CMP 13.09

MORTGAGEBROKERNEWS.CA ISSUE 13.09 | $12.95

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Which lenders have kept pace in a challenging mortgage environment?

SYNDICATED MORTGAGE SHIFT

What brokers need to know about updated syndicated mortgage guidelines

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LENDERS IN THE SPOTLIGHT

The inside scoop on the latest innovations from Merix and XMC

A BREAK FOR BFS BORROWERS

How will CMHC’s relaxed rules for self-employed buyers impact the market?

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ISSUE 13.09

CONTENTS

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BROKERS ON LENDERS SILVER

SPECIAL REPORT

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Find out which lenders brokers named as industry leaders in everything from BDM and underwriting support to tech capabilities and interest rates

WHEN OTHERS SAY ‘‘NO WAY’’ WE SAY ‘‘HERE’S HOW’’.

Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $2.2 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $5M to $100M. Blake Cassidy or Pierre Leonard | 800 494 0389 | www.romspen.com

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LIVE: 7.5” x 2.875”

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ROMPSEN

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6/09/2018 7:48:01 AM

ISSUE 13.09

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

CONTENTS

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42 38

UPFRONT 04 Editorial

How CMHC’s new self-employed rules will affect brokers’ business

06 Statistics

Borrowers are doing little research before taking the plunge on a mortgage

08 Head to head

FEATURES

44

STAYING FLEXIBLE

CMP caught up with Merix Financial’s Boris Bozic to get a progress report on the Interest-Only Flex mortgage

Newly rebranded, XMC Mortgage Corporation is pushing forward with its mission to form rewarding partnerships with brokers

INDUSTRY ICON

In less than two decades in the mortgage industry, Joe Flor has risen to the top sales job at Equitable Bank – and he’s just getting started

12 Alternative lending update

Legal cannabis is set to have a major impact on commercial real estate

40

16 Opinion

Achieving true credibility will require taking a hard look at compensation

THE VOICE OF THE INDUSTRY

Dave Teixeira outlines how he’s raising the industry’s profile as head of communications at DLC

18

FEATURES 48 Five myths about purpose

Finding purpose at work means looking beyond some common misconceptions

52 Is too much flexibility killing productivity?

How to know if it’s time to put some limits on your flexible work policy

PEOPLE

FEATURES

44

CREATE A WINNING PRESENTATION

Three tips that will help you wow your audience every time

2

Why brokers might want to say no to syndicated mortgages

14 Commercial update

PEOPLE

PEOPLE

10 News analysis

Could self-employed borrowers soon find themselves in the prime space?

FEATURES

FULL SPEED AHEAD

In a rising rate environment, are variable-rate mortgages still best?

55 Career path

Rena Malkah has been through countless ups and downs during her four decades as a broker

56 Other life

Flying high kiteboarder Richard Smith

MORTGAGEBROKERNEWS.CA CHECK IT OUT ONLINE

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6/09/2018 7:48:44 AM

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6/09/2018 7:48:57 AM

UPFRONT

EDITORIAL

CMHC levels the playing field

T

he Canada Mortgage and Housing Corporation has finally delivered on its promise to level the playing field for self-employed borrowers.

Beginning October 1, new guidelines will jettison much of the rigidity self-employed borrowers have had to contend with in order to realize their dreams of homeownership.

Right now, for example, self-employed borrowers have to provide a note of rationale, even after proving they have operated a business or been in the same line of work for two years. Under the new guidelines, buyers will be able to prove their creditworthiness based on factors such as acquiring an established business, having sufficient cash reserves, previous training and education, predictable earnings, and a demonstrated history of managing credit. CMHC has also eased

The argument can certainly be made that CMHC is trying to win back market share with its amendments to these qualification guidelines rules around financial statements to allow for more types of documentation.

The relaxed rules extend to newly self-employed borrowers, too. Starting in October, this cohort will be permitted to prove their income using documentation based on types of income, recent account statements, business documentation and even signed contracts.

The argument can certainly be made that CMHC is trying to win back market share with its amendments to these qualification guidelines. Originations in the private channel have been surging since 2016, and from outward appearances at least, it looks like CMHC is trying to compete with the unregulated lenders.

Regardless, this is good news for the broker channel because there will be fewer hoops to jump through. Given the growth of entrepreneurship and the gig economy, it’s imperative that brokers have more tools they can use to help Canadians become homeowners – so this move by CMHC should be commended.

www.mortgagebrokernews.ca ISSUE 13.09 EDITORIAL Writers Neil Sharma Joe Rosengarten Libby MacDonald Ephraim Vecina Heather Turner Hannah Go Copy Editor Clare Alexander

CONTRIBUTORS Jason Armstrong Emma Bannister Aaron Hurst Anna O’Dea

ART & PRODUCTION Designer Pia Marie Tandog 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

The team at Canadian Mortgage Professional

Canadian Mortgage Professional is part of an international family of B2B publications and websites for the real estate and mortgage industries MORTGAGE PROFESSIONAL AUSTRALIA otiena.ellwand@keymedia.com T +61 2 8437 4787

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

6/09/2018 7:50:58 AM

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JEFF SAMPSON Your CENTUM Connection!

6/09/2018 7:51:11 AM

UPFRONT

STATISTICS

No time for homework

WHO’S DOING THEIR RESEARCH?

Who has time to compare rates and products when shopping for mortgages? Not everyone, apparently

BROKERS MUST play the role of educator for their clients. That’s the message driven home by a recent survey from LowestRates.ca, which revealed just how incurious many buyers are about the cost of their mortgage.

Across Canada, nearly a quarter of mortgage holders reported that they spent no time at all investigating and comparing the rates of various products. More than half of

respondents said they spent less than an hour looking into what was likely the biggest purchase of their lives.

So who does take the time to research mortgage products? The data suggests that the mortgage holders most likely to compare various rates and products are younger, have a higher level of education and most likely earn north of six figures.

Canadian consumers are generally perceived as rate-focused – yet 24% of Canadian mortgage holders reported devoting no time to researching and comparing interest rates for mortgage products. There were some notable provincial exceptions: Around a third of homeowners in BC and Saskatchewan reported spending more than four hours researching the options, while only 16% of Albertans said they did zero research.

CANADA Less than 30 minutes 30 to 60 minutes

15% 13%

1 to 2 hours

14%

2 to 4 hours

22%

6%

of Canadians said they spent more than four hours researching mortgage rates

spent more than four hours looking into auto insurance rates

5%

devoted more than four hours to researching credit card rates

14%

24%

No time

11% 22%

More than 4 hours

of Canadians logged more than four hours watching the most recent World Cup Source: Lowestrates.ca, July 2018

THE GENDER DIVIDE

YOUNG AND INFORMED

Women are more likely than men to eschew the task of comparing interest rates – a quarter of men who hold a mortgage report said they spent more than four hours doing research.

The younger consumers are, it seems, the more likely they are to arm themselves with information. A third of baby boomers reported not spending any time at all comparing mortgage rates and products, while 34% of gen x-ers and 41% of millennials said they spent at least a couple of hours researching their options.

