Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Mortgage specialists hunting for referral payoffs?

Notify me of new replies via email
Mortgage Broker News | 14 Mar 2012, 10:00 AM Agree 0
There’s real concern that an increasing number of mortgage specialists may now have their hands out to collect “co-brokering” fees from brokers gifted with their referrals.
  • LizD | 15 Mar 2012, 05:42 AM Agree 0
    A heads-up for those licensed in Ontario - hopefully anyone who has completed the required Mortgage Broker Re-Licensing 2012 course should be aware that:

    According to Ontario regulations, a 'referral fee' may be paid to an unlicensed individual ONLY AS LONG AS:
    (1) it is a 'simple referral' only, ie name and contact info of the potential borrower are permitted with no details specific to the borrower's financial or credit situation provided.

    (2) the referral fee is truly a referral fee, meaning it is not a large percentage of the overall compensation received;

    Once either of these two guidelines are crossed, (ie. details about the borrower's needs or situation are shared OR the referral fee is a significant proportion of the overall commission received by the originator) then the referrer MUST BE LICENSED and can be charged under the Mortgage Brokers Lenders and Administrators Act with 'Brokering Without a License' - a serious offence.
  • Elfie Hayes | 15 Mar 2012, 05:47 AM Agree 0
    Is everyone standing around with their hands out these days instead of doing the work??? I was out networking and I introduced myself to a financial Planner. The first words out of his mouth were "how much do you pay for referrals"? I replied NOTHIING! and turned away to speak to someone else. Realtors in my area are also asking to be paid for deals. I wonder if these folks who are sellign their clients to the highest bidder realize you need to disclose that you are being paid to refer if you are being financially compensated. RECO rules say you can receive fees but it had better be in the offer for all parties to see. If I was the client I would think that person is not credible. It's a tough job selling RE and Mortgages but remember if you start paying for business, you'll only be as good as your last referral cheque. The highest bidder will walk away with the business next week!
  • Stephane Prevost Mortgage Agent DLC Alliance | 15 Mar 2012, 05:48 AM Agree 0
    I had the same thing happen with our local ... bank rep. In fact the manager was also requesting I pay a referral fee. Turns out the bank manager was his wife. I Chose not do the deal but did explain that even if was to do the deal with the referral I would have to disclose this to the borrowers.
  • MTG GAL | 15 Mar 2012, 06:18 AM Agree 0
    Effie makes a very valid point - are we selling our sevices and knowledge about mortgage products or selling the clients to the highest bidder ?
  • Kevin J. Power, President Power Mortgages Inc | 15 Mar 2012, 06:30 AM Agree 0
    Are people just beginning to realize that this isn't a new issue. This has been happening for the past 20 years that I have been in the brokerage industry. The only thing that has happened is the price has gone up and more people are playing the game. I have not and refuse to pay for business. it just goes to show the true character of some of the people in our industry and the banking industry. Shameful behaviour, that ultimately results in a bad reputation of our industry.
  • Len Lane | 15 Mar 2012, 06:36 AM Agree 0
    Hmmm interesting, I was once told by a senior BMO manager as in she ran a billion dollar mortgage team that if any of her specialist asked for a kick back to let her know and they would be fired on the spot.
  • Rob Stanfield | 15 Mar 2012, 09:21 AM Agree 0
    This is a problem in our industry. WHta athey don't realize is this makes them a service to be bought, not an associate that is valued and respected. To many agents that do not know how to build their business professionally so they are out buying business and cutting rates on the street corner. I don't pay referral fee's and never will. Plus you never form a relatiuonship with your referral sources becuase as soon as someone pays $5 more, they toss you aside. Have some self respect and pride, value what you do and EARN your business professionally. This is a probl;em in Ottawa with one of the large broker offices openly paying agents and the broker owner of the realty office. but hey, to each is own I guess. But in the end it effects everyone as it devalues what we bring to the table.
  • Ontario Broker | 17 Mar 2012, 05:20 AM Agree 0
    A major brokerage who will remain nameless ... were quick to mention in past posts they refuse to diminish their value by buying down mortgage rates while at the same time there is one of those brokers bribing Realtors with Gas Cards and another advertising $1,500 cash backs to clients for purchases. ... It's not how you paid it, it's that you are!
Post a reply