Evidence of meeting #68 for Finance in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was changes.
A video is available from Parliament.
President, National, Canadian Mortgage Brokers Association
I don't have those numbers handy. I think it could be looked up. As brokers, we see a lot of first-time buyers, and there's no doubt there is an inordinate number of people who are making the minimum down payment.
Liberal
Raj Grewal Liberal Brampton East, ON
The rationale for the question is this. The new stress test will obviously impact people buying a home with less than 20% down, and then you guys are advocating that it's going to impact your business. But you should—
President, Atlantic Chapter, Canadian Mortgage Brokers Association
No, sorry, we're less concerned about our business than we are about the Canadian consumer and the housing market itself.
Liberal
Raj Grewal Liberal Brampton East, ON
Either way, even if we're concerned about that, I think in terms of the basics we would need to know how many Canadians are purchasing homes. You guys are in the mortgage business, so I feel like this is one of the numbers you should know right off the top of your heads, x per cent of Canadians are buying homes with less than 20% down.
Secretary and Board Member, Ontario Chapter, Canadian Mortgage Brokers Association
We did a sweep of our homebuyers from last year. I don't know how many put less than 20% down, but close to 20% of them would not have qualified for their mortgage this year who did qualify last year. For one of our agents who does a lot of military relocation, close to 15% of her relocating members would not have qualified for a mortgage for their forced relocation, given today's economy.
Liberal
Raj Grewal Liberal Brampton East, ON
After the rules were implemented, have you guys seen a decrease in the number of people applying for a mortgage, year over year?
President, Atlantic Chapter, Canadian Mortgage Brokers Association
Not applying but certainly qualifying. If I could go back to your first question, most first-time homebuyers, at least in Atlantic Canada or in my neck of the woods, which is Halifax, are coming in with 5%. The problem is that it's a ripple-up effect. If that first-time homebuyer can't qualify with 5% down, whose home are they buying, who may have a 20%-plus...?
If the person has 20%-plus in equity on their current residence and is selling it to that first-time homebuyer, how do they then sell that house and move on if we don't have a first-time homebuyer qualifying at 5% without a stress test? The stress test eliminates that first-time homebuyer in a lot of cases.
President and Chief Executive Officer, Mortgage Professionals Canada
Could I comment very briefly?
President and Chief Executive Officer, Mortgage Professionals Canada
To answer about the data, the Canadian Real Estate Association will have tracked all the homes that changed hands this year. If you were to cross-reference that against the records of insurance through CMHC and some of the private insurers, you should be able to figure out pretty quickly how many of those purchases were made with less than 20% down.
Liberal
Raj Grewal Liberal Brampton East, ON
Yes. I was just curious to see if you guys knew it right off the top of your head.
President, National, Canadian Mortgage Brokers Association
Just so you know, in our industry we're not able to collate all that data. It funnels through to the insurers, and that's where that data is held. We're just not going to be privy to that.
Liberal
President, National, Canadian Mortgage Brokers Association
We're part of the industry, but we have to access the data.
Liberal
Raj Grewal Liberal Brampton East, ON
How are you guys compensating the individual mortgage representative? If I'm a mobile mortgage specialist in the city of Brampton, let's say, in my neck of the woods, what's the compensation model based on that?
President, Atlantic Chapter, Canadian Mortgage Brokers Association
The first thing I want to point out is the huge difference between a mortgage broker and a mobile mortgage specialist.
President, Atlantic Chapter, Canadian Mortgage Brokers Association
Respectfully, sir, you should ask about the mortgage broker because a mortgage specialist is different.
Liberal
Raj Grewal Liberal Brampton East, ON
With all due respect, sir, you didn't even bother listening to my question. My question was this: how do you guys compensate mobile mortgage specialists, people whose business is to get clients who purchase homes and get their mortgages approved?
President, Atlantic Chapter, Canadian Mortgage Brokers Association
We don't compensate mortgage mobile specialists because we are not them and we don't utilize them. We are mortgage brokers. There is a difference, sir. You need to understand that.
President and Chief Executive Officer, Mortgage Professionals Canada
Sir, can I...?
President and Chief Executive Officer, Mortgage Professionals Canada
I think there's a necessary distinction between an individual who's an employee of a financial institution, who recruits for one lender, versus a broker who's independent, who's a commission-based agent, and who would represent multiple lenders for the origination of a loan.
Liberal