The recent undercover work by @cbcmarketplace to expose mortgage fraud in Canada raised questions around how these bad actors were able to operate so brazenly. Now a new audit of @RECOhelps raises further doubts that self-governance is working. 1/ cbc.ca/news/marketpla…
Some takeaways from the incredibly scathing Auditor General's report:
auditor.on.ca/en/content/ann…
2/
auditor.on.ca/en/content/ann…
2/
Re spot audits:
"RECO has never performed a full
on-site inspection at 27% of registered brokerages, and
has not conducted a full on-site inspection at a further
35% of brokerages in more than five years."
3/
"RECO has never performed a full
on-site inspection at 27% of registered brokerages, and
has not conducted a full on-site inspection at a further
35% of brokerages in more than five years."
3/
Re the adequacy of fines as deterrents:
" we found that 67% of registrants were
fined a lower amount than the commission earned
in the related real estate transaction."
4/
" we found that 67% of registrants were
fined a lower amount than the commission earned
in the related real estate transaction."
4/
SO ANNOYING....lost the last 6 tweets on this thread. Will try to repost
Re screening for criminals:
"RECO does not have a formal policy, guide-
lines or a consistent process to assess whether
to refuse to register applicants who have a
criminal history."
HO...LEE....SHITE!
5/
"RECO does not have a formal policy, guide-
lines or a consistent process to assess whether
to refuse to register applicants who have a
criminal history."
HO...LEE....SHITE!
5/
Re fraud/lack of controls in qualification exams:
"...major breach in the integrity of exams
offered...RECO has not
taken steps to independently verify whether the
issues that led to the breaches have been satisfactorily addressed."
6/
"...major breach in the integrity of exams
offered...RECO has not
taken steps to independently verify whether the
issues that led to the breaches have been satisfactorily addressed."
6/
Re inspection of brokerages
"RECO does not review and monitor whether
inspections of brokerages are carried out
consistently and effectively"
"proportion of inspections that identify instances of non-compliance...as high as 82%"
BUT... "rarely follows up"
7/
"RECO does not review and monitor whether
inspections of brokerages are carried out
consistently and effectively"
"proportion of inspections that identify instances of non-compliance...as high as 82%"
BUT... "rarely follows up"
7/
Re money laundering:
"FINTRAC received zero reports of large cash
transactions between the 2017/18 and 2020/21
fiscal years, and just 18 reports of large cash
transactions in 2021/22, from real estate brokers
and salespersons."
8/
"FINTRAC received zero reports of large cash
transactions between the 2017/18 and 2020/21
fiscal years, and just 18 reports of large cash
transactions in 2021/22, from real estate brokers
and salespersons."
8/
Re conflicts of interest
"Although RECO’s role is to protect consumers,
its Board is composed mainly of real estate
industry representatives. At the time of our
audit, only two of the 12 directors on RECO’s
Board were not registered members of the real
estate industry."
9/
"Although RECO’s role is to protect consumers,
its Board is composed mainly of real estate
industry representatives. At the time of our
audit, only two of the 12 directors on RECO’s
Board were not registered members of the real
estate industry."
9/
End there. Just a crazy report. Governance of the real estate industry is even worse than I thought.
Industry is in serious need of a real regulator.
Industry is in serious need of a real regulator.
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