Mortgage brokers who prepare a deal with a lender only to find out their clients have used the rate information to shop around is something that happens "far too often" said paralegal Jeff Greenberg, who recently launched a business to help Ontario brokers collect commissions from clients.
Mortgage brokers who prepare a deal with a lender only to find out their clients have used the rate information to shop around is something that happens "far too often" said paralegal Jeff Greenberg, who recently launched a business to help Ontario brokers collect commissions from clients.
"After a client has signed a mortgage commitment and all the documentation, the broker has done their job and therefore they've rendered a service and are entitled to get paid for that service," said Greenberg, who did legal work for an Ontario mortgage brokerage for three years before branching out on his own to start Greenberg Paralegal.
Greenberg first tries to settle these types of situations amicably by asking clients to pay the commission the broker would have collected had the deal closed (this amount excludes volume bonuses and other incentives). If that doesn't work, he issues a claim and takes the clients to small claims court - something he said happens in about 60 per cent of the cases he sees.
"Brokers don't want to sue their clients and it's not good business, but the fact is that it's not good business for a client to negotiate in bad faith and to take advantage of someone who relies on their commissions to live," he said, adding lenders are not part of the process of collecting payment from clients.
