Who do you represent?
In Alberta, at least we have very clear guidelines about who we represent in the mortgage transaction, so clear in fact that we have three different forms that can be presented. The core duties are the same for all three, be honest, exercise care and skill, gather the required information, disclose and explain options to them, complete and submit information to the lender and keep all parties informed of progress.
The first is where we act as an intermediary, this means that we do not represent the borrower or the lender. In fact, it also means that we are merely the paper shuffler between the client and the lender, we do not verify any of the documents and we are technically not allowed to advise the client either. We can discuss and explain the options but we must leave the final decision to the borrower and for that matter to the lender.
The second is very different and that is when we are acting for the borrower, here things change and we are agreeing to represent the borrowers best interest, recommend a particular mortgage solution, advocate on their behalf, provide accurate and clear information so that our clients can make an informed decision. Our core responsibility is to the borrower but does not reduce the responsibility to lenders, as we still have the core responsibility to them to be honest and efficient.
The third is where we as brokers represent the lender, this is more relevant in the private lending world. If you represent individuals who lend their own money through you then you must represent the lender. Clients need to be advised to seek independent advice from either a lawyer or another broker who is skilled enough to advise them on the offering. This doesn’t necessarily apply when dealing with MIC’s or Syndicated lenders, at least in Alberta, as most of them are already brokerages and under the same guidelines. This scenario also comes into play, in my personal opinion, when you send all of your business to one lender and do not shop around or at least research for the best rates and features for your client.
In my brokerage, we have chosen to represent the borrowers as we feel the team is skilled enough to take on that responsibility.
Who do you represent or do you know?
Len Lane, Mortgage Broker
Dominion Lending Centres
Check out more great blog content from Len – http://www.brokersforlife.ca/blog