Panel explores state of the professions during recent turbulent times
Recent years have been a rollercoaster ride for the mortgage agent and broker professions, with the initial chaos of the COVID-19 pandemic giving way to an unexpected housing market boom and months of long hours, intense workloads, and, in many cases, record-shattering mortgage volumes funded.
The ensuing market slowdown, meanwhile, presented a fresh set of challenges as borrowers faced a new environment of rapidly rising interest rates and a cost-of-living crisis while home prices and sales in most major markets began to fall.
Against that maelstrom of factors, just what is the state of the sector, and how has its performance been over the last few years?
Those were two of the questions explored at a recent Financial Services Regulatory Authority of Ontario (FSRA) event in Toronto, convening a panel of industry experts to run an eye over developments in the sector and its overall health.
Huston Loke (pictured top), FSRA’s executive vice president for market conduct, noted that while the number of mortgages that were brokered in Ontario had gone up slightly (1.5%) in 2021 compared with previous years, the value of those mortgages had increased significantly, by more than 12%.
The number of new mortgage agents being licensed in the province, meanwhile, skyrocketed by 24% over the three years prior to 2021, Loke added, in a trend that raised questions over whether that plethora of new agents was equipped with the education and experience required to service clients in the current turbulent market.
“This presents a bit of an issue, because you may end up with a problem with rising indebtedness and now rising rates,” he said. “You have a level of experience out there that may not necessarily match. Now we do have, of course, the two-tier licensing [for mortgage agents] that is being introduced this year.
“And that’s exactly why we need to do it – because we need the capacity, the proficiency, and the experience of the mortgage agents to match the need.”
At FSRA’s Second Annual Exchange Event on January 19th, FSRA’s Huston Loke shared more details about how the regulator is working to elevate the professionalism of the mortgage brokering sector. pic.twitter.com/QdvQdOKAIC
— FSRA News (@FSRA_News) January 25, 2023
Loke added that FSRA is working on a mortgage suitability project, announced through the Mortgage Broker Regulators’ Council of Canada (MBRCC), ensuring that Canadians have access to the mortgages that they need.
Are new mortgage agents ready to face the challenges of the market?
Veronica Love, senior vice president of corporate development at TMG The Mortgage Group, said a heartening development she had seen during the timeframe mentioned by Loke was that many of the new agents entering the profession were coming over from the banking space, and therefore already had a wealth of experience in financial services and advisory work.
“They’re not inexperienced – they do know mortgages, and they know consumer debt load,” she said. “The greatest thing is if they just want to provide more options to Canadians and they were limited in their previous spaces where they couldn’t provide as many options, they’re seeking out this world so that they can truly advise the customer with all the options possible.”
While there is a learning curve for those professionals in getting up to speed with product and lender opportunities, Love said their existing expertise in the mortgage space meant they weren’t coming into the agent profession completely unprepared.
Is part-time brokering or agent work a viable path?
Sadiq Boodoo, principal broker at Approved Financial Services, said the work-from-home arrangements that dominated throughout the first two years of the COVID-19 pandemic might have accounted for slightly higher than expected agent registration numbers for 2021 as some individuals possibly viewed brokering as a part-time or side project.
Approved Financial Services was awarded for the best mortgage companies to work for in Canada in the recent top mortgage employers survey, learn more about the winners here.
He indicated that the number of licensed agents in the province was likely to return to more normal levels as that belief became less prominent.
“I think in 2021 those numbers were a little bit inflated because in the height of the pandemic, a lot of people who were working from home found that they had a little bit more flexibility in their schedule and decided to become part of that gig economy – and thought, wrongfully, that mortgage brokering is part of that gig economy,” he said.
“I think we’ll see some of those numbers being weeded out, because you realize that this is a full-time investment in yourself, in your education, in your clients. It’s not something you do on the side while doing your other stuff.”
What are your thoughts on the state of the mortgage agent and broker professions in 2023? Let us know in the comments section below.
