Road reps borrow 'broker' name

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“For ease of use” some road reps are  casually calling themselves “mortgage brokers who work for banks” to better "explain" their role to clients, one told, arguing the practice is harmless.

“I don’t think it’s a big deal,” an Ottawa mortgage specialist recently quoted in a major Canadian newspaper told “What I do, to make it easier for the client to understand, is tell them that I’m a 'mortgage broker' who works for a bank. They don’t necessarily understand what a mortgage specialist or mortgage development manager is, so using ‘mortgage broker’ makes it easier for them to understand what it is I do.”

That September news article also refers to the mortgage specialist as a "broker."

The road rep, speaking on condition of anonymity, is among the growing number of specialists winning the kind of media attention all mortgage professionals covet as an increasingly complex housing market has reporters scrambling for expert commentary.  

But mortgage specialists are largely using the term “broker” to better describe themselves to potential clients rather than as a tool to win greater media coverage, said one  Monday.

The fact is some of their Realtor-referral partners are doing the same, using their websites to describe those road reps as “mortgage brokers.” Ostensibly, that is for the same ease-of-use reasons.

These latest examples come as CREA moves to downgrade its outlook for the Canadian real estate market, with the growth in home sales and prices slowing.

While new mortgage rules are largely responsible for the slowdown, they’ve also increased consumer need for mortgage advice, say industry veterans, worried unlicensed road reps borrowing the broker name unfairly position themselves to win some of that new business.

  • Max Cafissi on 2012-09-18 4:25:58 AM

    Not only is the use of the term " Mortgage Broker " by the Bank Road Reps unethical, it is illegal and should be reported to both FSCO and OSFI. A Licensed Mortgage Broker or Agent must, by law, identify him/her self by quoting his individual Licence #, the Broker he/she is employed by and the Brokerage Licence# on ALL correspondence aimed at the general public. Furthermore, I find it reprehensible that the Bank's Head Offices are allowing this to happen. They should be notified that this is happening and should be fined by OSFI.

  • @kiltedbroker on 2012-09-18 4:32:58 AM

    As a broker channel, we need to continue creating our value proposition around the service we provide, access to multiple lenders among other things is how we should be marketing ourselves.

    These mortgage specialists or road warriors will be exposed for what they are - small time bank reps that work for the bank, get paid by the bank to make money for the bank with few actual options for their clients. I say let them call themselves "mortgage brokers who work for the bank" they just will just look stupid in the long run.

  • BT on 2012-09-18 4:43:28 AM

    Ottawa consumers must be so entrenched and aware of the role of mortgage brokers that it's a kind of compliment that the "mortgage brokers" term is used to define a role. On the flip side, I've seen many mortgage agents advertise themselves as a 'Mortgage Advisor', 'Mortgage Consultant', or 'Mortgage Professional'. The FSCO rule applies to these people as well. Rules are rules and we as licensed agents and brokers must follow them.

  • Len Lane on 2012-09-18 4:48:19 AM

    Have to agree with Max. The other issue is that we don't even call ourselves the same thing from one province to the next. Its Broker and sub broker in BC, Broker and Asscoiate in ALberta and Sask, Resticted broker in Manitoba and sale person of all things. I'm licensed from BC to Ontario as is my brokerage and now that there are licenses its up to the regulators to monitor or crack down on offenders.

  • Sophia on 2012-09-18 4:49:14 AM

    I cannot believe no one is making an issue about this. Brokers/Agents are so heavily regulated and these people can simply use the term broker loosely to misinform thier clients. The same term that bank employees have bashed for years. Who is looking our for our best interest? As Max, above, perfectly described the requirments, why are they not enforced for anyone else?We had to drop the term broker, if we did not hold a brokers license and refer to mortgage agents, why are the rules different.

  • Brokers Rule! on 2012-09-18 4:54:36 AM

    This is a major issue as the broker channel continues to see its market share erode. Confusing the public by calling themselves brokers is a strategy, not a mistake. Quite frankly CAAMP perpetuates this confusion by calling both mortgage brokers and bank road reps AMPs. There are nearly 400 non-broker AMPs running around causing confusion while we pay our membership dues.

    You know what? It's time for a national mortgage broker designation. If these associations, all of them, are interested in building the broker channel they should start by getting together to form a new broker designation.

  • Corey Klassen on 2012-09-18 5:11:36 AM

    Better describes??...its total misrepresentation!! To me it’s illegal and a very serious issue that should be addressed by our Provincial Licensing/governing body in each respective territory. I have my office right inside a very busy real estate brokerage and it disturbs me greatly for these “road reps” coming into the office and solicit themselves as mortgage brokers and to portray themselves to the realtors and their respective clients as my equal…these road reps go as far as doing a sponsored “how to” seminar with a realtor and right on the agenda they’ll write "Guest Mortgage Broker is from Bank _XYZ_” …I carry a license and retain all the credentials that upholds the “legal” right to represent myself as a true/legal Mortgage Broker…just by definition of the word “Broker” , should be treated as an act of fraud when the bank rep uses it to portray their role in a transaction.