No time Less than 30 minutes 30 to 60 minutes 1 to 2 hours 2 to 4 hours More than 4 hours

20% 17% 13% 14% 12% 25% Male

29% 13% 14% 15% 10% 19% Female Source: Lowestrates.ca, July 2018

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No time

30 to 60 minutes

2 to 4 hours

Less than 30 minutes

1 to 2 hours

More than 4 hours

13% 15% 12%

16% Age 35-54

Age 18-34

19%

Age 55+

25% AGE BRACKET Source: Lowestrates.ca, July 2018

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TIME CONSUMERS SPENT COMPARING MORTGAGE RATES AND PRODUCTS BRITISH COLUMBIA

26%

12% 10% 9% 12%

ONTARIO

31%

21% 16% 13% 8% 26%

26%

SASKATCHEWAN 32% 10% 34% 6% 19%

QUEBEC 15% 14% 16% 16% 8%

31%

ALBERTA 16%

17%

17% 14% 18%

19% ATLANTIC PROVINCES

MANITOBA

50%

10%

30%

40%

14% 11% 17% 4% 24% Source: Lowestrates.ca, July 2018

FINANCIALLY SAVVY

EDUCATED BUYERS

Is income level a marker of financial acuity? Perhaps – the higher a mortgage holder’s income bracket, the more likely they were to spend more than four hours investigating mortgage options. In contrast, the group most likely to say they spent no time hunting for the best deal were those earning less than $50,000.

Those with a university degree were much more inclined to spend hours educating themselves on mortgage options.

No time

30 to 60 minutes

2 to 4 hours

Less than 30 minutes

1 to 2 hours

More than 4 hours

Less than 30 minutes

11%

16% Less than $50,000

13% %

15%

$50,000 to $99,000

22%

14%

10%

23%

16%

12% More than $100,000

21%

22%

No time

30 to 60 minutes 1 to 2 hours 2 to 4 hours

27%

More than 4 hours

36%

14% 12% 17% 13%

16% 15% 14% 13% 9% 14% High school or less

INCOME LEVEL

16%

14% 13% 12% 23%

28%

College/ tech

University and beyond

EDUCATION LEVEL Source: Lowestrates.ca, July 2018

Source: Lowestrates.ca, July 2018

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UPFRONT

HEAD TO HEAD

Are variable-rate mortgages still the best bet?

Long seen as the better deal, variable-rate products are facing a new test as interest rates edge upwards

Scott Westlake

Michael Jones

Founder The Westlake Team, DLC National “Two important considerations when selecting variable versus fixed are penalty exposure and interest rate exposure.

Variable mortgages have a predictable penalty rather than the more complicated calculation of fixed mortgages. Many lenders and brokers don’t explain the penalty sufficiently for clients to gauge suitability. Many clients believe they will stay in the home and mortgage product for the full length of the term, but statistically we know that’s unlikely.

As for interest rate exposure, clients selecting a variable rate can withstand increases while still benefiting from a lower rate. Clients also have the option to convert to a fixed product.”

Mortgage broker Centum Core Financial “Variable-rate mortgages have many positives – the main one is that the penalty to discharge at most lenders is only three months’ interest, whereas the penalty to get out of a fixed-rate mortgage can be much higher, depending on various factors.

However, I like to know the client’s details before determining the best option. If they are struggling with affordability, a variable-rate product could be dangerous, as even a small rate change can have a significant impact.

Overall, I believe the fixed versus variable debate should be determined in reference to the individual client.”

D’Arcy Henneberry President MortgagePal

“The answer is as unique as each client’s individual needs. Homeowners tend to focus on the lowest rate when choosing their mortgage; however, as professionals, we must help clients understand the risk/reward between variable and fixed terms and present the payment/interest spread, along with all other benefits and disadvantages, to help clients make informed decisions.

The fixed-rate spread can be seen as insurance against the change in payments that can occur with most variable terms.

With a VRM, payments can be set at the higher fixed payment to protect against increasing rates. VRMs also provide lower penalty risk compared to fixed mortgages.”

EVALUATING THE VARIABLES The low interest rate environment that has persisted over the last decade has made variable-rate mortgages a popular choice for borrowers. But are variable rates always the best choice? In 2001, Moshe Milevsky, professor of finance at York University’s Schulich School of Business, published a landmark study comparing fixed- and variable-rate products over more than half a century, which established that mortgage holders would have been better off with a variable-rate product nine times out of 10. However, Milevsky himself admitted earlier this year that variable rates aren’t for everybody, telling Global News in April, “I would say go with a floating rate, unless you would be disproportionately affected in a recession.”

8

www.mortgagebrokernews.ca

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6/09/2018 7:55:27 AM

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6/09/2018 7:55:41 AM

UPFRONT

NEWS ANALYSIS

Should brokers stay away?

Syndicated mortgages have grabbed headlines for all the wrong reasons, prompting many to question whether mortgage brokers ever should have been allowed to sell them

THE FINANCIAL Services Commission of Ontario has amended the rules outlining mortgage professionals’ involvement with non-qualified syndicated mortgages – a move that has been, to put it lightly, controversial. Among the modifications is a $60,000 investment cap, which some believe doesn’t go far enough.

“Since 2016, I have said over and over again that there is no way mortgage people should have ever been licensed to sell syndicated mortgages,” says Calum Ross, a leverage wealth expert and broker with Verico Mortgage Management Group. “Despite the fact that they’re now cracking down on this, the bigger question is why were

with global debt capital markets would likely be in over their heads trying to understand the myriad complexities pertaining to syndicated mortgages. If they can’t do it, he reasons, it’s unlikely mortgage brokers can.

“How mortgage people and Realtors were ever allowed to sell them, and/or thought they were qualified to sell them, is absolutely idiotic to me,” Ross says. “Real estate and mortgage professionals were never, and should never have been, licensed to sell investment products and represent them as investment-grade assets.

Even people who have completed the securities course and are licensed with investment

“Real estate and mortgage professionals were never, and should never have been, licensed to sell investment products” Calum Ross, Verico Mortgage Management Group they ever allowed to sell them, and who’s going to pony up the cheques when a massive amount of investors lose a huge amount of money?”

Ross emphatically believes that a syndicated mortgage is beyond mortgage professionals’ depth of knowledge. To illustrate his point, Ross highlights the fact that most people involved

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firms would never dare recommend these as investment-grade assets.”

Non-qualified syndicated mortgages, Ross says, should only be presented to sophisticated investors and high-net-worth individuals. Under the current system, a slew of ethical lapses have imperilled both the public and the legitimacy

of syndicated mortgages. Fortress Real Developments is mired in the mother lode of syndicated mortgage fraud. The company’s co-founders, Vince Petrozza and Jawad Rathore, behaved unscrupulously in the mutual fund industry, prompting a caution for the former and a lifetime ban for the latter, and they set their sights on the mortgage broker channel.

“They started to do something that had really hardly ever been done – they started financing soft-cost construction,” explains Ron Butler of Butler Mortgage. “If people are building a condo, you have to buy land to build that condo on. You go to a company, or several companies, that will lend on raw land – they’ll lend anywhere between 50% and 70%, but mainly 50%. You buy yourself a parking lot, let’s say, but there’s an enormous amount of soft costs. There are engineer plans, architect plans, planners, lawyers, an application to the

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SYNDICATED MORTGAGES: WHAT’S CHANGED? FSCO’s latest amendments haven’t banned brokers from dealing with syndicated mortgages, but as of July 1, all mortgage brokerages that handle non-qualified syndicated mortgages are required to meet the following guidelines: Collect and document a potential investor’s or lender’s financial circumstances, needs, objectives, risk tolerance, and level of financial and investment experience Undertake and document a suitability assessment Collect and document expanded disclosure information, including property appraisal and borrowers’ financial statements Impose a $60,000 limit on an investor’s syndicated mortgage investment over a 12-month period

city – it’s a massive, multi-million-dollar project.

