The Real Estate and Mortgage Institute of Canada (REMIC) has now delivered the recommendations of a 1,000 brokers to the man responsible for leading the review of Ontario’s MBLAA, with concerns about a potential double-standard high on the list.
“We had a roundtable meeting with several stakeholders and Mr. (Steven) Del Duca and he told us he was looking for frank comments; I got the impression he was looking for honest feedback on how to go about that,” Joe White, president and CEO of REMIC told MortgageBrokerNews.ca. “Whether that will translate into actual changes remains to be seen but he seemed genuinely interested in what everyone had to offer.”
The letter addressed a number of issues, including, among others; the definition of mortgage instrument and mortgage agreement, syndicate mortgages, mentoring, E&O insurance and requiring bank employees to meet the same disclosure standards. Bank employee requirements have been a hot-button issue for brokers, who feel that MBLAA standards give them an unfair advantage.
“Over 72 per cent of respondents indicated a belief that bank employees who act as mobile mortgage representatives also act or behave as mortgage brokers and therefore should be regulated by the MBLAA,” the REMIC letter stated. “If a bank employee meets the definition of dealing in mortgages as defined in section 2 (1) of the MBLAA and is dealing in mortgages with lenders other than the bank that employs him or her, the bank employee is acting as a mortgage broker (and) by not being required to meet the same standards of disclosure borrowers are not afforded the same protection as those borrowers dealing with a mortgage agent or broker.”
And the solution, according to REMIC is simple.
“We suggest that consultations be held with banks and other industry stakeholders to address how to harmonize the disclosure that a borrower receives in a brokered transaction, regardless of whether it is brokered by a mortgage broker or a bank employee.”
Del Duca has been fielding suggestions from several industry insiders – from CAAMP to REMIC and even individual brokers – but it remains to be seen which, if any, recommendations will lead to reform.
As for REMIC’s participation, it is something White believes the organization owed it to brokers across the country.
“With the review of the legislation, there were some things that need tweaking – that’s what we’ve been hearing from the brokers we’ve been talking to,” he said. “We felt it was our responsibility to share what brokers and agents were saying.”