Broker market share has dropped year-over-year and some industry professionals believe regulations are to blame.
“There is a simple reason that broker market share has dropped,” Ron Butler
Butler Mortgage wrote on MortgagegBrokerNews.ca. “Brokers are forced to obey B-20 rules, banks branches circumvent them.”
’s annual fall report, released earlier this week, points to a significant drop in mortgage broker market share, a large portion of which was picked up by the big banks.
“For all current mortgages on homes that were purchased during 2014 up to the time of the survey, 61 per cent were obtained from a bank,” the official report states. “Mortgage brokers had a 31 per cent share. Credit unions were the source for six per cent of these mortgages, followed by two per cent from life insurance or trust companies.”
These numbers represent a significant change from the mortgage origination breakdown of just a year ago. In 2013, up until the date of last year’s publication, banks accounted for 42 per cent of mortgage market share, while brokers accounted for 40 per cent.
The tightened mortgage rules, which have sometimes stymied brokers’ ability to place clients in mortgages, have been a constant struggle for industry players. And this, coupled, with the big bank influence has not boded well for the industry, according to the CAAMP stats.
“Mortgage brokering is a relationship business and you can only expand your business by expanding your expanding your sphere of influence,” Clayton Carby of Total Mortgage Management wrote. “The Banks have a greater ability to do this because of all the services they offer. We need to offer education as well as best interest.”