Mortgage News

Mortgage news & commentary from Lou Perrotta, CPMB

Should banks that have alternative mortgage lending divisions license their employees/contractors?

An error has been made by an employee/contractor. An apology has been offered by an employer, which is satisfactory. I’m not certain that anything is to be gained by demanding vengeance, although I imagine that it would have been appreciated by many of us in the mortgage brokerage industry if an apology had also been issued by the employee/contractor.

The greater issue in my mind is the question of licensing/non-licensing for mortgage brokerage practitioners. Mortgage brokerage is provincially legislated and mortgage brokers and mortgage agents are licensed in jurisdictions where licensing is required.

Banks are federally chartered and in Ontario at least, their employees who engage in mortgage activity for the account of their employer are exempt from being licensed by the provincial regulator. However, some of these banks have alternative lending divisions that broker mortgage transactions to other financial institutions and to private lenders through their quasi-independent employees/contractors. These same people are not licensed by the provincial regulator.

Shall we discuss levelling the playing field?

Kudos to John Ribalkin of MBABC for raising the matter with the regulator in BC. Perhaps IMBA, AMBA and CAAMP can raise the issue in their provinces as well as nationally.