CMP 12.12

MORTGAGEBROKERNEWS.CA ISSUE 12.12 | $12.95

TOP BDMs 2017

Brokers name the 25 best BDMs in the Canadian mortgage industry

AN INSIDER’S PERSPECTIVE NPX’s Steve Lydon offers his take on the alternative lending space

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THE YEAR IN REVIEW A look back at the issues that dominated industry headlines in 2017

PREPARING FOR THE NEW NORMAL What can brokers expect when new B-20 regulations take effect?

30/11/2017 8:16:24 AM

We Stand for All Canadians Together we’ve made a major impact helping thousands of Canadians feel the pride of owning their own home, even when they thought it wasn’t possible.

The determination of small business owners, the courage of newcomers and the hope of people that have faced personal and financial hardship are some of the finest examples of our collective Canadian spirit.

These clients are vital to Canada’s housing and mortgage industry and to our future.

We’ve expanded our loan offerings and introduced new competitive rates. So now, when your clients need alternative financing, our team is here to help!

To stay informed visit hometrust.ca/we-stand

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ISSUE 12.12

CONTENTS

TOP BDMs 2017

24

SPECIAL REPORT

A good business development manager goes a long way toward making a broker’s job easier. Meet 25 of the best BDMs the Canadian mortgage industry has to offer

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ISSUE 12.12

CONNECT WITH US Got a story or suggestion, or just want to find out some more information?

CONTENTS

twitter.com/CMPmagazine plus.google.com/+MortgagebrokernewsCa facebook.com/MortgageProfessionalCA

UPFRONT 04 Editorial

Reliving the mortgage industry’s tumultuous year

06 Statistics

40

How will rising rates affect already indebted clients?

08 Head to head

PEOPLE

44 10

BROKER INSIGHT

Ottawa-based broker Chris Allard shares his tips for cultivating strong referral partnerships

16 Opinion

What a year it’s been – from surprise interest-rate moves to the rise and fall of the Toronto market, CMP takes a look back at all the highs and lows of 2017 FEATURES

18

Despite an initial cold shoulder from Canada’s lending community, Steve Lydon has risen to head Merix’s NPX

Brokers express suspicion about the motives behind the government’s latest rule changes The importance of combining technology with personal service

NEWS ANALYSIS

INDUSTRY ICON

12 Broker network update

14 Technology update

UPFRONT

PEOPLE

What brokers can do to help shift millennials from renting to buying

42

A NEW WAY TO ACCESS EQUITY

For clients with considerable equity who might not qualify for a HELOC, Home Trust has a new alternative

Shifting regulations present new opportunities, but brokers must capitalize on them responsibly

PEOPLE 47 Career path

A self-described math geek, Deren Hasip parlayed his love of numbers into his own mortgage brokerage

48 Other life

Sailing the seas with naval officer and mortgage broker Cari Hossmann

44 FEATURES

CONSTANT STATE OF CHANGE What brokers should be prepared for when the latest regulations go into effect in the new year

2

MORTGAGEBROKERNEWS.CA CHECK IT OUT ONLINE

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30/11/2017 10:20:04 AM

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UPFRONT

EDITORIAL

A roller-coaster of a year

L

ooking back over the past 12 months of mortgage channel-related news, it’s clear that 2017 has been anything but boring for the industry.

The year kicked off with an announcement from CMHC that it was, once again, raising its mortgage premiums. And while the estimated average $5 monthly increase was largely seen as negligible, it was a harbinger of things to come.

By February, one of the channel’s leading lenders found itself in the hot seat.

Home Capital Group was accused of misleading investors following its falsified document controversy in 2015. A class action lawsuit was announced; an OSC investigation followed, which sent the lender’s share price plummeting.

Eventually, a massively influential investor – some guy named Warren Buffett – stepped in to inject some much-needed capital into the beleaguered company.

The Home Capital saga made headlines for months; only the government and industry regulators managed to grab the spotlight back. In April, the Ontario government unveiled its Fair Housing Plan, which included a controversial 15% foreign buyer tax (sound familiar?). Then in the summer, the Office

All in all, 2017 was equal parts exciting, worrying and – at least from CMP’s perspective – a joy to cover of the Superintendent of Financial Institutions announced a crackdown on the industry in the form of increased supervision, sneaking in a proposal – which would eventually be finalized in the fall – that would require a stress test for all uninsured mortgages. The industry reacted as it does to all forms of government tinkering believed to place difficulties in front of Canadian homebuyers: disbelief and optimism.

Finally, 2017 had some fascinating developments for broker networks.

Dominion Lending Centres rebranded Marlborough Stirling, which it purchased in late 2016, as Newton, finalizing a move that made the largest mortgage network able to provide its own servicing for mortgage deals. Not to be outdone, Verico announced its sale to Montreal-based M3 Mortgage Group in September.

That particular deal cemented the shift to two major entities controlling the vast majority of the mortgage industry, at least in terms of networks.

All in all, 2017 was equal parts exciting, worrying and – at least from CMP’s perspective – a joy to cover. We can’t wait to see what 2018 holds.

www.mortgagebrokernews.ca ISSUE 12.12 EDITORIAL Editor Justin da Rosa Writers Joe Rosengarten Libby Macdonald Ephraim Vecina Heather Turner Copy Editor Clare Alexander

CONTRIBUTORS Lester Shore Dong Lee

ART & PRODUCTION Designer Loiza Caguiat Production Manager Alicia Chin Advertising Coordinator Ella Dayandante

SALES & MARKETING Associate Publisher Trevor Biggs Vice President, Sales John Mackenzie National Account Manager Trevor Lambert Marketing and Communications Melissa Christopoulos Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Global CEO Mike Shipley Global COO George Walmsley

EDITORIAL INQUIRIES

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KMI Media 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Sydney, Denver, Auckland, London, Manila, Singapore, Bengaluru CMCA AUDITED

Canadian Mortgage Professional is part of an international family of B2B publications and websites for the real estate and mortgage industries

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MORTGAGE PROFESSIONAL AMERICA chris.anderson@keymedia.com T +1 720 316 7378

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Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss

30/11/2017 8:30:17 AM

We help you shine a little brighter than the rest.

Opportunity@centum.ca | centumcanada.ca/franchises ®/™ Trademarks owned by Centum Financial Group Inc. © 2017 Centum Financial Group Inc. The intent of this communication is for informational purposes only, and is not intendedto be a solicitation to anyone under contract with another mortgage brokerage operation.

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UPFRONT

STATISTICS

Close to the edge

NATIONWIDE FEAR OF RISING RATES

Your clients might be approaching the cliff of unaffordable mortgage payments, and rising interest rates might be enough to push some off of it AFTER YEARS of holding rates near zero, the Bank of Canada raised its key interest rate target not once, but twice in 2017. That prompted major lenders to raise their prime lending rates, goosing the costs for those holding variable-rate mortgages, as well as those taking out new fixed-rate mortgages or paying off other debt, such as home equity lines of credit.

The spectre of rising interest rates is causing anxiety in some areas to a greater degree than others. Albertans, still bearing the scars of the 2014 oil shock, were most worried that they wouldn’t be able to handle their debt load if rates continue to climb, while those in Ontario exhibited the least amount of concern.

Percentage of consumers concerned about their ability to pay their debts if interest rates rise

Consumer parsimony is among the consequences of the rapid-fire rate increases: 70% of Canadians report that they’re now more careful with how they spend their money. It’s little wonder, in light of the fact that many don’t have much in the way of a financial cushion for unexpected expenses – 42% of households nationwide report having less than $200 left over at the end of the month.

47%

35%

of consumers report feeling the effects of increased interest rates

42%

of Canadians are already within $200 of not being able to pay their bills each month

46%

of Canadians are concerned about paying their debts if rates increase

British Columbia

58%

expect to take on more debt in 2018 to pay for basic expenses Source: MNP Consumer Debt Index, October 2017

YOUNG AND INDEBTED

STRETCHED TOO THIN

Interest rate increases are likely to hit millennials especially hard – almost 40% expressed concern that rising rates could push them toward bankruptcy.

The average Canadian household has $743 left over at the end of the month after paying bills, a significant drop from the $892 reported in June. More than four out of every 10 consumers nationwide are within $200 per month of not being able to pay their bills, a figure that climbs even higher in certain provinces.

CONSUMERS WHO EXPECT RISING INTEREST RATES TO TRIGGER A MOVE TOWARD BANKRUPTCY 40% 35% 38% 30% 30% 25% 20% 15% 13% 10% 5% 0% Millennials Gen x-ers Baby boomers

CONSUMERS WITHIN $200 OF NOT BEING ABLE TO PAY THEIR BILLS EACH MONTH

Source: MNP Consumer Debt Index, October 2017

6

British Columbia Alberta

38% 43%

Saskatchewan and Manitoba Ontario Quebec Atlantic Canada

45% 40% 47% 49% Source: MNP Consumer Debt Index, October 2017

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47%

Quebec

55%

45%

Atlantic Canada

Alberta 44%

Ontario

45% 45%

Saskatchewan and Manitoba

Source: MNP Consumer Debt Index, October 2017

HOW FAR TO BANKRUPTCY?

IN CASE OF EMERGENCY

The fear that rising interest rates could lead to bankruptcy is more pronounced in economically battered locations such as Alberta and Atlantic Canada.

Only a small proportion of Canadians are confident that an emergency scenario wouldn’t send them into even greater debt.

CONSUMERS WHO EXPECT RISING INTEREST RATES TO TRIGGER A MOVE TOWARD BANKRUPTCY

CONSUMERS WHOSE FINANCES COULDN’T WEATHER THIS SCENARIO

British Columbia

22%

Alberta 23%

Ontario

23%

Atlantic Canada

67%

Unexpected auto repairs or purchase

69%

Disease or disability requiring three months off work

70%

Job loss or wage decrease

72%

Death in the family

73%

Paying for someone’s education

74%

37%

Saskatchewan and Manitoba

Quebec

Divorce or other change in relationship status

34% 32% Source: MNP Consumer Debt Index, October 2017

Source: MNP Consumer Debt Index, October 2017

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UPFRONT

HEAD TO HEAD

How can brokers help rent-bound millennials?

Millennials are less likely to own homes than older generations, potentially putting a serious dent in brokers’ future client base

Ashish Gandhi

Brent Richardson

Minesh Thakkar

“Millennials have a preconceived notion that becoming a homeowner is nearly impossible – that’s why we see many millennials renting long-term. Many believe the obstacles of bad credit, down payment, affordability or too much debt will be the contributing factor in their in ability to becoming homeowners.

Much of the issue is that millennials are unaware of the various financing and down payment options available to them, as well as the multiple avenues brokers can provide to becoming homeowners.

Providing millennials with the right information and knowledge is the key factor in converting long-term renters into homeowners.”

“As the housing market, family incomes and employment conditions improve for millennials, the trend should shift towards ownership. These factors are beyond our control as brokers; however, efforts on our part to improve education and marketing of the opportunities available can help spur hidden demand.

For example, advertising monthly mortgage payment amounts for entrylevel housing on social media, thus targeting millennials, is a strategy that has worked for me. This approach and ideas like it have the potential to kindle the spark of desire for homeownership in this generation and help bring many out of rental hibernation.”

“Currently, renting seems like the only option, as entering the market is more expensive than it’s ever been.