  • AMP Broker on 2012-09-18 5:16:20 AM

    Most of the road reps are accessing multiple lending products through various internal systems.
    So for all purposes they are essentially mortgage brokers except they have the trusted name of a big bank on their card.
    Its the way of the market and in all likelihood its going to become a bigger factor as the chartered's flex their marketplace muscle.

  • Paolo Di Petta | on 2012-09-18 5:34:17 AM

    As previously mentioned, this is not only unethical, but illegal here in Ontario.

    Not to mention, it's INCREDIBLY misleading. Mortgage Brokers and Agents are professionals. We offer a variety of products from a variety of lenders, unique to the situation of the client. Bank road-reps (who also go by 'specialists' in this province) are little more than application pushers who try to shoe-horn everyone into whatever bank product they can. Calling them 'mortgage brokers' is akin to calling the line-cook, "head chef".

    Not to mention, that even as an Mortgage Agent, with a job much closer (and even identical to some) brokers, we're still constrained to 'Agent'. If we can't use the title, they certainly shouldn't be able to either. I encourage any Mortgage Broker/Agent who sees this to report it to FSCO/OSFI IMMEDIATELY.

    (Full disclosure: I'm currently enrolled in the Broker licensing course)

  • OttawaSouthAgent on 2012-09-18 5:39:08 AM

    I work for a mortgage broker, but I personally am not a mortgage broker - I am a mortgage agent. If someone asks me if I'm a mortgage broker, I have to tell them, "no, I'm a mortgage agent; I work for a brokerage." So how can someone who is not a broker tell people he/she is?

    It should be pretty cut-and-dried - if you don't hold an FSCO Mortgage Broker license (or equivalent in other provinces), then you cannot hold out as a mortgage broker. Anyone doing so is misrepresenting themselves to the public, and should be charged/fined under the applicable legislation.

    A referral told me they were working with "a broker from the bank"; I suggested they ask the "broker" at the bank how many different lenders she "brokers" for. That referral is now my client, in part because she was compelled to ask herself, if the bank rep was misleading her about something as basic as her job title, what other statements should then become suspect...?

  • MBerg on 2012-09-18 6:28:47 AM

    When I introduce myself to clients I refer to myself as a "mortgage agent" because legally that's what I am. Even if it was "for ease of use" I would not use the title "mortgage broker" because I'm not one. I agree that if someone misrepresents themselves they should be accountable.

  • Mark on 2012-09-18 6:32:07 AM

    I've never heard of Bank specialists calling themselves brokers. I have heard them called brokers by referral sources or others in the industry. This is probably more of a broker industry marketing issue than deliberate misinformation by bank people.

  • Cliff Sabirsh, Alberta on 2012-09-18 7:02:02 AM

    In view of the confusion all National Brokers should now inform Bank CEO's, through our Association, that bank emplyees MUST call themselves exactly what they are, namely Bank mortgage loan officers. The Bank CEOs have to be told to implement this immediately or the Brokers association will launch a trespassing damages suite, which of course our association should do. Is anyone at our Association reading this? Associates reading this should forward this to our Association (sorry I do not have an email address to supply)

  • Ontario Broker on 2012-09-18 7:28:13 AM

    Max & Sophia have addressed the legalities eloquently. If all provincial regulators are not jumping on this issue, then we have to ask all our provincial politicians why not.
    But, in my mind, "Brokers Rule " brought up an even more important issue, why hasn't the Executive Director & the Board of CAAMP jumped on this?
    Just like the issue with the RBC rep in BC last year, nothing is done for fear of upsetting the banks.
    You are a broker/agent/subagent or you are a bank employee. If you are a bank employee calling yourself a mortgage broker you are a) a liar b) misrepresenting your qualifications to the consuming public c) CAAMP should be all over this like a" fat kid on a Smartie" & if they are not I have to ask the members why they pay fees to an organization that does not act in the best interests of the industry they claim to represent?

  • Derek Rowley on 2012-09-18 11:15:33 AM

    Max & Sophia
    I could not agree more but let's look at it from a real point. Do we really think any governing body is truly going to make waqves here? Really! Banks have been getting away with whatever they want to do. No questions asked. Double standards as in a law for the rich and a law for the poor. We have 2 regulatory bodies - one provincial and one federal and of coures our association and in all honesty I really don't see anything being done. Perhaps it is not a priority? What I can say is that we can't worry about yesterday because it is gone - tomorrow's future is uncertain and that leaves us with today and this is where all of us need to concentrate.

