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Mortgage Broker News | 13 Oct 2015, 08:15 AM Agree 0
One leading network’s bid to arm itself against legislation has inspired a debate among brokers regarding their responsibility in private deals
  • Gerry Van Donkersgoed | 13 Oct 2015, 10:16 AM Agree 0
    I find the comments in this article completely miss the mark. What private lenders are we talking about? Frankly, there is NO private lender in my rolodex that is going to come after me for non-payment on a mortgage. None! Further, there is NO private lender in my rolodex whose law firm will rely on what I say - they do their own inquiries. That having been said - telling the truth is the only way forward. If the lender in front of you won't do the deal, based on accurate information, you are dealing with the wrong lender! Move on to the next lender on the list, whose lending profile and risk level actually fits with your deal.
  • George C. | 13 Oct 2015, 12:47 PM Agree 0
    Ron states it to be an obvious point that a mortgage broker would be responsible IN LAW for a mortgage recommended to a lender. Is he saying that it is the recommending or the mere fact of having referred the mortgage that triggers liability. It seems a very fine point which should be only carefully generalized. Ron, any details?
  • Ron Butler | 13 Oct 2015, 06:03 PM Agree 0
    @ Gerry, I am sure YOU, as a lawyer as well as a mortgage professional have a very clear concept about what deals to show your private investors and which deals you will simply say "NO" to. I assure you that there are many brokers who could care less about the quality, reasonability and future results of a private mortgage investment. There are brokers shoving private mortgage deals indiscriminately under client's noses simply based on the premise of 19.00% yields. Also to your point, the lawyers at a investor client's law firm will review all the points of the title and registration but I know of no law firm that will vet the reputation of the appraiser or the veracity of the income verification.

    @ George: I think my statement was self-explanatory, under the Act that governs mortgage brokers in Ontario FSCO insists we take responsibility for the private mortgage recommendations we make, we must defend the suitability of mortgage to both parties to the private mortgage transaction as well as vetting all the details of the transaction.

    The reference I made to torte law in the case of payment default were those cases where negative items were "missed or willfully ignored by the mortgage broker" naturally those types of mistakes can result in a claim under law, the claim may or may not be successful but under the circumstances I described there are clearly grounds for a claim.
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