New Proposed Legislation for Mortgage Brokers

Mortgage brokers would have to provide their clients with more information, including commissions from lenders, under proposed provincial legislation.

On Monday, Service Nova Scotia Minister John MacDonell tabled the Mortgage Regulation Act at Province House. The proposed act updates a 1966 law governing mortgage brokers and lenders. The last significant change it had was in 1999, the province said.

Mark Coffin, a senior official in MacDonell’s department, said it is not unusual for a broker to say that they are getting a commission, but the amount is a matter between them and the lender. Coffin said a typical fee is $300, but it can be more.

An individual consumer may get that information through talking to the broker, but disclosing it isn’t mandatory, he said.

The act, which also contains stricter licensing requirements, will tighten up government oversight of the industry and provide consumers more transparency, Coffin said.

Jim Murphy, president and chief executive officer of the Canadian Association of Accredited Mortgage Professionals, said in a provincial government news release that the group supports the proposed legislation.

The organization estimates that 30 per cent of residential mortgage shoppers in this province consult a broker. There were more than 38,600 mortgages taken out in the province in the last fiscal year, according to the province’s mortgage numbers, but the government doesn’t have a breakdown of residential versus commercial.

Coffin said there are about 125 brokers and 125 provincially regulated lenders, not including the major banks, in Nova Scotia.

The new regulations should be in place later this year, MacDonell said.