Members of the Canadian Institute of Mortgage Brokers and Lenders (CIMBL) have a message for Canadian Realtors: refer with confidence.

Realtors who refer their clients to CIMBL members are assured their customers' needs will be handled efficiently and professionally, the association says. That's not something that consumers have always been able to expect in the past, as the fledgling mortgage brokerage industry struggled to gain a foothold during the last 20 years. But now mortgage brokers enjoy 26 per cent of the mortgage market share in Canada, according to an annual survey of mortgage buyers by Canada Mortgage and Housing Corp. (CMHC).

"Mortgages these days have become increasingly complex. There are different mortgage products, different features, and even different technologies coming into play," says Peter Vukanovich, president of CIMBL. His association wants consumers to know that its members can handle all their mortgage needs, in a professional manner.

Last year CIMBL, which has about 6,000 members across Canada, launched a formal accreditation process, which includes minimum educational requirements, ethics standards and mandatory continuing education. More than 1,000 CIMBL members have already earned the designation, and more than half of CIMBL members have taken the compulsory ethics course.

The mortgage industry in Canada is regulated by the provinces, resulting in a patchwork of licensing requirements. Mark Webb, CIMBL's senior director, professional affairs, says, "We see that as a real challenge. If you look at education, there's one course in B.C., a second one in Alberta, nothing in Saskatchewan and Manitoba, and a third one in Ontario that is not mandatory. In Quebec, you get licensed as a real estate agent to become a mortgage broker. In the Maritimes, there are no educational standards."

Some of the provinces are currently looking at updating their educational requirements, including Ontario. The Ontario Real Estate Association recently called on the government to introduce strict new educational requirements for mortgage brokers in the province.

Webb says CIMBL has been consulting with the Ontario regulators and others across the country, to update and harmonize requirements. The association is also working with the federal government's Office of the Superintendent of Financial Institutions (OSFI). "This year they looked at the relationship between lenders and mortgage brokers," says Webb. "We're working closely with OSFI to ensure that when the broker community goes out and gets a mortgage loan, that they do the proper due diligence."

The CMHC survey says the public's perception of mortgage brokers is already improving. It says 51 per cent of consumers say brokers provide a valuable service when arranging a mortgage, up from 37 per cent in 2001. However, 31 per cent of consumers incorrectly believe that mortgage brokers work on behalf of lenders.

Consumers who have used mortgage brokers in the past are more positive about their role than consumers who have not. Sixty-six per cent of previous users say mortgage brokers provide a valuable service, compared to 41 per cent of non-users.

Surprisingly, the survey also reports that the proportion of consumers who shop around for a mortgage has been steadily declining during the last five years. In 2004, only 40 per cent of new mortgage purchasers and 30 per cent of renewers shopped around for mortgage proposals from different lenders. This is the lowest level since the annual survey started in 1999, says CMHC.

Use of mortgage brokers among first-time buyers has increased from 22 per cent in 2002 to 32 per cent this year, but broker usage among renewers has dropped from 11 per cent in 2002 to six per cent in 2004. Overall usage of mortgage brokers has remained stable at 26 per cent, says CMHC.

The survey says the use of the Internet to get mortgage information has climbed from 26 per cent in 1999 to 48 per cent in 2004. However, it says that two-thirds of consumers still consider a personal relationship an essential part of mortgage negotiations. This attitude has not changed in the last four years, says CMHC.

Published: December 2, 2004

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Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He is also consulting editor of Homes & Cottages, Canada's largest building and renovation magazine. Email jimhc@pathcom.com.