Ontario’s mortgage broker act could take a clue from the real estate sector, suggest brokers, who feel beefing up licensing requirements and improving enforcement can only benefit them.
“The industry is taking baby steps to improve itself,” says Nick L’Ecuyer, principal broker with Verico
The Mortgage Wellness Group in Barrie, Ont. “The mortgage channel is fairly parallel to the real estate sector, but the regulations for real estate are far more involved than for ours. Higher barriers and more rules will strengthen our industry.”
Parliamentary assistant Steven Del Duca was recently appointed by Finance Minister Charles Sousa to oversee the five-year review of Ontario’s Mortgage Brokers Act. Del Duca will consider any revamps to the regulations governing brokers in Canada’s biggest market, and will formally receive industry feedback in the coming months.
Much like the broker channel, the real estate industry is, for the most part, self-regulating.
“It is self-regulating at the moment, sort of a ‘I tell on you’ and the governing body enforces the regulations,” says L’Ecuyer. “The self-governing aspect the real estate industry does very well; we could do better, and that is what we should be aiming for.”
Two major improvements would require more continuing education and stricter guidelines for mortgage brokers, L’Ecuyer told MortgageBrokerNews.ca.
“There needs to be more rigorous enforcement of the regulations already in place,” he says. “But with each new addition to the regulations, the industry will experience a natural attrition – probably a 30 per cent drop in those licenced. Through the enforcement and revision of the regulations, we will weed out those part-time individuals who, I feel, are hurting our industry the most.”
Although L’Ecuyer feels tougher regulation of part-time brokers would help, it would be impossible to enforce.
“The only ones who seem to have figured it out is the banks,” he says. “They have very strict guidelines when it comes to mortgage specialists.”