Tougher MIC rules mean a better, stronger MIC community within the broker channel, says one Alberta broker whose family has been operating a MIC for some 30 years.
“That is a positive for the industry, raising the bar to become a MIC,” says Dale Koeller, the vice president and senior underwriter for Calvert Home Mortgage Investment Corporation. “Back then it was a lot easier to form a MIC. But then again, it was a lot easier to form a brokerage too.”
Tighter amortization and mortgage rules have captured headlines in the broker channel, but the ever-increasing number of hoops brokers and investors must now jump through to form a Mortgage Investment Corporation have proved challenging.
Still, those hoops will help the industry, says Koeller, who also praises the open nature of MICs, which “must fully disclose their mortgage investment criteria,” making a MIC more advantageous for investors.
In 2001, Dale joined his older broker Dean at the brokerage (Dean following in his father Everett’s footsteps in 1997). Everett founded the company in 1975, later forming in 1982 the Calvert Home Mortgage Investment Corporation to streamline financing for the real estate market under the MIC designation.
But the regulation of MICs in some provinces remains an open question.
, CEO of the Mortgage Brokers Association of British Columbia, has been working with the British Columbia Securities Commission on the language governing MICs and mortgage brokers. In her opinion – and by extension the MBABC – regulatory oversight is needed, but it is a question of just how it should be applied.
“Consumers do need regulatory oversight over the professionals who provide them with financial services,” Gale told the BCSC. “Registration under the Securities Act and its accompanying know your client rules and suitability requirements are certainly essential for financial intermediaries.
However, these requirements should not be imposed on MICs as MIC managers are not capable of fulfilling the role of financial advisor to the investor.”
Meetings between the MBABC and the Securities Commission continue, with one wrapping up just recently, Gale told MortgageBrokerNews.ca.
“Some investors are people with considerable wealth who may dislike intrusions into their financial status and investing habits,” she says. “We believe that consumers should ultimately be responsible for looking after their own interests and take responsibility for their own choices.”