“It’s meant for people who have real pockets,” he adds. “Jawad and Vince said, ‘We’ll provide the financing for them.’”

form mortgage brokerages that they effectively controlled. At the time they did this, everybody knew there was a relationship. When I heard about them 10 years ago, the guy who was

“I’d be in favour of … regulation so [brokers] have to have some further qualification to peddle this type of investment” Bob Aaron, Aaron & Aaron There is evidence to suggest that Petrozza and Rathore were far from forthright with their investors. “Among the bad things they did, they hid the fact that they were acting as co-developers,” Butler says. “I was around when they started doing this, and they ran out and built front companies. They gave people money to

fronting them, and who voluntarily gave up his licence, Glenn May-Anderson, was happy to say he was in a partnership with Fortress.

“It was only later that Fortress realized it was important to pretend they were apart so that they could blame mortgage brokers later,” Butler adds. “It was never disclosed that the only develop-

ment they did was collecting a third of every dollar on the mortgages. They didn’t pay for any architects’ plans or soft costs. They took $0.35 on every dollar and kept it for themselves, but they never put any money toward development.

That was one red flag. The other is they only used one appraiser – one lone guy. That’s more like a Superman’s cape red flag.”

While the Fortress scandal has dominated headlines, real estate lawyer Bob Aaron stresses that not all syndicated mortgage companies are crooked. Among his clients is a company that sells syndicated mortgages and acts with transparency and full disclosure. He believes brokers’ involvement in the sale of syndicated mortgage is acceptable – provided a precaution is taken.

“I’d be in favour of an extra layer of regulation so that mortgage brokers and agents have to have some further qualification to peddle this type of investment,” Aaron says.

www.mortgagebrokernews.ca

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UPFRONT

ALTERNATIVE LENDING UPDATE NEWS BRIEFS Buyers adjusting to B-20, rather than seeking private funds

CREA’s July numbers showed that national home sales increased by 1.9% month-over-month – a development that Re/Max regional executive VP Elton Ash attributes to buyers finally adapting to stricter rules, rather than turning to alternative financing. “Where they may have qualified previously to purchase an $850,000 home, they’re now looking at a $750,000 home,” Ash said. “It’s not that they’re seeking secondary financing – because the only lenders not bound

by B-20 are credit unions and private lenders – it’s reducing their overall expectations of what they can afford in the type of home they’re looking for.”

Home Trust credit cards added to LendingArch platform

Rate comparison platform LendingArch has recently announced the expansion of its credit card division to cover several leading lenders, including Home Trust.

Through the platform, the alternative lender’s credit cards will be matched to particular clients that have specific sets of needs, thus improving their chances of approval and saving time, money and effort in the process. Meanwhile, credit card providers will have access to a pool of pre-qualified users that are most likely to be approved.

MCAN reports 24% increase in second-quarter profits

MCAN Mortgage has reported a net profit of $11.1 million for the second quarter this year, 24% higher than the same period in 2017. Meanwhile, its impaired total mortgage ratio decreased significantly to 0.02% from 0.1% the previous quarter. According to MCAN, the B-20 stress test has led to an improvement in mortgage quality. “We

estimate that the uninsured stress test has impacted approximately 10% to 15% of mortgages that we underwrite based on the borrower’s ability to service the higher mortgage rates used in the stress test, and will continue to have some impact on the proportion of mortgages that we approve,” the lender said.

Airtight docs a must when submitting private deals

Mortgage originations in the private channel have grown this year because of B-20, but with the increase in volume has come a slew of common mistakes.

According to Laura Martin, COO of Matrix Mortgage Global, brokers often treat the private channel as an afterthought, but she cautions brokers that private lenders expect a clear purpose for funds, as well as an exit strategy. “Be realistic and have a good understanding of what your client needs the funds for and what they will be doing during the term to make sure they are in a better position for financing at the end,” Martin advised.

Home Capital improves earnings and volume

Home Capital Group’s latest financial results show improved earnings and mortgage origination volume. For the second quarter of 2018, the lender posted net income of $29.6 million, compared to a net loss of $111.1 million in the same period of 2017 (which included the cost of its credit facility and divestment of certain assets). Total mortgage originations grew 10% yearover-year to $1.23 billion. “Our second quarter results were markedly improved with solid year-over-year earnings growth, taking into account last year’s liquidity event, and with a third straight quarter of mortgage origination volume growth,” said Home Capital president and CEO Yousry Bissada.

Selfemployed: moving to prime?

CMHC is adjusting its criteria to make mortgages more accessible for selfemployed borrowers Canada’s self-employed borrowers, who have long been relegated to the alternative mortgage segment due to their unpredictable income, are slated to receive some muchneeded policy assistance from CMHC. Beginning October 1, the Crown corporation will be adjusting qualification criteria for this segment.

The policy updates, which also apply to newly self-employed borrowers, are expected to provide greater leeway compared to the current rules, which hold that self-employed individuals who have operated their businesses or have been in the same line of work for less than two years can only qualify for mortgages upon supplying a solid rationale, which is to be noted on the lender’s loan file.

But now lenders will be able to assess self-employed borrowers’ income potential based on factors such as “acquiring an established business, having sufficient cash reserves, predictable earnings, previous training and education, and looking at borrowers’ demonstrated history of managing credit,” according to Monica Guido, manager of client relations at CMHC. They’ll also be able to submit a broader range of documentation to lenders, including a Statement of Business or Professional Activities report, a Proof of Income statement and a Notice of Assessments accompanied by a T-1

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General. In addition, self-employed borrowers who will be using the “add back” to gross up their incomes can do so using financial statements, along with a Review Engagement Report signed by a practicing accountant.

“Our newest enhancement is in response to lender inquiries,” Guido said. “CMHC recog-

“Any time requirements are loosened on getting approved for a mortgage, it gives us more options” nizes that unincorporated business owners may not typically have [the currently required] documentation.”

Daniel Johanis, a broker with DLC Mortgage Centre, responded positively to the changes, which he believes will offer more flexibility for brokers while helping CMHC recover market share.

“For the majority of my self-employed clients, I’m doing it through the alternative channel,” he says. “At alternative banks where you put at least 20% down, they have a little bit more flexibility with what they can use as far as income sources. You have the Canada Child Tax Benefit, you have Registered Business, whereas some other banks, if you’re doing high-ratio, you always have to look at your Line 150 or whatever your net income is. Any time requirements are loosened on getting approved for a mortgage, it gives us more options.”

Q&A

Kim Mercer Manager of marketing XMC MORTGAGE CORPORATION

Years in the industry 15 Fast fact After working with some of Vancouver’s top startups, Mercer returned to Toronto to help grow the XMC brand

Just getting started How have things been at XMC in recent months?

Busy! We added key team members, notably Derek Serra as managing director of sales and marketing. Our underwriting team grew, and we expanded sales to Ottawa and Vancouver. We’re also growing in Waterloo and the York/Durham regions. We’ve built our network of partner brokers out to growth markets, launched products, and invested in tech and strategic partnerships. We also launched as XMC Mortgage Corporation.

How do your alternative mortgage offerings distinguish themselves from the competition?

The XMC alternative mortgage program is designed for Canadians who find themselves struggling with institutional lenders and are otherwise unable to buy a first home, access equity to consolidate debt, invest in rental properties and build businesses. We offer great rates — in line with what you’d expect from a bank — with flexible terms, unique benefits and the insight that comes from many decades of experience. We understand that these deals can sometimes require more time and effort, so we pay more, too.

We’re spending significant resources to support partner brokers with the same entrepreneurial spirit — the hustle — that embodies what we’re doing here. They’re total pros who have structured their teams and processes to optimize growth. Our goal is to generate business — measured in real leads — for our partners.

What are the most challenging financing problems your clients struggle with?

Many Canadians don’t understand the new mortgage rules; in fact, 82% of our clients were not aware of the changes when we surveyed them in the spring of 2018. It’s our responsibility to educate them and provide guidance — an opportunity to help them move forward.

