Broker critical of lack of consultation regarding new rule

"From the Brokers perspective it seems that clarity on the details as they apply to a file are sinking in and pretty clear," according to one industry veteran

Broker critical of lack of consultation regarding new rule
"From the broker's perspective it seems that clarity on the details as they apply to a file are sinking in and pretty clear," according to one industry veteran.

“Based on the blow up I am seeing in Broker chat forums some clear details on the how where, when, how, and who are sorely needed and clarity around the absence of industry consultation in particular is important,” Dustan Woodhouse, a broker with Dominion Lending Centres Canadian Mortgage Experts, told MortgageBrokerNews.ca. “The 'trickle up' effect this could have on the market as a whole may have been underestimated.”

Brokers and industry stakeholders have not shied away from offering their opinion on what is being touted as a game changer for the mortgage broker industry.

The federal government announced a number of policy changes aimed at safeguarding the housing industry Monday – one of which will make it harder for many homebuyers to qualify for a mortgage.

A new stress test will require homebuyers taking out any insured mortgage to qualify for the higher of the contract rate or the Bank of Canada’s benchmark rate.

With the current BoC rate at 4.64%, that means, in some cases, clients will have to qualify for a mortgage that is more than double their contracted rate.

And while many have been critical of the policy, some see it as necessary.

“This was inevitable. Something had to give. I think this is the slowest possible way for the government to reduce the absurd housing prices without creating chaos,” Ryan Kirwan, a broker with HQ Mortgages, wrote in the MBN forum. “If this qualifying rate would have always been around, maybe we wouldn't be talking about this right now.”

Kirwan, however, did note the change will negatively impact brokers, realtors, and other industry stakeholders.