A prominent industry figure says principal brokers need to take the lead in driving change in Ontario
The question of whether it’s too easy to obtain a mortgage agent licence in Ontario is one that’s been a prominent discussion point in the mortgage industry over the past several years.
An influx of new entrants into the profession since the pandemic (the number of licensed agents rose by 17% between June 2020 and June 2021, according to the Financial Services Regulatory Authority of Ontario) has seen renewed calls for higher entry requirements among some in the industry.
The current FSRA-approved agent education programs are deemed too straightforward – but the onus is also on principal brokers to ensure that the agents they’re hiring and the educational measures they have in place are adequate, according to a prominent member of the Ontario mortgage industry.
Carmen Costa (pictured top), a broker at TCG Lending Centres, told Canadian Mortgage Professional that principal brokers and broker owners should lead the way on enacting change in the industry to help elevate the standard and competence of agents coming on board.
“It should be on the principal broker who’s responsible for that agent to educate them and to hold them accountable. There should be processes in place,” she said.
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“We’re not going to change this overnight. But I know that for the principal broker or the broker house, if we want to step forward and try to take responsibility for each agent, then there could be a movement and a change.”
Principal brokers who take on new agents should take responsibility for those new hires, Costa said, particularly in ensuring that they address what she highlighted as the main flaw of the current agent course – the frequent inability of new agents to put a deal together.
“I do test my agents on T1 Generals, notices of assessment, and whether they understand articles of InCorp,” she said. “Your client is not always a straightforward client – it could be business for self, it could be an investor – so the lenders are getting inundated with deals that some agents have no idea [about].
“The course isn’t preparing them to read a T1 General or articles. So, who is responsible for that agent once they come off the course? It’s the principal broker.”
Costa and her team created a two-week academy for new entrants to their business, a program that’s mandatory irrespective of whether an agent has prior experience in the industry or has just completed the course.
That was an effort to ensure that new hires hit the ground running when they join the company and aren’t saddled by inexperience or knowledge gaps as a result of the agent course or lack of education at their previous brokerage.
It also addressed the fact that lenders are frequently inundated with deals that have been incorrectly put together by agents, resulting in a lengthy submission and review process that ultimately sees the deal collapse because it hasn’t been structured properly.
“We put the curriculum together, sitting down as a group and putting together enough information to educate the agents on handling a deal and going through the buying process or the refi process,” she said.
Upon conclusion of that two-week program, Costa said that many agents note the difference between what they learned while training to get their licence and the actual mechanics of running a business.
It’s not currently clear what form a revised qualification program for prospective mortgage agents in Ontario would take, or whether higher entry requirements could be introduced in the near future.
If reform of the mortgage agent course is in the cards, Costa said that experienced mortgage professionals and those with a stake in the industry should be consulted on what it might entail – something she said would equip would-be agents with a better understanding of the essentials of the role.
“They should get the opinions of the people on the street that are actually doing the job,” she said. “Maybe sit down with a group of broker owners who are in this industry and get our intake on what should be in the curriculum, and whether we can do a review on that.
“The higher-ups sitting around a table trying to put a curriculum together – to me, that never works. I go to the people that I’m trying to see a change with to get their opinion.”