We need strong partner brokers to help us do that. Smaller homes, growing communities and the impact of remote work and the gig economy on real estate markets are just a few of the trends we’re tracking and building for.

MCAN, our parent company, has an established record of being on the right side of market trends. That experience and success means that we understand this business on a level that few do. XMC offers specialized solutions — the right mortgage, at the best rate, with personal and professional service.

What aspect of XMC are you most proud of?

With MCAN’s market strengths and XMC’s experience in alternative single-family lending, we’ve built this business to withstand market fluctuations, and we’re helping our partners and our clients do the same. Our goal is to enable partner brokers and give them new tools to match more Canadians with the right mortgage solution. We don’t sell mortgages; we sell a way forward — peace of mind, opportunity and growth. We couldn’t do it without our partner mortgage brokers.

That spirit of cooperation and collaboration is why this works.

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UPFRONT

COMMERCIAL UPDATE

Legalization to inflame demand Canada’s retail and rental properties are expected to receive a generous cannabis-driven windfall

that the heightened demand will begin once retailers start “looking to stake a claim at the best locations, many of which we own.”

According to Edward Jones & Co. analyst Matt Kopsky, the October legalization represents a significant opportunity for firms that have access to large expanses of commercial real estate.

“Obviously it’s a growing segment within the retail market,” Kopsky says. “With retail

“With retail struggling, it’s good to have any sort of growth opportunities”

The legalization of recreational cannabis will pave the way for much greater demand for rental and retail properties in Canada’s most dynamic markets, according to an analysis by RioCan Real Estate Investment Trust.

RioCan estimates that legalized marijuana will drive demand for as much as 200,000 square feet of retail space, particularly in Ontario, which remains the leading choice of provincial market among Canadian cannabis producers and sellers. Once the provin-

NEWS BRIEFS

cial government allows private sales, many cannabis producers have indicated they will proceed with establishing such facilities – a move that would considerably diverge from the existing setup for liquor stores, where sales are conducted by government agencies.

“There’s no question that whatever rules finally come down, they’re not going to want four cannabis stores at one corner — there’s going to be some control over that,” says RioCan CEO Edward Sonshine, adding

Investment in Toronto real estate surges

The Greater Toronto Area’s flourishing commercial real estate segment saw a total investment value of around $5.6 billion in the second quarter of 2018.

A new study by Altus Group found that the GTA continues to magnetize commercial investment, recording a total of 574 investment property transactions valued at more than $1 million in Q2 2018. This brought total investments for the first half of the year to $11.3 billion, representing a 6% annual gain over the record-breaking first two quarters of 2017.

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struggling, it’s good to have any sort of growth opportunities.”

Even provinces with sluggish commercial markets are expected to benefit from legalization. Calgary’s central business district, for instance, saw a 10% vacancy rate in the second quarter of 2018, according to Barclay Street Real Estate, but the firm predicts “a significant drop” in commercial vacancies once the Cannabis Act goes into effect – and there could be a further decrease as soon as Calgary finalizes its approval process for cannabis stores.

“Obviously, they’re not all going to be approved, and there are some restrictions in terms of where they can go,” says Zoe Addington, the director of policy, research and government relations at the Calgary Chamber.

“But I think it sounds really positive.”

Montreal’s industrial supply falls to 15-year low

The supply of industrial space in Montreal fell to its lowest levels in more than 15 years during the second quarter of 2018. The availability rate was 5.3%, down from the previous quarter’s 5.6%. A total of 829,399 square feet of industrial space was occupied or absorbed in Q2 2018, which CBRE attributed to businesses’ increased confidence in the city and the local economy.

“People want to … base themselves in Quebec because it’s still very cheap compared to the rest of Canada,” CBRE’s Avi Krispine told the Montreal Gazette.

www.mortgagebrokernews.ca

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Q&A

Francis Moon Project financing/ commercial mortgage broker MORTGAGE ALLIANCE COMMERCIAL CANADA

Years in the industry 15 Career highlight Moon’s most significant transaction to date was securing financing for a $143 million condo/ townhome project

Toronto’s commercial strength not waning What’s the current situation in Toronto’s commercial segment?

I believe we’re in a very interesting state, given the fact that Canada is indeed one of the safest countries in the world and has also been voted one of top places to live and visit. Especially with robust financial and political systems in place, not only are domestic investors and businesses looking to do more and more investments, but many foreign individual and institutional investors are also keeping their eyes on investing in Canada.

There’s no shortage of capital in the market as long as there are good assets or projects to invest in. I work with several overseas institutional investors who want to have their feet in Canada, but it’s always been a challenge to find good assets available at a given time.

What role does a mortgage broker play in helping clients navigate these market conditions?

Our day-to-day priority is to stay on top of market conditions so that we’re well aware of what’s going on out there, who’s doing what, who’s not doing what and so on.

Our developer and builder clients are looking for financing on various projects in various locations all the time. Not all lenders will entertain certain locations or certain asset types. We always put in the same kind of effort, whether it’s a $1 million transaction or a $140 million transaction.

What are some of the unique challenges that commercial mortgage brokers in Toronto face?

The biggest challenge would be finding the best solution

Vancouver industrial sector the best global performer

According to CBRE Group, Vancouver is the strongest industrial real estate market globally. The city’s warehouses helped propel 29% year-overyear growth in lease rates in the first quarter of 2018 – far above the worldwide average of 3%. IKEA and BMW AG acquired the largest proportion of the city’s available space for industrial and logistics purposes.

And, according to CBRE Vancouver vice-president and sales manager Jason Kiselbach, “we haven’t even scratched the surface of the demand.”

for each client, as market conditions change rapidly. It is imperative that we set the right expectations for clients and be able to deliver them as promised. We want to under-promise and over-deliver.

What about buyers? What are some of their major challenges in this market?

In the last 10 years, we’ve experienced a historically low interest rate environment, and we are continuing to enjoy that even with a recent increase in pricing. As long as our investors can achieve the type of return they’re looking for, we’ll likely continue to see this trend. Unlike the residential market, I haven’t seen a slowdown in a commercial space.

What advice would you give new commercial brokers who want to break into the highly active and competitive Toronto market?

The first piece of advice I can give is to have a mentor you can learn from and who has enough experience in his or her career. As our common goal is to service the client as much as possible for their maximum benefit, we wouldn’t want to use clients as trial-and-error learning tools.

The second piece of advice would be to set the right expectations for your goal and have a detailed plan on cash flow management. Commercial financing can take months, if not years. It would be wise to keep your residential mortgage business open and make a slow transition to commercial side.

What’s behind the commercial real estate boom?

Robust demand for commercial and industrial space has stimulated a 47.1% increase in construction activity nationwide, according to a recent CBRE report. E-commerce, food distribution and warehousing were responsible for the greatest demand for these properties.

Location has become a core consideration for companies looking to be situated near major highways and population centres.

This is leading markets to boost their transit capacity to accommodate increased commercial operations, CBRE noted.

Telus cashes in on Vancouver’s strength

A downtown Vancouver office tower valued at around $425 million was sold by Telus Corp. to an undisclosed buyer, a mere three years after the telecommunications company set up shop in the city. Jointly owned by Telus and Westbank Corp., the sale of Telus’ portion of the office property yielded roughly $170 million. Announcing the sale in early August, Telus explained that the move was in response to the “favourable real estate opportunity” presented by the city’s vibrant commercial property market.

www.mortgagebrokernews.ca

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6/09/2018 8:01:59 AM

UPFRONT

OPINION

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

Allowing for bias The industry must take steps to keep commissions from being a factor in brokers’ decision-making process, writes Jason Armstrong.

AS A MORTGAGE broker, what does being unbiased mean to you? Are you unbiased in your decision-making process when selecting the most appropriate mortgage for the borrower you’re representing?

