AMBA Matters Spring 2012

Matters Y EAR OF T HE

DRAGON a new year, a new vision

thinking OUTSIDE

the box

AMBA Education: are you ready to grow ALSO INSIDE What's all the hype about average price?

SPRING 2012

Matters

SPRING 2012 contents A SPECIAL THANKS TO OUR ADVERTISERS...

04 09 11 13 14 16 17 18 20 22 23 24 28 29

BILL WATSON MEMORIAL

Invis/MI ������������������������������� 2

RECA UPDATE: ACHIEVING BALANCE

Capital Direct ������������������� 5

Cyber risk & protecting client privacy

Amba’s lenders forum a hit

ask the experts: private lending

the importance of exit strategy

RMG ���������������������������������� 7 Lanyard ������������������������������ 8 Equitable Trust ����������������10 LMS ProLink ���������������������12 Cedar Peaks ��������������������12 J.E. Fletcher ���������������������18 Home Trust ����������������������19 D+H ��������������������������������� 24 Romspen ������������������������� 25 Richard I. John ���������������� 26

amba education: are you ready to grow?

Bridgewater Bank ���������� 28

examining part-time associates

First National ������������������ 31

rule change feature

2012 annual conference Preview

What’s all the hype about average price?

MERIX Financial ������������� 27

Alta West Mortgage ����� 32 Caplink ���������������������������� 33 Fisgard ���������������������������� 35 VWR Capital Corp. ��������� 37 Dominion Lending ��������� 39 Verico ������������������������������ 40

Matters is a quarterly magazine which provides fundamental information to members of the provincial association, offering an opportunity for the industry members to be educated, updated and entertained.

Toll Free: 1.888.452.2652 Phone: 403.685.9652 Fax: 403.685.9682 Email: info@amba.ca Web: www.amba.ca Suite 200, 1940 9 Ave. SE Calgary, AB T2G 0V2

Pipa feature: how safe is safe?

2012 board elections

Protect yourself against mortgage fraud

Amba 2011

Board of Directors President Paul Bojakli Quantus Financial

Past President Dean Koeller Calvert Home Mortgage Investment Corp.

Treasurer Frank Hickey Concord Mortgage Group Ltd.

Vice President/ Public Relations Director Ron McClenaghan Invis

Events Director Kristen Linde-Ferrier Combined Mortgage Ltd.

Arbitration Director (North) Gord McCallum First Foundation Residential Mortgages

Membership Director Jill Paish Merix Financial

Arbitration Director (South) Ken Kirkpatrick Axiom Wise Mortgage

Government Policy and RECA Relations Todd Fralic Quantus Financial

Interprovincial Liaison Director Phil McDowell Mortgages Are Marvellous

Education Director Ryan Spence Davis + Henderson

Consumer Awarness Director Nadeem Jiwa MCAP Service Corporation

AMBA/RECA REP Gary Siegle Invis Inc.

REGULAR FEATURES...

President’s Message 5 Executive Director’s Report 6 Industry News 26 AMBA Social Centre 30 AMBA Community Member Briefs 32 Member Profile of Jay Golumbia 34 AMBA Calendar 38

Return undeliverable Canadian addresses to: Alberta Mortgage Brokers Association Suite 200, 1940 9 Ave. SE Calgary, AB T2G 0V2 SPRING 2012

3

William Charles 'Bill' Watson 1956 - 2012 It is with profound sadness and broken hearts that our family announces the death of our wonderful husband, father, son, brother, uncle and cousin on January 4, 2012 in Red Deer. Bill was born in St. Boniface, Manitoba on November 25, 1956 to William and Joan Watson. Bill grew up in Edmonton, Alberta where he attended Meadow Park Elementary, JP High School and later would attend the U of A. At the age of 23, he embarked on his lifetime career as a mortgage broker. Having worked for KCR Investments, Combined Mortgage and Premier Mortgage Investments, Bill pioneered in the mortgage industry by being the first mortgage broker in Red Deer. In 1988, he became a Firstline franchise owner in Red Deer. In 1991, it would be called The Mortgage Centre. Over the years, Bill expanded his company, opening offices in Grande Prairie, Stettler and Sylvan Lake.

In 1993, Bill met his soulmate, Grace, and they married on July 22, 1995. Together Bill and Grace raised three wonderful children and for many years had opportunities to travel and enjoy life to the fullest. Bill and his company received many accolades over the years, some of which were ‘Best of Red Deer’ Gold Division in 2009 and 2011. In 2003, he received the Lifetime Achievement Award from Firstline. In 2004, he received the Strategic Excellence Award through MCC, and most recently a Lifetime Achievement Award from AMBA. Bill was a great believer in giving back. For many years, he served as a hockey coach for his sons’ teams. He belonged to many charitable foundations with the Terry Fox Foundation being one of his favourites. Bill was an avid sports fan who enjoyed playing hockey, softball, curling and golf. Bill will continue to be loved but dearly missed by his wife Grace, his children Brenan, Cody and Kristen, his mother Joan, brother Alan (Joanne), his sisters Linda (Garry) Lauer, Donna Thompson and Brenda Kraft as well as his large extended family, his many friends, colleagues and clients he touched over the years.

In lieu of flowers, Bill would like you to “Pay It Forward.”

4

SPRING 2012

President’s Message Paul Bojakli AMBA President

AMBA Supports CAAMP’s Federal Initiative Recently, AMBA supported a CAAMP federal initiative to represent the industry in Ottawa. The good news is the CAAMP Board is listening to the provincial associations and the CAAMP president is following through. I feel it is a step in the right direction to have our industry heard. With the many unpopular changes coming into effect with some lending institutions, it is even more important to voice our concerns today. CAAMP is willing to take accountability and lead the charge but we must do our part as industry professionals and offer constructive input as well as our support. We have to stand united and in agreement—it is very important for the health of our profession.

With reciprocity and harmonization, new Associations and Regulators, a lot is going on behind the scenes and it seems like we cannot keep up. Staying on the same page is very important.

My Utopian View So let me try and explain a thought. What if we had a federal and provincial model moulded into one national professional association?

We have all the parts to build this vehicle. CAAMP can represent the industry federally and the associations can represent the industry provincially. You might argue this is the way it is now. That is not the case. We are fragmented and disorganized. The reality is all the

Associations are competing to bring value to each member at a high cost.

As a professional association, we would begin to leverage as one voice.

We would create consistency, standardize education, documentation and, most importantly, eliminate duplication. This would mean we could put more resources into developing our industry. We would benefit from lateral communications, self-regulating, reciprocity and harmonization. What do you think? Is it possible? I think this really depends on you and me. We need to say more, we need to have faith in our association, we need to hold people accountable and we need to be prepared to support change that is for the greater good (even though you might not believe in it). The key to all this is everyone accepts their role and commits to each other.

This model would be similar to other professional organizations such as the Law Society or Chartered Accountants. We are not reinventing the wheel. I know that I am not the only one feeling this way. Together, we will find a way. There are so many positives to this model that I believe if we cannot make it work it will develop on its own and we will lose the opportunity to build the foundation. AMBA feels your input is important and would like to know your thoughts …

Post your comments in the 'member zone' chat.

Equity Lending!

Over 600 Million lent Since 1997 BR I T I SH COLUMBI A • ALBERTA • ONTAR IO • ATLANTIC PROVINCES

UP TO

80%

1st Mortgages Rates start at

LTV Residential Private Money Lending

5.75% AND UP

2 nd Mortgages Rates start at

6.75% AND UP

R AT E SRATES & F E& E SFEES A R EARE S USUBJECT B J E C T TTO O CHANGE C H A N GWITHOUT E W I T H ONOTICE. UT NOTICE.

Member CAAMP, AMBA, MBABC, BBB, Offices in Vancouver, Calgary, Edmonton & Toronto.

George Lay

Moe Haymour

Paula Hutton

Hugh Doggett

Trevor Bowie

Business Development Manager British Columbia

Business Development Manager Alberta North

Business Development Manager Alberta South

Business Development Manager Ontario

Business Development Manager Atlantic Provinces

Phone: 604 | 329.6067 Fax: 604 | 430.3287 Toll Free: 800 | 625.7747 glay@capitaldirect.ca

Phone: 780 | 919.9211 Fax: 780 | 665.6010 Toll Free: 800 | 959.9290 mhaymour@capitaldirect.ca

Phone: 403 | 278.6200 Fax: 403 | 278.6296 Toll Free: 80 0 | 959.9290 phutton@capitaldirect.ca

Phone: 905 | 299.6951 Fax: 905 | 824.7095 Toll Free: 80 0 | 814.2578 hdoggett@capitaldirect.ca

567413_Capital.indd 1

Phone: 902 | 894.7700 Fax: 902 | 894.7736 Toll Free: 866 | 830.7734 tbowie@capitaldirect.ca

SPRING 2012

12/31/11 6:22:09 AM

5

EXECUTIVE DIRECTOR’S

Report Spring 2012 Judy Martin AMBA Executive Director

Here we have it, a new year, a new vision with a new attitude …

It is the Year of the Dragon according to the Chinese horoscope; it is a year of possibilities and good partnerships. New ideas and energy will move people to do things they would not normally think of undertaking. Things that seemed impossible last year will now be easier to conquer. But, there is a caveat to this good fortune and that is “you will have to take the chance.” This is when the power is in your hands. You can sit back and wait or you can get motivated, create a positive vision with an attitude of achievement.

We have a saying here in the AMBA office and it goes like this. “Success isn’t a matter of chance … it’s a choice. It is your choice.”

Back in the old days when I worked as a counselor/facilitator, I facilitated courses on self-esteem, time management, stress management, customer service skills, professional and business skill development, assertive training, anger management, and communication skills to name a few. And in each and every one of these courses I instructed, the premise was the same … attitude. You know the old sayings, ‘think positive; Is the glass half full or half empty’: It is easy to sit back and complain, or you can start reading, take courses, listen to inspirational or motivational talks, and then read some more. These old adages will create energy to achieve success … if you have the right attitude.

Time and time again, I hear, “Well, AMBA, what are you doing for me?” I think of AMBA being a Dragon (well, I just checked and AMBA was born in 1975 not 1976, so the reality is that AMBA is not a dragon.)

But what we do offer to the membership are new ideas, through courses, communication, and an excitement for opportunities by participating in AMBA events. We give you the tools but it is what you do with them that counts.

I hear people saying the speaker was a jerk, or he is boring. There are many other things that I hear, and I’m included in that pack— you should hear what I say about Anthony Robbins — but I have never, ever left a seminar,

6

SPRING 2012

workshop or presentation without learning at least one thing. And that one thing is one more thing that I know now than I did when I went into the presentation … it is about attitude!

Ok, you might be saying Judy sure is on her soap box again. Well, maybe I am, but I am so passionate about people achieving success and that success doesn’t happen by accident, it requires work on your part. AMBA is here to assist you. Take advantage of what we offer; everything we do in this office is for you, the member!

A couple of weeks ago, Eden McNichol came into the AMBA office.

I asked her the usual question about how business is. She started her sentence with “busy.” She went on further to say how she is expecting 2012 to be a great year for the mortgage industry. She spoke with passion, enthusiasm, and with an attitude to succeed.

She had my attention and with this spirit of excitement, I felt the excitement, and as a result of this 10 to 15 minute chat, I became inspired and wanted to share: Take advantage of the dragon year, there are lots of opportunities and possibilities if you wish to take the chance!

MISSED OPPORTUNITIES Did you remember to renew your membership? Your grace period is over now and if AMBA has not received your membership payment, you are no longer showing up on the database and consumers who are looking to use a mortgage broker will not find you. Here is a perfect example: We had a consumer call to look for an AMBA member in Fort McMurray and he only found one member on the database.

