Mortgage Broker Ethics colours the Canadian real estate industry
Across the profession, mortgage broker ethics and legislation in Canada have come a long way. Mortgage brokers first emerged as an alternative to those consumers with bad credit in need mortgage financing. When monolithic financial institutions and mortgage bankers denied loans to such a customer because he or she was a “credit risk” or a “high risk” mortgage applicant, prospective homebuyers with bad credit sought alternatives to the big bank paradigm of mortgage financing. Motivated to find acceptance from lenders, high risk applicants were often prepared to pay higher rates and/or additional fees in order to secure financing. Mortgage Brokers became very adept at sourcing lenders for risky borrowers. In a new and under-regulated profession abuses were prone to occurring—gouging and predatory lending could devastate already desperate clients. Ethical mortgage brokers realised the overall value in running a clean shop. Working in step with legislators to pass laws provincially and federally, and, with fellow ethical mortgage brokers founding professional associations to oversee best practices be employed in training and certifying mortgage brokers as well as in professional mortgage brokerage’s daily operations.
While ethics in the mortgage broker industry (or in any profession for that matter) is a rather abstract concept open to personal interpretation, the various mortgage broker associations along with federal and provincial lawmakers and, of course, Canadian mortgage brokers concerned with ethical and professional conduct appear generally to agree on the most important issues dealing with mortgage broker ethics and best practices.
It’s in everyone’s best interest to learn more about fair and ethical practices in the mortgage broker profession. Regulation are often imposed at the provincial level, with some mortgage broker laws applicable across Canada. Be sure to drill down to the provincial sites to learn more about mortgage broker ethics, laws, regulations, and professional associations in your part of the country.
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