A commenter wrote yesterday about how easy it is to get into the mortgage business, suggesting that we’re not a true “profession” given the low barriers to entry.
We don’t like to admit negatives about the industry we love, but the comment rang somewhat true.
Training and practical experience requirements do need to be strengthened in our business. Consumers’ interests are not maximized when:
A rookie broker can be licensed and provide mortgage advice in as little as 1-4 months, depending on the province.
A bank teller can move from the counter to selling mortgages with a few days of training, some manuals, and no licensing.
You don’t realize how mishandling a mortgage can seriously impact someone’s financial life until you’ve been in the business a year or so and see what can go wrong.
Hopefully, regulators eventually realize the importance of practical education pre-requisites. Experience counts. Many (but not all) new brokers are simply unequipped to advise borrowers on a debt that will cost tens of thousands in interest. Telltale signs include insufficient knowledge of:
Formal internship requirements and greater practical knowledge testing are just two possible solutions.
Whatever the answer may be, it should apply equally to employees of financial institutions (albeit, the disconnected web of federal and provincial laws don’t make that easy). At the moment, for example, the playing field between bank reps and mortgage brokers is far from even when it comes to licensing and educational requirements.
The benefit of such changes—if implemented—would be a better-advised consumer and a stronger reputation for the industry as a whole.