If you’re looking for a Toronto mortgage, and you need help from a Toronto mortgage broker in order to do it, you’ll be happy to know it won’t cost you a thing. In Canada, even though the broker is working for you, they get paid commissions by the lender in exchange for finding that lender the business. The commissions is really left out of the entire deal, generally being left for the broker and the lender to work out among themselves. But in Nova Scotia, they want to change those rules so that brokers now have to disclose their full earnings to their clients. The question is, is this the right thing to do?
Nova Scotia has a lot of new rules coming down the line for the mortgage brokers. One is that every single practicing agent must be fully licensed within the province. As it stands now, only the main broker needs to be licensed, not those that are working under them. The changes also outline the standard educational and training requirements that brokers must now meet in the province – and those pesky changes to disclosing commissions is still being proposed. And it’s really only this latter one that there’s a problem with.
As Mark Coffin, Nova Scotia’s Deputy Register of Credit put it, “I’m not sure the rationale is there for it.” After all, other sales people who work on commissions aren’t required to disclose how much they get paid. And homebuyers aren’t even the ones paying the commission, so one does have to wonder how this would help. Not surprisingly, most mortgage professionals in Canada and in Nova Scotia have trouble with this new proposal.
Glen Ward, president of Mortgage Brokers Association of Atlantic Canada said in front of Nova Scotia’s Law of Amendments committee on Wednesday, “I asked the committee not to require brokers to disclose the amount of their commissions. Bank mortgage specialists are commission sales people as well and they are not required to disclose.”
That may be a good enough argument in and of itself. After all, the only reason to disclose pay amounts is so that the buyer can know fully that the broker is truly acting in their best interests – and not just for those that will pay them the most. But doesn’t the same apply to mortgage bankers? These professionals really are just selling a few of the bank’s products, and there’s no way if the homebuyer is to know whether that product is best for them.
Jim Murphy, president of Canadian Association of Accredited Mortgage Professionals also has a huge problem with the new proposed changes. He says that these kinds of rules have already been implemented in Canada, and then taken away because it simply didn’t work. “Disclosure of exact commission amounts is something that CAAMP has concern with. This was an issue in Saskatchewan where the regulation was actually changed due to our hard work.”
