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The-Mortgage-Gal

Broker commissions

Mortgage broker commissions

On January 18th I did an interview on CBC Radio Kelowna regarding the FICOM proposal for more disclosure on the Form 10 used by mortgage brokers. FICOM is asking mortgage brokers to disclose the exact amount of commission they are paid by the lender. 

I, along with many mortgage brokers in the Okanagan, the Mortgage Brokers Association of BC, and the Mortgage Professionals of Canada do not support the proposed change - not because we have anything to hide, but because we don’t want to confuse our clients.

On December 14, Patti Anderson, Dean Larson, Karen Shale, April Dunn, and I met with our three MLAs, Norm Letnick, Steve Thomson, and Christy Clark’s designate, Becky Harmata.  

I asked the other brokers if they had ever had a client ask them how much commission they were making on their mortgage. Not one of us had, in our combined 80 years in the industry, such a conversation with our clients. This suggests that it is not a concern to the average consumer. 

We explained the proposed disclosure requirements to the MLAs, who were not aware of FICOM’s plans. The MLAs seemed concerned, and promised to speak to the appropriate ministers involved. 

It is unclear what brought this issue of commission disclosure to light, as there have not been any complaints or instances of mortgage brokers not acting in the client’s best interests.

Mortgage brokers help 55% of new mortgage clients, and 30% of clients overall, according to the Bank of Canada. On average, we obtain 19 basis points off the rate that consumers would get if they applied for the mortgage on their own. 

We provide choices to meet our clients needs, taking into consideration interest rate, prepayment options, and payout penalties. 

In most cases, these services are free to our clients (exceptions are when we place a private mortgage or deal with a lender who does not pay us).

By disclosing our commission to our  clients, there could be a perception that they are paying more to deal with us than they would if they dealt with their own bank’s sales force, who do not have to disclose the commission they are paid.

Castanet Podcast CBC with Laurie Baird

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About the Author

Laurie Baird and Tracy Head are mortgage brokers with Verico Complete Mortgage Services. Together they have over 45 years of experience in the mortgage industry.

As mortgage brokers, Laurie and Tracy spend time getting to know the people they work with and help them understand the mortgage process. They support their clients before, during, and after a home purchase.

Laurie and Tracy are able to offer their clients advice and options. With access to over 40 different lenders, Laurie and Tracy are able to match the needs of their clients with the right mortgage package. They work closely with their clients to find the right fit, and are around to provide support for years down the road!

Contact them at 250-862-1806 or visit:
http://www.okanaganmortgages.com

Visit Laurie's blog at: https://www.okanaganmortgages.com/blog



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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