Guess who got the business?

Have you updated your profile on the AMBA website? There are a variety of questions on the AMBA website that you can answer.

This information is populated into your profile. When consumers are looking for a mortgage broker, they can select from a drop down menu of choices to find you. Here is another example: A consumer phoned the AMBA office looking for someone who speaks Portegese. No one has

filled in the different languages that they speak, for example if you speak Portegese and you had this information in your profile, you would have got the deal.

Does your website have a link to the AMBA consumer page?

AMBA has excellent information for consumers on the website. This information will not only assist a consumer to understand why they would use a mortgage broker but it will also show the potential borrower your commitment to the industry by being a member of your Association.

AMBA had nearly 50,000 hits to this page in the last year. Is your website listed in your AMBA profile?

Do you read your emails from the AMBA office? The emails you receive from the AMBA office all relate to current, timely and important news. We have taken the practice of reducing emails to you by sending out an e-newsletter twice a month and when you receive a separate email it is because we believe a message has to be reinforced. I have people still saying I didn’t know about that social, or maybe they say to me I didn’t know the sponsorships have been sent out, or maybe even I haven’t received an email from you in a long time. Well if you are Sean

McDowell, this is correct, he didn’t and that is because he didn’t update his profile and correct his email address. I also hear from members that they didn’t receive an e-newsletter from AMBA. We don’t like to hear this information so we are now capable of checking on a data list if the email was sent to you, if you opened it and if you may have selected the ‘do not send’ button … which of course was identified with one of our very important lenders.

I encourage you not to miss out on any more opportunities. Pay attention, read, and archive emails for a future reference.

The Right Partner Makes All the Difference.

Industry leading compensation Realtor referrals through mortgage brokers and agents for property listings Client referrals direct to mortgage brokers and agents 3% cash back towards down payment Competitive fixed and variable rates

RMG mortgages Shawn Thompson

Northern Alberta, Saskatchewan & Manitoba

780.446.4440 shawn.thompson@RMGmortgages.ca

Ann-Marie Cunningham

South Alberta

403.880.3447 ann-marie.cunningham@RMGmortgages.ca

Corbett Connors

South Alberta February 2012 RMG Mortgages is a division of MCAP Financial Corporation Ontario Mortgage Broker licence no 10600 & 10515 / Ontario Mortgage Administrator licence no 11692 & 11790

403.650.7965 corbett.connors@RMGmortgages.ca

SPRING 2012

7

Interest Rates Starting from an Incredible 5.75%

1st Mortgage Financing $1,500,000 - $15,000,000 Income Producing Properties: • L/V: Up to 75% • Interest Rates: from 5.75% • Fees: from 1.0%

Condo Inventory Loans: • • • •

FINANCIAL

CORPORATION

L/V: Up to 65% Interest Rates: from 7.0% Fees: from 1.5% Flexible Partial Discharge Provisions

866-698-5388 Toll free

Call Brian Chelin or Mike Saba today Visit our website at: www.lanyardgroup.com

Or contact us at: bchelin@lanyardgroup.com or msaba@lanyardgroup.com

Achieving Balance: Self-Regulation, Industry Professionals and RECA The Real Estate Council of Alberta (RECA) has approved a 2011-2016 Strategic Plan that will usher in an era of greater professionalism, higher standards and a renewed focus on putting the “self” back into “self-regulation.”

Throughout the extensive industry consultation that occurred prior to Council’s development and approval of that Plan, the message that came through from industry professionals, Advisory Committee members and other industry stakeholders was a desire to increase the professionalism within the industry. The belief being that, in doing so, it would:

• Increase the strength and reputation of Alberta’s real estate industry and its dedicated professionals • Help build an even stronger complement of competent, ethical and experienced industry professionals; and • Demonstrate to consumers the tremendous value proposition inherent in the work of Alberta real estate industry professionals

RECA’s vision is that the public interest is best served when all industry professionals are provided the opportunity to be as good as they can be and all stakeholders collaborate to promote and support an environment in which licensees can flourish whilst ensuring the best possible experience for the public within the real estate profession. It is within this context that RECA has set its vision, established its strategic direction, and aligned its services, communications and resources for the next five years.

RECA believes that collaborating toward effective self-regulation for Alberta real estate brokerage, mortgage brokerage and real estate appraisal professionals will lead to continued and additional success for the industry.

Putting the 'Self' Back in Self-Regulation The first step in engaging industry professionals in the concept of selfregulation is to clearly define what it is, what it means for each individual and for RECA. This past October, Council approved in principle a Statement on Self-Regulation. From mid-November to early February, Council invited and encouraged all industry professionals, associations and related stakeholders to provide their feedback on self-regulation to Council for further consideration.

Approximately 500 individual industry professionals took part in a series of self-regulation town hall meetings that were held across Alberta, and nearly 150 individuals responded to the online survey available on RECA’s website.

This feedback gathering process is culminating on March 7, 2012, at RECA’s Symposium on Self-Regulation. This Symposium, the first of its kind in Canada, will bring together industry stakeholders from across Canada, including individual industry professionals, representatives from regulatory organizations, government and trade associations, and members of the public.

Moving Forward Following the Symposium, Council will consider the Statement on SelfRegulation in light of the complete feedback gathered along with the final report from the Symposium, with the intention of approving a finalized Statement at either its April or July meeting. The approval of a finalized Statement on Self-Regulation should not be viewed as the end to this process, but rather as the beginning of an era of strengthened, effective self-regulation for professionals in Alberta’s real estate brokerage, mortgage brokerage and real estate appraisal industries.

During the course of the next five years, RECA will look to Alberta industry professionals to be active participants in the concept of selfregulation; to be fully engaged in their industry, with their peers and consumers; and, to be the standard by which all real estate, mortgage and real estate appraisal industry professionals should be measured.

SPRING 2012

9

It’s about more than just a great rate.

And you know it!

“Service” wins the deal!

Lending Excellence, by people who care.

Experience the Equitable approach.

Open conversation. Partnership success.

Equitable Teams take the time to see & hear what’s often missed . . .

......Client Circumstance.

Got a Client Circumstance that wants Lending Excellence?

Let’s talk today.

Call:

403.440.1200 1.866.940.1201

www.equitabletrust.com

Cyber Risk & Protecting Client Privacy Derrick Leue, LMS PROLINK Ltd. Actor Marlon Brando once said: “Privacy is not something that I’m merely entitled to, it’s an absolute prerequisite.” Like Brando, most people value their privacy. While Brando went so far as to purchase his own private island to protect his privacy, most of us do not have this luxury.

In today’s technologically driven world, safeguarding a client’s privacy is growing increasingly difficult. A breach in a computer network can pose a threat to valuable financial, customer, and employee data. Despite the growing potential risks, far too many Canadian companies overlook cyber-liability. A recent poll of Canadian businesses conducted by EKOS Research for the Office of the Privacy Commissioner of Canada found that 42% of businesses surveyed were not concerned about network security breaches. This revelation comes in spite of the fact that businesses are increasingly collecting and holding personal information about their clients.

Clearly, there is a disconnect between the perceived risk and the reality.

Mortgage brokerages understand they have an obligation to protect client information stored on their computer systems or received through email. Nevertheless, greater investment can and should be made on both hardware and software security solutions.

Unfortunately, there is still no way to guarantee that your client data is 100% secure because criminal behavior and human error are beyond individual control. AT&T, Sony, Zappos and hundreds of other large corporations have recently been subjected to the costly nature of privacy breaches. In fact, industry sources in the U.S. indicate that the average cost of a data breach is $204 per customer record as of 2009. Furthermore, the cost of $204 per customer doesn’t account for expensive liability lawsuits brought forward by third parties affected by a breach.

CYBER LIABILITY INSURANCE Conscientious risk management practices can go a long way in protecting the fidelity of your proprietary data but there is no way to completely eliminate the chance of a breach.

Liability insurance is your final defence. In Canada, insurers offer cyber-insurance policies to help protect businesses from numerous technology related liabilities. This coverage offers protection against a variety of “cyber” liabilities, including:

1.

Network Security Liability: This coverage protects companies from losses associated with unauthorized access to or theft of customer, employee or other proprietary data, and computer viruses.

2.

Privacy Liability: This coverage protects a brokerage that fails to protect electronic or non-electronic information in their care, custody and control.

3.

Regulatory Liability: This coverage is provided for privacy-related lawsuits or investigations by federal, provincial or foreign regulators.

So how should a company protect itself from cyber risks? In general, it is important to be proactive rather than reactive when it comes to risk management. Most brokerages likely recognize they confront risks related to identity and security breaches but the key is developing risk management strategies that actually reduce exposure. There are a number of strategies that brokerages can utilize to mitigate their risk:

4.

Notification Expense: This coverage is for expenses regarding compliance with privacy law notification requirements.

5.

Credit Monitoring Expense: This coverage is for your expenses regarding compliance with privacy law credit-monitoring requirements.

Develop cogent corporate policies specific to data security and privacy.

6.

Crisis Management: This coverage is provided to address your expenses when hiring a public relations firm.

Train employees and associates to understand their roles and responsibility in the protection of client data.

7.

Data Recovery: This coverage addresses your expenses when recovering data damaged on a brokerage’s computer system as a result of a failure of security.

RISK MANAGEMENT

Ensure mobile devices are using the most up to date encryption available.

Clearly communicate your brokerages’ expectations when it comes to downloading sensitive and private material.

Make employees and associates aware of the precautions that should be taken when travelling with laptops and other devices containing proprietary data.

It is important to note that Mortgage Broker Errors & Omissions Liability and Commercial General Liability policies will not cover claims related to a data and privacy breach. Cyber Liability is a specialized form of liability insurance only offered by a select number of insurers in Canada.

To learn more contact:

LMS PROLINK Ltd.

P. 800-663-6828 LMS.CA/AMBA

SPRING 2012

11

Your Preferred Choice for Private Funding

Rapid Turn-Around Time | Broad Base of Investor Funds

DIANNE PULLIN

Flexible Brokerage Fees | First & Second Mortgages – All Types

Mortgage Associate

Open to Unique Properties in Alberta & Other Provinces

MARK PULLIN

Mortgage Broker

dianne@cedarpeaksmortgage.ca | mark@cedarpeaksmortgage.ca | 1-888-831-2009 | 403-249-2007 | cedarpeaksmortgage.ca |

|

Residential

2012 F12 e b 2 0SPRING 09 AMBA - Half Page Color Ad

|

Commercial

|

Industrial

|

Multi-Family

|

AMBA’s Lenders Forum a hit New regulation for mortgages Would you be surprised to know that in 2009 Canada made an historic legal precedent to broaden the definition of a security to include mortgage investments? This was a first for all Commonwealth countries! This change by the Canadian Securities Commission (CSA) created a chain of events, rules and regulations that upset the status quo for a number of private lenders in Alberta and across Canada.

Who is affected by the new rules?

Mortgage Investment Corporations (MICs), pools of mortgages, and syndicated mortgages which were previously governed by the Alberta Real Estate Act were catapulted into securities law.

Private Lenders Forum To address the changing regulatory landscape, private lenders across the province, the Private Lenders Forum, began to meet in an effort to understand and comply with the new rules.

“For many of us who had operated for more than 30 years as private lenders without any securities regulations, it was a big shock to be faced with a long list of securities regulations,” said Dean Koeller co-chair of the Private Lenders Forum.

“The Private Lenders Forum was an opportunity to share ideas, resources, information and cost. More than 15 companies shared the expense of an industry policy manual that was required for registration with the securities commission.” Dave McKitrick cochair of the Private Lenders Forum.

