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Mortgage Broker News | 02 Nov 2015, 08:15 AM Agree 0
The MBABC has started a petition with the hope of derailing an updated legislation interpretation around disclosure of fees, citing lack of consultation with the industry
  • Victor - ON | 02 Nov 2015, 09:07 AM Agree 0
    Compensation for service rendered is an agreement between the independent contractor and the lender. Do business disclose to the public what their margins are? Would doctors disclose how much the Crown is paying them? There is enough documentation available to ensure that the public is protected.
  • Ron Butler | 02 Nov 2015, 11:24 AM Agree 0
    Actually in most provinces there are "sunshine" lists that reveal incomes for those paid by the province who earn more than $100K so the answer to your question is "yes", well paid doctors in Ontario do disclose their incomes. So do civil servants, cops, firefighters. I will once against point out that we exist in a regulated industry and the regulator controls what we disclose to the public. Period, the regulators are in charge.

    That being said; I do not agree that precise disclosure of compensation makes sense but for a slightly different reason than most. I question how accurate it will ever be, what is the real compensation? if an mortgage broker is on a 80/20 commission split with the brokerage house they are simply NOT receiving 20% of the total compensation, why would they be forced to disclose 100% of the comp? Will large brokerage's like MI/Invis, Mortgage Alliance, MCC and the rest be forced to disclose the overrides paid directly to the Head Offices by the lenders. What about trips and perks some receive and not others? the spot contests? the short time comp increase on a special rate?

    How can ACTUAL compensation be fully disclosed? It is a minefield. So it makes more sense to simply disclose there IS compensation than do a bad job of giving a truthful number.
  • Andrew | 02 Nov 2015, 11:51 AM Agree 0
    Ron, your idea that regulators are in absolute charge is for sure a very wrong assumption. They only have the powers that the law gives them. In BC that is the very issue, does the BC law give the regulator that power? To assume the regulator has broad brush powers and then submit to such imagined powers is not warranted and is sometimes dangerous. Whether it is dangerous here may be for debate but it would not change the answer to the specific question whether the law gives the regulator that power.
  • Ron Butler | 02 Nov 2015, 12:04 PM Agree 0
    @ Andrew, following your logic if the regulator chooses to proceed with the new regs then mortgage brokers would need to litigate their regulator to fight the change: interesting concept to say least.
  • Disappointed Broker | 02 Nov 2015, 04:16 PM Agree 0
    I actually agree with Ron Butler.

    Among the many consequences, there is a significant challenge in providing accurate non misleading information because of the complexity of compensation, which in turn may lend itself to class action suits for inaccuracy. What's even more disappointing is that it appears that the regulator has not taken the time to understand these complexities before suggesting changes are required.

    So yes, Ron is right by saying:
    How can ACTUAL compensation be fully disclosed? It is a minefield. So it makes more sense to simply disclose there IS compensation than do a bad job of giving a truthful number.
  • Dave | 02 Nov 2015, 08:55 PM Agree 0
    In the real estate industry we have been required to do this for perhaps 5 years or more. I'm not saying I like it, just that you wouldn't be alone in this if your industry did.
  • Andrew | 03 Nov 2015, 10:13 AM Agree 0
    Ron, following your logic - a mortgage broker should always be submissive and never question authority.
  • Ron Butler | 03 Nov 2015, 12:52 PM Agree 0
    No Andrew, I am a big time questioner of authority, I just wanted to focus on the real outcome and consequences. Litigating government is normally impossible under our constitution so we may need to focus on other forms of pressure.
  • Andrew | 03 Nov 2015, 02:24 PM Agree 0
    Ron, lots of times a court tells the government or a regulator it can't do something because of the constitution. The constitution helps litigate government. Agreed though, a non-court solution and pressure is better if possible. But never be afraid of litigating government if they try to use powers they don't have. Sometimes it is the only way to make government listen.
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