A new international federation for mortgage brokers was announced at the Canadian Mortgage Broker Association Atlantic Canada conference in Halifax yesterday.
The International Mortgage Broker Federation (IMBF), which so far encompasses Canada, Australia, New Zealand, the U.K. and U.S.A., will help mortgage brokering industries deal with everything from regulatory hurdles to establishing international commission sharing guidelines.
“It’s a global conversation and what we’ve found is the things that play out in one country regularly play out in another,” Peter J. White, executive director of the Finance Brokers Association of Australia—who made the announcement at the CMBA Atlantic Canada conference—told MortgageBrokerNews.ca.
“If we want to have meaningful discussions with regulators, we have to be ahead of the curve. The only way we’re ahead of the curve is by talking to each other, and that’s what the IMBF is all about—global conversation at an industry association level to be ahead of that curve.”
Australia went through its own B-20, and had there been open, clear lines of communication, perhaps Canadian brokers and lenders would have had guidance rather than learning heuristically.
“With the regulatory change Canada had, we did that in 2010,” continued White. “What we learned in our transitory period can help other countries go through theirs and they can have discussions with their regulators that may help stop where it’s going or put fair arguments to it, or even help change regulations. We changed regulation in Australia.”
While governing bodies in countries far and wide may, from time to time, emulate policies—wittingly or not—their journeys aren’t invariable and White believes a robust industry advocacy group can be the difference between good and catastrophic policymaking.
“The United Kingdom is very important for us because our regulator has a memorandum of understanding with them and they’re constantly shaping regulations,” he said, “but their system and historic lending are very different to what it is in Australia. Regulators get a bit blinkered and think, ‘They did it there, so we’ll do it here,’ but it could have very bad outcomes.”
If a Canadian broker had a client who sought a property in, say, New Zealand, they could contact a broker there through the IMFB and receive a referral fee.
“We’re still working out commission sharing, but that’s something we want to bring in,” said White. “The IMBF is making its first public announcement here today, so we’re still formulating that, but the brokers will be able to get in touch with each other and share the commission structure. We’re all running businesses and if somebody gives their client as a lead, it qualifies as a referral.”
The insurance brokering industry is a well-oiled machine, and Clinton Wilkins of Centum Home Lenders Ltd. believes that the IMBF has the potential to help Canadian mortgage brokers grow market share.
“It could be similar to what insurance brokers are doing,” said the Halifax-based Wilkins. “They’re very organized in Canada. Almost all of us buy our insurance from a broker, and someday that could be the mortgage brokering industry too—all mortgages being originated by mortgage brokers.”
It’s no secret that Canada is not renowned for trendsetting, but—at least where mortgages are concerned—that could change. Not only can Canada get ahead of the curve, it can ameliorate what’s already been done elsewhere.
“Things that happen in the U.S. happen in Canada five years later, and whatever happens in Toronto seems like it happens in Halifax 10 years later,” said Wilkins. “Let’s take look at some of those emerging trends and either get ahead of it or take what they’re doing and make it better.”