What is it all about?

The Private Lenders Forum has been growing over the last few years. In the beginning, there were a few concerned lenders. Now there are more than 28 companies participating in the monthly meetings.

The issues discussed at these meeting have included:

• Registration issues • Compliance requirements • Regulatory deficiencies • Overlap in regulations • Policy and procedure manual • Federal Budget implications • Tax implications • Accounting and IFRS

(International Financial Reporting Standards)

conversion issues

• Regulation of syndicated mortgages “The Private Lenders Forum is an opportunity for us as an industry to have a voice and ensure that the health and survival of our businesses are addressed. In the same way that bankers, lawyers, and accountants have associations to advocate on their behalf, private lenders need to get organized or regulators, law makers and politicians are going to make decisions without our interests taken into consideration. We can’t expect others to look out for our interests. It’s time we took responsibility and to do our part to build a healthy and viable industry for ourselves,” said Dean Koeller.

To learn more or participate in the Private Lenders Forum, please contact Dean Koeller at dean@chmic.ca, or Dave McKitrick at dave@altawestmortgage.com.

SPRING 2012

13

ask the expert:

Understanding private lending This Issue’s Experts

Dean and Dale Koeller Calvert Home Mortgage Investment Corporation

Dean and Dale Koeller of Calvert Home Mortgage Investment Corporation, have been in the industry for 15 and 12 years, respectively. Being groomed by their father, an industry authority since 1975, has provided them with an advantage in their careers. They are our private lending experts.

What is private lending?

Also known as alternative lending, non-traditional lending, or even ‘C’ lending, private lending is when a private individual or group agree to loan funds directly (or through an intermediary) to a borrower.

These loans are not provided through a financial institution and are not insured by an insurer. Not having insurance provides additional flexibility when underwriting the loan, as well as a greater risk to the full collection of the loan.

Why use a private lender?

Private lending can be a valuable resource to assist borrowers in financing properties when there are no institutional options. Even when other options are available, private lending can be more efficient, comes with greater flexibility than traditional products, and it can even be cheaper in some circumstances. For instance, clients may have extremely low first mortgage rates and potentially large prepayment penalties, making second mortgages a more economical option for small loans when considering the blended interest rate.

Circumstances where there are no institutional options, or where private lending is a better option, can include a requirement for short term funds, or if there are conditions the borrower cannot meet, such as finishing construction or renovations, or achieving a sales target of a certain number of units sold or paying out personal loans.

The time it takes to review, approve and fund a mortgage through a private lender can also be much faster (as little as 48 hours) than traditional methods. This allows clients to take advantage of other financial and buying opportunities that would otherwise not be possible.

It can also be more flexible. With less lending criteria, a private lender can bridge a credit problem (be it lines of credit, federal taxes or enforcement issues) by paying off these debts to be able to meet conditions of a traditional lender down the road. Private lenders have the ability to be more flexible with situations such as: Foreclosure, credit consolidations, self-employment, or poor credit, and partially completed and partially renovated properties.

14 SPRING 2012

TIP: In some cases, refinancing a first mortgage can trigger prepayment penalties, while arranging a second mortgage from a private lender that expires at the same time as the first can save your client money.

Why are Private Deals worth it?

Arranging private lending deals is profitable, offers additional lending options and typically has less competition than traditional bank financing. While there is a learning curve to understanding how to put transactions together, the rewards are worth learning. In an economic environment where finding new business opportunities are paramount, private lending is a great way to expand your service offering. Even ‘A’ borrowers may have a need for private lending.

TIP: If you are not sure, get a mentor who understands private lending or talk to a few private lenders.

If the deal gets turned down by the banks, credit unions, and alternative (insured) lenders, or if the deal simply doesn’t fit with them, then contact a private lender to consider an alternative way to help your clients achieve their goals. The more private lenders you talk to, the more potential and options appear for existing and future clients.

TIP: It’s your job to provide clients with the best options, which best suits their needs. In some cases, a higher rate or fee mortgage product can give a client a better solution.

What do I need to know?

Rates and fees are not the whole story. Make sure when you’re comparing one lender to another, you understand what they’re offering. With varying combinations of rates and fees, more expensive options can appear deceivingly less expensive.

TIP: Compare two mortgage options by looking at the effective interest rate for a one year period.

Issues to consider Look at other factors that could cost a borrower down the road:

Are there additional closing costs, such as legal, appraisal, stand-by fees?

What does the lender charge for renewal fees?

Are there any additional costs for defaulting on a mortgage payment?

Is the interest rate simple or compounded?

Is the interest rate compounded semi annually or monthly?

Is the mortgage amortized or interest only (unamortized)?

Are borrowers paying interest on a holdback of funds?

TIP: Be aware of the conditions like fund hold backs and “subject to” clauses. Check with your client to confirm that these conditions can be met. An unfunded deal is no good for you or the borrower.

What should I charge a client for a private deal?

If you are not sure what to charge, talk to a mentor, colleague or private lender to learn what’s appropriate. Things to think about:

How much effort has this deal been to arrange, and how much experience is required to secure the best offering?

Is there other compensation you’re receiving from a first mortgage or takeout financing?

Second mortgages typically have a higher fee than first mortgages

Is this a one-time deal, or can you generate repeat business from the client?

Fees range from 1% to 10% (with minimums of $750 to $1,000)

How do I package a deal for a private lender?

There’s often not much difference between what a private lender asks for compared to an institutional lender. While there may be more consideration with respect to the equity in the property, private lenders like to have good information to make a sound decision. Private lenders are more than happy to work with you and the borrower to get the information needed to make a quick decision.

Remember that associating yourself with a lender can impact your reputation in the industry. You need to find the right fit for you and your clients. Think about:

What is the private lender’s reputation in the industry?

How long have they been in the business?

What is the source and reliability of the lender’s funds?

How do they communicate and interact with you and your clients?

Do they refer re-financings back to you, the mortgage broker?

What is the charge for renewal fees, if any?

Will the interest rate change at the end of the term?

Are there any hold backs and conditions on these funds? Are they charging interest on hold backs?

TIP: Give your client a clear expectation of who they are working with and what they can expect the process to be.

No one likes surprises.

Have other questions?

Contact us at 1-800-752-4642, or email: dean@chmic.ca or dale@chmic.ca

SPRING 2012

15

STRATEGY

The importance of

Jared Morrison, Alta West Mortgage

From the

Client’s point of view

How many times have you been stuck on a private deal? They are different than ‘A’ or ‘B’ deals. Successful brokers recognize this and treat them differently. This strategy will apply to all deals, but becomes more important the less ‘normal’ a deal is.

A great place to start when brokering a private deal is to consider what happens next. Consider the exit strategy first.

Look at this from the point of view of each participant (broker, client and lender). This will help you identify the reasons for each participant to be involved. If you know what’s in it for them, if you understand what they get out of it, you will understand why they should be involved in the first place.

From the

lender’s point of view

Clients need to know why they are where they are and what to do to move forward. They want to know what comes next. They want to know there is a plan to move them from where they are to where they want to be.

You also need to show them how to get there.

Think of it like taking a family holiday in a strange city. Knowing you want to take the family to the zoo is one thing, knowing what bus to catch or what highway exit to take makes life so much easier.

The importance of Exit Strategy to the

broker

Private lenders are not looking to hold a file forever.

Private lending attracts fees. The faster the churn of the money, the more fees are earned.

Lenders realize that clients with a clear path to move forward are more likely to succeed. They know where they are going and how they are going to get there. When clients are placed with a private lender as a ‘last resort’ and not as a, say, ‘three step plan,’ they eventually begin to resent their situation.

For those deals that are marginal, the decision to lend may simply come down to the ability to get out. That’s why private lenders often cut to the chase. What is the property, where is the property, what is it worth and what LTV do you want? They make the assumption that the deal may go wrong, and are looking to underwrite accordingly. Show them the exit strategy to help with this process.

Understanding the exit strategy will help you sell the client on the whole plan, in turn making the private deal much easier to sell. It is so much easier to sell the ‘three part plan’ as opposed to the ‘lender of last resort.’

Presenting your client with a plan that includes ‘what comes next’ helps set you up for repeat business. Part two of your plan (of course) is to refinance as soon as it makes sense.

The exit strategy (plan) provides an opportunity to refer business back to your referral sources (think realtors, budget advisors, accountants, etc). How will this help grow your business?

As you can see, exit strategy is important to everyone involved. Understand this and you will go a long way to being successful with Private Lending.

16 SPRING 2012

Are you ready to grow our market share?

It’s time to raise the bar.

It’s time to get better as a collective.

It’s time to get inspired.

It’s time to improve our channel.

These are a lot of phrases that we hear regularly.

Many of us have talked about it for a number of years and continue to work on solutions. In every market, in every city, there is one constant in your business. That constant is you.

We hear talk about the market, we hear forecasts and listen to experts tell us what our business is going to look like. We talk about market statistics and market share numbers. We talk about growing our market share as a channel. The bottom line is that if we want to take a bigger piece of the pie, then we need to get better at what we do. We need to be better than our competition.

You can’t control the market. You can’t control your suppliers. You can’t control your competition. The only constant in your business that you can control is you.

If we want to get better as a collective then it all starts with you, the individual. It is time for all of us to stop talking about what ‘they’ are doing about ‘it’ and time for us to start thinking about what ‘I’ am doing about ‘it’.

As a channel, we are only as good as our weakest link. Don’t let that be you.

We have all heard of the 80/20 rule — the one that suggests that 20% of the sales people represent 80% of the business. Doing business amongst the throngs of the 80% is a lot tougher than soaring with the 20%. While we may not be able to change the way the other 16,000 brokers across the country do business, there is one broker you can change. One broker you can impact. That broker is the one that you look at in the mirror each and every day. That’s right it is you. You are the only broker you can impact with any certainty.

getting the right tools AMBA Education is committed to giving you, the member, the tools you need to succeed. Whether you are looking to improve your game or you have a burning desire to help others improve theirs, over the next 12 months, we will be introducing programs to allow you to do both.

Mentorship & Leadership

a specific topic with “Commercial Mortgages Month,” “Privacy and Fraud Month” and “Policies and Procedures Month.” Keep an eye on the AMBA website for an outline of the upcoming topic months!

Online Learning Centre

We will be launching our Mentorship program on March 1, 2012, allowing those of you who want to help lead and shape the mortgage brokers of the future share your knowledge and experience in a structured manner.

The Mortgage Online Learning Centre is an online learning environment dedicated to providing mortgage professionals with timely, relevant, practical opportunities to expand and update their skills and knowledge base, in a format which addresses the needs of the adult learner.

For those that are looking for assistance to learn the business and develop your skills, our Mentorship program is a perfect way to gain some structured guidance as you develop your skills.

Our courses are designed with the learner in mind. Our online format is designed to help busy adult learners take advantage of lifelong learning – on their schedule, at their pace, on their terms.

Professional Development Program

The Mortgage Online Learning Centre is a collaborative initiative between the Alberta Mortgage Brokers Association, the Independent Mortgage Brokers Association of Ontario and the Mortgage Brokers Association of Atlantic Canada.

On April 1, 2012 we will be officially kicking off our new Professional Development program. The program consists of a series of ‘lunch and learns,’ workshops and courses over the next 12 months designed specifically to give you some firm take-aways that you can implement immediately to help you grow your business. Each month will focus on

Visit www.mortgagelearningcentre.ca to view the growing library of mortgage e-learning opportunities available.

It’s time to forget about the market, forget about your competition, forget about what you can’t control. It is time to focus on what you can control. YOU! It’s time for you to raise your game and AMBA Education is here to help.

