The province of British Columbia is looking for public input into a review of the provincial Mortgage Brokers Act.
Why? In order to identify and address anything within the act that might conceivably expose consumers of mortgage products to unnecessary financial risk or “create undue inefficiencies in the market.”
According to the provincial government, the Mortgage Brokers Act provides a framework for the registration and regulation of mortgage brokers in British Columbia. ( If you have any specific questions about the Act or real estate law in Victoria, please contact us.
The government wants to hear from you about problems, gaps, inconsistencies or ambiguities in the act and any reforms you would like considered.
The crux of the matter: the current Act (aka “MBA”) was enacted in 1972 – now forty years ago – as consumer protection legislation. Although the act has been amended several times, the financial services sector has changed profoundly over the past four decades, so it may be a good idea to bring it up to date!
The original policy goal of the MBA was to prevent harsh and unconscionable mortgage transactions that were being carried out by persons who tacked on fees to the face rate of a mortgage without disclosing the effect of the fee on the true cost of borrowing. To help solve this problem, the MBA required such mortgage brokers to register their business address and provide borrowers with true cost of borrowing disclosure.
Other changes since 1972 include the variety in the type of mortgage products available, securitization of mortgage pools (i.e. asset-backed commercial paper), reverse mortgages, syndicated mortgage investments, the emergence of non-traditional mortgage lenders and the increased role of mortgage brokers as intermediaries in arranging mainstream residential mortgages.
You can send your comments and suggestions, by February 28, 2013, via email to: fcsp@gov.bc.ca