The short answer is no. A mortgage broker cannot be unbiased or impartial if they have a monetary stake in the decision-making process. You are likely more biased than you think – and I’ll highlight how.

Our industry has successfully manipulated the public’s perception of how mortgage brokers are compensated. All too often, we hear about how mortgage brokers are compensated by the lenders at no cost to the borrower. Although there is some truth to this statement, nothing in life is free, and everything comes at a cost.

Digging deeper into how we are compensated highlights the potential risk of mortgage brokers to influence the decision-making process to benefit ourselves at the ultimate expense of the borrower. I’ve identified four keys factors of a mortgage that can impact commission: term, lender, conditions and rate.

The most popular mortgage term in Canada is five years. I have a tough time believing that it’s merely a coincidence that this just so happens to be the term mortgage brokers are typically compensated most highly for. If you’re recommending a five-year term, are you explaining why you’re recommending that term?

In terms of lenders, borrowers’ main reason for using a mortgage broker is that they believe we shop their mortgage around until we find

16

an appropriate lender that offers the best terms and conditions. FSCO, on the other hand, acknowledges that most brokers tend to work primarily with one or two lenders. Although it’s nearly impossible to keep current with every lender’s product offerings, being incentivized to support a particular lender based on volume bonuses encourages this behaviour among brokers. This isn’t necessarily in the best interest of the borrower, but instead in the best interest of the broker, who receives higher

easy question to answer, as there are so many factors that impact rate. Is our best rate the one posted on lender’s rate sheet, or does the best rate we can offer include our ability to sacrifice commission in the name of a rate buy-down?

I believe most borrowers understand that mortgage brokers are indirectly paid by the interest on their mortgage, but I don’t believe they understand how much control we have over our commission. As an industry, we have made huge headway in recent years by increasing our market share while also educating borrowers on the benefits of using a broker. However, we risk losing the momentum if we don’t address compensation.

Doing so will require mitigating brokers’ influence over our own commission in the decision-making process. Disclosing commission and/or standardizing compensation to a fee-for-service model can effectively mitigate some of the risk. If you believe in the value of the service you’re providing and that the commission won’t impact the decision the borrower makes, then what harm is there to disclose? A fee-for-service model could result in the borrower paying for your services directly, completely removing any bias and

“As an industry, we have made huge headway in recent years ... However, we risk losing the momentum if we don’t address compensation” compensation and often needs to spend less time on a file.

As for conditions, lenders’ projected income takes into consideration the risk of the mortgage being paid out prior to maturity and the associated penalties for doing so. If the mortgage’s conditions include higher penalties or a bona-fide sales clause, some of the lender’s risks are mitigated, and in turn, brokers are typically compensated more. I’ve found that this is often a solution for many brokers, as it achieves the goal of lower, more competitive rates while not impacting their compensation – but do clients truly understand the restrictions of a bona-fide sales clause?

Finally, there’s the question of rate. Often the first question from a prospective client is: “What’s your best rate?” This is not an

allowing you to truly search for the terms and conditions that are most appropriate for the borrower’s needs.

To personally reduce the influence of commission in my decision-making process, I have removed it completely from my database and no longer track my commission, except for tax-preparation purposes. I encourage all brokers to review how commission impacts their decisions and to examine if the recommendations you’re making are truly in the borrower’s best interest – or your own.

Jason Armstrong is a London, Ontario-based mortgage broker with Mortgage Intelligence. He is also qualified as a Chartered Professional Accountant and has more than 10 years of experience in the field.

www.mortgagebrokernews.ca

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6/09/2018 8:02:30 AM

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6/09/2018 8:02:41 AM

PEOPLE

INDUSTRY ICON

BORN TO LEAD Equitable Bank’s Joe Flor has ascended the ranks of the Canadian mortgage industry to become one of its youngest, brightest stars

JOE FLOR is a natural leader. From his start as a teller at Scotiabank, he worked his way up the ladder to become Equitable Bank’s director of national sales by the age of 38. Flor credits Scotiabank, where he worked as a student, with allowing him to get his foot in the door, and he’s remained on a steady upward trajectory ever since. After school, Flor landed an underwriting gig with Wells Fargo, but that well dried during the financial crisis south of the border.

“I was an underwriter at that point, and the whole system crashed with subprime lending and all the lenders closed up shop,” he says.

“Graciously, I had a few lenders looking at me at the time. I had CIBC, First Line, Home Trust and Equitable, and obviously I chose Equitable Bank.”

Upon arriving at Equitable, Flor was immediately taken by the company’s culture – a key reason why he’s still there almost a decade later. Having accrued invaluable experience at a major bank like Wells Fargo, Flor made an immediate impact.

“I don’t want to say that I brought processes with me, but I brought different ways to position deals, how to underwrite and explain why I believed in certain files,” he says. “I had a lot of confidence from senior management. I still remember the VP of credit telling me when I

18

got into sales, ‘Joe, if you ever want to come to credit, you’ll always have an open door here because you’re a good underwriter.’ They gave me confidence and let me do my thing, put in processes with my team, and they worked. Some

relationships with them as an underwriter,” he says. “That gave me a lot of confidence to get into sales. Now I can look at deals in their office and piece them together.

“I think that’s how I’ve gotten to where I

“I think that’s how I’ve gotten to where I have – continually having the ambition to push forward and want more. I didn’t stop at underwriting; I didn’t stop at sales; I didn’t stop at management; I just kept going. I’ve always had that knack for leadership” of my team members now are managers, some of them are seniors, some are even in sales, so they’ve excelled in their careers, and I take pride knowing I gave them some confidence too.”

Flor has a knack for talking to people and asking the right questions, getting down to brass tacks and helping close files expeditiously. His personal touch is a major reason why he was such a successful underwriter.

“I was able to talk to brokers about deals, the next deals, their families – basically build

have – continually having the ambition to push forward and want more,” he adds. “I didn’t stop at underwriting; I didn’t stop at sales; I didn’t stop at management; I just kept going. I’ve always had that knack for leadership. Some people tell me I’m a born leader because I take initiative and lead by example.”

Cultivating relationships Brokers are lenders’ lifeblood, and Flor and his team work diligently to identify opportunities

www.mortgagebrokernews.ca

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PROFILE Name: Joe Flor Title: Director of national sales Company: Equitable Bank Based in: Toronto Years in the industry: 17 Career highlight: Being nominated twice for BDM of the Year at the Canadian Mortgage Awards.

Career lowlight: “I was at Wells Fargo, and they shut their doors in 2008 to the broker channel in Canada. I had to find another job, and fortunately Equitable was there.�

www.mortgagebrokernews.ca

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6/09/2018 8:04:13 AM

PEOPLE

INDUSTRY ICON

for them. However, a key ingredient is identifying the right brokers to work with.

“What we do in terms of cultivating relationships is that each BDM has a list of key brokers they’ve identified as the people they really want to get the business out of,” Flor says.

“It’s not that they don’t give anyone else top service, but these are the guys we strategize about. They’ll go see them twice a month, learn what niches they’re in, whether it’s self-employed or new to Canada or bruised credit, and we

Shifting into reverse Equitable Bank recently launched the Path Home Plan, a reverse mortgage for seniors, joining HomeEquity Bank as only the second lender in Canada to offer the product. The timing couldn’t be more fortuitous; as Flor points out, more and more seniors are retiring with debt.

“Everyone wants everything in life, and they live beyond their means,” he says. “As you get older, you continue carrying that debt. With home prices going up over the last few years,

“At the end of the day, if you say, ‘Hey, this is how Equitable can help you,’ [brokers] value that because there are so many lenders out there who are not going to remind them what they do. It’s nice that my team goes out there and reminds them every opportunity they get” work with them to offer the products we have to get that business.”