SPRING 2012

17

Examining Part-Time Associates Nolan Matthias There are very few industries where the most successful members claim to be the victims of a game where they wrote their own rules. Yet, at an alarmingly more common rate, some of our industry’s biggest players are crying fowl about a problem that they have played a significant role in creating. The problem is the part-time associate, and the reality is it is not the failures of the part-time associates that are the problem, it is the fact that we, as an industry, have failed to provide them with the tools they need to succeed.

While it is unfortunate that some of our best and brightest have taken the position that the biggest detriment to our industry is part-timers— characterizing them as unprofessional, unknowledgeable, and generally as the members of our industry that have to go—the part-time broker actually represents one of the single greatest opportunities for our industry. In an era in which banks are growing their sales forces at a faster rate than ever, we have an opportunity to mobilize a large base of parttime associates that have already received their preliminary training and are for all intents and purposes willing to put in the time, if somebody would only show them how.

type or past experience. If you need proof that this sort of system exists, you need only look so far as the bank sales forces, whose success rates among new mortgage specialists are significantly higher than that of mortgage brokers.

Unfortunately, the ‘how’ is where we as an industry have come up short.

While some of us have become extremely good at what we do when it comes to completing a mortgage, we have been utter failures when it comes to passing on our knowledge to new industry members. Our lack of ability to transfer this knowledge is the exact reason why we have so many part-time associates.

Don’t go looking to our industry associations and regulators to provide these standardized systems, either. The only useful birthplace of this sort of basic training is the trenches themselves. We have the responsibility to systemize and teach what it is we do that makes us successful. Contrary to popular belief, we don’t need to make it harder to get into the industry, we need to make it easier to succeed. And implying that it is the industry association’s responsibility to implement the proper training is the mentality of a victim. Victims complain, players don’t. Players look for solutions. The solutions ultimately have to come from those of us who are in the field, playing the game. The question is, are we an industry of victims or players?

Some may argue that even with the best training, it takes the right person to be successful in this industry. However, given the right tools, anyone can become a successful associate. The key is to provide them with a standardized system that creates results, regardless of their personality

Nolan Matthias is the best-selling author of The Mortgaged Millionaire and an industry trainer who specializes in selling systems that are process oriented and guarantee results. Visit him at nolanmatthias.com or contact him at 403-615-6132 or nolan@nolanmatthias.com.

18 SPRING 2012

as canada’s leading alternative mortgage lender, Home trust company has been opening our doors to brokers for over 25 years. our dedicated underwriting team along with our wide range of financial products are the keys to success that can close even your most difficult deals. Whether your clients are self-employed, new to canada or recovering from bruised credit, when your next opportunity knocks, Home trust will answer.

mortgages

|

credit

|

visa

|

deposits

|

www.hometrust.ca

Playing by the rules

The Alberta Mortgage Brokers Association (AMBA) would like to take this opportunity to comment on the recent media coverage surrounding the cap on the government guaranteed mortgage insurance and the concerns over potential mortgage rule changes.

AMBA is a trade association committed to professionalism by providing members with education, information and resources to develop the highest standards of excellence in the mortgage brokerage industry. As an industry voice for Alberta mortgage brokers, AMBA fully supports the initiatives by the national association the Canadian Accredited Association of Mortgage Professionals (CAAMP) in their efforts to advocate on the mortgage brokers industry’s behalf.

CANADIAN MORTGAGE TIMELINE 2005  Prime rate was 4% and a 5 year rate was just over 6%.

2006  Prime rate was just over 5% and a 5 year rate was just over 6%.  CMHC extended the maximum allowable amortization for a mortgage from 25 years to 40 years.  20% of Canadian home owners are taking out 35 year amortized mortgages.

2007  Prime rate was 6% and a 5 year rate was just over 6%.  In April, CMHC’s 100% financing program for rental properties, opened up income property investing to the masses.  4.9 million Canadians own homes.  July 2007, Canadian mortgage lenders started reducing higher risk subprime mortgages.  Canadian housing starts were 227,530.

 A mortgage rule change announcement was made in June.  The new rules only applied to mortgages closing ON or AFTER October 15, 2008.  The new stated minimum Beacon score for an insured mortgage is 620. The new maximum TDS (total debt service) ratio is 45%. In the past, lenders and mortgage insurers have set their own lending and underwriting standards. This will continue going forward but the above guidelines are now required for mortgages to qualify for government-backed insurance.

2009  Prime rate was 3% and a 5 year rate was just under 6%.  In January, Finance Minister Jim Flaherty announces continued job loss.  The average Canadian home was worth $281,972 in February, down 9.2%.  In March, The big banks have moved their 5-year posted fixed rates down to 5.55%. That’s a record low, breaking the 5.70% mark from July 2005.

 From 1997 to 2007 Canadian house prices rose 78% (Source: The Economist).

 The all-time low on record for any term over four years is 5.00%, way back in 1951. (That 5.00% was for a 25-year term.

5-year mortgage data only goes back to 1970.)

 The Bank of Canada lowered their target lending rate, and by default prime rate, by 1/4% in December.

 Foreclosures are up notably in Alberta and BC.

 Canada’s average home price shot up 79% from 2001 to 2007, or 9.5% a year.

2008  Prime rate was just under 6% and a 5 year rate was over 7%.  CMHC reduced the maximum amortization from 40 year to 35 years.  Canada’s average house was worth $329,383 in March, up 5.5% over March 2007.

20 SPRING 2012

2010  Prime rate was 2% and a 5 year rate was over 5%.  CMHC reduces the maximum amortization from 35 year to 30 years.  In January, The Bank of Canada’s rate announcements have sounded pretty similar for the last 8 months: no change, no change, no change… 0.25%  The average Canadian’s debt-to-income ratio is now 145%—an all-time high (largely due to greater mortgage costs).

CAAMP has taken the initiative to communicate the following:

Government has already tightened lending criteria significantly and mortgage volumes have decreased;

1

The issue of lenders and the mortgage insurance ceiling has nothing to do with lending practices, but rather liquidity and capital requirements;

2 3

Arrears and defaults in Canada remain low and are declining;

4

Homeowners have significant equity and are paying down their mortgages;

As an industry, we are vigilant and caution against further measures that could precipitate a weakening of the housing market.

5

On April 19, the government announced three major rule changes to “prevent” a housing-price bubble and keep homeowners from “overextending.”

These new rules apply to government-backed insured mortgages only.

Rule 1: 5-Year Fixed Qualification Rates  The New Rule: Borrowers need to qualify using a 5-year fixed rate regardless of what term they choose. If you want a 1.95% variable rate, for example, you need to show that you can afford payments at a higher fixed rate, like 4.09%.  The Government’s Reasoning: “This initiative will help Canadians prepare for higher interest rates in the future.”  The Effect: It will now be harder to qualify for a variable-rate mortgage, but not much harder. Most lenders already used three- or five-year mortgage rates to calculate a borrower’s debt service ratios. For many discount lenders, this meant the qualifying rate went from something like 3.25% to 3.89%.

Rule 2: 90% Maximum Refinancing  The home refinancing allowable amount dropped from 95% of its value to 90% maximum.  The Government’s Reasoning: “This would help ensure home ownership is a more effective way to save.”  The Effect: Borrowers will be less able to pay off high-interest debt with lower-cost mortgage money. On the upside, this rule has the positive effect of keeping equity in the home (which is quite helpful when home prices fall). It also discourages homeowners from relying on home equity to bail themselves out when they accumulate debt.

Rule 3: 80% Maximum Insured Financing On Rentals  People buying non-owner occupied rental properties will need to put down 20% to get an insured mortgage, versus 5% previously.  The Government’s Reasoning: To reduce speculation.  The Effect: The number of investors creating rental housing will drop notably. Investors will need to borrow down payment funds elsewhere (assuming it’s allowed) or use higher-cost non-

In addition to the above national initiatives, AMBA is advocating the following:

Impact to local markets. AMBA believes that real estate is primarily driven by local market factors, therefore broad national policies may damage both healthy and struggling local markets.

Minimum government intervention. Action taken in adjusting rules or policies has the potential of reducing liquidity in the marketplace and may cause a crisis where none existed previously.

Developing a debt strategy. In considering mortgage rule changes, we urge the government to consider the risk of forcing consumers to higher interest-bearing credit such as personal lines of credit or credit cards as a result of less mortgage product options.

Options versus cost. Government should consider the risk of limiting consumer choice when it comes to large financial transactions. AMBA believes that consumer choice is important to families who are managing their debt and with less choice comes higher costs.

insured lenders (like TDFS) to get 90% financing. Note: This rule does not apply to multi-unit owner-occupied homes with rental units (like duplexes and triplexes).  The average Canadian home value fell 1.2% in June.  Average Canadian home price: $342,662  In September, The Bank of Canada has therefore raised its overnight rate target to 1%, from just 0.25% three months ago.

2011  Prime rate was 3% and a 5 year rate was just over 5%  January 2011: Effective March 18, 2011, the government announced three more new rule changes.  A 30-year maximum amortization on insured mortgages over 80% LTV.  An 85% LTV limit on insured refinances  Elimination of government insurance on secured lines of credit (aka., HELOCs) March 2011  Debt-to-income may be at 148%, but CIBC economist Benjamin Tal says the mortgage picture isn’t as bleak as some have portrayed it  Despite a surge in 4th quarter economic activity, the Bank of Canada has held its key lending rate at 1.00%.

2012 January 2012  Canada’s key interest rate will begin 2012 exactly where it’s been since September 2010 – unchanged at 1.00%.  Government-imposed tightening of mortgage qualifications a red hot topic.  In February, CMHC approached its $600 billion governmentimposed limit on issuing mortgage default insurance. This is largely due to lenders’ enormous appetite for something called portfolio insurance (a.k.a., “bulk insurance”)

SPRING 2012

21

2012

Annual Conference & Trade Show

Sneak Peak

2012 ANNUAL CONFERENCE

& TRADE SHOW

September 6 & 7, 2012 Fairmont Banff Springs Host Sponsor: Dominion Lending Centres This year we’re changing it up with a new location and format that is sure to please.

Events Format:

September 6, 2012 Golf at the Fairmont Banff Springs Golf & Country Club Banff Springs AMBA Social

September 7, 2012 Continental Breakfast Panel of Experts (Lenders) Two Breakout Sessions Keynote Speaker and Awards Ceremony Trade Show Evening Sponsored Parties or Family Time

Keynote Speaker

Andrew Coyne Andrew Coyne is the former National Editor of Maclean’s magazine and a current weekly columnist with The National Post.

Raised in Winnipeg, Andrew received a B.A. in Economics and History from University of Toronto and a Master’s in Economics from the London School of Economics.

In addition to his writing for Maclean’s and The National Post, Andrew has also been an editorial writer and columnist for The Financial Post, The Globe and Mail, and the Southam newspaper chain.

He also writes regularly for a number of Canadian and foreign publications, and is a frequent commentator on television and radio, including acting as a panelist on CBC TV’s The National for their popular “At Issue” segment.

Andrew is the winner of two National Newspaper Awards and a four-time finalist in the National Magazine Awards. A past recipient of the Hyman Solomon Award for Excellence in Public Policy Journalism, he‘s also a fellow of the School of Public Policy and Governance at the University of Toronto.

Check out our sponsorship opportunities at www.amba.ca/mediakit.

Conference and Exhibitor Registration will open April 16, 2012.

22 SPRING 2012

This Years Host Sponsor: Dominion Lending Centres

What’s All the Hype about Average Price?

