With the province proposing to raise annual fees paid by mortgage professionals, these brokers think the fee increases are reasonable, provided they’re used for their intended purpose.
The Ministry of Finance has proposed creating a new Minister’s Regulation wherein the four classes of licenses under the Mortgage Brokerages, Lenders and Administrators Act of 2006 would be subject to fee hikes.
Under the proposal, after April 1, license applicants would pay $1,156 from $800; mortgage brokers would have to renew their licenses at $1,056 biennially from $700, and mortgage brokerages and administrators would face the exact same increase for periodic regulatory fees.
According to provincial government’s online proposal summary, existing fees are too meagre to cover the Financial Services Commission of Ontario’s (FSCO) costs for compliance and enforcement activities. The last license fee increase was in 2010.
Frances Hinojosa, a mortgage broker and managing partner of Tribe Financial, acknowledges there have likely been many new entrants into the industry since 2010, and that fee increases make sense.
“No one likes increases—no one likes to pay more for anything in life—so, at first, whenever you’re told about an increase it seems like a big deal, but when you break it down it’s a fee increase of $1,100 biannually, which amounts to a $1.50 a day,” she said. “It’s an investment in your business.”
Hinojosa believes the fee increase is the first of many to come because, as she sees it, the government is trying to regulate the mortgage industry as much as it can. While she doesn’t necessarily believe in calling certain brokers “part-timers,” she says there are “hobbyists.”
“If you’re doing a job or a profession and you’re not earning a living from it, then it’s not a job, it’s a hobby,” she said. “[The fee increase] wouldn’t get rid of part-timers, it would get rid of hobbyists. Any time that there is a cost associated with a something that is not adding value back to you, you have to then evaluate whether or not that cost makes sense. So I think a lot of people who are choosing this profession as a hobby will have to really think hard if it makes financial sense for them to renew their licence.”
David Smith, a partner at Oriana Financial, says the fee increases aren’t completely unreasonable, and that, at first glance, the government looks like it’s being vigilant.
“We have not seen increases in eight years,” said Smith, “so in that light they’re a little on the high side, but not out of the realm of the reasonable.”
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