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Whats the difference? Principal Broker, Mortgage Broker and Mortgage Agent

 A principal broker (PB) is the broker who usually owns the brokerage or has a senior position in the firm. The PB is directly accountable to private investors because they typically will sign the Investor Disclosure and underwrite the deal to ensure that proper disclosure have been provided to the Lender and the Borrower. This is the highest designation. They also provide the Financial Services Commission (FSCO) an annual information return for the brokerage and answer directly to the governing body for the business of the firm.

 

A mortgage broker (MB) is usually working for the PB. They can also sign the investor disclosure. However most brokerages will not allow them to sign the form unless they have checked the file carefully for disclosures. I personally would not allow any broker or agent to sign the form at my firm but some firms do allow them to sign and if the firm is really responsible they will double check to make sure the proper disclosures have been given to the clients.

 

A mortgage agent (MA) works for the firm as an agent. They do not have legal authority to sign investor disclosure. This is the first designation that is awarded to work in the mortgage industry. It’s an entry level designation. An agent however may have been in the business for many years and be very experienced but never bothered to get the broker designation.   Or maybe didn’t need to obtain the designation of broker.

 

Does it matter what desgination my agent/broker has?  Yes, I believe that if your borrowing private money your much better off working directly with a PB because you will likely have less fees for underwriting and a more experienced broker with contacts for private lenders. A bank mortgage is easily looked after by an agent or broker. Those deals are relatively very straightforward and the rules and guidelines are much more stringent to qualify for than private money.