If you follow real estate news, you’ve probably been conflicted over media reports on average house price and market conditions at one point or another.

While real estate authorities tend to focus their monthly reports around ‘the average price’ because the variance between month-to-month is very slight or it shows a positive increase, media often report the bigger picture of market doom and gloom, with little focus on the average home price.

Timeline of Calgary Average House Prices Vs. Sales Volume

This is where the ‘conflicting,’ news reports or, more appropriately, the ‘confusing’ reports get consumers excited. The truth is, the reports aren’t really conflicting.

For the most part, market reports say the same thing, but it’s all about how they’re presented and how they’re perceived by the consumer, which ultimately affects confidence.

For veteran realtor Stephen Howes, Real Estate Professionals Inc. in Calgary, the average house price doesn’t even raise a hair.

“I’m not concerned about the average price because it doesn’t drop overnight.

It’s volume that I focus on,” Howes said.

“It’s alarming when the monthly sales numbers drop off, as they did in October 2008 through mid-2009 and even at points in 2010 and 2011,” Howes said.

According to The Calgary Real Estate Board (CREB) statistics, monthly sales in April 2007 went from 2,086 to as low as 846 in December of the same year.

Sales volume dropped as low as 449 in December 2008 and 550 sales in January 2009 when consumer confidence dropped to an all-time low.

“At this point, the market was really tough and I had to go back to my roots and do what I was best at, talking to people and selling homes. It wasn’t about being fancy, it was about face-to-face interaction,” Howes said.

Today, sales volume numbers are holding relatively steady, but Howe is affected by another challenge, rising housing inventory, which also affects sales volume.

“I have zero control over price, but I do have control over my volume for the most part, so I do what I can to meet my goal of four sales a month, despite market conditions,” Howes said.

Regardless of today’s market challenges, Howes prefers the current market over the boom years.

“There’s no doubt that both markets have issues, but in a boom, there are lots of new realtors there for the money, more competition and issues,” Howes said.

“At least in a soft market, you can interact more with people through open houses and help increase consumer confidence by talking to them. If people believe realtors hold a positive perception of the market outlook, then it will increase.”

Quick Facts About Stephen Started his career in 1989 with Royal LePage Born in Saskatchewan and raised in Calgary.

2007 2008 2009 2010 OCTOBER average price $452,254

NOVEMBER average price $462,134

DECEMBER average price $444,769

sales 1,113

sales 1,103

sales 846

OCTOBER average price $449,100

NOVEMBER average price $435,471

DECEMBER average price $417,398

sales 820

sales 670

sales 449

OCTOBER average price $462,465

NOVEMBER average price $464,444

DECEMBER average price $451,349

sales 1,285

sales 1,095

sales 799

OCTOBER average price $444,744

NOVEMBER average price $455,460

DECEMBER average price $441,341

sales 888

sales 891

sales 734

SPRING 2012

23

Privacy Protection: How Safe is Safe?

Julia Lee, AMBA Privacy Officer

Insurance Broker Failed To Safeguard Personal Information Found In Garbage The Complainant reported that she came upon a garbage bag split open and full of paper. Other paper strewn across the alley also originated from the bag. The papers were insurance forms containing personal information about clients of MBS Insurance Brokers Ltd. (‘MBS’) and included information such as client names, addresses, policy numbers, policy details and insurance coverage. ... a garbage bag full of its [brokerage’s] documents had been left outside of its building. The day the Complainant made MBS aware of the incident, MBS removed the papers which had scattered on the roadway and alley, as well as the bag itself …

(Ref: PIPA Case Summary P2007-CS-007. Retrieved from http://www.oipc. ab.ca/Content_Files/Files/Orders/P2007_CS_007.pdf on Feb 17, 2012).

As consumers, when we give out our personal information to our bank, mechanic, carpet cleaners, or whomever we are doing business with, we expect certain measures to be taken to ensure our information is kept private and secure. We do not expect our names, addresses, birthdates, social insurance numbers and other personal information to be found in dumpsters, on the street or otherwise floating around for all to see.

As mortgage professionals, when we gather personal information from our clients, we owe it to our clients to ensure we are living up to our clients’ expectations with regards to the safeguarding of their personal information; to ensure our files do not end up in dumpsters, on the street or otherwise floating around for all to see.

Expert mobile half page ad.pdf

17/02/2012

5:47:11 PM

Section 34 of the Personal Information Protection Act (PIPA) requires us to take reasonable security measures to protect against “unauthorized

access, collection, use, disclosure, copying, modification, disposal or destruction” of any personal information that we gather, keep and/or control.

But are we? Are we doing what we should to keep our clients’ information safe? How safe is safe?

A rash of data breaches in 2008 at a number of mortgage brokerages led to an audit by the Office of the Privacy Commissioner of Canada (OPC).

Results released in 2010 indicated that some brokerages were not in fact living up to client expectations of safeguarding information.

“Some brokers stacked files containing personal information on the floor or on desks within accessible offices. One had overflow storage in an unsecured parking arcade.

Brokers lacked shredders capable of securely destroying documents.

One broker was re-using the reverse side of old, filled-out mortgage applications in order to print out new applications.” (ref: http://www.mortgagebrokernews.ca/news/features/securitybreach-what-brokers-are-doing-to-guard-their-clients-privacy/76153/) To assist organizations to develop ‘reasonable safeguards’, the OPC has developed an assessment tool, which is free, interactive and online.

The OPC’s Self-Assessment Tool is a series of questions which help organizations identify if they are meeting minimum privacy compliance standards. The formulation of the questions and structuring of the online tool itself will also provide organizations with tips and strategies through which to raise their security standards beyond the minimum levels.

Visit: http://www.priv.gc.ca/resource/tool-outil/security-securite/english/ AssessRisks.asp?x=1 to take advantage of this valuable tool to find out how your organization fares in terms of meeting privacy compliance standards.

NE W !

Expert Mobile

technology for your

C

M

Y

phone that is

CM

MY

CY

to use.

CMY

K

Contact your Regional Sales Manager to learn more about Expert Mobile

© D+H 2011. All rights reserved.

D+H and its logos are trademarks of D+H Limited Partnership.

24 SPRING 2012

https://m.expert.dhltd.com

Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada. With $1 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $2M to $60M.

Blake Cassidy 800 494 0389 | romspen.com

$35,000,000

Condominium Construction Facility VICTORIA, BC $11,000,000

Condominium Development Site TORONTO, ON $7,500,000

19 Serviced Industrial Lots EDMONTON, AB

ANYONE CAN DO THE SLAM DUNKS. License # 10172

Industry News Could there be trouble on CMHC’s horizon?

Canadians teeter on edge of debt cliff

The facts:

The growth of household debt in Canada to levels approaching those seen in the U.S. before the 2008-2009 crash seems to be of great concern to many.

• “The greatest risk to the domestic economy is s household debt,” Bank of Canada Governor Mark Carney said.

• The ratio of credit market debt to personal disposable income rose to a record high of 150.8% in the third quarter of 2011, according to Statistics Canada.

• The Bank of Montreal offered a five-year mortgage rate of 2.99%; The lowest rate offered in history.

• Two U.S. organizations started in 1968 as a government sponsored enterprise, have a mandate to help Americans to become homeowners by increasing liquidity for housing lending and, where appropriate, taking on risks. These two organizations were bailed out by the U.S. government in 2008 after the housing market deflated, it is estimated that their bailout will eventually cost taxpayers as much as $124-billion (U.S.) through 2014. When the housing bubble burst in the U.S., the value of many houses fell by 50%.

• In November, The Economist magazine said that Canada is among nine countries in the world where house prices are overvalued by 25% or more. It went on to say that Canada is one of only three countries where “housing looks more overvalued that it was in America at the peak of its bubble.”

• Canada’s national housing agency (CMHC): Backed loans of $541-billion (Canadian) as of Sept. 30, 2011. At that time, the total equity of CMHC was $11.5-billion. This is 2.1% in equity against its overall loan exposure. To put the $541-billion in perspective: If we go back to those imaginary 50,000 couples that bought a $400,000 house and put down $20,000, that represents $19-billion of mortgages.

Mortgage arrears in Alberta fall The number of people in Alberta falling behind on their mortgages has dropped.

According to the Canadian Bankers Association, 0.72% of mortgages in the province were in arrears of three or more months.

That’s the lowest level it’s been since April 20120 at 0.71%.

Nationally, the percentage of mortgages in arrears across Canada was 0.38%, the lowest it has been since 0.37% in June 2008.

Ri ch ar d I . Joh n L a wyer, No ta ry Pu bl ic 205 - 7A Street NE Calg ary, Alberta, T2E 4E7 Phone: 403-205-3949 F ax : 403 -205- 3950 email: r ich ar d .john @telus .n et

Richard I. John Professional Corporation

26 SPRING 2012

ð Denotes a Professional Corporation

ð

Bank of Canada Governor Mark Carney has warned that the ratio of debt to income will rise from the already alarming 153% record reached last year, and many think it will approach the landmark 160% hit by the United States before the U.S. tipped into crisis more than three years ago.

While Canada has spent the last few years boasting of its escape from the global credit crisis and its quick recovery from recession, both Carney and Finance Minister Jim Flaherty are sounding the alarm on household debt, warning it has become the biggest homegrown risk to the financial system.

In December, TD estimated the average Canadian home was overvalued by about 10%, while others have predicted a 25% drop in house prices. That would leave many homeowners underwater, unable to service their debts and risking default.

The Canadian Bankers Association, which lobbies on behalf of lenders, points out that 68% of household debt is residential mortgages— loans that are backed by an asset and increase an individual’s net worth. Twenty percent comes from lines of credit and only 5% is credit card debt.

Canadian home prices slide for first time in a year Canadian house prices dropped in November, December and January for the first time in nearly a year, according to the Teranet-National Bank house price index.

The 0.2% drop followed two months of flat prices, and was the first decline in the index since a brief correction during the three months ending November 2010.

The national composite index, which tracks registered prices of homes sold at least twice, shows prices fell in eight of the 11 metropolitan markets—one more than in October.

December data released by the Canadian Real Estate Association suggested most real estate markets in the country are balanced, with the exception of those three cities, and Victoria, which is considered to be a buyer’s market.

Year over year, the composite index has gained 7.1%, up slightly from 7.0% the previous month because of a bigger drop in prices.

Study finds Calgary homes expensive Calgary’s housing market was rated as “moderately unaffordable” by an international survey.

The Eighth Annual Demographia International Housing Affordability Survey, which covers 325 global metropolitan markets, ranks affordability around the world.

Its method divides the median house price by gross (before tax) annual median household income to rate housing affordability around the world.

Canadian housing affordability rankings in 325 international markets: Median Median Median House Household Ranking Multiple Price CITY Income 324 Vancouver 10.6 $678,500 $63,800 313

Abbotsford 7.0

$443,700

$63,000

309

Victoria

6.8

$417,300

$61,600

303

Kelowna

6.6

$385,100

$58,100

276

Toronto

5.5

$406,400

$73,600

255

Montreal

5.1

$281,700

$54,700

221

Hamilton

4.2

$292,700

$69,000

208

Sherbrooke 4.0

$192,200

$48,200

208

Saskatoon

4.0

$274,700

$68,300

206

Calgary

3.9

$353,700

$91,400

Its method divides the median house price by gross (before tax) annual median household income to rate housing affordability. The survey is as of the third quarter of 2011.

Calgary’s median multiple was 3.9, ranking it 206 out of the 325 markets covering Australia, Canada, Hong Kong, Ireland, New Zealand and the United States.

Can you spot the MERIX originator?

Vancouver was rated 324th with a median multiple of 10.6, behind Hong Kong’s 12.6.