    With all due respect to Mortgage Broker News, I see a ton of articles that seems to stir up a bees nest in many of us - calamity, doom and gloom and it stirs up a lot of heat and anger in too many.

    To all I say, move forward to bigger and better. Let the bank road reps hang them selves. Life is just way too short to worry about these INFIDELS.

    Keep upo the good work by being an ambassador as you are now.

    Continued good selling to all

    VIVA Brokers and Agents

    Derek Rowley

  • RBC rep on 2012-09-18 1:01:00 PM

    Please don't assume that the actions of one or some mean that all of us bank "road reps" are doing the same thing. I agree with most of the comments here, but will ask how many agents, sub brokers, associates, etc respond to being called mortgage brokers, when in fact they do not hold a broker licence. I personally corrected many clients when they referred to me as a broker, due to my respect to the different titles within the industry. We work in a very competitive industry, there are people that act professional both as employees / representatives of a bank, and people that act professional in the broker channel. Lets not paint with a wide brush on either side.

  • John Dearin RPA,. AMP. on 2012-09-18 8:20:22 PM

    I assume that everyone that posts here complaining about the illegal use of the word "Broker" has also officially filed a complaint with their respective regulators?

  • JERRY J. ROSE on 2012-09-18 10:14:11 PM

    I have said for years that brokers need to have their own organization totally dedicated to improving the education and competance of mortgage brokers and mortgage agents.This organization in Ontario is IMBA not caamp. quit fooling yourselves caamp is dominated by the banks who are undermining the real role of a licensed mortgage broker deicated to obtaining the best mortgage possible for his clients. I urge everyone to join their local provincial organization that has only licensed mortgage brokers and agents as members.

  • John W on 2012-09-19 12:11:56 AM

    This is all about marketing, to mislead the client. If we include all these reps business in our stats of market share for brokers we could advertise Mortgage Brokers do 60%(estimate of all mortgages in Canada). That would take some thunder away from the banks. Wouldn't they love to see us do a National campaign advertising that. That would be payback!

  • Jim A - Toronto and Durham Broker on 2012-09-19 12:18:46 AM

    It amazes me with the justification that these bank mortgage reps consider it okay to use the word mortgage broker. Even mortgage agents working for a mortgaqe broker can possibly state that they are a broker since in essence they are doing just brokering. Though I beleive if you are professional mortgage agent working for a mortgage brokerage then proper representation should be upheld. Being the mortgage broker of record and working my way up from a mortgage agent then a mortgage broker of a few franchised mortgage firms I have branched out and opened my own firm. So if a mortgage broker has decided to open up a firm and have mortgage brokers and mortgage agents work for him/her then I think to maintain professional status one should ensure proper representation is given.
    Now going to these bank mortgage reps stating they are brokers is 110% misleading. I do not agree how these mortgage road reps are being allowed by FSCO and by their respective banks to use the term Broker. They as mortgage reps and their respective banks are not brokering deals. They work with clients to use their own products and that is it. As the word broker means it states that a broker is the professional who works with the customer and finds them the best product for their particular needs. A mortgage rep for a bank can not do that as they only have access to what their respective banks can offer. Now if a mortgage rep goes to a true mortgage broker/agent to get the deal done then what is being done is not brokering it is just being referred to a mortgage broker/agent to find a mortgage for the client when the mortgage rep's bank can not approve them. And how compensation here is done for this referal should in deed be explained and disclosed to the client because if it is not then that mortgage agent/broker who is getting the referal from the mortgage rep from the bank should not have to pay the referring bank mortgage rep or must disclose this as per FSCO.
    Thhis is not a small issue as trully if you have a mortgage agent/broker working under the rules and regulations mandated by the governing bodies and a mortgage broker of record trying to ensure his/her mortgage agents/brokers are following the rules then it seems unfair that these bank mortgage reps are allowed and have the benfit to use the word mortgage broker.
    This must be corrected and ensured these mortgage reps and their respective banks halt from using this title.

  • May on 2012-09-19 12:24:35 AM

    I'm a "Mortgage Agent" and represent myself as such. I just lost a client to an RBC "Broker" who just happens to have access to all of the lenders that we do and are also able to offer the client all of the different products that the bank has to offer?? I was alway under the understanding that we could offer our clients options with the different lenders and that was one of the ways that differentiates us from the banks. I always thought that the banks did not have access to the other lenders.
    *Oh boy was I wrong... Welcome to the future!!!

  • J Scott on 2012-09-19 12:34:23 AM

    I agree with Jerry. CAAMP did a marketing campaign to promote the AMP designation, which is held by both brokers/agents and bankers. With brokers share of the market only 25% (approx) why isn't CAAMP promoting Mortgage Brokers and agents instead of the cash grab designation. The road reps know we are trying to grow our share hence the reason they use the term Broker, its too bad our national association isn't helping our industry obtain a larger piece of the pie.