I believe lifestyle plays a large part in this decision. Everyone wants to retire early; however, very few take action. Real estate has always been one of the best ways to build wealth.

Sometimes our clients want everything: the location, the convenience, etc.

I believe compromise is confused with sacrifice. It’s our job to teach them the difference and what it will mean to them 10, 20 or 30 years down the road.”

Principal broker and financial advisor The Mortgage Division

Mortgage broker Altrua Financial

Mortgage broker Broker Financial Group

GENERATION RENT Spiralling property values in the nation’s most populous cities have led to a growing number of renters, according to the latest census. At the forefront of this trend are millennials: Statistics Canada reports that only 50.2% of Canadian 30-year-olds are likely to own a house, compared to 55% of baby boomers at the same age. Another frustration for those nurturing the dream of homeownership is the fact that two out of every five tenants nationwide (and half of tenants in Toronto) are spending more than 30% of their average monthly take-home pay on rent, leaving little left over to save for a down payment.

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UPFRONT

NEWS ANALYSIS

The year in review Another year, another 12 months of headlines.

CMP takes a look back at the major stories that defined the industry in 2017 January Following a tough 2016 for BC’s real estate industry, in which home prices fell after implementation of a foreign buyer tax, pundits weighed in on whether it was time to worry.

“If you look at the recent sales stats, we have decreasing supply, and you’ve still got 40,000plus people per year migrating into BC,” said Dustan Woodhouse of DLC Canadian Mortgage Experts. “Those 40,000 people all have to live somewhere. And we are not building at the pace to account for that.”

Woodhouse was proven correct. According to the latest CREA stats, prices rebounded 18.4% year-over-year, and sales were up 9.9%.

committee. But as the rest of the year unfolded, the industry’s calls for a halt to further regulation would be completely ignored.

March In March, CMP asked industry players whether the runaway Toronto market should consider a foreign buyer tax similar to Vancouver’s.

“When the idea of introducing a foreign buyer tax in Ontario surfaced last year, TREB cautioned it would be a knee-jerk reaction before knowing whether a problem existed,” said Larry Cerqua, president of the Toronto Real Estate Board. “There was little in the way of reliable data on the issue.”

February

April

At the beginning of February, a number of mortgage industry players attended a standing

By mid-April, the Ontario government had rolled out its Fair Housing Plan, which included

Best prediction of 2017

“Right now the odds are in favour of another increase, likely another 25 basis points” Craig Howie, Neighbourhood Dominion Lending Centres committee of Parliament to share their recommendations on how the government could tweak 2016’s mortgage rule changes.

“This is the only time the government has made changes unilaterally and very quickly without proper consultation, and that is having a massive impact on Canadians and their families,” DLC head Gary Mauris told the

10

the expected foreign buyer tax, along with new rent-control measures and initiatives to create more affordable housing.

Many felt the provincial government had missed the mark. “We have agreed strongly that it’s a supply issue here, and really, none of the actions will increase the housing supply,” said Bob Finnigan, president and COO of the

Canadian Home Builders Association. “The bottom line is there is no quick, easy fix to housing supply.”

May Home Capital Group had a rough 2017 – an OSC investigation, dwindling deposits and a sell-off of a portion of its book all contributed to the lender’s market share dropping. May marked the nadir of the company’s troubles, but brokers remained divided on whether to stand by the embattled lender.

“We are not sending Home Trust any deals at this point, as we fear their ability to fund the mortgages at closing has been compromised,” said Dan Eisner of TrueNorth Mortgage.

However, Admore Financial Services’ Geoff Carnevale insisted that “they’ve supported my business and the broker channel for years, and I’m going to keep supporting them until somebody tells me I can’t.”

June At the beginning of summer, Toronto’s market started to see a dip as the Fair Housing Plan took effect. “This [month’s] Toronto Real Estate Board data makes official what we expected: the GTA market is following in Vancouver’s footsteps,” wrote TD Bank econo-

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HEADLINES FROM A YEAR GONE BY What have brokers been most concerned about in 2017? Here’s a look back at the most-read stories on MortgageBrokerNews.ca over the past 11 months.

JAN “Mortgage insurance premiums hiked once again” FEB “Big banks are freaking out about Toronto real estate” MAR “Bank of Canada hikes rate” APR “Home Trust seeks line of credit as deposits, shares plummet” MAY “Home Trust backed by influential player” JUN “Home Capital announces sale” JUL “Big banks raise fixed-term mortgage rates” AUG “Mortgage rule impact revealed” SEP “Canadian real estate to enter cooldown period later this year” mists Michael Dolega and Diana Petramala in a research note.

July Home Trust made headlines once again after it announced an agreement with KingSett Capital to sell a commercial mortgage portfolio valued at around $1.2 billion. It was swiftly followed by the appointment of industry veteran Yousry Bissada as Home Capital Group’s new CEO. But it wasn’t until Warren Buffett announced

industry pundits speculating about further increases. “Right now the odds are in favour of another increase, likely another 25 basis points,” predicted Craig Howie, a GTA-based broker.

September brought with it some indication as to how impactful 2016’s mortgage rule changes had been. A study by Royal LePage found that many millennials – 49% – had decreased their chances of getting into the market.

“We have some concerns that the stress test will push some borrowers to nonfederally regulated lenders” Neil Parmenter, Canadian Bankers Association

August Industry talk in August was firmly focused on the Bank of Canada’s first increase to its overnight rate in seven years. The move had

NOV “Foreign buyers find loophole in Vancouver real estate”

September

Most ominous quote of 2017

that Berkshire Hathaway would offer Home Capital a substantial bailout package that the industry truly breathed a sigh of relief.

OCT “Government lying about reason for rule change implementation, claims industry veteran”

“Unfortunately, we heard absolutely nothing about that case from the bank over the past two months.”

November OSFI dropped a bombshell with its update to B-20, which included a stress test for uninsured mortgages. The move was met with criticism from brokers, lenders and associations alike.

“We have some concerns that the stress test will push some borrowers to non-federally regulated lenders, which will shift risk outside of the regulated space,” said Neil Parmenter, CEO of the Canadian Bankers Association.

October

December and beyond

October had the industry reeling from another Bank of Canada rate hike that was announced the month before, bringing the overnight rate to 1%. While predicted by some in the industry, the move came as a surprise to others.

“We believe the case for rate hikes is strong,” said BMO chief economist Doug Porter.

What does the year ahead hold? More of the same, it would seem. In fact, last year’s prediction could easily be applied to 2018: “Brokers and lenders will continue to grapple with the mortgage rule changes as the markets feel the effects ... As the cost to lend money increases, so too will interest rates.”

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UPFRONT

BROKER NETWORK UPDATE NEWS BRIEFS BFG and RMA rebrand network as BrokerONE

After joining forces in 2016, Broker Financial Group and Real Mortgage Associates have cemented their partnership, renaming the combined entity Broker ONE. According to Broker ONE CEO Joe Rosati, the company has been building strong offerings in home and auto insurance, as well as robust streams of lead generation, in the time since the two networks announced their partnership. Rosati added that the new model will benefit brokers with all the advantages that come with belonging to a national organization, while allowing them to retain their autonomy.

Mortgage Architects ready for pre-new-year flurry

Ambivalent consumers appear to be taking the plunge into homeownership before OSFI’s rule changes take effect on January 1, according to Mortgage Architects president Dong Lee. Lee said Mortgage Architects brokers are “informing customers of the potential impact of the rule changes, so those on the border are making decisions quickly to either get into the market or wait for the market to change.” Lee added that because Vancouver and Toronto will feel the changes the most, those two cities are likely where the most activity will occur before January 1.

DLC says majority of households still manage finances responsibly

While OSFI says its decision to tighten mortgage qualifications is necessary to cool down outsized price growth, DLC’s Dr. Sherry Cooper observed in a recent blog post for the network that the majority of Canadians have a sensible approach to debt. “With so much

attention paid to the imprudent borrower, I think it is important to note that the vast majority of Canadians manage their finances in a responsible manner,” Cooper wrote. “Roughly 40% of homeowners are mortgage-free, and one-third of all households are totally debt-free. Another 25% of households have less than $25,000 in debt, so 58% of Canadian households are nearly debt-free.”

Centum hopes new online platform will be a game-changer

Centum is rolling out a new online platform, Centum 2.0, with the expectation that it will not only maximize output, but also become an unparallelled industry tool. “On the back end, we’ve done a complete CRM package,” said president and COO Chris Turcotte. “It tracks where you’re submitting your deals, the progress of each one of your files, and you have a really powerful CRM that will [automatically] communicate with your clients at certain milestones ... but the big thing is the analytics of your business. Every time you log in, you’ll have a snapshot of your business. To be able to log in and see where every file I have is at in real time is huge.”

Scott Musselman moves from Invis to Mortgage Architects

In October, Scott Musselman took over as VP of operations at Mortgage Architects. Previously, Musselman held the same role at Invis/Mortgage Intelligence, where he had worked since 2001. In his new role, Musselman hopes to leverage his considerable experience in the broker network environment to drive growth at his new company. “Bringing efficiencies in economies of scale, I hope to bring French and new creative ideas in a collaborative environment,” he said.

“By joining Mortgage Architects now, I will have some internal operational insight into seven superbrokers in Canada.”

DLC brokers question new rules’ impetus Brokers speculate on whether the federal government is being upfront about its new mortgage underwriting regulations Mortgage industry players continue to question the motive behind new regulations on mortgage underwriting practices laid out by the Office of the Superintendent of Financial Institutions in October.

Despite OSFI’s claim that the new regulations are needed in order to curb high levels of household debt, Michael Lloyd, team leader for Dominion Lending Centres Canadian Mortgage Experts, believes the government’s real intention is to lower housing prices in Vancouver and Toronto, which he says would explain its repeated intervention in the housing market over the last year or so.

“They don’t have any room to raise rates, so it seems like the only other option they can do is make it tougher for people to qualify for mortgages,” Lloyd says, adding that he considers the idea that Canadian households are too indebted, thereby making the housing market precarious, to be spurious.

Lloyd says the government has become so myopic that it risks stunting real estate markets in the rest of the country. “The problem is that most people making purchases in Vancouver and Toronto won’t be affected by the changes, but people in the rest of the country will,” he says. “If somebody in small-town Saskatchewan is trying to buy a house, they will now be further from that. It’s going to impact everyone. The market will be affected, which will cause less demand, which will slow prices or maybe even

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causes prices to come down a bit. We have the strongest housing market in the world, but we keep tinkering with it. It’s disappointing that they did this in spite of experts in the industry telling them not to.”

Kevin Boucher, principal broker of DLC Service First Mortgages, believes the latest intervention will further hurt monolines.

“To compete on a rate level so banks end up making the money – that’s the real problem with all these rule changes,” he says. “It’s going to decimate portfolio insurance … and make it

“It’s disappointing that they did this in spite of experts in the industry telling them not to” three times more expensive to insure the same stuff it did six months ago.”

Boucher reports that he has noticed a major drop in the number of first-time buyers who have come to him for mortgages – and he says that 90% of the first-time buyers he sees usually have their parents present as guarantors.

“Thirty-five per cent of my business used to be first-time homebuyers, but this year, I’ve only done seven or eight applications for first-time buyers,” he says. “That’s my experience since the first round of tightening with the insurance rules, and now they’re doing it with conventional mortgages, which is wholly unnecessary.

