Rate-Driven Subterfuge + MORE Jul 1st

Every seasoned mortgage broker has lost deals to other brokers. It’s just part of doing business. But a few in our profession feel it’s over the line to court another broker’s clients with better rates. They deem it okay to undercut banks, credit unions and other lenders, but somehow it’s a tacit sin to undercut another broker. When a prominent agent recently suggested otherwise, this was a fellow agent’s response to him: “F*%k you. Learn some ethics.” Fortunately, the e-bully behind that vulgarity is unrepresentative of the vast majority of civilized client-centric mortgage professionals. Yet still we see some brokers falling READ MORE

TORONTO – At first glance, the mid-century, three-level Winnipeg home was everything that Sarah Fehr and her fiancee had been looking for.
It was located in the right neighbourhood, had a double garage and the backyard was spacious enough for the couple’s two pugs to frolic in.
Perhaps most importantly, it was reasonably priced.
However, a quick Google search revealed the home’s shadowy past: it had been busted several years earlier for housing a marijuana grow operation.
While former grow ops may seem like a good deal to some buyers, experts caution that banks and insurers are increasingly shying away from these properties — even after all of the necessary remediation has been done.
“It’s always been strict, but it was a lot looser four or five years ago,” says Jeff Mark, co-founder of broker Spin Mortgage, adding that only credit unions and subprime lenders are willing to finance these homes, often at higher rates than those offered by the banks.
Running a grow-op in a residential home can cause extensive damage that may be pricey to remedy…

(Illustration by Sebastien Thibault)
The Conservatives are expected to table a new consumer protection code governing banks in the coming months, but don’t expect the campaign-friendly bill to improve your bottom line. While intended to empower banking customers navigating the financial services industry, pundits say the “Comprehensive Financial Consumer Code” falls flat because it does little to protect Canadians from being nickel-and-dimed at every turn.
“If people think this code will in any way limit what they pay to their banks, they’re dreaming,” says John Lawford, executive director and general counsel at the Public Interest Advocacy Centre.
Instead, the code will only feature standardized fee disclosure boxes on bank statements, loosened ID requirements on new accounts, mandatory cooling-off periods on a greater range of products, and a crackdown on misleading advertising.
As is now the case with Canada’s telecom providers, Lawford would have preferred to see the banks prevented from charging paper-bill fees—not to mention more egregious pay-to-pay tactics, such as charging customers $1 to $2  to make mortgage, loan and credit card payments…

People in the mortgage business have heard the terms “fraud for profit” and “fraud for shelter.” Both have long plagued the mortgage market. But there’s another type of fraud that some may not be aware of. It’s called fraud for rate, and it’s growing. While not conclusively a trend, it seems that more and more mortgage applicants and mortgage originators are fudging applications and/or documentation to get a better rate. This is especially true with BFS (business for self) borrowers who often try to portray higher income than they really earn. Stricter mortgage regulations seem to be the catalyst. “With READ MORE