In Canada, the following markets were ranked less affordable than Calgary: Abbotsford, 7.0; Victoria, 6.8; Kelowna, 6.6; Toronto, 5.5; Montreal, 5.1; Hamilton, 4.2; Sherbrooke, 4.0; and Saskatoon, 4.0.

The Demographia international survey said markets with median multiples of 3.0 and under are described as affordable. Those 3.1 to 4.0 are moderately unaffordable. Those from 4.1 and 5.0 are seriously unaffordable. And those from 5.1 and over are severely unaffordable.

Housing presses pause Sales of existing homes kicked off the year with the largest decline in almost 18 months, something the real estate industry says is to be expected as the market moderates.

The Canadian Real Estate Association said January sales dropped by 4.5% from December on a seasonally adjusted basis, the first monthly decline since August 2011 and the largest monthly decline since July 2010.

Price increases are also beginning to shrink with the average Canadian home selling for $348,178 in January, a 1.2% increase from a year ago.

“The national housing market is stabilizing and remains well balanced,” said Gary Morse, president of CREA. “That said, forecasts for economic and job growth going forward vary widely for different parts of the country, suggesting a possible continuation of a softening trend in some markets, as well as the potential that demand will pick up based on strong fundamentals in others.”

Gregory Klump, chief economist with CREA, warned that year over year price comparisons could become negative as they are impacted by what happened in the Vancouver market in the first half of 2011. “At the time, high-end home sales in Vancouver’s priciest neighbourhoods surged to all-time record levels, which skewed the national average price upward considerably,” he said.

As well as building long term value in your business, MERIX Financial has an exclusive status program for approved originators. The MERIX Centre of Xcellence offers a host of exclusive privileges and benefits, including a dedicated senior underwriter, DBD support and a Quarterly Bonus reflecting your status level.

Find out how rewarding partnering with MERIX is.

Call 1- 877- 637- 4911, email info@merixfinancial.com or follow us online.

2012 Board of Director Elections Have you considered running for AMBA’s board? It’s a great way to get involved in your industry and to be heard.

“You r As so cia tio n ne ed s yo u, isn ’t so me th ing yo u he ar Th en on e da y a ev er yd ay. co lle ag ue tap s yo u on th e sh ou lde yo u sh ou ld ru n r an d sa ys fo r AM BA’s bo ard be ca us e th er e are ari sin g th at yo ur iss ue s ex pe rie nc e co uld he lp wi th . We all co mf or tab le wi th be co me jus t go ing ab ou t ou r ow n bu sin es th er e are tim es wh s. Ho we ve r, en yo u ca n co nt rib ut e an d sh ou ld. To are fac ed wi th th da y, we e ch all en ge of ma kin g th e mo rtg ag ch an ne l a un ifie d e br ok er ag e vo ice na tio na lly, bo th to ou r go ve co ns um er s. I en co rn me nt s an d ur ag e me mb er s to str on gly co ns ide fo r ele cti on to th r ru nn ing e Bo ard of Di re cto rs.”

– Ro n Mc Cl en ag ha n, Pu bli c Re lat ion s Di rec to r

Please be advised that we are requesting nominations for the position of seven directors for the 2012/2013 term.

Important dates to keep in mind …

March 14, 2012 Call for Nominations for Board of Directors

April 13, 2012 Deadline for Nominations

April 27, 2012 Online Voting Begins

May 18, 2012 Voting Closes

June (Date TBA), 2012 Annual General Meeting

t my ow n o n ly a b o u t o n as a te a in d u st ry p a ss io n e w h o is r c h o se n rv e n u o se o e f m to o y so h it “A s e h e a lt p p o rt u n th o t e u a rd th b o , b ve l d to h a b u si n e ss o fo rm a h I had n s d e li g h te and g a u t w o n I e , th rr le n u o c wh . E ve fr o m B A B o a rd su p p o rt b il it ie s o n th e A M I fo u n d th a t th e y re sp o n si m rn a le , e c of my to n r e e a ri m e ye p d ex a ll o w e th e fi rs t rs to in c n e a te d o ir d d y fo rm e r th e r d e ic u te e a rl o rk w it h o d c o n tr ib th a n w n s a to ve e ly ti n k c u ic e qu n t p e rs p g o o d fo rt re e fe th e th if d h d a it h w ry rk in g te rm . I e w it h ve th e m . W o BA M ls — so m m A a o u fr re id t ti iv lo n d in n d th e e d le a rn a a n ny a , a in m — rt a in n my ow Jud y M e ri e n c e D ir e c to r, a in e d e x p o a rd g b ve , ti ve g u I’ in c l. n u n xe E d e rf g ic p la t been won n s, st ra te o ve rn m e n st a ff h a s ia re la ti o d e m e n t, g e m g s a a n a t my h a c m th su t s fi is a ro re e a hop fo r- p c e , n o t. M y o n ly e n e fi ts I g o ve rn a n a n d m o re e many b th s, ic to r th e te re a re la ti o n s, q ual or g .” on was e o f m y te rm e rs c o n tr ib u ti u o c e th r rt h) ve o e c to r (N o re c e iv e d ra ti o n D ir it rb A , m cC a ll u – G o rd M

Our Power Compensation® Program gives brokers the man advantage.

Which means better service and lower rates for your clients and bigger earnings for you.

And, with exclusive products in your lineup — like B Lending Solutions and ARM, plus dedicated underwriting and All Star Portal access — you’ll be even more competitive in the market.

Be a Power Broker with Team Bridgewater.

1-888-837-2326

n

Personal. Efficient. Committed.

28 SPRING 2012

bwballstarportal.ca

AMBA001 13/02/12

Share this helpful article with your clients

Protect Yourself against Mortgage Fraud Mortgage fraud is a serious issue that can have a devastating impact on unsuspecting buyers who are new to the home buying process.

Participating in a scheme that requires you to provide false or misleading information to a mortgage lender is fraud. Fraud is an offence under the Criminal Code of Canada.

There are two prominent kinds of mortgage fraud today: One involves scams that attempt to illegally acquire property—‘fraud for property’—and one wherein schemes are designed to squeeze money out of transactions involved when a property is exchanged between buyers — ‘fraud for profit’.

The No. 1 rule to remember when it comes to real estate investments or any investments; if it sounds too good to be true, then it probably is.

Mortgage Fraud Processes

Follow the suggestions below the next time you are thinking about investing in real estate.

Invest Wisely Do your homework! Make sure you are using a licensed mortgage broker who is registered under the Real Estate Act in Alberta. Licensed mortgage brokers are required to conform to a code of conduct enforced by the Real Estate Council of Alberta (RECA). Contact RECA at 403.228.2954 to ensure your broker is licensed. Even better choices are AMBA members, they’re all licensed, because they truly believe in helping their clients and adhere to AMBA’s best business practices.

Before you buy, have a REALTOR® show you the listing history on the property. Check the number of sales, price ranges, and community prices.

Straw Buyers: People who are offered money to lend their identity and are considered phoney loan applicants. They are often offered several thousands of dollars for the use of their name and good credit information. Straw buyers can also sign documents that contain false information or information they cannot prove. For example, stating residency where you do not reside is considered fraud.

Get your own REALTOR® or independent representation for your purchase (if the seller objects, something is wrong).

Property Flipping: Involves a dishonest seller who artificially inflates the value of a property. This involves fraudulent appraisals, false loan documentation and exaggerated incomes in order to secure loans. The seller inflates the price using a phoney appraisal and arranges for a buyer who can qualify for a large mortgage. Once the mortgage is delivered, the home is sold and another buyer assumes the mortgage.

The phoney appraisal remains with the property through multiple transactions, making it difficult to determine the property’s true worth.

AMBA is committed to providing you with helpful information regarding the real estate and mortgage markets.

Make sure your REALTOR® is a licensed associate with RECA. Ask for a copy of the land title search.

In the offer to purchase, include the option to have the property appraised by a designated or accredited member of the Appraisal Institute of Canada. Who is also authorized by RECA. Make sure your deposit is being held in a trust account.

To learn more about mortgage fraud and the red flags, visit: www.amba.ca and www.servicealberta.gov.ab.ca/895.cfm.

The Alberta Mortgage Brokers Association (AMBA) takes mortgage fraud very seriously. AMBA is committed to ensuring its members follow the highest standards of professionalism and the AMBA code of ethics. It is important that you take a proactive approach, as a consumer and a person on the front line, to prevent yourself from becoming a victim.

DOWNLOAD THE PDF IN THE MEMBER ZONE, UNDER MEMBER RESOURCES SPRING 2012

29

amba

SOCIAL CENTRE How to Use to Generate and Qualify B2B Leads LinkedIn is often considered a jobseeker-only social media platform. As a result, B2B marketers sometimes overlook the professional social media site’s ability to support lead generation and qualification. LinkedIn enables brands to offer bite size chunks of content that support business objectives.

as a job search board contributes to its tendency for higher traffic during typical business hours.

Other usage patterns to consider for LinkedIn would be the people 35.2 35 to the site. As of July 2011, when the network had 119 million logging on members worldwide: %

%

58.5% 41.5%

58.5% male users

35.2%35.2%

35% 35%

41.5% female users users between the ages of 23 and 34

To better understand LinkedIn’s value, it’s useful to understand its usage patterns.

users between the ages of 35 and 54

At first glance, LinkedIn’s main usage appears to be during the workweek across the U.S., with less activity on the weekends. This is in contrast to Twitter and Facebook, which seem to have the most usage and engagement during the weekends.

LinkedIn users are typically college educated, middle- to upper-class and with no kids. Popular industries represented here are the tech and medical fields, while common job functions of members are entrepreneur, sales and administrative.

This makes sense since LinkedIn is intended to be a social network for user’s to stay connected with coworkers and colleagues, past and present.

Part of the reason many B2B marketers overlook % % %potential 58.5LinkedIn’s 58.5 41.5 41.5% is that they don’t realize the breadth of information available. To help you use this information about when LinkedIn users engage to maximize your lead generation and qualification activities, examine eight common types of content listed below.

Although statistics for the time of day LinkedIn users are most active is hard to come by, social media usage in general tends to spike during the workday between noon and 3 p.m. Daytime public profile viewing is highest at this time in the U.S. when people take a break, seek information online and connect with others to support their business needs. Its utility

LinkedIn Content Description

The table below explains how each of the different forms of content can be used from a business perspective and a job seeker perspective.

How to Use Business Focused Content (During business day)

How to Use Job Search Focused Content (During evening)

Personal profile.

Present individual’s business credentials

Gather insights on prospects.

Qualify potential job candidates.

Recommendations. Provides insights about individuals and reflect on organization

Qualify potential business prospects. Gather insights about company.

Pursue additional research on job candidate selections.

Status updates. Offer insightful tidbits about an individual or company

Give insights into your organization’s capabilities, goals and internal culture.

Give insights into prospective opening opportunities and qualification needs.

Links.

Share useful content to wider audience

Become source of business information to attract connections.

Show interest and knowledge of field.

Q&A. Collect input or give answers to questions related to your area of expertise

Share information to position an individual or organization as a thought leader.

Position yourself as expert & display knowledge.

Groups. Be active and/or start groups to extend reach and connections

Increase reach and expand knowledge of participants.

Expand circle of contacts.

Company pages.

Position organization

Provide evidence to help qualify company and/or employees in business interactions.

Give background on organization.

Advertising.

Extend reach with targeted ads

Enables organization to target specific organizations or individuals based on range of segmentation options

Provide opportunity to target message to specific types of job candidates with the right skills.