This is going to be a self-fulfilling prophecy that will stall the market and impact the economy, and people are going to get hurt.”

Q&A

Elizabeth Saheed Mortgage agent CENTUM MORTGAGE SMART

Years in the industry 3 Fast fact Prior to entering the mortgage industry, Saheed spent two years working in accounting

A springboard for professional growth What are the most difficult financing challenges your clients tend to deal with?

I think the most significant challenge is finding the right lender for a particular client. Different clients have different needs, after all. Some of them have bad credit; some of them have no choice but to go to B lenders – and finding a good lender to fit these people is not easy.

What benefits have you seen from working with a network like Centum?

Centum has greatly helped me with access to a wide selection of lenders. This is so different from working with banks, especially those where my clients can’t qualify. The variety that Centum provides allows me to find the lender that best fits each client’s unique situation, since not even similar cases will have the exact same particulars. I can link my clients to the lenders who are actually willing to work with their situations.

It has also taught me a lot more about the industry than I could have ever hoped to find out on my own. Centum has helped me significantly – working with the other professionals there has given me access to valuable advice and industry experience. The industry changes every month, every week, even every day, and since I’m still relatively new, the guidance of far more experienced agents is extremely helpful to me.

What lessons have been most memorable for you?

One thing that comes to mind is an early transaction that involved bad credit, and my first impulse was to help in every possible way I can, because of course my clients depend on me. When I was not able to find a solution in a timely manner, my seniors gave me the advice to help my clients better themselves and improve their credit. I’ve learned a lot more since then, but that incident from my earliest days taught me that the best way to really help my clients is to guide them toward improving their situation via their own actions.

What advice would you give to those who are considering entering the industry?

Always, always keep yourself updated on the news about the housing market. Educate yourself on the ever-changing rules. Keep on the lookout for any changes to qualifications, requirements and other similarly important details so that when a client comes to you with questions, you are actually able to provide the correct and updated information. Giving clients working information about how the housing and mortgage markets operate is an important aspect of helping them. If you’re planning to just depend on your seniors’ advice all the time, you’re setting yourself up to fail. You’re not growing as a professional – and that doesn’t make sense in a world where you can easily find a vast amount of information about the housing market.

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UPFRONT

TECHNOLOGY UPDATE

In-person interaction isn’t going away The most successful brokers will be the ones who combine new technology with the human element

always going to be room for the good broker,” she says. “There are always things that change in the marketplace that you may need to rely on an expert to guide you through.”

James Loewen of Loewen Group Mortgages agrees that today’s services need to seamlessly meld an in-person experience with technology. He’s currently working with the Blink mortgage app to upgrade the Loewen Group app.

“When we meet in person with clients, part of the meeting is showing them how to download the app,” Loewen says. “It’s also for

“There’s always going to be room for the good broker”

While technology will continue to drive the evolution of the mortgage sector, industry players argue that in a space where relationship cultivation is key, balancing technology with the face-to-face broker experience remains imperative.

Chantel Chapman, a financial fitness coach and broker of record at MogoMortgage, says that maxim holds true even at tech-focused companies like hers. “When we built our

NEWS BRIEFS

experience,” she says, “we were looking to find a balance between the traditional benefits of working with a mortgage broker – advice and guidance when making the biggest purchase of their life – mixed with a little bit of digital to make it convenient.”

While the MogoMortgage app has proven popular with consumers, Chapman maintains that brokers will always be in demand because mortgages are inherently complicated. “There’s

Industry players not sold on artificial intelligence

According to the recent Imprev Thought Leadership Survey, less than half of real estate industry respondents showed an inclination to invest in augmented reality and virtual reality 3D tours (46% each). Even fewer (30%) voiced confidence in artificial intelligence. Real estate portals weren’t as popular as their recent proliferation would suggest, either. “A mere 20% of respondents rated real estate portals … as one of their most important real estate marketing channels and technologies five years from now,” Imprev said in its report on the findings.

clients who are trepidatious about meeting in person. People sometimes don’t want to commit because then they feel obligated to use the agent, but the app gives them a feel for how we work.”

Loewen notes that while he still encounters clients who don’t trust technology enough to handle their finances, these same people often don’t realize just how prevalent technology is in their daily lives.

“I hear people say all the time that they won’t use online banking because they don’t trust technology, so they go to tellers,” Loewen says. “I used to work in a bank, and tellers use the exact same platform and system as online banking. All you’ve done by integrating a teller is created an opportunity for human error.”

Mobials aims to make home valuations easier

Mobials, a tech firm based in London, Ontario, has launched a new web-based home valuation tool called HomeProof. The tool uses data from sources such as the Municipal Property Assessment Corporation to provide real-time home valuations. “As a homeowner, when it’s time to buy or sell, not knowing what your home is worth can cause a great deal of stress,” said Mobials founder and CEO James Hayes. “The benchmark value we provide takes the stress out of the initial stage of any real estate transaction – getting the valuation.”

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Q&A

Joseph Valenti Co-founder and customer advocate BROKRBINDR

Years in the tech industry 20+ Fast fact Valenti speaks five languages and has managed contracts with clients throughout North America, Latin America and Western Europe

The importance of investing wisely in technology How have your years in the industry shaped the way you conduct your business?

It is said that time is the great teacher. In recent years, our team has learned to focus ever more narrowly on adding value, being responsive and adapting to change.

In terms of the technology used, what has changed between the time you started in IT and the present?

Technology has always had the potential to provide a distinctive competitive advantage. In the past, seeking that advantage involved high risk and high upfront costs.

Today that has all changed. Our product, BrokrBindr, and others provide great tech with no risk and at a very modest cost. The client’s experience is so simple and so positive that they are much more likely to provide new referrals. Wise investments in technology can make all the difference.

How could mortgage professionals keep themselves updated on the latest tools?

In any business, it is best to build processes around customers’ expectations. With the introduction of mobile technology after 2010, customer expectations changed.

The systems and processes needed to meet those expectations must also change.

Your most effective competitors are using marketing automation, lead-scoring, document management, sophisticated CRMs and other tools to better meet customer expectations – and yes, that means that change for many brokers. Learning and adapting to the needs of the customer will always be a challenge. Tech

Google to build ‘smart city’ in Toronto

Sidewalk Labs, a division of Google parent company Alphabet, has signed a deal with Waterfront Toronto to develop the city’s 12-acre Quayside district into a high-tech model city that will pilot innovative construction techniques and principles, including self-driving systems and climatefriendly architecture. If the project goes smoothly, Sidewalk plans to pursue a larger area to develop, including at least 3.3 million square feet of space that will accommodate the relocation of Google Canada’s head­ quarters from Kitchener to Toronto.

is perhaps more important than it used to be, but it is still just one part of the service brokers must provide to satisfy customer expectations.

What do you think the broker’s role will be in a world increasingly reliant on information that’s readily available through the internet?

A combination of AI and other technologies will provide the major banks with the means to close deals with their own customers very efficiently. That may seem new, but the banks have always enjoyed that same privileged status. They’re going to exploit their competitive advantage as well as they always have. In future, as today, brokers will present a viable and interesting alternative.

Yes, brokers must invest in technology, but it is essential that the larger community also invest in awareness campaigns, as independent insurance brokers do. Creating the perception of value in the borrower’s mind is essential, and that is very much about marketing and positioning, not just AI and tech.

How do you see the relationship between the client and the mortgage professional developing in this online landscape?

Technology is just a medium. At least some clients still want to speak to a real human about the most important financial undertaking they are ever likely to make. Some clients will sail through a deal without needing to speak with anyone, but imagine if the client did need some advice and had a hard time reaching a thoughtful advisor.

Would they ever return there? No. Even this tech guy acknowledges that handshakes and insight still count!

Meridian launches digital lending platforms

Meridian Credit Union recently launched two new digital platforms for secured and unsecured lending. The secured lending platform aims to eliminate much of the documentation in processing mortgages. According to Meridian, the digital mortgage application takes just 20 minutes to complete, and applicants will be able to select the payment they want and secure a rate for 90 days. “The launch of [these platforms] is a real game-changer in the personal lending space,” said Meridian president Bill Maurin.

New tool lets brokers outsource follow-up

Launched earlier this year, Client Caller is designed to assist brokers in following up with past clients by using trained calling assistants to phone brokers’ client databases on a semiannual basis. The assistants do not field any mortgage-related questions; instead, they speak with past clients to find out where they are in their lives and if they could use the services of a broker again.

“They say the fortune is in the follow-up, and I totally believe it,” said Client Caller co-founder Scott Peckford.

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30/11/2017 8:39:24 AM

UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email mortgagebrokernews@kmimedia.ca

Opportunity knocks The many recent rule changes represent a new opportunity, writes Dong Lee, but only if brokers manage their responsibility and duty to customers THE MORTGAGE rule changes of October 2016 and the liquidity crisis of Home Trust have led to an incredible run for private mortgage lenders. At Mortgage Architects alone, we’ve seen a doubling of growth in the number of private mortgage transactions this year. With the new mortgage rule changes introduced in October 2017, this segment will continue to see further expansion.

If you doubt this growth, look at the evidence of reputable and long-serving private lenders such as Fisgard and Alta West, who are making inroads into new markets like Ontario. They have bet big by bringing on seasoned veterans such as Reaza Ali and Mike Forshee. These are but a few examples of the many veteran lenders that are seeking opportunities in the private lending world. There’s also been a surge of new mortgage funds, limited partnerships and mortgage investment corporations seeking to benefit from private lending.

This has been the one clear opportunity from all the rule changes, but we need to manage our responsibility and duty to customers and investors. I have noticed of late what I perceive to be a gouging of customers at a time of vulnerability, along with others who appear to be dabbling in a complicated business where they have little to no experience.

Investors should be mindful of new private mortgage opportunities. They should look closely at the pedigree of the management team, experience and track record of these new entities to ensure they are making

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good investment decisions. Many of these inexperienced new private lenders have never managed through a market downturn, managed the complexity of mortgage administration or had to navigate the challenging road of foreclosure.

Large, private first mortgages are also in high demand, but brokers and lenders

avoid the potential headaches of costly and time-consuming E&O claims.

Having been at the helm of a national brokerage, I’ve navigated many private mortgage claims and have even been asked to serve as an expert witness on other E&O claims.

I’ve witnessed firsthand the damage caused to businesses when inexperience leads to giving bad advice to investors and customers.

Those who think this is an opportunity to gouge customers in a time of vulnerability should think twice. Your actions are misguided and short-sighted. If you want to build a career in this industry, then do the right thing and charge fair prices.

We’ve all seen the impact of regulations on our business. If we can’t manage and control ourselves, then be prepared for even more regulatory oversight. Someone once said to me that the mortgage brokerage industry today is what the financial planning industry looked like 20 years ago. Look what’s happened to the financial planning industry with respect to regulation and over-

“We’ve all felt the impact of regulations. If we can’t manage and control ourselves, then be prepared for even more regulatory oversight” should be cautious: As mortgage rules tighten and home valuations soften, there may be no immediate exit strategy for these deals. Lenders need to be prepared that these large first mortgage transactions may become longer-term investments as exit strategies disappear.