On top of that, Equitable works with those brokers to identify key agents – the ‘rainmakers,’ as Flor calls them.

“Outside of taking them for lunches and dinners, when we hold events, they’re invited, and we reward our broker partners all the time,” he says. “We take them golfing, for example.

We reward our key people. From a relationship standpoint, it’s not ‘out of sight, out of mind’ – and I think brokers appreciate that more than coming in with a box of doughnuts. At the end of the day, if you say, ‘Hey, this is how Equitable can help you,’ they value that because there are so many lenders out there who are not going to remind them what they do. It’s nice that my team goes out there and reminds them every opportunity they get.”

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people are treating their homes like piggy banks.

They refinance and pay off some debt, get back into more debt and refinance again, pay off that debt – and really, they’re just taking from Peter to pay Paul. At the end of the day, it’s on their mortgage.”

Complicating matters, many retired Canadians now have adult children who need a financial boost to get into the housing market.

Under these circumstances, Flor says, a reverse mortgage often presents the ideal solution.

“Eighty per cent of borrowers who retire don’t have enough in terms of their retirement savings to last them beyond a year,” he says. “It’s a staggering statistic, so a lot of them use their home.

A reverse mortgage allows them to stay in their home, not have a monthly payment and basically worry about it whenever they pass on or move to a retirement home or long-term facility.”

JOE FLOR’S CAREER HIGHLIGHTS 2005

2006 Becomes an underwriter

2010 Starts at Equitable Bank and is named team lead of underwriting after just four months 2010

2011 Moves into sales

2012

2015

Receives a nomination for BDM of the Year at the Canadian Mortgage Awards

2016 Is tapped to run Equitable Bank’s Central Canada GTA team

2018 Gets promoted to national sales director

www.mortgagebrokernews.ca

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WHAT DO MORTGAGE BROKERS KNOW THAT YOU DON’T?

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SPECIAL REPORT

BROKERS ON LENDERS

BROKERS ON LENDERS

Which lenders are among the industry’s best? Heather Turner reports on where brokers think lenders are excelling and where they have room to improve A LOT CAN change in a year. CMP’s 12th annual Brokers on Lenders survey reveals that lenders have made significant improvements in their service to brokers over the past 12 months. Brokers came together to rate up to six of their lender partners on a scale of 1 (very poor) to 5 (very good) in 10 key categories, including turnaround time, interest rates, product range, underwriter support and more.

Overall, lenders experienced a boost in nearly all categories, and they made dramatic improvements in two critical areas: turnaround time and BDM support, both of which saw an impressive .17-point increase over last year. Even amid the continuing struggle with rising interest rates and stricter lending guidelines, it’s clear that brokers want to commend their lenders for the efforts they’ve put in to improve their processes and achieve efficiency.

Traditional lenders such as CMLS and First National, along with alternative lenders like Bridgewater Bank and NPX, are making return appearances as top lenders. What did brokers have to say about their performance, and which other lenders received gold, silver and bronze medals from brokers this year?

Read on to find out.

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AVERAGE LENDER PERFORMANCE

Lenders secured higher scores this year across all categories with the exception of one: transparency of commission structure. What’s also impressive is that all categories except one (interest rates), lenders received an overall average score of 4 (‘good’) or higher.

2018

BDM support

2017

4.15

4.32

4.27 4.30

Transparency of commission structure Underwriter support

4.22 4.08

Broker support

4.20 4.05

Overall service levels

4.10 3.98

Product range

4.06 3.97

Turnaround time

4.06 3.89

Satisfaction with credit policy

4.00 3.92

IT/technology

4.01 3.92 3.97 3.84

Interest rates Very poor

Poor

Satisfactory

Good

Very good

www.mortgagebrokernews.ca

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6/09/2018 8:05:46 AM

KE

RS

ON LENDER

S 18

BR

O

S

ER

N AT I V E L E N D

IN

LT

IN

G

LT

G

G

IN

A

N AT I V E

D LEN

A

A

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ER

ON LENDER

SILVER

GOLD LT

RS

18

18

BR

KE

20

O

S BR

ON LENDER

20

O

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20

KE

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N AT I V E L E N D

6/09/2018 8:05:56 AM

SPECIAL REPORT

BROKERS ON LENDERS BDM SUPPORT

BR

18

18

BR

O

S

O BR

ON LENDER

S

SILVER

KE

RS

ON LENDER

S 20

18

Bronze First National Financial

RS

18

ON LENDER

KE

20

RS

20

KE

Silver CMLS Financial

S

GOLD

O

BR

S

20

O

ON LENDER

ON LENDER

18

RS

SILVER

RS

KE

20

18

KE

Gold B2B Bank

BR

S

20

O

ON LENDER

GOLD

O

RS

KE

TOP ALTERNATIVE LENDERS

BR

TOP LENDERS

2018 average score 4.32

Gold Bridgewater Bank Silver Magenta Capital Bronze NPX

2017 average score 4.15

Somewhat surprisingly, BDM support has overtaken transparency of commission structure as lenders’ best-performing category this year, earning an average score of 4.32 out of 5. B2B Bank took gold among the traditional lenders with a score of 4.67, followed

by CMLS Financial and First National Financial. In terms of alternative lenders, all three are making their second consecutive appearance on the medal podium in this category, although Bridgewater Bank

leapt over Magenta Capital for the top spot this year.

Based on brokers’ ratings and comments, it’s clear that lenders’ outstanding performance in this area can be largely credited to the outstanding BDMs who are “very good to deal with,” “always available,” “quick to return calls” and “always get back in timely manner.” One broker remarked that his lender is “doing it better due to the support I get from the BDM” – proof that BDMs can make or break a lender’s business.

There are still lenders struggling to offer consistent BDM support, however. One broker said that dealing with “slow replies and lack of communication from BDMs” was his biggest challenge with his lender.

A couple of other brokers gave more specific comments on how BDMs could go the extra mile: “When underwriters don’t respond on a deadline day, the best thing a BDM can do is pick up the phone and move it along.

Communication is key,” said one. Another stressed that “BDMs must do a better job of educating the brokers on [product limitations/variable terms] and not just selling the lender.”

TRANSPARENCY OF COMMISSION STRUCTURE O BR

KE

2018 average score 4.27

24

RS

ON LENDER

S

SILVER

RS

ON LENDER

S

18

18

Bronze First National Financial

KE

20

O

S

20

BR

ON LENDER

S

18

RS

ON LENDER

20

18

KE

Silver RMG Mortgages

RS

GOLD

O

BR

S

20

O

ON LENDER

BR

RS

SILVER

KE

18

18

KE

Gold CMLS Financial

BR

S

O

ON LENDER

GOLD

20

O

RS

20

KE

TOP ALTERNATIVE LENDERS

BR

TOP LENDERS

Gold Equitable Bank Silver Bridgewater Bank Bronze Community Trust

2017 average score 4.30

Transparency of commission structure has consistently ranked as lenders’ topperforming category – until this year. But that’s not to say it’s no longer a priority.

Partnering with lenders that exhibit transparent commission structures remains crucial for brokers.

CMLS Financial, RMG Mortgage and First National Financial scored averages of 4.70, 4.49 and 4.34, respectively, to take home gold, silver and bronze in this category.

Among alternative lenders, Equitable Bank rose in rank from bronze to gold this year, while Bridgewater Bank and Community Trust completed the top three.

Lenders have been doing consistently

HOW MANY LENDERS HAVE YOU SUBMITTED DEALS TO IN THE LAST 12 MONTHS?