  • Bill Jones on 2012-09-19 3:46:48 AM

    It happens all the time MAY. I've seen a TDCT road rep place a deal with SCOTIA! They pass themselves off as a broker because they "farm" out business (i.e. turndowns, deal doesn't fit etc.) to a brokerage company and then obviously get a cut. They say they have access to multiple lenders, but THEIR institution gets first refusal. I've mentioned this to referral sources and they don't seem bothered by it. Frustrating.

  • Sophia on 2012-09-19 4:52:37 AM

    RBC Rep: A couple of years ago, we had strict rules enforced where we had to change all advertising, websites business cards etc to properly state our titles. We are either Mortgage Agents with our license number clearly displayed,along with our Brokers License number clearly displayed or we are a Mortgage Broker with the brokers license number clearly displayed. We take courses, pay tuition fees and write exams. Any advertising which doesn't comply to these rules are subject to fines. Anyone who notices advertising that does not comply can call and report them. So, we now have bank reps who conveniently call themselves brokers, in order to give their clients a better understanding of what they do without any repercussions. Your client is not being given accurate information, and the worst part of all this is the bank rep doesn't seem to mind misinforming them. I don't care which of my peers are calling themselves brokers where in fact they are mortgage agents. The fact remains, I have an option to report those if I choose to, and just because that may be happening doesn't give anyone outside of the broker world to do the same. By comparison, I guess its ok that I can discuss mutual funds and recommend mutual funds just because "I used to work for a bank for 25 yrs and used to have my Mutual Funds license" Maybe all mortgage agents including myself, and brokers should stop sending deals to the banks. We shall see how quickly the situation would be resolved.

  • Murray Savage on 2012-09-19 4:52:49 AM

    Calling a Bank Employee/Mortgage "Specialist" a Mortgage Broker is like Calling a Pet Vet a Medical Doctor

  • Larry Rachlin, Toronto Mortgage Broker on 2012-09-19 9:42:10 AM

    There ought to a standard term for those who work for and represent banks, (& related financial institutions.) Consumers have the right to be able to differentiate. The current situation is confusing.

  • @mortgagepro10 on 2012-09-19 2:54:50 PM

    This boils my blood. We are held to very high standards of ethics, continuous education and expensive licensing in order to carry the title of broker. In what industry is it acceptable to simply add false credentials in order to "make it easier for the customer"? A bookkeeper can not just simply refer to herself as a CA. A legal secretary cannot hold themself out to be a lawyer.

    The simple answer to this is that it is an act of fraud and should be sanctioned as such. The truth is likely not that it is easier for the customer, it is easier for the specialist to win the sale by fooling customer into false sense of security. OSFI needs to take a long hard look into licensing and regulation of specialists because tactics like this are detrimental to the entire mortgage marketplace.

  • Derek Rowley, RMA on 2012-09-19 3:19:40 PM

    Personally I would like to see one title for all agents and that being Mortgage Consultant.When I had that title no one ever asked me what a Mortgage Consultant was but I am asked what is a mortgage agent.Also bank road reps can show themselves as "Mobile Mortgage Specialists" whereas we cannot. I don't see the problem with showing us as Mobile Mortgage Specialist but shoulod we be caught doing this means fines and other forms of so called punishment.So what punishment will be handed down to the road reps?

    On a closing note, years ago when i was a licensed insurance agent I showed on my buwiness card "Insurance Consultant" and a major competitor filed a complaint and my lawyer rebutted that when a client comes to me, he is actually consulting me and therefore I was well within my rights. Nothing more happened. Maybe it is time that we challengeso called imposed legislation.

    just my thoughts

  • Joe F on 2012-09-22 5:20:23 AM

    have read all the comments and in my modest opinion CAAMP is the one that needs to represent us nationally and address this "mortgage broker" title issue with all Provincial Regulatory bodies in an effort to have them force the Chartered Banks to make their reps "cease and desist" using the "broker" word or have all their reps licensed.Simple enough as they(regulatory bodies)also have the power to force the hand and make them comply.

  • Susie q on 2012-09-22 6:21:19 AM

    We are all working to make our industry professional with standards and ethical practices. To sell insurance or many financial products you require licensing and training To continue to expose the public to unlicensed "professionals" considering the magnitude of a mortgage transaction is not acceptable for so many obvious reasons Training, licensing , mandatory e&o and liability coverage adds layers of protection for consumers as well as consistent accurate information to meet their borrowing needs.
    Provincial regulators should work together to streamline the titles and roles and responsibilities across the country and call upon osfi to mandate licensing of mortgage professionals working for Institutions under their jurisdiction

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