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What is a TRUE Mortgage Broker? What is a “Rover” or Mobile Lending Specialist?

Sunday, October 19th, 2008

I’ve been made slightly crazy this week with clients telling me they have been working with a “TD Mortgage Broker” or a “RBC Mortgage Broker.” Why is this making me crazy?

Because, they are NOT Mortgage Brokers!

The very essence of a Mortgage Broker and our service, is that we are independent, not tied to any one lender, and able and willing to access lenders with the best rate, product, and service to fit a client’s unique situation. If you are dealing with someone from TD or Royal Bank or BMO who is a “Mobile Lending Specialist” or Business Development Manager, THEY ARE NOT A BROKER. They are just the same as the person in the branch. They are there to drive business to their respective institution, but they are given a slightly different mandate: They can come to you, at your house, or in a move convenient location. However, they are, and always will be, working for the institution with their parent company’s best interests ahead of your own.

A true mortgage broker does not deal with only one lender (or even two or three!). A true mortgage broker acts as a third party who has a fiduciary duty to their client. This is a duty to look out for the financial best interests of their client. If TD is offering a rate of 5.55% for a standard 5 year closed mortgage, and, all other things being equal, we can get you the same product at Scotiabank but at a rate of 5.25%, a mortgage broker will ensure that your mortgage gets done at Scotiabank. A TD “Rover” or Mobile Lending Specialist is only equipped (and heavily incented) to send the business to their own company.

Now, there are exceptions to this rule. I have seen TD Mortage Specialists that can’t get a deal done at TD, and then end up using a broker-channel lender once TD has declined the business. However, the business still gets first shot at TD.

I am naming TD here, not because of any inherent dislike of them, but rather because their TD Rovers and mobile lenders are often confused with mortgage brokers because many of them work out of real estate offices, and work non-traditional hours. Naturally, they don’t want to change this image of themselves as independent brokers, so they say little to contradict the rumour that their client is dealing with a mortgage broker.

Be very wary when dealing with a mobile lender that deals exclusively (or primarily) with one lender. As a true, independent, mortgage broker, I take your mortgage “to market” and shop for the best rate and terms at ALL lenders (except RBC, Coast Capital, and BMO because they won’t deal with mortgage brokers and have their own mobile lending staff which they feel is more cost effective). I have over 30 institutions that I can take your mortgage to: many you will have heard of, and many that you will not have heard of.

Lastly, a mortgage broker is a licensed individual, who is overseen by FICOM (Financial Institution Commission) who regulates and assures ethical practices amongst its member brokers. Most mortgage brokers also are members of their provincial and national broker associations. In my case, I am a Member of the Canadian Assocation of Accredited Mortgage Professionals (CAAMP) as well as the Mortgage Broker Association of British Columbia (MBABC). Lastly, I hold my AMP designation making me an Accredited Mortgage Professional, and this is the highest level of education, oversight, ethical training, and continuous education in the country for lending professionals. Your local bank employee rarely has any of the the above certifications that attempt to ensure ethical practices and ensure proper training and oversight.

When dealing with me, you can be sure that you are getting truly independent advice. I don’t favour one lender over another (unless they have the best rate or product in the market at that time) and always send my deals to whichever institution offers the best overall package. Rate is a very important part of the package, but it is by NO means, the only issue. Term, ammortization, pre-payment priviledges, flexibility, portability, assumability, and many other concerns need to be given equal consideration along with long-term plans, career aspirations, and credit worthiness.

Don’t mistake your local banks’ mobile staff members as brokers. They aren’t. Deal with a true broker, and you will receive superior rates, service, and product selection. Call us up, you’ll be glad you did.