Brokers who are inexperienced with private mortgage transactions should be aware that 60% of all errors and omissions claims are centred on private mortgage transactions. If you are not brokering a deal through a large, reputable private lender or a private lender that can provide assurances that they can fund the transaction, then you are putting yourself, your brokerage and your client in harm’s way. There is a premium to be paid for certainty that the lender has the means to fund the mortgage transaction. If you aren’t familiar with private mortgages, then partner with someone who is and

sight. If we want to remain a strong, selfgoverning, principle-based industry, then we need to do the right thing.

As we make the turn into the new year and digest the latest rule changes, there will be increased demand for private mortgage transactions. We all need to do our part to continue to put the best interest of the client and investor first by making sure we’ve provided proper disclosure, ensured comprehension of material risks and assisted in making suitable product decisions. Only by doing the right thing will we all benefit from the opportunities.

Dong Lee is president of Mortgage Architects. He has more than 21 years of experience in residential mortgage financing and financial services, and has held senior positions at brokerages, banks and a mortgage insurer.

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Hear from brokers who made the move to DLC With the move to DLC, I must say, I have been more than impressed! Every week I am finding a new tool to help my brokers and I close more deals. The support team for marketing has been able to turn around new logos for my website in less than ONE day! The sales team has been able to send us leads on agents that are interested in joining our franchise. Consumers are more familiar with the DLC brand than any other brokerage. Insureline is a great tool to build additional revenue streams and provide more value to our clients.

And yet, I can’t help but think the best is yet to come with Dominion leading the charge as the largest firm (and in my opinion, the best) in Canada.

Kyle Green DLC Homeline Mortgages, formerly Mortgage Alliance It was the opportunity to have better tools. No doubt the national advertising can’t be ignored.

As for advertising, DLC took a bigger picture than what Verico was doing. They’ve been extremely active in helping us build this business, and we have. We keep getting a little bigger every quarter. That’s one of the biggest pluses as far as I’m concerned, It was definitely an advantage for us to make the change.

Len Lane DLC Brokers for Life, formerly Verico

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30/11/2017 8:40:06 AM

PEOPLE

INDUSTRY ICON

ANOTHER ALTERNATIVE Despite encountering a major roadblock, Steve Lydon, vice-president of alternative lending at NPX, fought his way to become a leader in the Canadian subprime space STEVE LYDON left Great Britain in the midst of a burgeoning career in alternative lending, only to be met with an icy reception from the Canadian lending community. But that didn’t stop him. Instead, Lydon kept his foot in the door of the mortgage industry by becoming a broker.

“I was always drawn to the subprime, alternative lending world,” he says. “My main lender as a broker was Wells Fargo. The salesperson for Wells Fargo was leaving and asked if I’d be interested [in joining the lender], and I said, ‘Yeah, that’s what I did in England.’ So that’s where it all started.”

Lydon’s regional sales role with Wells Fargo helped the bank achieve success in the Canadian market. He then moved to MCAP, where he spent a decade as national sales manager for the Eclipse product before being approached by an industry rival. In May 2017, Merix/NPX appointed Lydon as VP of its alternative lending arm.

Lydon attributes his success in the industry to his laser focus on subprime business. “That was my experience from England, and I stayed on it because that’s what I knew,” he says. “I just developed an understanding of what the alternative lenders required and focused my time virtually 100% on the alternative lending business.”

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The experience he developed in alternative lending in England, combined with his work as a broker in Canada, gave Lydon a skill set that was infinitely useful.

“I was knowledgeable in what those types of lenders were looking for when you submit a deal, and I was very knowledgeable about

lenders in the Canadian mortgage industry, but he believes it’s just the beginning.

“It’s already changing because of B-20 and the more rigorous ways lenders have to look at deals and underwrite them,” he says. “The news now about the stress test come January 2018 – that’s going to change it again.”

“The challenge for lenders will be to have the full portfolio of products and the knowledge and the means to service them, because there’s an awful lot that goes on behind the scenes with deals” how to package a deal, put it together and find a solution,” he says. “That’s what I was good at. That just gelled in well with the lending side because I could teach brokers what I thought was the best way to package a deal, and as it turns out, it was quite successful.”

Winds of change Lydon acknowledges that 2017 has been a year of great change for both brokers and

OSFI’s latest tweak to Guideline B-20 will require a stress test for uninsured mortgages as well as insured. While the move is expected to hinder Canadians’ home-buying power, Lydon believes it will also tip the scales back toward the broker industry in its competition with the big banks.

“It’s certainly going to make it … a more level playing field [with the alternative side] – which is interesting and good,” he says.

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PROFILE Name: Steve Lydon Title: Vice-president of alternative lending Company: Merix/NPX Based in: Toronto Career highlight: “Being headhunted by Merix – being recognized as someone who was good and knowledgeable in the alternative world.”

Career lowlight: “When I had come to Canada after being successful in England and the lenders at that time wouldn’t recognize my experience. That’s always a lowlight in any person’s career – not being recognized.

But I proved them wrong!”

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PEOPLE

INDUSTRY ICON

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before,” he says. “We’re growing because we know we have to.”

That growth, he adds, will be fuelled by a thorough understanding of what products are needed in the market – which involves soliciting feedback from multiple avenues.

“It’s an insight for the whole executive board as to what’s needed,” he says. “We all sit down and have input from the market.

You just can’t come out with an 80% product; you have to have a full suite. There’s business for self, rentals, new-to-Canada. There’s lots of things. You have to be on top of the game and see what the market needs. A good advisory panel of brokers is always a good thing. I tap into the broker knowledge and find out what is needed.”

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on behind the scenes with deals. It’s not a case of putting an ad out there and saying you offer an 80% alt deal at 4.5% if you can’t service it. There’s a lot involved in setting that up. It’s not just a case of saying, ‘I’m going to do it.’”

For brokers, he adds, the key to conquering the alternative space – and thus growing their business in the face of ever-tightening mortgage regulations – is knowledge of what lenders in the space are looking for.

“In the A world, it’s pretty much in a box – either it fits or it doesn’t,” he says, “whereas in the alternative world, it’s more solutionbased. You’ve got to have the knowledge of what each lender is doing to do the right thing for your clients, especially with things like

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“In the A world, it’s pretty much in a box – either it fits or it doesn’t – whereas in the alternative world, it’s more solution-based.

You’ve got to have the knowledge of what each lender is doing to do the right thing for your clients”

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How will channel lenders continue to compete with the big banks and earn Canadians’ mortgages? Lydon points to NPX’s recent efforts to expand its market share.

“As we speak, I am hiring a national sales team for NPX, which has never happened

Launched in 2016 as an answer to the growing need for alternative solutions, NPX has already scooped up a number of accolades. Brokers gave it top marks in several categories in CMP’s Brokers on Lenders survey earlier this year.

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Taking the banks head-on

BROKERS LOVE NPX

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interest rate differential penalties. There’s such a variance in how lenders calculate.

Brokers keep telling me they want to do what’s best for their clients, so you have to have the knowledge of what’s involved with each deal and each guideline.”

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“Hopefully that will start the increase back up on the broker segment. But certainly for the alternative arm, it’s going to make it a more level playing field for the likes of NPX as opposed to the bigger players. There will be less room for buying business with low rates and higher commissions.”

Of course, adapting to the new normal won’t be without its challenges – on both the lender and the broker sides.

“The challenge for lenders will be to have the full portfolio of products and the knowledge and the means to service them,” Lydon says, “because there’s an awful lot that goes

BDM support Underwriter support Overall service levels Satisfaction with credit policy

www.mortgagebrokernews.ca

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30/11/2017 8:41:30 AM

Opportunity Knocks!

Since 1989, the strength of our brand has been the exception. Why not be part of a vibrant culture that empowers you to reach the pinnacle of your potential faster?

Open the door to new beginnings.

Want to know more? Contact us today! www.mortgagecentre.com/join-our-team 1-800-201-1258

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30/11/2017 8:41:50 AM

nominations for the most coveted award show in the mortgage industry are now open!

Now in its 12th year, The Canadian Mortgage Awards define excellence in the Canadian mortgage landscape, celebrating outstanding performance by companies and individuals at the top of their game.

Being nominated for such a prestigious event is a clear recognition of your professional standing as one of the best in the industry.

We look forward to celebrating with you on April 20, 2018 at The Liberty Grand where all of the winners will be announced!

#MortgageAwardsCA canadianmortgageawards.com

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“Winning a CMA is huge in the industry. It’s like the Oscars or Emmys of the mortgage world.

For us to be able to advertise that is huge—and I still advertise that; it’s in my email signature, on my Facebook page, my website, everything.”

COLLIN BRUCE

Franchise Owner Dominion Lending Centres Mortgage Mentor

“It’s always a fantastic evening. It’s nice to get dressed up and go out on a fancy evening and network with industry peers, see old friends and make new ones.

The gala is always a first-class event. It’s the highlight of the year.”

GORDON MCCALLUM Founder, President and CEO First Foundation

“[CMA] gives other people something to strive for and helps build professionalism in the industry.”

RAJ BABBER President CLN Mortgages

SPECIAL THANKS TO OUR AWARD SPONSORS

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30/11/2017 8:43:18 30/11/2017 3:17:19 AMAM

FEATURES

SPECIAL REPORT

TOP BDMs 2017

These 25 professionals – named by their broker partners – are shining examples of what makes a great business development manager

A BUSINESS development manager can be a broker’s greatest ally – and having a skillful BDM by your side can make a night-and-day difference when trying to secure financing in today’s evolving mortgage environment.

For the second year in a row, the broker community came together to nominate the industry’s top-performing BDMs. Brokers told CMP what makes their BDM the best the mortgage industry has to offer, while the BDMs themselves shared the strategies behind their success and offered their take on the best formula for a winning broker-BDM partnership.

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TOP BDMs INDEX COMPANY

NAME

PAGE

Alta West Capital

Tim Hurlbut

36

B2B Bank

Domenic Ciaravella

28

Bridgewater Bank

Sophia Jessa

25

CMLS Financial

Sam Samadi

31

Equitable Bank

Prakash Bector

26

Equitable Bank

Suzanne Fleur de Lys-Aujla

34

Equity Financial Trust

Steve Futyer

34

First National Financial

Richard Richards

32

First National Financial

Jose De Santos

28

First National Financial

Livia Pellegrino

36

Fisgard Asset Management Corporation Reaza Ali

27

Fisgard Asset Management Corporation Hali Noble

36

Home Trust

33

Mike Ayoub

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SOPHIA JESSA Bridgewater Bank

COMPANY

NAME

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ICICI Bank of Canada

Bonny Clarke

30

MCAP

Corey Massi

29

MCAP

Laura Cook

26

Merix Financial

April Morin

31

Merix Financial

Jessica Fitzpatrick

32

Optimum Mortgage

Jackie Matthew

35

Paradigm Quest

Kate Arviko

28

RMG Mortgages

Carlo Parise

26

Scotia Mortgage Authority

Ron Gronkowski

32

Scotia Mortgage Authority

Pino Mucci

34

Street Capital Bank of Canada

Donna Rachel

37

TD Canada Trust

Christian Mortier

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Sophia Jessa’s mortgage career started in 2003 when she began underwriting at CMHC, where she took on progressive roles for the better part of 12 years. During her time as an area manager at CMHC, she worked closely with most banks and lenders, developing an intimate understanding of their challenges and opportunities.

Keeping up-to-date with policy changes has been integral to Jessa’s success in 2017: “I focus on being proactive, sharing what I’m learning and being open about the conditions that could impact a deal,” she says. “I work hard to be an expert resource for my brokers.”

