This is my vision: one day, people will scoff, laugh at the idea of going to a bank for advice on financing. People will get ridiculed for suggesting to go to the bank for help with the financing.
Mark my words, when the truth is out and the majority of the general public completely understands what I am about to explain, the big shift will happen. I don’t mean to jest or be condescending to mobile mortgage specialist or bank mortgage advisors. I only mean to point out the most obvious facts. I have many close friends and colleagues whom I consider my business partners. I respect them for doing their job.
However, the ugly truth is that without independent brokers representing the clients, 98% of the time, the very same client would not be getting the best arrangement out of that financing deal. I have seen it happen so many times. Further to this statement, I have presented my case for this in detail below.
The need for independent mortgage brokers: The public does not completely understand. They don’t understand what they’re doing. The consumer is oblivious to the fact what all bank employees are faced with when dealing with the general public. The most important one of them is that nearly all bank employees do not individually hold a license that allows them to offer any advice on mortgage financing.
As independent mortgage brokers, we are all required to take:
an intensive mortgage broker course
a very detailed exam and pass with high marks to receive a license to offer mortgage/financing advice
several continued education courses over the years and compulsory retest every few years
an oath to uphold the code of ethics or face severe disciplinary action
The bank employees, mortgage advisor, mortgage managers and mobile specialists on the other hand do not have to do any of these or even required to hold a license to give you advice on financing. As a former bank employee, I can attest to this. How safe would you feel if your doctor in the hospital didn’t need to pass their exams or need to get a license?
For bank employees, they are always put in a position that causes them to question what is the true motive behind their decisions. They are responsible to their employers and have moral/ethical obligations to the client. Most of the time they are put into a position that places them in direct conflict of interest. For them to “advise” the clients, the bank employee face one or all of these conflicting issues:
represent who’s interest first and foremost? My employer the bank or the client?
give client best rate and lowest fees = lowest profit margin clients
performance review, pay raise or promotion is dependent on being a highly profitable employee
more profitable client equates to higher bonus for the bank advisor/manager/specialist
doing whats right for me, my employer or the client? win/lose dilemma, rarely a win-win situation
There are many, many other benefits of using a mortgage broker. Just Google benefits of using a mortgage broker.
What a predicament:The most important question that bank customers FAIL to ask themselves: if you were going to court, would you want the plaintiff’s lawyer to also represent your defense? If the answer is NO, then why are you asking the bank employee to do just that? Just because he/she has a fancy title, it does not change the fundamental challenge of “Praeiudicium” which is latin for conflict of interest. They are always in a “predicament.”
For mortgage brokers, we have a code of ethics that we must abide by. You can read more here: MBABC version. When a mortgage broker gets punished for doing anything that breaks the code of ethics of a mortgage broker, they face severe penalty. He or she can be banned for 10 years or permanently from the industry. Most face stiff fines and have to pay the cost of the investigations.
What happens when a bank employee goes rogue? They get fired. End of story. The employee then moves on to another bank to find work. With their previous “banking experience”, they are usually hired on the spot. The previous employer cannot even warn the new bank employer of the ex-employee’s past failings for fear of having their own bank admitting of this fraud and losing face to the public. Most internal fraud are usually “swept under the carpet” and the public never hears about it. It is not in the best interest of the bank to have their reputations tarnished in the market place.
We found out about one of these case from a client in the recent past. One employee of a major bank had approved so many fraudulent loans over a span of two years that the bank had to call every single loan that this employee had made. One of his former client had their loan “called” and he came to us for assistance. Even though this client had never missed a payment, their loan had been reviewed and because of their current status, the loan was recalled. This is how we learned firsthand about this sad side of our industry.
I am not here to proudly thump our chest or point fingers at anyone. Either side of the industry have their fair shares of rotten apples. I am here to give awareness to the public that this sort of thing happens in every day life. It is not just a fictional story. Ignorance is not bliss. It is costly and you, the consumer should be well aware of this. Ignorance can potentially make you become a casualty of war.
Now you know, the punishment for a mortgage broker are usually quite severe. For the rogue bank employee, the bank would simplify remove the problem, deemed it as a write-off and any clients affected would just be a casualty of war. I don’t believe any side is better. I only want the public to be aware of the consequences that the members of each side would face. An independent mortgage broker would face a more onerous penalty than any rogue bank employee and that I believe is what puts us apart. Independent mortgage brokers are held to a much higher level code of ethics and accountability.
I am here to give my colleague and friends at the bank an olive branch. Let us work with you and pre-qualify the client for you, handle all the paper work and due diligence for you. Let’s build a mutually beneficially relationship to help the consumers the right way. No need to be in a position where it would cause a conflict of interest. You represent your employer and let us represent the consumer. If they come to you without a broker, contact one of us to help them so that everyone at the table can have proper representation.
At the end of the day, when you are ready and want to make a big difference in other people’s lives, come join the broker side. We have great people who can mentor you and work together the minute you step out of your J.O.B. You know what that stands for right? That’s enough for me today. Let me know if you agree or disagree with any of the points written. I would love to hear from you.
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