Mortgage News

Mortgage news & commentary from Lou Perrotta, CPMB

The Bank Note that Backfired

A sales rep or “mortgage specialist” for one of the major Canadian banks lit up the blogosphere last week when an article she had published about the differences between bank mortgage specialists and mortgage brokers got noticed.

I won’t embarrass the bank by naming it.

Professionals in the mortgage brokerage industry from coast to coast took umbrage at the misleading nature of the article.

The author stated that “specialists’ work for one financial institution and don’t charge set up fees. Dah! They certainly do work for the bank that employs them … and we all know that banks always avoid charging fees every chance they get.

She thought it was some sort of revelation that professional mortgage brokers charge fees. Of course mortgage brokers charge fees when warranted. Banks often reject homeowners because their circumstances may not fit the perfect little box that the banks insist a homeowner must fit into. It’s mortgage brokers that help homeowners source mortgage loans for those who would otherwise be at the mercy of the big banks.

Suggesting there is something secretive or immoral in charging a fee for service insults the intelligence of the millions of Canadians who have benefitted from the assistance of certified professional mortgage brokers.

This bank employee completely overlooked the fact that using of the term “specialist” does not connote formal training or accreditation – it simply sounds better than sales rep. She has been trained in the product line of her bank. So what?

By contrast, the licensing, training and testing of professional mortgage brokers in Canada are detailed and rigorous.

The note this bank employee published backfired. It was meant to convince consumers that free advice from the ‘specialist’, who is trying to sell the products her bank provides, is the smart move. In fact, it served to illustrate why shopping for a broader range of financial products and suppliers is really the wise move.

The truth is that mortgage brokers do not charge fees to approximately 85% of their clients. Why not? Because their clients qualify for mortgage loans under the regular guidelines. These mortgage loans are supplied by non-bank mortgage lenders, at lower rates. These non-bank lenders pay mortgage brokers for referring qualified transactions. Only mortgage brokers have access to these mortgage lenders.

For clients whose lives are in turmoil due to poor credit, job loss or marriage dissolutions, mortgage brokers often provide a life-line that banks are not prepared to offer. Regrettably, lenders who assist clients in these types of transactions usually do not compensate mortgage brokers. It’s for these types of circumstances that mortgage brokers charge fees.

At DOMUS Financial we are proud of the professional service we provide. We are up front about fees when we need to charge them. And, we are glad that we offer people more choice and opportunity when they are making the biggest purchases in their lives, or sorting out their lives.

Visit us at to learn more about how we might help. All information is held in strictest confidence and we have a solid record of success in assisting people seeking the best mortgage for their circumstances.