Jessa’s previous underwriting experience also gives her a keen awareness of the impact market conditions can have on her brokers and their clients. “I have personal relationships with my brokers,” she says. “I understand and care that they are trying to do their best, and [I] provide them with the tools to do their best. Understanding how to package a deal, how insurers approach a deal and how to mitigate risks helps me coach my broker clients every day.”

Aware that personal service goes a long way – especially in this industry – Jessa strives to go above and beyond with her relationships. “Whether it’s volunteering with my brokers or [making] education visits, I want to help them be successful however I can,” she says. “I really treat my brokers like friends and hope they find me easy to talk to and approachable.”

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FEATURES

SPECIAL REPORT PRAKASH BECTOR Equitable Bank

An advocate for continuous learning, Prakash Bector has been instrumental in providing education to the mortgage broker industry, including teaching CMBA Ontario’s mortgage agent course since 2014. Five years ago, Bector joined Equitable Bank, currently serving as team lead for central Canada and as the regional business manager for several large mortgage brokerages in Toronto.

Despite a challenging 12 months, Bector has remained at the top of his game in 2017. “The main thing I did was make sure I had a firm understanding of the new mortgage landscape and

presented the opportunities these changes offered to mortgage agents,” he says. “The ever-changing regulatory environment has created some confusion for consumers, so if mortgage agents are able to provide some clarity as to why [the changes] occurred and what options are available for their clients, this will give them an added advantage in the marketplace.”

Bector’s dedication this year has paid off – not only was he recognized as a 2017 CMP Young Gun, but he also won the 2017 CMBA Ontario Leadership Award.

Bector believes product knowledge and service are the key attributes of a successful BDM. “Without knowledge, you don’t have the credibility required to establish loyal partnerships,” he says. “In addition, service

is crucial in our industry. Being available to return calls and emails promptly with the correct responses is invaluable. Mortgage agents not only have clients they need to get back to, but also very demanding referral sources. It’s vital that a BDM keeps this in mind at all times and responds to inquiries or issues as quickly as possible.”

CHRISTIAN MORTIER

LAURA COOK MCAP

TD Canada Trust

With 14 years of mortgage experience, Laura Cook has surpassed expectations in each role she has held. “I bring a different approach on focusing on my clients’ needs and finding the best MCAP niche products that work for them,” she says. “I always strive to be available for my clients and am prompt in helping to find any solutions they may need.”

As regional sales manager for Fraser Valley and Vancouver Island at TD Canada Trust, Christian Mortier is highly regarded by his broker partners, who praised his “exceptional customer service and high level of product knowledge.” Prior to TD, Mortier held roles with First National Financial, Paradigm Quest and RBC.

CARLO PARISE RMG Mortgages

Boasting more than 20 years of industry experience, Carlo Parise began his BDM career with National Bank of Canada in 2000, which allowed him to garner insight into the day-to-day needs of mortgage brokers and their clients.

“As I dedicated more time to this channel,” he says, “I was able to learn and sharpen my skills to better serve my brokers, specifically in understanding their needs and providing helpful solu­tions, along with lasting relationships.”

Through the years, Parise has worked

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for a number of companies, including HSBC Finance, Adobe Mortgage Corp. and Resmor Trust, which is now RMG. To set himself apart from other BDMs, Parise offers what he refers to as “in-yourface service.” He explains: “Not only does the first point of contact make a huge difference, but the ongoing consistency in answering my phone and returning emails in a timely manner also results in achieving very satisfying relationships with my customers. Most brokers appreciate these attributes above all else, and in turn, I try to be appreciative of their support in me by being a good listener.”

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REAZA ALI Fisgard Asset Management Corporation

A respected professional with 19 years of experience in the mortgage industry, Reaza Ali has held various roles, including account executive, branch manager and national sales manager, over the course of his career. In his view, there are several qualities a BDM must possess in order to be successful.

“High integrity and genuine caring, along with educating our broker partners on how they can source clients in the shifting market to help them continue to grow their business year-over-year, have been useful in remaining successful over the past 12 months,” he says. “I try my best to be a resource to my broker and lender partners, regardless of whether my organization can complete the transaction or not. The ability to direct the broker to a source that can help solidifies our relationships.”

In recognition of his accomplish­ ments as a BDM, Ali was named Best Newcomer – Lender BDM at the 2015 Canadian Mortgage Awards.

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30/11/2017 8:45:39 AM

FEATURES

SPECIAL REPORT DOMENIC CIARAVELLA

JOSE DE SANTOS

B2B Bank

First National Financial

Domenic Ciaravella started his mortgage career in 2001 as a broker, funding $9 million in his first year. In 2006, Ciaravella moved into a BDM role, where his time with a B lender was cut short by the subprime mortgage crisis. But Ciaravella remained undaunted. “It was an invaluable experience working at the height of the B market and then losing my job when there was simply no more money to lend,” he says.

In 2008, Ciaravella was hired as a BDM by Laurentian Bank, which later became B2B Bank, where he remains today. Recently, B2B recognized him with three awards for highest achievement in sales objective, highest efficiency and most units funded.

“I continue to be challenged by my mortgage broker clients and continue to empathize with them in this challenging lending environment,” he says. “B2B Bank has been and continues to be extremely rewarding for my family and me, and I am grateful to be part of such a forward-thinking organization.”

“Be the best you can be at whatever you are doing, and treat others like you would like to be treated” are the mantras Jose De Santos strives to live by.

Currently with First National Financial, De Santos previously held roles at Scotiabank, Laurentian Bank and MCAP, where he managed the underwriting centre and business development team for Western Canada.

“I love the people I work with at First National and in the broker channel,” De Santos says, “and I want to assist all of my brokers, from those new to the industry to those who are very experienced in being successful. I kept my brokers highly informed of the changing landscape that we were experiencing [this year] and provided them with solutions that assisted them in adapting and growing their business.”

Apart from his BDM duties, De Santos is also past president of the Mortgage Brokers Association of BC.

KATE ARVIKO Paradigm Quest

Kate Arviko started her career in the consumer packaged goods industry, where she worked as a market analyst, consulting with Canadian retailers to help them develop their market share and grow their brands. However, her passion for renovating homes led Arviko to pursue a role more closely aligned with the Canadian housing market. As a result, she entered the mortgage industry four years ago at Paradigm Quest, where she manages the white-label mortgage product for Verico Financial Group.

Arviko brings to her role an under­ standing that being a great BDM requires more than just customer service and product knowledge.

“A BDM has to empathize with their clients and be willing to take the steps necessary to ensure a seamless mortgage review and approval process for their

28

clients,” she says. “[You must] identify strategies and act to help your clients grow their business at every opportunity.

Finally, be prepared to go above and beyond for not only your clients, but also for the end client. You will then develop long-term relationships, and you become the first person they call when a live deal hits their desk.”

Taking those qualities to heart, Arviko endeavours to be a valued resource to her broker partners, providing consistent service levels in all her relationships.

“My goal is to be top of mind when a client is questioning where they should send a deal, even if that means I ultimately have to recommend a competitor’s program that would better suit the end client,” she says. “I view this as a true partnership, where together we are working to assist people in their dream of becoming homeowners or obtaining their dream home. It’s an incredibly rewarding and honourable role.”

www.mortgagebrokernews.ca

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30/11/2017 8:45:46 AM

COREY MASSI MCAP

Whether it’s working through tight deadlines or one of the many other roadblocks that can derail the mortgage process, Corey Massi has proven his dedication to his clients time and again, making sure to always be on call and ready to go the extra mile.

Boasting more than 20 years of expe­ rience in the financial services industry, Massi has served in a BDM role for the past 10 years. Prior to joining MCAP, he held roles at Scotiabank, Avco/CitiFinancial and CIBC/Firstline Mortgages.

During that time, Massi has learned how to find balance as a BDM. “A great BDM

has to be a knowledgeable strategist – someone who can both tow the company line and be ‘the broker’s voice’ diplomatically,” he says. “My ability to listen to the challenges and needs of my clients, and then strategize across various products and policies to find the best solution, is something I pride myself on. Asking lots of questions lets me help brokers package deals effectively.”

Massi developed his approach to his role by watching his father. “My father has always been an inspiration to me,” he says. “He was a small business owner, factory worker, father of three and a husband. He managed to do it all – I don’t know how – with honesty, integrity and kindness.”

www.mortgagebrokernews.ca

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30/11/2017 8:45:52 AM

FEATURES

SPECIAL REPORT

BONNY CLARKE ICICI Bank Canada

In 1997, Bonny Clarke started her career as a BDM with a major monoline lender.

For 17 years, she served in various roles in the West and Ontario before moving to ICICI Bank in 2014, where she managed the Prairies until taking over the British Columbia region in 2016.

This past year, Clarke navigated the industry’s changing landscape by

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“understanding what we do and what other companies do as well,” she says, as well as maintaining “great relationships with other BDMs and directing brokers to them when it doesn’t fit the ICICI box. My role is not rocket science – it’s answering the phone and returning emails to assist brokers in getting files done.”

Throughout her career, Clarke has served on both the AMBA and MPC boards, and she was recently named chair elect of the Real Estate Council of Alberta.

30/11/2017 10:26:36 AM

SAM SAMADI CMLS Financial

APRIL MORIN Merix Financial

April Morin has been part of the Merix family for eight years, primarily working in Atlantic Canada. One broker partner describes Morin as “always there to try to help her brokers put a deal together … she makes you feel like you are her only broker.”

To earn her brokers’ trust, Morin focuses on “being available for questions, communicating and responding in a timely manner, understanding brokers’ challenges in today’s market, and sharing niches that can help build their book of business in our changing marketplace.”

Morin attributes her success to the relationships she has developed with brokers, while also recognizing the role her team plays. “It takes more than one person,” she says. “You can’t do it alone, and my operations team works super-hard.”

Sam Samadi started his mortgage career as an underwriter in 2006 before moving into a BDM role in 2010 in order to expand his abilities and knowledge of the mortgage industry. “This role gave me a whole new insight into working with mortgage brokers and a whole new level of understanding of the mortgage submission and approval process,” he says. In 2014, he took his skills and experience to CMLS Financial.

During the past year, Samadi has employed a strategy that has made the new mortgage landscape easier to navigate. “I think we as a collective group – lenders and mortgage brokers alike – are still getting used to the new normal that 2017 has presented us,” he says.

“By far, the most important strategy I employed was to become a student of mortgages again. This meant I had to educate myself on the recent changes and familiarize myself with how these changes would impact our business and mortgage consumers moving forward. Only when I knew the details could I confidently articulate them to my mortgage broker partners in a way they could understand.”

Samadi mentions listening and communicating as key qualities for BDMs to possess, recognizing that effective communication is critical for BDMs who are the ‘face’ of their organizations. “It’s one thing to know what the answer is,” he says, “but it’s a completely different thing to communicate that answer back to your mortgage broker partners in a way so they can explain it to the average mortgage borrower. That takes practice.”

Crediting his “great peers and leadership group” for giving him an advantage in his role, Samadi was recognized as finalist for Lender BDM of the Year at this year’s Canadian Mortgage Awards.

www.mortgagebrokernews.ca

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30/11/2017 8:46:18 AM

FEATURES

SPECIAL REPORT RON GRONKOWSKI Scotia Mortgage Authority

For the past 14 years, Ron Gronkowski has been a business development manager with Scotia Mortgage Authority, where he has enjoyed great success as the company’s top-performing BDM nationally. He started as a mortgage underwriter in 1990, spending the majority of his career in the broker channel, along with a few years in credit risk management.