LinkedIn is a treasure trove of B2B content that can be used to support your organization’s lead generation and qualification activities. It requires rethinking how you tap into this content to maximize results for your organization.

30 SPRING 2012

How to Use Twitter as a Marketing Platform Instructions: Gaining Followers 1. To market successfully on Twitter, you will need to gain a large number of followers. Followers are other Twitter users who ‘follow,’ or see your updates on their main page. First, do not put your Twitter account settings on 'private.' People considering following you will want to see your 'tweets,' or updates, before committing to follow you.

2. ‘Tweet’ regularly with relevant information to your target audience.

Regular updates shows your followers that you are interested in providing fresh content for them.

3. When a follower replies to one of your tweets, respond back.

That shows your followers and potential followers that you enjoy engaging in conversation with them and provides your followers a benefit for following you.

Marketing your service or event to your followers 6. Link as many tweets as possible to your website that promotes your service, product or event. Use tinyURL.com to shorten each link’s length and meet Twitter’s 140 character limit.

7. Offer coupon codes and promotions to Twitter users. Either place a coupon code in the actual tweet, or link to a page on your website with a printable coupon.

8. Don’t over tweet your sales pitch. You do not want your account to be flagged as spam, or your followers to drop you for appearing ‘spammy.’

4. Analyze the trending patterns section of Twitter.com for topics you can adapt to your target audience. The trending patterns section of Twitter will allow you to contribute to a trend page, where your tweet will show up to anyone looking at the trend page.

9. Provide a link to your blog from your Twitter page and vice versa for branding reasons. If you have other social networking accounts (such as MySpace or Facebook), invite your followers to join you on those sites also.

5. Follow your followers. The idea is to show your followers that you are interested in what they have to say.

10. Try testing different sales pitches. See if you receive more feedback by tweeting one pitch over the other.

Visit The

amba president’s Blog!

AMBA_Matters_HalfPage_Ad_0112.pdf 1 1/13/2012 1:22:48 PM

www.amba.ca/blog Mortgages at the speed of life With First National you can rely on the strength and innovation of our technology and the flexibility of our mortgage solutions – designed to keep you responsive to the always changing needs of clients.

C

M

Mortgage solutions are our business – making clients’ home ownership dreams come true is yours. Let’s make this happen together, call your Account Manager today.

Y

CM

800.567.8711 | FirstNational.ca

MY

CY

CMY

K

Delivering Ser vice. Creating Solutions. Building Success. *2010 Broker on Lenders study, conducted by CMP Magazine and published September 2010.

SPRING 2012

31

AMBA BRIEFS Voting for the 2012/2013 Board of Directors

Nominate a Candidate for the AMBA Awards

We’re bringing back the e-ballot system for the 2012/2013 elections.

This method is not only environmentally friendly, saving our trees, it is also more accurate and efficient as the voting results are updated automatically in real time.

It’s awards time again! You soon will be invited to send in your nominations for the AMBA awards, which are annually given out in four categories.

All members will be provided with a user ID and password in order to logon to the e-ballot system at their own convenience. One click equals one vote.

Refer to the AMBA Calendar on the back page of this issue for the important dates regarding nominations and voting deadlines.

Your vote is important to us!

Are you showing up in AMBA’s Directory?

If you haven’t renewed your 2012 membership, your information will not be visible to consumers or other members. Be sure to renew today to become searchable again and maximize your benefits.

On behalf of the Board of Directors, thank you for your support and continuing participation.

Please note the 2012 fees:

Brokerage and Corporate Fee: $360 Individual and Corporate Active: $115

This year’s work will continue to support our commitment to improve the industry through education, community and governance efforts and ensure a healthy and sustainable future.

Please encourage your co-workers to renew their memberships or join the association.

These awards are an excellent opportunity for AMBA to recognize those members who have made significant contributions to the industry, their community and the association. A transparent and established process is prepared to consider those from our industry deserving of such recognition from their peers.

Nominees for the awards, The President’s, Ambassador, Executive Awards and the Partner of the Year, will soon be sought.

Information on the criteria for each award will accompany the invitation to submit nominations. As part of that transparency, please know AMBA does consider nominees currently on the AMBA Board.

Members will have until early June to submit nominations, so the Awards Committee can process them and award recipients can be selected in time for the Annual Conference in Banff this September.

We would like to encourage all members to give careful consideration to these nominations and to use this award process to honour those in the industry.

New Atlantic Canada Association (MBAAC) joins the industry Recently, brokers in Newfoundland, New Brunswick, Prince Edward Island, and Nova Scotia rallied together to form the Mortgage Brokers Association of Atlantic Canada (MBAAC).

The association’s headquarters are in Halifax, NS. MBAAC is a volunteerdriven organization headed by Glen Ward, regional vice president, and co-founders Michelle Drover (vice president) and Don MacVicar.

AMBA would like to welcome our new friends. We look forward to working with them in the future.

Support AMBA through Sponsorship & Advertisement You now have easy access to all AMBA’s advertising and sponsorship opportunities with a click of a button.

Click the Media Kit icon on our home page and start exploring.

You can advertise in our quarterly magazine, e-newsletter, on the website or sponsor our world class events.

Visit www.amba.ca/mediakit.

Meeting Space Available in the AMBA Office If you’re tight for space, we’ve got lots of it. We have one large board room with room for up to 30 people, a meeting room with space for 1518 people and an office available for rental. We’ll offer you a great deal and flexibility on rental times and price.

If you’re interested, call the office at 403.685.9652.

32 SPRING 2012

AMBA Member briefs Street Capital Awards its Top National Broker in Jamaica!

Anthony Contento of Mortgagebrokers.com, Sherwood Mortgage Group was awarded the prestigious 2011 Highest National Sales Award for Street Capital Financial Corporation at their third annual Broker Rewards Celebration at the Iberostar Grand Rose Hotel in Montego Bay, Jamaica on January 21, 2012. Each year, Street Capital takes their top producing brokers on a trip to reward them for their support and their business.

Paul Grewal states, “Anthony and the Sherwood Mortgage Team have been tremendous supporters of Street Capital over the past few years.

It was an honor to recognize him at our dinner reception and awards ceremony as our No.1 producing broker in Canada.”

Anthony Contento adds, “The top notch service, excellence support from my Street Capital underwriting team and the Street Capital executive team is second to none. This is why I send my business to Street Capital.

To be awarded by the Street executive team was a proud moment for me.”

In this photo with Anthony Contento receiving his award is the Street Capital Executive team Paul Grewal, President; Ed Gettings, CEO; Greg Gray, EVP Sales; Alfonso Casciato, VP of National Credit Operations.

The Birth of a Bold New Brand This past December, MCAP and ResMor Trust Company announced an agreement for the purchase by MCAP of ResMor’s residential mortgage business, including nearly $6 billion in mortgage assets under administration, and a team of talented mortgage professionals.

This acquisition represents a key element of MCAP’s strategic plan for growth. The addition of ResMor’s mortgage assets grows MCAP’s total serviced mortgage portfolio to more than $31 billion and enhances MCAP’s dominant market position in the Canadian market.

The transaction also includes the addition of ResMor’s highly qualified leadership team, including Michel Cubric (Vice President, Mortgage Operations), Ted Cadigan (Director of Mortgage Originations), Bruno Valko (Director of National Sales), Tara Somerset (Director of Mortgage Services) and the strong broker and customer relationships they have developed. MCAP is committed to serving the broker mortgage origination channel and the addition of ResMor’s team of professionals further enables MCAP to grow that commitment.

Rather than simply combining the ResMor mortgage team with MCAP’s existing team, they decided to create a new, dynamic brand in the Canadian market: RMG Mortgages.

RMG Mortgages will continue to serve and support Canadian mortgage brokers through their dedicated team of Business Development Managers who work in nearly every region of the country. RMG Mortgages offers a comprehensive line-up of residential mortgage products and features designed to suit the needs of Canadians from coast to coast.

See what CapLink’s unparalleled experience in mortgage lending can do for you.

We are able to finance a broad spectrum of property types and loan situations.    

We will respond within 24 hours Competitive rates and fees Expert advice and consistent reliable service We lend in Alberta and BC

Gay Andrews Vice President gay@caplink.ca

Helen Neufeld

Underwriter helen@caplink.ca

Phone: 1-888-429-0114 Fax: 1-888-226-8834 www.caplink.ca

Providing lending solutions since 1997

SPRING 2012

33

Industry talk with

Jay Golumbia Meet Jay Golumbia of the Mortgage Architects Planners’ Network.

Jay's an industry vet who started his career in Edmonton in 1981.

Where are you from?

I was born in Melfort, SK on January 25, 1959 (a proud ‘card carryin’ Aquarian). I was raised in Saskatoon, SK, the prairie oasis better known as Alberta’s largest suburb.

After high school, I moved to Edmonton to join a rock and roll band (I can still hit the high notes!).I started my working career in financial services there in 1980.

I purchased my first home in Leduc in 1982 (and used a mortgage broker!), but moved back to Edmonton in 1987.

I moved back to Leduc in 1996 and raised my daughter Kaeli there through her high school years. She married this past September in Sonoma, California, and makes her home in Calgary.

I met Susan Klein at an AMBA/MLAA Christmas luncheon in 1999 when she was working in Edmonton for the Canada Mortgage and Housing Corporation (CMHC). After getting to know each other better at an AMBA ‘funspiel,’ we hooked up and decided to get married in March 2001.

Kaeli and I moved to Calgary and a bought home in the Altadore area and have been there ever since. We also own a home on a golf course in San Jose del Cabo in Baja, Mexico and spend as much time there as we can during the winter months.

No matter where I am from at the moment, I’m still a diehard Roughrider and Oiler fan (although, I have become a bit of a ‘closet’ flames fan, too).

I’ve never lived in Seattle, but I still hope to see the Seahawks win the Super Bowl someday!

Tell us a bit about yourself.

I am a child of the universe, mastering my own reality on this journey known as life and I pretty much live with the perspective that I will do what I want, when I want, wherever I want and with whomever I want because I can!

This may sound a little idealistic to some, however, it is my heartfelt desire to live with a ‘can and will’ approach to life in a world where everything is possible.

What are a few of your hobbies?

I am an avid golfer and have spent a lot of time playing and working on the game. I accomplished two Aces in one season—and it only took 35 years of playing to do it!

I also have a small collection of guitars and basses that I spend a lot of time with discovering some original music, as well as playing some of my all time favourites. I haven’t played professionally for a number of years but still have very fond memories of my ‘gigs’ with TR-3 at a number of AMBA functions over the years. I will still jump into a jam session when the opportunity arises.

Susan and I love spending time at our home in the Baja when we can, and have really made it our second home. We enjoy travelling to explore other places as well, and enjoy travelling to visit family and find all sorts of interesting things to do and see. Susan is a very active pottery artist and I enjoy spending time with her at galleries, studios and exhibitions and helping out with her sales as well as visiting potters in other areas we travel to. Love hanging out at music festivals and on the beach in Cabo, too!

Do you have a family?

Susan and I live with our 14-year-old Blue Heeler, Sky. (she’s been with me since she was a pup!) My daughter Kaeli lives about five minutes away from us with her husband Tyler and our ‘grand dog’ Winston. ( No grandchildren yet ... yikes!!) We have lots of family and extended family that we visit in other locales and enjoy our time spent with them ... wherever they are!

Please tell us a little about your company.