The majority of brokers still prefer to submit deals to a wide range of lenders; no brokers reported that they submit deals to only one lender.

2% 5% 13%

80%

Five or more lenders

Three lenders

Four lenders

Two lenders

well in terms of managing commissions for the most part, although there were still calls from a few brokers for more clarity in terms of commission charts/breakdowns and rate sheets. Others suggested lenders move toward f lat-rate commissions for a more “hassle-free” broker-lender relationship, and a few hinted at the fact that increased commissions will always be welcomed by brokers.

When asked which lenders are performing above the rest, one broker cited “RMG’s service and commission structure” as his reason for handing out top marks. However, not all brokers agree that commission should be an important consideration when selecting a lender. One said: “I do think that brokers will often choose lenders based on the commission structure, and that is very wrong.”

www.mortgagebrokernews.ca

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CF 37

O

BR

S

KE

RS

ON LENDER

S

17

BR

ON LENDER

17

17

GOLD

RS

20

KE

O

S

BR

ON LENDER

20

O

RS

20

Your trust is our greatest asset.

KE

SILVER

Each and every day, we at CMLS Financial look for new and better ways to serve you. Your ongoing support and recognition are what drive us to go above and beyond in our services.

We are committed and look forward to further exceeding your expectations, because above all else, you - our broker partners, are our top priority.

Competitive. Experienced.

Broker focused.

1.866.426.2657

cmls.ca

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2018-08-29 12:01 6/09/2018 8:06:21 AMPM

SPECIAL REPORT

BROKERS ON LENDERS UNDERWRITER SUPPORT TOP ALTERNATIVE LENDERS

TOP LENDERS

S

18

BR

ON LENDER

O BR

O

KE

RS

ON LENDER

S

SILVER

Bronze Street Capital

KE

RS

ON LENDER

S

18

RS

Silver RMG Mortgages

20

KE

20

O

SILVER

S

BR

BR

18

BR

20

O

S

ON LENDER

GOLD

18

ON LENDER

RS

20

RS

KE

18

18

KE

Gold First National Financial

O

S

BR

ON LENDER

GOLD

20

O

RS

20

KE

Gold Equitable Bank Silver Haventree Bank Bronze Community Trust

2017 average score 4.08

2018 average score 4.22

Even as the call for common-sense underwriting continues, many brokers acknowledge that certain lenders and their individual underwriters are doing a swell job in helping them get their deals through.

Overall, lenders achieved an average score of 4.22 in underwriter support, a notable improvement from their score of 4.08 in 2017. Both Haventree Bank (formerly Equity Financial Trust) and First National Financial are making back-to-back appearances as top lenders in this category; the latter moved up the ranks this year to earn gold.

Several brokers were quick to praise their underwriters, especially those who stayed on top of things and kept them informed at every turn: “I work with an underwriter who is very clear on expectations and prompt in

her responses to questions,” said one broker.

“My underwriter usually has an approval [ready] before I head to the office in the morning – love that,” another said. Brokers also singled out a couple of lenders for their exceptional underwriting teams: “RMG has excellent underwriters who are quick in responding to approve or decline,” one broker said.

But on the flip side, some lenders are still struggling to bring their underwriting standards up to par, while others are doing well in certain areas but have yet to achieve consistency. Brokers do seem to understand that “stricter underwriting [is] due to regulatory oversight” and that it’s not all within the lenders’ control. Still, they agreed that lenders can do more to improve the process, whether by simply hiring more qualified underwriters or introducing f lexibility where they can.

There’s also the matter of streamlining the process and weeding out any redundancies. One respondent complained about a lender “get[ting] three or four people on a file, all playing catch up.” Another broker shared these sentiments, referring to “duplicate emails and data” that result from having several people working on the same file. “The conditions are passed back and forth between the underwriter and fulfilment specialist, and things often get missed,” he said.

One broker summed the general feeling about underwriting by pointing out that

WHY CHOOSE A BANK OVER A MONOLINE?

As in previous years, brokers tend to prefer banks over monolines – and their key reason is the wide variety of products banks are able to offer. However, what has changed this year is that nearly a quarter of brokers say they’re going with banks based on the client’s preference – a 12% increase from 2017.

Product offering 49%

Client preference 24%

Underwriter/BDM service 14%

Rates 11%

Compensation 2%

what brokers want are “underwriters [who are] looking to make deals happen, not pick them apart.”

CANADIAN HOME APPRAISALS INC. Residential & Commercial If you need a accurate and speedy appraisal for Street Capital “A” side or “B” side, Genworth Canada, CMLS Financial Industrial Alliance, ICICI Bank, IC Savings, Equity Credit Union, Most Private Lenders, Canada Revenue Agency (CRA) and Legal and Listing Purpose you can order via or website www.chainc.ca or please contact:

S.K. BALES

26

CRA, DAR, Certified Appraisal Reviewer, MVA Residential, FRI, CRES www.mortgagebrokernews.ca President

CMP Canadian Home Appraisal Inc.indd 1 22-37_Cover story-SUBBED_v2.indd 26

Bus: 416-438-2200 Cell: 416-801-3219 Email: skbales@hotmail.com

5/09/2018 4:34:10 AM 6/09/2018 8:06:41 AM

FN_C

Thirty years ago, First National started as a small company with a clear vision and an unyielding commitment to brokers – go beyond service and be your business champion. Today, we’re bigger in size and scope, but still dedicated to that same vision and still unwavering in that commitment.

When you recognize us for that vision and commitment – the work we do, the service we provide, the support you’ve come to rely on and the innovation we bring to market – it truly is the proudest honour that we can receive.

In CMP Magazine’s 2018 “Brokers on Lenders” Survey, First National received an unprecedented eight awards.

Four gold. Two silver. And two bronze.

ON LENDER

O

S O

RS

ON LENDER

S

KE

RS

ON LENDER

S 17

BR

O

KE

RS

BR

O

KE

GOLD

17

17

17

SILVER

S

BR

ON LENDER

BR

RS

S

20

KE

ON LENDER

20

O

S

RS

GOLD

20

O

GOLD

20

BR

ON LENDER

KE

17

RS

S

17

GOLD

KE

ON LENDER

17

17

BR

RS

20

KE

BR

S

O

ON LENDER

BR

RS

20

KE

20

O

Your respect, appreciation and acknowledgment reaffirms what we’ve invested in for the past 30 years and inspires us to do more, be more and champion more in the next 30 years and beyond.

20

M

We can’t thank you enough for this recognition!

SILVER

firstnational.ca Ontario Mortgage Brokerage License No. 10514

FN_CH1_CMP2018_AU30_full_FA.indd 1 22-37_Cover story-SUBBED_v2.indd 27

2018-08-29 3:31 6/09/2018 8:06:49 AMPM

SPECIAL REPORT

BROKERS ON LENDERS BROKER SUPPORT

18

BR

O

S

KE

RS

ON LENDER

S

SILVER

KE

ON LENDER

S

18

2018 average score 4.20

RS

20

Bronze RMG Mortgages

O

BR O

20

BR

S

ON LENDER

GOLD

18

ON LENDER

RS

20

RS

KE

18

18

KE

Gold First National Financial and MCAP (tie)

BR

S

O

ON LENDER

GOLD

BR

RS

TOP ALTERNATIVE LENDERS 20

KE

20

O

TOP LENDERS

Gold Equitable Bank Silver Home Trust Bronze Magenta Capital

2017 average score 4.05

Lenders bettered their performance in BDM and underwriter support, so it’s no surprise that they also did well in terms of broker support this year. Ultimately, this category is about brokers feeling that their lenders have their back and that everyone on the team is on the same page.