In a highly relationship-based business, Gronkowski is grateful for the professionalism and expertise of the many brokers and agents he has worked

JESSICA FITZPATRICK Merix Financial

A dynamic business development professional with experience in sales, customer service, training, support and marketing, Jessica Fitzpatrick thrives on challenge and is passionate about helping business owners and entrepreneurs succeed by offering customized solutions.

For the past three years, Fitzpatrick has called the Canadian mortgage broker industry home. In 2015, she took on the role of director of business development

32

with over the course his career. He believes being a great BDM boils down to three simple qualities: knowledge, relationship focus and respect. “Know your business better than anyone else, understand your customers’ and business partners’ needs, and treat everyone you deal with respect, including respecting the time demands they all face,” he says.

Despite the challenging mortgage environment this year, Gronkowski has remained successful thanks to his industry experience, knowledge and communication skills. “Be aware and knowledgeable of industry and economic changes/trends, and always focus on the needs of the customer,” he advises. “The rest will follow.”

for Merix Financial, quickly progressing from an inside sales to an outside sales position. She’s currently responsible for Southwestern Ontario for Merix, Lendwise and NPX. Fitzpatrick acknowledges that 2017 has been a challenging year. “Continually educating myself so that I can then pass along my knowledge to my broker partners is a key to success with the continually evolving mortgage rules,” she says. “I’m thankful to be able to provide a number of solutions to accommodate homeowners, from the A space with the Merix and Lendwise brands, all the way to alternative lending with NPX.” Prior to Merix, Fitzpatrick was with a charity for more than five years, where she was responsible for outreach, fundraising, educating and managing events. She also donates her time to various charities and causes, including the Special Olympics, where she volunteered as a swim coach.

“I strive to do my very best every day, reminding myself that ‘I can and I will’ accomplish whatever I put my mind to,” she says. “Dory’s ‘just keep swimming’ attitude from Finding Nemo pops into my head on the most challenging days and helps me dig a little bit deeper for my broker partners.”

RICHARD RICHARDS First National Financial

After earning a degree from BCIT, Richard Richards had plans to become an aircraft technician, but “fortunately that industry was down at that time, and the next lucrative option was mortgage financing,” he says. “Very few people wake up and say, ‘I want to be a mortgage broker or a business development manager,’ or to be in this business at all, but am I ever glad that I am.”

Richards joined the industry in 2006, first serving as an underwriter and internal account manager before moving into his current role as account manager/ business development manager.

“I am always willing to help, regardless if you are an agent or broker in or outside of my territory,” he says. “This also means pointing them in the right direction, whether it’s my deal or another lender’s.

I have been called ‘politely persistent’ – I don’t easily give up and always treat people the way I want to be treated.

Relationships are key, and to genuinely care for my brokers’ and agents’ business is the secret to my success.”

www.mortgagebrokernews.ca

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30/11/2017 8:46:51 AM

MIKE AYOUB Home Trust

For the past seven years, Mike Ayoub has been a BDM for Home Trust in Atlantic Canada. Since he joined Home Trust, Ayoub has been nominated as BDM Newcomer of the Year at the 2012 Canadian Mortgage Awards, in addition to being recognized as a Top BDM by CMP for two consecutive years.

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“Not many people can say they love what they do, but I can,” he says.

“Interacting with my brokers is the best part of my job. I truly love getting up every day and going to work.”

Ayoub’s passion for the industry manifests itself in top-notch service for his broker partners. “My brokers know they can reach me at any time day or night, seven days a week,” he says. “My brokers work 24/7, so why shouldn’t I?”

30/11/2017 8:48:52 AM

FEATURES

SPECIAL REPORT SUZANNE FLEUR DE LYS-AUJLA Equitable Bank

Suzanne Fleur de Lys-Aujla has worked as regional business manager in British Columbia for Equitable Bank for just over a year, and during that time, she has continually smashed her monthly sales targets.

With a passion for the mortgage industry in British Columbia, Fleur de Lys-Aujla thrives on building relationships.

Her peers recognize her for her dedication, collaborative efforts and advocacy on behalf of the issues affecting the mortgage industry in BC. “I really care about my clients’ business, and they know that,” she says.

A firm believer in giving back, Fleur de Lys-Aujla has served on numerous industry committees over the years. She is currently an active member of the CMBA-BC/MBABC and Mortgage Professionals Canada. She is also involved with several social media groups, such as I Love Mortgage Brokering and Mortgage Brokers Get Serious, and is a co-founder of Women In the Mortgage Industry, which has more than 3,300 members nationally. In addition, she is co-founder of the BC Lender’s Group, a coalition of industry partners that supports mortgage brokers provincially via lender ‘speed dating’ events and informative day-long education sessions.

34

STEVE FUTYER

PINO MUCCI

Equity Financial Trust

Scotia Mortgage Authority

Steve Futyer operates under the motto “If it’s important to you, then you will find a way. If not, you will find an excuse.” With more than 20 years of work experience in the financial services sector, including 14 years in the prime and alternative lending spaces, Futyer worked for Berkshire Securities as a branch manager and financial planner before becoming a business development manager for several lending institutions.

“I always pride myself in servicing my brokers by providing quick responses and a solution-oriented approach in helping brokers get deals done, understanding that brokers don’t earn a living unless the clients deals get funded,” Futyer says.

“This approach helps me to be very disciplined and organized so I can be as proficient as possible to be there for my brokers and point them in the right direction, even when our institution cannot help their clients.”

Pino Mucci started his career in retail banking in 1991, working for a small trust company and later with major financial institutions, including TD and CIBC. After many years in retail banking, Mucci became a mortgage agent, underwriting for small and large broker houses, acquiring extensive experience working in high-volume environments and managing unique mortgages, as well as commercial lending. Now as a BDM with Scotia Mortgage Authority, Mucci works with agents to find the right mortgage solutions.

“My background, knowledge in different areas of banking/lending, and the relationships I’ve been able to nurture with colleagues and brokers have all contributed to my success today,” he says.

For Mucci, knowing your audience, keeping your agents informed and setting proper expectations and requirements for success are the fundamental qualities of a good BDM. “While at times [the job can be]

overwhelming, much of my success comes from constant communication with my team and keeping agents/brokers up-to-date with policy changes, capacity and processing timelines,” he says. “Ultimately, it’s about the relationships you have with a clients and the support you receive from your team. If you have a great team with the right management support and positive relationships with the various departments you work with daily, this will translate into a better experience for your clients.”

www.mortgagebrokernews.ca

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30/11/2017 8:49:04 AM

JACKIE MATTHEW Optimum Mortgage

Born and raised in Greater Vancouver, Jackie Matthew possesses a passion for and thorough knowledge of her territory.

Following post-secondary school, Matthew went straight into the mortgage industry to become a broker. She leveraged that experience to start her own brokerage, which she ran for 10 years. At her brokerage, she worked in both the A and B spaces, and also had a small portfolio of private lenders.

Matthew has also worked with HLC as a B mortgage specialist and with RBC Alternate Mortgage Solutions.

In 2010, Matthew joined CWB Optimum Mortgage as a BDM. Her unique approach

to business has allowed her to grow her territory significantly, and she has seen her team expand from a few employees in the Edmonton office to more than 100 staff nationwide.

“The most important strategy is putting people first, whether it be a broker or a client,” she says. “I’m always here to listen to any issues there are with a deal or to hear about a ballet recital. Building relationships is where I thrive, and I know the business will eventually follow. A great BDM is someone who makes every broker, underwriter or funder part of his or her team. They get to know each person on the team and ensure they listen. Together, everyone on the team will work together to find a solution for the client, which is the most important part.”

Email lender notes, application, and credit bureaus to:

deals@vwrcapital.com D IMITRI K OSTUROS

Chief Operating Officer dimitri@vwrcapital.com

P AULA H UTTON

BDM - Prairies paula@vwrcapital.com

www.mortgagebrokernews.ca

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30/11/2017 8:49:19 AM

FEATURES

SPECIAL REPORT LIVIA PELLEGRINO First National Financial

Livia Pellegrino epitomizes First National’s motto of “going beyond service.” She joined First National Financial in 2014, bringing 15 years of mortgage industry experience to her role as an account manager for Southwestern Ontario.

Formerly a commissioned mortgage sales agent for more than 10 years, Pellegrino has an inside track on how brokers operate their businesses and how they define success.

“I take pride in my territory and the great responsibility my company has given me to manage this account and all the wonderful brokers in my portfolio,” she says. “I’m an entrepreneur at heart, and I am motivated to grow this territory like it was my own business to ensure that it is profitable, efficient and productive for both my brokers and my company.”

Pellegrino’s prior experience as a mortgage agent has given her a thorough understanding of the importance of urgency and timing. She works closely with brokers on applications, providing as many solutions and options as possible for them and their clients.

“Partnering with my brokers to get

TIM HURLBUT Alta West Capital

Tim Hurlbut has been in the industry since 2007, starting as a mortgage agent before moving into business development with Alta West Capital in 2013. For the last four years, he has contributed to the company’s national expansion. This year, the Alberta Mortgage Brokers Association recognized Hurlbut as Volunteer of the Year for his contributions to his clients and community.

“Tim has always supported me and my clients,” a broker partner says. “He has saved my files from the fire on a number of occasions, and I will always be grateful.

36

their deals approved is deeply satisfying,” she says, “but the true sense of reward and accomplishment comes from knowing that I just helped their client achieve their greatest financial goal of homeownership.”

In light of the government’s mortgage rule changes of 2016 and 2017, education continues to be an important key for Pellegrino to maintain successful relation­ ships with brokers. She believes that more than ever, it is imperative that brokers are up-to-date on government and lender policies to save themselves time and set reasonable expectations for their clients.

He is a true industry player.”

Hurlbut’s attitude and willingness to change with the times, such as embracing social media, have elevated him above the competition. In addition to his social media savvy, he credits lower prices and an expanded lending area as a few of the top contributors to his success in 2017.

HALI NOBLE Fisgard Asset Management Corporation

A founding director and SVP of residential mortgage investments and broker relations at Fisgard, Hali Noble has spent her entire career in the Canadian housing industry as a Realtor, mortgage broker and mortgage lender.

With 25 years at Fisgard under her belt, Noble’s experience, values and integrity ensure the company’s customer service levels are of the highest standard. She and the Fisgard team maintain a high level of internal communication to ensure consistency in communication and equal fairness in their broker relationships. For Noble, being a top BDM means “being responsive, doing more than just pushing product, being an educator and mentor, setting a high bar for professionalism, and giving alternative options, even if it means sending the broker/deal to anther lender.”

A supporter and promoter of the mortgage industry, Noble has been extensively involved in various industry organizations, having served as president of MBABC, as well as chair of Mortgage Professionals Canada. She has been inducted into the Canadian Mortgage Hall of Fame, was awarded with the MBABC Pioneer Award for Lifetime Achievement in the Mortgage Industry and was named BDM of the Year by Mortgage Professionals Canada in 2016, among other achievements.

www.mortgagebrokernews.ca

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30/11/2017 8:50:06 AM

DONNA RACHEL Street Capital Bank of Canada

Boasting nearly 20 years of mortgage industry experience, Donna Rachel serves as the regional vice-president for British Columbia’s Fraser Valley at Street Capital Bank of Canada. Rachel started her BDM career with Firstline Mortgages in 1998 and moved over to Street Capital in 2012. Prior to these roles, she worked at a national bank as a branch manager with a focus on mortgage sales.

