian Matthey, president of Verico The Mortgage Professionals, in Kingston, Ont. “I don’t know that I, as a mortgage broker, would have the time to devote to becoming a real estate professional and the same applies in the opposite direction. The number of people in our industry doesn’t matter, but the number of professionals does.”
 
  • Joe Devison on 2011-04-28 2:41:54 AM

    Would not the lenders look at this as a conflict of interest? The realtor has something to gain by being involved with the financial aspect of the mortgage transaction and this could lead to fraudulent activity. With the realtor involved as the mortgage broker in his or her own real estate deal there would be a obvious conflict of interest.

  • Mario on 2011-04-28 2:50:35 AM

    I appreciated the comment from Brian Matthey:
    “I don’t know that I, as a mortgage broker, would have the time to devote to becoming a real estate professional and the same applies in the opposite direction. The number of people in our industry doesn’t matter, but the number of professionals does.”
    Not being a full time professional does jeopardize the integrity of serving the client, and the eventual reputation of our industry... leave each professional to do their job fully.
    Are we going to get to the point where someone will have a Realtor's licence along with a Mortgage Broker licence as well as be the appraiser & home inspector?

  • Ont Broker on 2011-04-28 3:08:53 AM

    Sure - let the milk man do mortgages too! If realtors can do mortgages then the mtge brokers and agents s/b able to sell real estae . What is the diff as long as the mandatory courses are complete. I believe it is more greed than anythning - especially with a multitude of new real estate people in the biz. This should not have been allowed - nor should it ever be allowed unless the rules apply for both. I cannot believe FSCo would allow as such !!! Especially when you read the money laundering issues ! PS - the lenders do not want realtor direct biz !

  • Alberta Bound on 2011-04-28 3:34:59 AM

    It's a total conflict of interest in my opinion. Why dilute the Mortgage Industry with allowing other designations to be mortgage associates as well. We need to create a level of professionalism in the industry where a jack of all trades, and master of none should not be allowed. How can you really best serve your clients by being a part time realtor and a part time mortgage broker - doesn't add up in my books. The mortgage industry needs to be more like Financial Planners, they are only allowed to hold other designations. It about time the Mortgage Industry strengths it's community by not allowing just anyone to join it!

  • No Need for Compliance Now! on 2011-04-28 3:44:40 AM

    I think we are heading Backwards, not Forwards.
    Where does the credibility come into play? This morning on TV, I seen a Gold Buyer who now claims to arrange Mortgages.

    Now Realtors want to be Mortgage Agents; what they weren't satisfied with making 5% on the sale, they now want our 1% too?

    If FISCO allows this, then the door swings both ways. All Mortgage Agents should get their Realtor License and stop referring Pre Approved Buyers to Realtors and start making points.

  • Alberta Bound on 2011-04-28 3:45:37 AM

    Sorry, NOT allowed to hold other designations.

  • AB Mortgage Broker on 2011-04-28 4:51:06 AM

    This is a huge conflict, not to mention a massive liability to the to both brokerages! Have you heard the saying, a jack of all trades and a master of nothing!! This should not be allowed, period. What a joke!!!

    If you want to clean up the industry, get ride of the part-timers and that includes the realtors who are dually licensed! The reason they hold two licenses is because they can't support themselves on one!!!!!!!

  • MP on 2011-04-28 4:53:49 AM

    I used to be a Realtor about 10 years ago and chose to forego that license so that I could focus on mortgage brokering. Also, I figured I would lose a lot of Realtor referrals too. What Realtor would refer any business to a broker who is also a Realtor. duuhh.

  • Ron Price / DLC on 2011-04-28 5:49:42 AM

    I have been a mortgage consultant for 20 years; 2 years ago i decided to get my real estate license mainly to take advantage of synergies including referrals to realtors w/o reciprication. Anyway i did OK in real estate but found that i could not serve two masters well. Our business has become so complicated especially over the past 5 years that it represents a huge learning curve that takes years to become really proficient and a true expert. My team asked me to return full time to market our mortgage biz to the next level and i did so realizing that i can make us far more income. I think the only reason realtors are moving to dual licensing is because they see the writing on the wall re the decline of real estate commissions.

  • Angela Wong-Liao/ Invis Mortgage Agent on 2011-04-28 7:12:26 AM

    As a veteran in the mortgage industry since 2001 and a former banker for several years, I truly believe that there is conflict of interest if a real estate broker also acting as a mortgage broker because in order to facilitate his/her real estate transaction, it can be very tempting for the real estate/mortgage broker to commit fraudulent activity.
    There is an old saying"Jack of all trades and good at none", it is very difficult for a real estate broker/mortgage broker to provide both services to his/her clients proficiently.

