Mortgage brokers in Canada not totally useless, eh: Deloitte
For our neighbours down south, mortgage brokers have earned a reputation for being as ethical and competent as, well, the big banks they sold loans to. (Remember when Jon Stewart said AIG could change its name to “herpes” and have a stronger brand? Good times.) The situation is totally different in Canada, according to a new report from big-time analysts at Deloitte Canada. Basically, while the mortgage brokers in the U.S. have been implicated in the worst excesses of the housing bubble there, brokers in Canada have become a useful, important addition to the market, according to the Wall Street Journal.
“Canada could not be more different,” says Rob Galaski, senior manager, corporate strategy practice at Deloitte in Toronto. “In Canada, most of our lenders, particularly the major banks, have exhibited considerable restraint during the credit crisis and were much more conservative.”
“Over the last decade, there’s been a lot of speculation as to whether the brokerage channel is here to stay,” he says. “We’re finding that the broker channel in Canada is extremely stable and definitely a viable channel for all types of lenders, including the major banks. And, that’s a large contrast to what you find in the U.S.”
In Canada, which was largely shielded from the global credit crisis because of stricter mortgage lending rules and more conservative underwriting standards, the big Six banks and mono-line lenders, such as Home Capital Group Inc. (HCG.T), continue to tap the mortgage broker channel to expand their business.
How very Canadian of us, eh? Take something the Americans invented and make it boring, safe and reliable. Sure, it’s great that homeowners-to-be can go to mortgage brokers without getting fleeced or taking part in a massive international financial crisis, but what about the reporters? They need scandals and examples of gross incompetence to report. Just once, can’t someone think of the press?
• Canadian Mortgage Brokers Here To Stay, Deloitte Says [The Wall Street Journal]
• More homebuyers turn to mortgage brokers [Calgary Herald]
• Canadian mortgage broker industry remains strong and stable after decline of U.S. broker market [Deloitte Canada]