“I am truly passionate about what I do,” she says. “I have the highest amount of respect and pride for the brokers I work with.”

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30/11/2017 8:49:52 AM

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30/11/2017 2/11/2017 8:51:20 4:42:45 AM AM

PEOPLE

BROKER INSIGHT

The power of a good referral Chris Allard of Ottawa-based DLC Smart Debt tells CMP how he’s relied on referral partners to grow his business and how recent government interventions have affected his clients

CMP: What made you first get into the mortgage broker industry?

Chris Allard: Like most mortgage professionals, I did not plan on being a mortgage broker. While I was in university, I met a friend of a friend who was talking about his boat, penthouse and big SUV. I quickly realized I wanted all of those things! So I asked him what he did, and Andrew – who is my colleague today – said, “I’m a mortgage broker.” In that fluke of an evening, I signed up to do the licensing and became a mortgage broker a few months later.

My father used to be a bank branch manager and worked at CMHC and Beneficial in private financing, so the mortgage industry was table talk when I was growing up. It was definitely something I knew of and understood, and that probably made entry into the business easier for me.

CMP: How would you describe your time in the industry?

CA: I love the industry. I love chatting with people, whether that’s borrowers or referral partners. A big part of my business has been built on the customer service side.

That means giving people quick responses, answering the phone and responding to emails in a matter of minutes. It’s why so many Realtors and financial planners refer business to me – purely because I answer the phone, get answers quickly and get files approved.

40

CMP: You’ve achieved a lot in a relatively short time. To what do you attribute your success?

CA: I was 21 when I became a mortgage broker, and you can imagine that most people probably wouldn’t want to take advice from someone of that age. But the same person who brought me on, Andrew, was a mentor and taught me how to speak with referral partners. That was a key part of my success in the beginning. From there, I have built strong friendships and relationships in the industry, mainly because I enjoy my job so much.

CMP: How have you seen the Ottawa market shift in recent years?

CA: I have seen a shift this year with many more first-time homebuyers being able to put 20% down after being gifted funds from their parents. My assumption is that because insurance premiums have increased from 2.7% to 4%, parents have chosen to get more

involved. A couple of years ago, a first-time homebuyer could buy in central Ottawa, but we are starting to see that many don’t have large enough down payments to do that.

They either need a bigger down payment or a co-applicant.

CMP: How have your clients reacted to the latest interest rate change?

CA: I’ve not seen many clients rush into buying in order to secure a preapproved rate. However, the phone did ring with a lot of questions on whether a fixed or variable mortgage is best right now. It’s good that clients are looking into their finances, and I think that is due to the fact that we share a lot of information and explain how they will be impacted from the rate perspective.

I would say the biggest difference we’ve seen in the last couple of years has been caused by the qualifying rate of 4.84%, not so much the rate increases.

ALLARD’S TIPS FOR OTHER BROKERS “Communication is key to our success in the brokerage world. Keep your clients and referral partners in the loop with how the file is progressing. Email is great, but getting on the phone and having a conversation with your borrower and educating them is really where you are going to gain clientele. Not only is that client going to be happy with your service and stick with you, but they are also going to refer friends and family. The best tool in our industry is the telephone.”

www.mortgagebrokernews.ca

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30/11/2017 8:51:50 AM

FAST FACTS: CHRIS ALLARD

Has worked at Dominion Lending Centres Smart Debt for six years

Based out of The Glebe, Ottawa

Closed more than 100 mortgages in 2016

Was one of the DLC network’s top 50 brokers in April 2017 in terms of mortgages funded

“A big part of my business has been built on the customer service side. It’s why so many Realtors and financial planners refer business to me – purely because I answer the phone, get answers quickly and get files approved” CMP: What are your views on the recent tightening of mortgage approval rules?

CA: I understand that the government wants to mitigate some risk; however, I find that they have created a scenario in which people who earn a low to medium income can no longer buy.

That means we are creating a bigger

spread between individuals who have money and those who don’t have as much, which is the exact opposite of what the government says the rules were supposed to do. A single person can no longer afford to buy a townhouse, so instead a wealthy investor buys it and rents it out to them. Lower- or medium-income people can’t get ahead based on these new rules.

Named one of CMP’s Young Guns in 2017

Serves on the board of advisors for the Entrepreneur’s Club at the University of Ottawa’s Telfer School of Management

Prior to becoming a mortgage broker, co-owned a painting company and an entertainment business geared toward university students

www.mortgagebrokernews.ca

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30/11/2017 8:51:57 AM

SPECIAL PROMOTIONAL FEATURE

ALTERNATIVE LENDING

A new way to access equity If your clients are considering a home equity line of credit, here are three situations where they could benefit from a Home Trust Equityline Visa instead THE PRICE gains experienced in several real estate markets in recent years have put many Canadians in the enviable position of having considerable equity in their homes.

Not surprisingly, some of these homeowners are looking at strategies to access the wealth they have accumulated.

Because an equity-based loan is secured to a property, the interest rate is generally lower than an unsecured loan or even a personal line of credit. This can make an equity loan a cost-effective way for your clients to finance home repairs and renovations, fund a business venture, or even pay for a significant expense such as a child’s education.

With a home equity line of credit [HELOC] loan, it is possible to borrow up to 80% of the home’s value, minus the remaining balance on the mortgage. The borrower can also access the HELOC as needed rather than taking a lump sum upfront.

A HELOC alternative Of course, there are other ways to access this equity besides a HELOC, and for many Alt-A clients, the highly flexible and versatile Home Trust Equityline Visa [ELV] is an option worth considering. The Home Trust Equityline Visa is a specialized Visa credit card secured by a mortgage against residential property. Because it is secured through a physical asset, the interest rate for the Home

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Trust ELV is much lower than a standard credit card and is in line with other types of secured loans.

This makes the Home Trust ELV an ideal way to finance a renovation project, start or expand a small business, or consolidate debt.

The Home Trust ELV is a form of revolving credit that allows the cardholder to charge any amount up to the approved limit; once repaid, that portion can be redrawn again as needed. The Home Trust ELV is fully open and, just like a standard mortgage, it can be placed in either a first or second position.

In addition, the Home Trust ELV offers other unique advantages not available with a HELOC. For instance, the Home Trust ELV offers 1% cash back on all purchases made with the card; for large expenditures such as a renovation, this could be a significant reward. The Home Trust ELV is also accepted by most retailers and can be used for everyday purchases.

The following examples illustrate three scenarios ideally suited for a Home Trust ELV:

SCENARIO 1 Borrowing to expand a personal business Just over a year ago, Jordan launched his own contracting business after working as a supervisor for a well-known construction company. He has enjoyed considerable success with this new venture, but to expand

further, he needs to invest in new equipment.

Jordan intends to borrow against the equity in his home to provide the $100,000 he needs to purchase this equipment. His home is valued at $840,000 with an outstanding mortgage of $430,000, leaving him $410,000 in total equity. Adding another $100,000 to the current balance would increase his total LTV to just over 63%.

However, because Jordan is now selfemployed, he could find it difficult to qualify for a loan through one of the major banks.

Home Trust, on the other hand, has a long history of lending to those in business for themselves – so, for your self-employed clients, the Home Trust ELV should be at the top of your list of potential solutions.

The flexible repayment structure of a Home Trust ELV also gives Jordan unprecedented control over his finances. He can chose to pay only the monthly minimum payment or any amount greater than the minimum.

He may also, at any time, pay down the entire balance without penalty.

SCENARIO 2 Funding a major renovation project Anil and Priya live in a home valued at $680,000, with a balance of $390,000 remaining on the mortgage. They plan to turn their basement into an in-law suite and expect they will need about $75,000 to complete the construction, which they intend to borrow using the equity in their home.

Taking out a second mortgage for $75,000 would increase their total LTV to just over 68%, so they are well within the 80% limit.

While they both have stable employment, a large part of Anil’s income comes in the form of commissions based on meeting quarterly sales targets, so his income does tend to fluctuate. In addition, they’ve both had some late payments, and this has reduced their credit scores into the ‘fair’ range and could make it difficult for them to obtain additional financing through their bank.

For clients facing a similar dilemma, Home Trust’s ELV can provide a cost-

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30/11/2017 8:52:49 AM

HOW TO APPLY FOR A HOME TRUST EQUITYLINE VISA Applying for a Home Trust ELV is similar to applying for a mortgage. The documents required as part of the review process include: Latest property assessment and property tax assessment Income verification matching Home Trust’s existing mortgage application requirements Inventory of current debt, complete with outstanding balances, interest rates, terms and payment amounts, for all other loans and credit cards

effective means for them to get the funds they need. For those with non-standard income contracts, as is common in sales and other target-driven occupations, Home Trust will take the time to consult with your client to fully understand their unique circumstances.

Whereas the major banks may simply dismiss your client’s application, in most cases, and with the appropriate supporting documentation, Home Trust can resolve even the most challenging application.

SCENARIO 3 Consolidating highinterest debt and rehabilitating credit John and Michelle have had some credit issues as a result of recent job losses, and this is reflected in their credit scores. John has a relatively weak 580 score, while Michelle’s is only slightly better at 582.

Both are back at work now and are hoping to secure $100,000 to pay off roughly $70,000 in high-interest debt. This was accumulated during their extended period of unemployment and consists largely of credit card debt and personal lines of credit. They also have an urgent need to provide financial assistance to their son, who is about to start his first year at university.

The couple is fortunate to have considerable equity in their home, and they have plenty of headroom under the 80% LTV cap. However, because of their recent credit issues and the fact that they have accumulated so much debt, their bank is not willing

to refinance their mortgage.

Rather than directing a client in this situation to a private lender, the Home Trust ELV can provide the money this couple needs at a far more reasonable rate. Even with their past credit concerns, if they can demonstrate they are addressing these issues, and with their equity as security, Home Trust will recognize the strengths in the deal during the underwriting process.

It’s also important to note that unlike private lenders, Home Trust’s ELV reports to the credit rating agencies on a monthly basis. Clients maintaining their Home Trust ELV in good standing will begin the process of rehabilitating their credit score, helping to put them back on the path to repairing their credit.

For any questions about how you can use a Home Trust Equityline Visa to help your clients, please contact your Home Trust BDM.

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SPECIAL PROMOTIONAL FEATURE

ALTERNATIVE LENDING

Constant state of change Many brokers are still wondering what the latest OSFI regulations will mean for their clients. Lester Shore, SVP and regional general manager at CWB Optimum Mortgage, sheds some light on what brokers can expect in the new year

IN OCTOBER, the Office of the Super­ intendent of Financial Institutions [OSFI] released an update to the revisions of B-20 regulations it released last year. The revised guidelines, which come into effect on January 1, 2018, apply to all federally regulated financial institutions [FRFIs]. As the market prepares for these changes, there is some uncertainty around what they will mean for brokers and lenders.

At press time, we still have a lot of ques­ tions about the revisions. Like most lenders, we will be getting clarification about the changes by the middle of December. As your trusted alternative lending partner, we wanted to break down what we know at this point about the revised mortgage rules and share how they will affect you and your business at Optimum.

