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Profession Broker February 2013
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Profession Broker February 2013
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The advertising of below-market interest rates is an issue that affects the entire industry and is
becoming a source of problems for most mortgage agencies and mortgage brokers acting on their
own account. many ads do not comply with the regulations.
It is possible to announce interest rates, but the following rules must be observed. Section 112 and 113 of the Regulation respecting brokerage
requirements, professional conduct of brokers and advertising, which we deem it appropriate to fully reproduce, provides the following:
Section 112. No licence holder or person promoting real
estate or mortgage brokerage services may in any manner
make representations or engage in advertising that is false,
misleading or incomplete or that leaves out a material fact.
Any dissemination of false, misleading or incomplete infor-
mation is therefore prohibited, in particular with regard to
1. the competence of a licence holder;
2. the extent or efficiency of the services provided or those
generally provided by brokers and agencies;
3. the costs of a loan secured by immovable hypothec; or
4. the selling price of an immovable, which must be the price
set in the brokerage contract or the transaction proposal.
Section 113. No licence holder or person promoting real estate or
mortgage brokerage services may make, engage in or allow any
representation or advertising that
1. suggests the licence holder or person is authorized to engage in a
brokerage transaction described in section 1 of the Real Estate
Brokerage Act (R.S.Q., c. C-73.2) when in fact he or she is not legally
qualified to do so at the time of the representation or advertising;
2. falsely suggests that he or she holds a specialist's title;
3. contains information or uses a formulation, name, trademark,
slogan or logo likely to be confusing;
4. contains a statistic for which no source is given; or
5. contains a photograph of the licence holder taken more than
5 years earlier.
Clarifications regarding
advertising of interest rates
When an interest rate is made subject to certain conditions,
the essential conditions must appear in the ad. The statement
"mortgage amount greater than such amount" is required if a
certain mortgage amount is essential for obtaining the interest
rate announced. The same applies to the condition regarding
the time period for mortgage disbursement. In addition, if there
are other conditions, the statement "other conditions apply" must be
indicated. These conditions shall be available by referring consumers
to the source of information where they can access it (e.g.
a website). The date or the period when these rates will be in force
should also appear in the ad.
Examples of advertising issues
There are many advertising issues, among other things:
· an ad announcing "a rate of 2.95% over a 5-year period" whereas
after verification, we realize that the mortgage amount must be
greater than $250,000 to be able to benefit from this rate or that
the rate can only be obtained through a buydown in a specific
situation;
· an ad announcing "a rate of 3.2% over a 5-year period" whereas
this rate represents the rate posted by a lender including the lat-
ter's rebate and there is no explanation in the ad;
· advertising an interest rate that no lender offers.
The consequences of non-compliance with the sections of the
Regu-
lation respecting brokerage requirements, professional conduct of
brokers and advertising
are many. Think first about consumers. The
latters must have accurate information about the interest rate they
may get and thus a professional image about mortgage brokers.
Second, think about professional ethics. Any advertising that may be
regarded as misleading with respect to interest rate can be the subject
of a request for assistance to the OACIQ. This will affect the mortgage
broker's file. The latter may receive a stern warning, an obligation to
take training on advertising or face an investigation by the Syndic.
Feel free to check the
Advertising Guide
on our website or contact the
OACIQ Info Center at 450-462-9800 or 1 800 440-7170.
The OACIQ
at CAAMP's
Mortgage
Forum
As part of the activities of the mortgage brokerage
working group, the OACIQ, together with many dele-
gates from across Canada, attended the Mortgage
Forum of the
Canadian Association of Accredited
Mortgage Professionals (CAAMP)
. The event was held
November 25-27, 2012 in Vancouver under the theme
Communication in all its forms.
The event featured a number of interesting conferences,
including on our sector's long-term outlook in the
Canadian marketplace, and one on ways in which mort-
gage brokers can improve their business. Several mar-
keting and advertising experts also participated in the
Forum.
A detailed report of the event, prepared by CAAMP,
will be published in the next edition of the
Mortgage
Journal. As soon as it becomes available, we will inform
you via the
mortgage brokerage section of
Synbad
.
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