  • John Dearin DLC on 2011-04-29 12:31:38 AM

    In our brokerage you do mortgages, not real estate sales, full time, not part time. My people are very knowledgeable of mortgages and I don't want that knowledge affected by having to learn a whole new trade.

  • David O'Gorman Principal Broker on 2011-04-29 1:09:37 AM

    What a bunch of whining sanctimonious CRAP! We have conflicts of interest every day of our lives. How do resolve conflicts of interest? You disclose them in writing to all parties concerned! As a mortgage registrant you sell "garbage life" insurance & get paid a referral fee, did you disclose the referral fee to your client & tell them the insurance industry does not pay off in 15%-20% of the claims on "garbage life"? If you tell a client you work for them, are you spelling out exactly how much your brokerage is getting from the lender as a finders fee? If you recieved toaster points or cell phone minutes from a lender, did you disclose that? If you are dually licensed under RECO & FSCO, & you act as both in a transaction, you have a duty to disclose to the borrower you are making a finders fee from the lender & disclose to the lender you are making a real estate commission, conflict resolved.
    Real estate salespeople in Ontario have a probationary license after 200 hours of education covering real estate & mortgage law, contracts, appraisal, mortgages, POS & foreclosure & other topics & a permanent license after two years in the industry & another 120 hours of education...and a mortgage agent has a 5 day CAAMP/IMBA course...and with one or two more days education he/she can be an AMP! Truth of the matter is real estate brokerages see it as "value added service" they may reduce commission & compensate by recieving a finders fee...been done in the US for decades....and before mortgage agents/brokers "trash talk" real estate brokers being mortgage brokers you will find that in Ontario more than 40% of the Principal Mortgage Brokers are also Real Estate Brokers(not salespeople).....for those who like the "Jack of all, Master of none" line...there are eight people in Ontario who are licensed as BOTH, medical doctors & as lawyers....last time I looked doing mortgages did not require the skills of a surgeon or a litigator.

  • Bobby D. on 2011-04-29 9:05:03 AM

    There's an upside here. Don't sell the realtor on doing mortgages, but on getting a license so he can talk to his client and take the mortgage app. Then he can give the app to a full time mortgage agent in the brokerage and get paid a fee, like a co-broker fee. What's wrong with that? But I don't think anyone should hire a realtor to be a mortgage agent without doing it that way. Just my two cents.
    And it's easier to get an AMP then it is to get a speeding ticket.

  • Mortgage Broker on 2011-04-30 11:50:39 AM

    Re: David O'Gorman Principal Broker

    Are you kidding me?! Obviously the comments from those of us who value and would like to maintain the integrity of our industry, not dilute it, have hit a nerve. Judging by your comments you are a follower not a leader. If I understand you correctly, because someone else is doing it, it's okay. Can't fix stupid!

  • Earl King on 2011-05-13 7:28:22 AM

    You can't be all things to all people. Whatever happened to becoming very good at one thing and having other professionals really good at what they do surrounding you.

  • Elfie Hayes on 2011-05-17 7:16:02 AM

    I've met a good number of Realtors who also hold a mortgage agent license recently. Trouble is most of them are new to RE and can't write a decent offer let alone know all the ins and outs of the mortgage business. Our Industry is doing nothing to protect the public from them. CAAMP allows them to be members, FSCO has no issue with it, Mortgage Brokerages encourage it! The Realtors I do know that are successful are so busy selling homes that they do just wouldn't consider doing the mortgages! Maybe that's the answer.

  • Kinger on 2013-04-29 8:03:19 PM

    Really!! The question is "can you be proficient at 2 realitively similiar services". The ability to create a relationship of trust and assist thru the end of the buy and finance of a home is what most buyers are looking for. You are not trying to cheat the homeowner!! commissions are disclosed and mortgage rates are published daily. It's not about cheating its about good wholesome service. Every buyer Client I have ever had understands this value. Learn to be transparent and a relationship based professional and this conversation is over.

  • Smart on 2014-08-28 2:30:18 AM

    I am both and I love it. No problem at all if you are honest and trustworthy. Some people are jealous and can't even get one license. That's y u putting them down. Good luck holding a job. Losers.

  • Toronto Broker on 2014-09-02 1:07:42 PM

    I do not agree with anyone doing mortgages p/t. I also do not agree with banks having people who know little to nothing about mortgages handling mortgages for their clients. The broker industry and the banking industry should only be allowed to work mortgages as their f/t role. As another said, Jack of all trades, master of none. Stick to real estate and let the 'mortgage professionals' handle the mortgages...for the clients benefit if for no one else.

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