What caused these changes?

The changes to guideline B-20 reinforce OSFI’s expectation that federally regulated mortgage lenders will remain vigilant in their mortgage underwriting practices. It’s important to note that the 2008 financial crisis in the US was caused primarily by poor underwriting prac­ tices and fraudulent mortgage documents presented by mortgage brokers. We believe

44

the government is continually implementing changes to prevent that from happening again.

There are four components of this guide­ line that we foresee impacting brokers in the alternative space: A new minimum qualifying rate for uninsured mortgages – the ‘stress test’ A requirement for lenders to enhance their LTV measurement and limits so they are dynamic and responsive to risk Restrictions on certain lending arrange­ ments (what B-20 is now referring to as ‘co-lending arrangements’) that are designed, or appear to be designed, to circumvent LTV limits A rigorous approach to income verification

What do the changes mean for CWB Optimum Mortgage?

Just like other FRFIs, we are still interpreting these new guidelines. We do have some insight into how we will handle each issue individually, but only time will tell how some of these will play out.

The stress test During visits to broker offices over the last two months, I’ve heard a lot of concerns about the stress test. Prior to this change, uninsured borrowers would qualify for debt service based on the five-year benchmark rate. The new guideline requires qualification using the contract rate plus 2%, or the Bank of Canada’s five-year benchmark rate, whichever is greater.

In response, many lenders are considering extending their amortizations to reduce the monthly payments made by borrowers, which will reduce GDS/TDS calculations, but we will not take this approach. What brokers need to do is understand their lenders’ debt service appetite and their GDS/TDS limit.

We have always been very competitive from a debt servicing point of view, as long as we are satisfied that the proposed debt is affordable.

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conditions in each province. Parameters are set from region to region, but we take a commonsense approach to set the appropriate LTV for your client’s individual needs.

Restrictions on lending arrangements B-20 defines ‘co-lending’ as an arrangement between an FRFI and another lender for a mortgage, or a combination of a mortgage and other lending products (secured by the same property) that circumvents the FRFI’s maximum LTV ratio or other limits. As a result of this change, our Opti-85 program will no longer be available. Whether we can do an advance with a second lender where the total encumbrances (first and second) exceed 80% LTV is yet to be determined. We will provide more clarification by the end of the calendar year.

A rigorous approach to income verification

“For deals that made sense before January 1, we will do our best to make those same deals work after January 1” Lester Shore, CWB Optimum Mortgage

B-20 now requires a ‘rigorous’ approach to income verification; prior to this change, it required a ‘reasonable’ approach to income verification. From our point of view, the approach we currently take is rigorous. If you’ve worked with us before, you know we ask for a lot of documents throughout the submission process. The nice part of this is, we suspect there won’t be any changes required because we already exercise rigorous due diligence. But stay tuned – we will know more after our meetings in December. If anything changes, you’ll be the first to know.

What can brokers do?

Each deal will still be considered on its own merit and circumstances, so please continue to work with your underwriter on every deal. Our expectation is that you are satisfied that your client can afford to repay the mortgage, and this should show in the supporting documents.

For deals that made sense before January 1, we will do our best to make those same deals work after January 1.

What will the impact of this change be?

We suspect it will have similar repercussion as

last year’s stress test, which was applied to the insured market. Some A borrowers will flow into the alternative space, while some alternative clients will move into the private sector.

Responsive LTV measurements and limits This component of the revised rules is something CWB Optimum Mortgage has always done, so it should not affect your business with us. We review each of our markets on a frequent basis, and we adjust LTVs based on market

First and foremost, brokers need to accept the change. Tighter rules give way for different opportunities. You also need to understand what your lender requires. Ensure you have a completed package at the outset of your deal submission to alleviate any headaches along the way.

If you have chosen to only work with one lender in the past, I recommend you start packing your toolbox with a few more tools to find solutions for your clients. As a result

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SPECIAL PROMOTIONAL FEATURE

ALTERNATIVE MORTGAGES

of these regulatory changes, more and more clients are now entering the alternative market, and you need to be their trusted resource. By guiding your client, working with your lender and packaging deals properly, you can put yourself ahead of the curve.

Manage your clients’ expectations and keep them (and your lender) aware of every single step in the process. By taking these steps, customer loyalty will increase, and along with it will come increased referrals, more repeat business, significantly improved

close/efficiency ratios and, most important of all, reduced stress for you and your client.

These steps will allow for a smooth, quick and hassle-free experience.

The team at Optimum is here as a resource for you. If you have any questions, please reach out to your BDM. They will be able to assist you or help you find the answers. Thank you for your ongoing patience while we adjust our business to these new rules. We look forward to continuing to be your trusted alternative lender throughout this changing landscape.

OPTIMUM’S DOCUMENTATION REQUIREMENTS

BRUISED CREDIT

CONFIRMABLE INCOME

SELF-EMPLOYED

PLUS ONE OF THE FOLLOWING INCOME DOCUMENTS

46

Evidence of selfemployment

Self-declared letter

Bank statements

Obtain details about selfemployed borrowers: • Tenure • Nature of their business • Operating name • Business address (PO boxes not accepted) • Gross earnings (for previous year and expected for current year)

Business bank statements are required to confirm: • Cash flow of the business • Affordability and reasonability of income • May consider personal bank statements for sole proprietors (if applicable)

The following items can be used as evidence of selfemployment: • Valid business licence • GST number • Articles or certificate of incorporation • Business financials • Corporate search

Employment letter

Pay stub

Verbal confirmation

Must meet the following criteria: • Dated within 60 days • Position title • Start date • Income details • Signed by HR or HR agent on company letterhead with contact information to complere a verbal employment verification

Must meet the following criteria; if pay stub is a nontypical format, additional supporting documentation may be required: • Dated within 60 days • Employer name • Employee name • Regular earnings, deductions and YTD earnings are evident

A verbal employment verification call will be completed within 30 days of funding date; loss of employment may nullify our offer

Confirmation of satisfactory repayment of mortgage or rent

Repayment history of account operation

Bankruptcy/consumer proposal documentation (if applicable)

• Six to 12 months of bank statements from main account demonstrating satisfactory account operation • Evidence that the account is being managed in a reponsible manner with minimal returned payments

• Bankruptcy discharge documentation • Statement of affairs to show debts and number of times client has filed for bankruptcy • Letter from trustee, confirming payment history with debts included

• Six to 12 months of bank statements demonstrating statisfactory rent or mortgage repayment history • Borrower must provide complete and recent bank statements illustrating satisfactory mortgage or rent payments made in a timely manner

Business financials

T1 General • Used to validate income, support the nature of the business and show self-employed expenses • Must be most recent and full copy; summaries not accepted • Must include statement of business • If it shows BFS income, may also be used for evidence of BFS

• Must be prepared by a licensed accountant • May be used as evidence of BFS if a company name is evident • A corporate search will be completed to confirm that the company is active and borrower is a director • Must be most recent and full copy

Contracts Contracts wil be considered if the self-employed borrower sources the majority of their income from one contract source and the detailed contract is provided

Miscellaneous items that may be required: • Child tax credit • Universal tax credit • Child support • Alimony support • Separation agreement • CPP • OAS • Employer pension We can accept two to three months of bank statements for the following items. Pay notice may be required if deposits are not consistent: • Reserve fund study/deprecation report (AB/BC/SK) • AGM

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PEOPLE

CAREER PATH

WORKING HIS WAY UP

Deren Hasip has come a long way since his days as a teenage bank teller Born in Mississauga to an immigrant family, Hasip’s childhood included eight years in Cyprus, where he excelled at math “I was a math geek; I was quite advanced when I came back to Canada. My dad said he thought I would make a great banker. While I was in school, I worked at the branch down the street, starting as a teller. When I graduated, I was promoted to financial advisor”

1980s

FALLS IN LOVE WITH MATH

1998

STARTS AS A FINANCIAL ADVISOR

2001

TAKES OVER A BRANCH

Hasip’s move into the role of business advisor with CIBC indirectly led to him taking on the position of branch manager a year later “The job involved supporting four different retail branches; one of them came to need a branch manager. I knew that I needed some experience in retail management if I was going to take my career to a new level. CIBC gave me their blessing, and I moved into the role. It was an incredibly valuable experience”

2004

GOES TO THE HEAD OF THE CLASS Hasip’s nascent desire to teach was nurtured by a client connected to George Brown College, who gave him the opportunity to lead a continuing education course “He said he needed people who were credible and had expertise. It was incredibly valuable and a great learning experience that gave me skills I needed later for training mortgage specialists”

2015

MAKES HIS OWN WAY Hasip reached his longtime goal of starting his own business when he founded Mortgage Scout with a mission to bring a higher level of professionalism and accountability to the mortgage world

“My partner was the missing piece I needed.

To influence, you need both know-how and social proof; he was the social proof. We knew we had the formula to help people achieve”

Hasip’s first full-time job ignited his competitive nature as he encountered the realities of starting his career in an industry where age is often equated with wisdom “People don’t want to take advice from a 20-year-old. The more grey in your hair, the greater your credibility. I had no grey – I had highlights and an earring. I had to work harder and be more professional. I wanted to be one of the best; by the time I left, I was number one in that branch and ranked in the top 1% of the GTA region”

2002

MOVES INTO MORTGAGES After refusing several attempts by colleagues to recruit him as a mortgage specialist, Hasip had a change of heart “The opportunity to do management was incredible, but I spent more time generating leads than functioning as a manager. I thought if I was going to be doing that anyway, I should be paid [a commission]. I was 23 years old – I got bored easily, I needed new challenges, and I felt I needed to move on”

2005

BUILDS A TEAM As a regional sales manager for TD Bank, Hasip was charged with building a new team – one that would eventually become one of the top teams in the company “You have to win the trust of one person at a time – you have to earn their respect, their trust. It’s like herding cats. My ability to lead a team helped me make that transition. I had to prove to my team that I had a vested interest in them doing well.

We all achieved great success”

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PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email mortgagebrokernews@kmimedia.ca

a n n hrea es Ho ss m th s e rveddounri n g h e r s hi p s i n t h e t i m e di a n Fo rce s Ca n a

19

The most days Hossmann has spent consecutively at sea

7

Height, in meters, of the highest swells Hossmann has experienced

4–8

Hours per week Hossmann commits to drills, parades and training

IN THE NAVY Vancouver-based broker Cari Hossmann is no stranger to life at sea GROWING UP in an Air Force town, Cari Hossmann spent most of her childhood aspiring to wear the uniform of her country – so it was little surprise when she signed up to join the navy within weeks of her 18th birthday.

Today, Hossmann splits her time between the navy and arranging mortgages for Vancouver-area buyers. But

during her 15 years of full-time service, she was posted to points across the globe, from Syria’s Golan Heights, where she passed eight months in temperatures that often exceeded 40ºC, to the northernmost tip of Ellesmere Island in Nunavut, where she spent 137 days in complete darkness.

“It was -114ºC with the wind chill,” Hossmann recalls. “It was so cold, the

moisture in the air meant it snowed inside our buildings.”

While Hossmann has scaled back her navy career, she treasures her involvement and the sense of community it brings.

“Having a feeling of community is very important to me,” she says. “It’s part of who I am. I’m proud to be part of something that represents Canada internationally.”

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30/11/2017 9:07:49 AM

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