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We Get What We Quietly Accept

Keep calm and carry on

You’ve probably lost count of how many times you’ve heard that stale motivator after last week’s mortgage rule travesty. 

Brokerage heads are busy reassuring their agents, investors and lender partners that we brokers will persevere and get past this. Well of course we will.

But wouldn’t it be nice if broker leaders spent as much time publicly decrying these rules as they did publicly comforting themselves?

The truth is, we as an industry just got unapologetically shafted by a handful of anonymous policy-makers—policy-makers who sit insulated from the backlash and consumer repercussions in their cozy government office towers. 

There is absolutely nothing to be ‘calm’ about when:

  • broker lenders are forced to hike rates 15-25 bps and ditch products because of a bureaucrat’s stroke of the pen;
  • a world-class lender like First National has its market value hammered six days in row;
  • hard-working qualified Canadian families are told to pay enormously higher interest because—virtually overnight—they’re told they can no longer qualify for a refinance.

We brokers depend on product access. “What could be more damaging to the rank and file mortgage broker than telling their clients that 30-year amortization without a surcharge is only available from a bank?” asks broker Ron Butler. “…Why wouldn’t many consumers just go to the bank?”

Without choice and competitive rates, we’re just another mortgage seller pushing advice and service. Our industry cannot—and will not—grow on advice and service alone.

And the hits just keep coming. We get the next dagger in Q1 when bulk insurance premiums at least double, which will make broker lenders even less competitive. And the grand finale could come next year if/when regulators propose a deductible on insurance claims. Depending on how that’s implemented, some lenders may not survive it.

Keeping calm is not the answer. All that does is show regulators that we’re willing to take whatever rancid medicine they spoon down our throats. It makes them think they can restrict mortgage lending overnight, with virtually no consultation from consumer advocates or people who actually know how mortgage finance works.

Don’t just sit by calmly and tolerate bad policy that threatens your livelihood. Stand up for the tens of millions of Canadians who need mortgages and cost effective refinances. Stand up for the choice and cost savings we deliver as brokers. Tell the media how bureaucrats on the public payroll have unilaterally decided that well-qualified homeowners should pay more to renegotiate their debt—and have fewer options for managing their limited cashflow, despite absolutely no default data to support these moves. (And no, this doesn’t refer to overleveraged borrowers. Those folks should be curtailed.)
Write about this on your blogs, write to the Finance Minister, sign this petition, copy @FinanceCanada on social media, volunteer for association policy committees, tell your MP and tell your broker network’s leadership.

None of this is about broker self-interest. It’s about saving Canadian families literally tens of thousands in interest over their lifetimes, with no material increase in housing risk. It’s about standing up for government sponsorship of the mortgage industry, which has kept defaults low for decades, added billions to government revenue and fostered vital competition in a market dominated by six lenders.

Carry on, yes, but don’t keep calm.

This editorial solely reflects the author’s opinions and not those of this publication’s parent.