Since 1981, I’ve worked in the mortgage brokerage, real estate, consumer and automotive finance and banking industries, as well as being active in mortgage lending and real estate investment. I started off as a REPO man for GMAC … oh the stories I could tell! Being licensed in mortgages and real estate since entering the business, I’ve assisted in developing three regional brokerages based in Edmonton as manager and broker of record, and after moving to Calgary in 2001, served as Western RegionalDirector and Broker of Record for a smaller national mortgage company. In 2009, the Mortgage Insight Team joined the Mortgage Architects Planners’ Network. Having always remained primarily an independent operator, I had never really considered or seen an advantage in joining a large

34 SPRING 2012

it is my heartfelt desire to live with a ‘can and will’ approach to life in a world where everything is possible national firm. However, the team I had been developing since my move to Calgary was starting to move to a higher level of production where we felt being part of something bigger would be a benefit to us and that has definitely been proven. It is great to be part of the supportive environment of the MA Planner Network, where consultants across Canada help each other because they are confident in their own businesses and are happy to see others in the group succeed for the common good of the company.

I am excited about the opportunities for Pacific Mortgage Group and what we will be building as a financial services provider and anticipate PMG will prove to be a big part of the imminent change in our industry.

As a knowledgeable and experienced advisor in aspects of real estate investment and mortgage financing, as well as having a good general knowledge of insurance and financial planning, my focus now is on developing Insight Homeowner Solutions to be creative and attentive in coaching clients with a holistic approach to personal finances, not just providing a debt facility for the purpose of owning property.

Having been dual licensed in mortgages and real estate since I entered this business, I have always thought that mortgage brokers are

better equipped in initiating referrals to real estate agents and financial planners, instead of the other way around … and getting paid for it. It presents a win for service providers and our clients are better served when financing plans are in order before they start house hunting or looking into other investment opportunities. The goal is to have our service offering be in line with our customers’ needs and wants and to advise and coach associates and their customers on aspects of real estate, investments, insurance and other areas of homeownership and then partnering with the appropriate solution providers in those areas. Canadian homeowners are looking for much more than a good mortgage product or rate ... they really want to be debt free on a much shorter timeline and to gain financial independence through homeownership. It’s our job to help them with that.

CONTINUED NEXT PAGE ...

THE ALTERNATIVE LENDER You NEED To kNow Fisgard is one of the largest private alternative lenders in Western Canada and is dedicated to supporting mortgage brokers and their clients. We provide competitive products, flexible lending guidelines and dedicated customer service.

Having a good relationship with you, our broker clients, is critical to the success of our business. Fisgard’s creative, knowledgeable and experienced underwriting team wants to see all of your deals that don’t fit the typical “bank box”. Chances are that Fisgard can fund these deals, and fund them quickly. We are here for you and we’re here for your clients.

Call your underwriter today.

Call 866.382.9255 or visit www.fisgardmortgage.com

Fisgard Capital Corporation Fisgard_AMBA_half.indd 1

|

3378 Douglas Street, Victoria BC V8Z 3L3

|

www.fisgardmortgage.com 2/17/2012 2:37:04 PM

SPRING 2012

35

SPRING 2012 member profile What is your experience with AMBA? I became a member of AMBA in the mid-90s, about the time RECA was getting ready to take over regulatory governance in Alberta. This was also just as the brokerage business was moving from being a very small part of the picture in the mortgage industry to partnering with banks and other lending institutions as a ‘distribution channel’ for mortgage origination. Prior to this time, a broker would almost always charge a fee for service as well as possibly receive compensation from a lender ... and would most likely have a contract in place with the borrower before proceeding to present a mortgage approval (man I miss those days!). Needless to say, this was a very interesting part of our association’s history and was also a time, much like today, of great transition.

AMBA’s role became a much more significant one for all concerned. I was very interested in seeing how things would play out and how AMBA would function on behalf of mortgage brokers in Alberta.

I attended most of the events and meetings that came along.

My first major AMBA event was the 1999 AGM and golf tournament in Sylvan Lake. Then the 25th anniversary celebration, and ‘Disco Daze’ in Kananaskis and subsequent golf tournaments, bonspiels, luncheons and other functions over the years ( I still have and use all of the various golf attire and luggage I have taken home over the years, too!). During a number of those years, I chose not to be a member of AMBA and had lost interest for a number of reasons (some business and some personal), and didn’t see a lot of value in attending many of the events either. Having said that, I have also seen positive changes in recent years in how AMBA has positioned itself in its representation of industry members and their concerns. So I decided in 2011 that I would rejoin AMBA and attended the conference in September, where I was very pleasantly welcomed back by Judy Martin and a number of the directors and longtime members. It made me feel like getting more involved in my contribution to AMBA, so I have joined the communications committee with Amanda Roy and a number of our members and attended our first meeting in January. I am looking forward to doing some great things with this group at AMBA and having some input on getting our message out to both industry members and, more importantly, the public on the value that AMBA brings to our marketplace and community overall. We have a great opportunity to make a difference for homeowners through community associations and other groups ... and it is our responsibility to let them know we are there to serve their needs.

What advice would you give to people wanting to enter the mortgage business?

Of all the businesses that you can get into in the financial services field, this business has the most potential for anyone that has the desire to pick up the ball and run with it. The fact is that in our culture, everyone over the age of 18 either owns their own home or would like to, and there is an infinite amount of opportunity to assist people in achieving a higher level of success as homeowners. They don’t all need real estate, insurance or financial planning services or even a bank branch to put their money in.

However, I think it’s safe to say that virtually everyone needs a guide to get

36 SPRING 2012

through the mortgage process (realtors included) and at one point or another, mortgage advisors can be there to meet that need ... every time! So when you hear that the market is tight and that it is hard to find customers, or that the banks are stealing our business, don’t buy into it— just go out and find another person to talk to about your value proposition and get on with making their life better.

The best advice I can offer to new, developing or established associates in this business is to learn how to ‘aim high,’ so you can ‘thrive in the middle,’ because that is where all the opportunity for growth is. Some believe that ‘striving for the top ‘ is what is needed in order to be successful and that may be true, but only for some!’ It seems to me that the air gets awfully thin at the top and there really isn’t a lot of space to move. In my opinion, it is far easier to fall off than it is to get there in the first place.

The market is infinite and will bring abundance to you if you are satisfied with having your piece of it, no matter how large or small that may be.

What is your vision for the mortgage industry?

Firstly, the mortgage industry in Canada is a large, multi-faceted and multi-billion dollar sector that is primarily a corporately driven environment and is in turn just a part of the financial services industry which is a massive sector of the overall economy. Its important that we realize that residential or ‘retail’ mortgage brokering is only a part of the mortgage brokerage industry as well and, as it stands right now, is made up of multiple small to medium sized operators, all chasing the same business and trying to find ways to keep their lenders/ partners/suppliers happy so that they can appear to remain a competitive alternative to consumers going directly to those same lenders/suppliers/ partners. Even the large national firms are having difficulty knowing where they fit into the scheme of things and in my opinion are not showing great leadership or innovation or offering a self-sustainable business model to work from that goes beyond building a high production mortgage sales organization. Overall, the Canadian residential brokerage industry is fragmented and has done a very poor job of communication to the end user of our value proposition. Having said that, there is nowhere to go but up in terms of our footprint and it is clear that if we want to grow, then we are going to have to get serious about our value proposition and backing it up to with tools and service offering that allow us to offer our customers a full service experience and get away from merely being a ‘distribution channel’ for mortgage origination on behalf of our suppliers. It’s also crucial that we get very good at communicating our message to the end user — the homeowner — our real partners, because without them, there is no mortgage industry.

Mortgage brokerage is still a fairly new and underutilized service in Canada that has never really been able to get a strong footing. In my opinion, as long as we continue being dependent on our suppliers to pay our way, we will always struggle. If we are going to play on the same field as the banks and other financial institutions then we need to operate in a more business-like manner overall and from a more collaborative

SPRING 2012 member profile people and I find being transparent and forthright with customers and engaging them in the process has always served me well. Having said that, I am also not afraid to walk away from those that just won’t ever get it. (including associates, lenders and realtors) approach, where best practices are shared and we look at each other as colleagues instead of competitors fighting over and trying to protect small pieces of a very large pie.

On the other hand, we could always go back to the future, forget about volume bonuses and market share and just focus on looking after our customers and getting paid a reasonable income for a job well done.

Either way, this is a great business with infinite opportunity and as long as homeownership is popular, mortgage brokers will always have a role.

In such a competitive market, how do you stay ahead of your competitors and remain successful?

What aspects of the mortgage industry do you find most challenging?

The fact that our industry has never taken control of its own destiny in earnest, at both the corporate and consumer level, has always been challenging for me. I am hopeful that in this time of transition and volatility that the brokerage industry will find its way with some breakthroughs in this and that when we come out the other end, our industry is in a strong position with a solid and self sustaining model that will drive us forward.

As I stated earlier, there is nowhere to go but up as far as increasing our footprint in the financial services sector in Canada and even though we are a small part of a much bigger picture, we have to remember that pulling together in a collaborative way is going to be very important as we move through this turbulent time.

I’ve never really found the ‘market’ to be overly competitive and don’t view others in the industry as competitors either. In fact, I have always taken the approach that the only competition I have is the customer that is sitting in front of me. Customers have all the choice of who they want to work with and I am really competing with that … not the other service VWRstay half-pg-magazinead-CMYK-march2011.pdf 1 09/03/2011 AM remember and don’t ever forget. Great days are by design, so providers. To ahead of that, I have always just told people the way it 9:45:37 Always is … not the way I wish it was. The mortgage process is a mystery to most design yourself a GREAT DAY!

And anything else you WOULD like to share?

Phone: 604-530-7430 Toll Free: 1-866-907-5407 Email: info@vwrcapital.com

C

M

Y

1st, 2nd and 3rd Private Mortgage Funds Available • Competitive rates and nominal lender fees • Quick approvals • Lending Areas: British Columbia, Alberta and Manitoba • Purchases, refinances, equity takeouts or renovations • Bridge financing, serviced land or acreages • No income qualifications, no minimum beacon score

CM

MY

CY

CMY

K

“Your Private Mortgage Solution” DOUGAL SHEWAN

DON KILLEEN

LINDA WESTON

dougal@vwrcapital.com

don@vwrcapital.com

linda@vwrcapital.com

#111 - 20434 - 64th Avenue, Langley, BC V2Y 1N4 www.vwrcapital.com SPRING 2012

37

amba calendar a big thank you

June 2012 Annual General Meeting TBA

to our sponsors!

SEPTEMBER 2012 FALL Golf Tournament September 6, 2012 Fairmont Banff Springs Golf Course, Banff, AB Annual Conference & Trade show SEPTEMBER 7, 2012 Fairmont Banff Springs, Banff, AB

Important Dates to Keep in Mind ...

March 14, 2012 Call for Nominations for Board of Directors April 13, 2012 Deadline for Nominations APRIL 27, 2012 Election Opens MAY 18, 2012 Voting Ends

HEADLINES Your solution to get information out...QUICK! AMBA offers its members this service to help get announcements and job postings to a mass audience, quickly and cost-effectively.

Headlines, job postings and other classified advertisements are posted on the Industry Members Main Page and the AMBA Members Main Page for a cost of $25 (+GST) / week. Respondents can notify the posting brokerage directly Graphic Design for this issues of AMBA Matters

403.890.9782 erin@5ofSix.com

Photo credit for some photos used with in this issue of AMBA Matters are ŠShutterstock.com

38 SPRING 2012

Please Recycle This Magazine

Setting

THE STANDARD! 速

#1 NETWORK IN CANADA

The ONLY NETWORK supporting

Scan the QR code to Learn More

Your Brand. Your Business. Your Way.

The Best Brokers.

The Best Network.

Join VERICO Today.

Please visit www.verico.ca/welcome or e-mail membership@verico.ca to find out more.