FSRA places focus on brokers involved with MICs
While Leung said MICs serve an important market, she said FSRA was focusing on understanding how brokers were juggling the interests of the client with those of the MIC they also represent.
“Conflicts of interest sometimes can be bad, especially if not managed well. So, I think part of us putting some attention in this area is to understand how that conflict is being managed when a mortgage broker has influence over MICs… how they are making sure that when they’re finding a mortgage for the borrower, they are thinking about their interest.”
Where MICs and private mortgages are concerned, one of the most important things for brokers to ensure is that clients have information both about the mortgage terms and costs.
“We’re noticing that in some cases [with] private mortgages, there may be additional costs when it comes to renewing or if you miss a payment,” Leung said, “and there may also be restrictions on whether you can renew or not.
“So those are really important for clients to understand because for a mortgage from a bank, you have a term of five years, so you don’t have to think about it. But in some cases, private mortgages could only be for a year.