A few brokers singled out their lenders for standing out from the competition in this area: “MCAP – [whether in] innovation, broker service/servicing department, VPs, BDMs, underwriters – they all are very

28

committed to broker support, more so than any other company,” one broker said. “My BDM and the RVP are amazing,” another said of his lender. “If I need them, they are there for me every step of the way.”

Broker support matters even more to new brokers who are just beginning to navigate the industry’s increasingly complex regulatory environment. One respondent was relieved to note that “as a new broker, I have some pretty silly questions; most BDMs have been great.”

Another broker remarked that “one lender provides faster turnaround times and is willing to help newly licensed brokers more than others.” This kind of support will no doubt go a long way in enticing more brokers to join the industry and in helping them thrive and grow.

It should go without saying that responsiveness goes hand in hand with support – one broker gave his lender low marks in broker support based on the slow turnaround times he experienced. For another broker, the fact that his lender’s “supporting, underwriter and fulfilment staffs are very poor on all areas of customer relation” led to poor scores in this category.

WHO IS YOUR BEST REFERRAL PARTNER?

Past clients remain the biggest source of referrals for brokers by a wide margin, although Realtors and real estate agents have gained traction this year (rising from 26% to 34%) as a key partner for some brokers.

3% 34% 58% 5%

Past clients Realtors

Insurance brokers

Financial planners

www.mortgagebrokernews.ca

22-37_Cover story-SUBBED_v2.indd 28

6/09/2018 8:07:07 AM

EQB_

The Results Are In! Thanks to our broker network of valued partnerships for choosing us as this year's alternative lending winner in eight categories.

TURNAROUND TIMES

BROKER SUPPORT

UNDERWRITER SUPPORT

OVERALL SERVICE LEVELS

SATISFACTION WITH CREDIT POLICY

TRANSPARENCY OF COMMISSION STRUCTURE

PRODUCT RANGE

INTEREST RATES

EQU ITABLEBANK . CA

EQB_CMP_Ad_FullPg_13.09.indd 1 22-37_Cover story-SUBBED_v2.indd 29

2018-08-29 10:15 6/09/2018 8:07:22 AMAM

SPECIAL REPORT

BROKERS ON LENDERS OVERALL SERVICE LEVELS TOP ALTERNATIVE LENDERS

TOP LENDERS BR

KE

RS

ON LENDER

S 18

18

Gold First National Financial

O

S

BR

ON LENDER

GOLD

RS

ON LENDER

S

18

S

18

BR

ON LENDER

Bronze Street Capital

KE

RS

2018 average score 4.10

ON LENDER

S

18

RS

SILVER

20

KE

20

O

SILVER

Silver RMG Mortgages O

S

BR

O

ON LENDER

BR

RS

20

KE

18

BR

KE

20

O

GOLD

20

O

RS

20

KE

Gold Magenta Capital Silver Equitable Bank Bronze Haventree Bank

2017 average score 3.98

When it comes to service, it’s pretty much an all-or-nothing game – the lenders doing exceptionally well in this area were commended by brokers for going all out, while the rest appear to be struggling largely due to inconsistency. As one broker put it when asked about challenges with lenders: “[It’s] consistency on all levels – different days equal different levels. Despite being a top producer for all lenders noted, it does not always mean [getting] same-day service; client service areas are failing rapidly.”

Another broker described what seemed like a common experience – a lack of follow through: “Overall, the first touch is great;

however, after [getting] initial approval, the service fails badly.”

Some lenders also have the tendency to bite off more than they can chew. “[They’re] not managing the volume sent to them,” one broker noted. “When they have rate sales, they don’t seem to be able to handle the volume, and service levels drop.”

Another broker was exasperated with her lender’s lack of resources and organization, which ends up causing delays and confusion.

“Brokers are extremely frustrated with them and their service,” she reported, advising her lender to “get more staff to improve turnaround times. If someone leaves for holidays, they need to communicate to whomever worked on the file when they get back. Get a file portal that shows what’s outstanding, what has and hasn’t been signed off on.”

For the lenders providing top-notch service, it’s not just about getting all the basics right, but also adding a personal touch and consistently staying on top of things.

Brokers commended lenders for everything from “friendly service [that] really stands out” to “fast turnaround, consistent underwriting and great document review” to “less documentation [and] not too many questions asked.” For a number of brokers, a lender’s exceptional service can often overcome other deficiencies such as higher rates or a lack of market share.

“Provided feedback and took away the 10-business-day hold because service was too slow” “Allowed a second appraisal to get a better/correct value because the first stated commercial activity, which there wasn’t” “Reviewed the entire client story before making a cut-and-dry decision” “Used a common-sense approach … looked at actual history versus just the score” “BDM picked up the phone on the first ring and provided the solution” “Called our client, who was extremely upset with the timeline” “Was transparent with changes and educated us on how they have impacted the lender and how they can impact us as brokers” “Lowered the rate for the client to match a competitor’s but kept my finder’s fee the same”

Proud to be... TMG

INVESTING IN YOUR GROWTH

“For yourself, not by yourself rings true with TMG. It is a very professional organization with strong leadership. They handle the technology side of my business in a professional, courteous and transparent manner. Knowing that dedicated support is there has allowed me to focus on what I do best -- mortgages.”

It’s not easy to find a great business partner.

You have to know what to look for…

- Miles Kulik, Mortgage Broker

mortgagegroup.com FSCO#10315 SK Brokerage #315867

30

WHAT’S THE BEST THING A LENDER HAS DONE FOR YOU IN THE PAST 12 MONTHS?

We remove the obstacles that hinder business growth with infrastructure, state-of-the-art tools and resources so you can focus on your core business…

We are… TMG The Mortgage Group, Canada’s #1 independent, full-service, national mortgage brokerage.

www.mortgagebrokernews.ca

22-37_Cover story-SUBBED_v2.indd 30

6/09/2018 8:07:53 AM

Product Range

O

KE

ER

N AT I V E L E N

RS

ON LENDER

BR

S

SILVER N DI

Turnaround Times

LT

IN

G

O

LT

G

G

S

SILVER N DI

G

N AT I V E L E N

ON LENDER

18

Interest Rates

ER

RS

A

LT

A

N AT I V E L E N

KE

GOLD N DI

A

ER

S

18

GOLD LT

ON LENDER

BR

RS

18

18

BR

KE

20

O

S

BR

ON LENDER

20

O

RS

20

KE

20

ss

Thank you for voting Optimum!

A

.

Bank Trust Wealth Management

ER

N AT I V E L E N D

IT/Technology

Thank you to our valued brokers! We have heard your honest feedback and are so honoured to once again be recognized in the annual Brokers on Lenders survey. 2018 has seen a changing landscape in the mortgage industry and we know that these changes have not been easy for the broker community. Optimum has focused on being your educational lender as we work through the new policy and regulations together. Over the course of the year, we have travelled coast to coast to be on various lenders panels, and hosted educational industry events to address these challenges.

At CWB Optimum Mortgage, we strive to continue to be your alternative lender of choice – the partner that knows the value of your client relationships and works with you to exceed your clients expectations. With our wide product range and optimal interest rates, our brokers rest easy knowing our mortgages are backed by a Schedule1 bank.

Tell us how we’re doing today t. 866.441.3775 | f: 866.477.8897 | e. mortgage.documents@cwbank.com optimummortgage.ca | @OptimumMtg

A CWB Financial Group company

22-37_Cover story-SUBBED_v2.indd 31

6/09/2018 8:08:08 AM

SPECIAL REPORT

BROKERS ON LENDERS WHAT’S THE ONE THING YOU WOULD LIKE TO SEE LENDERS IMPROVE ON IN THE NEXT SIX TO 12 MONTHS?

WHICH DEALS DO YOU SEND TO ALTERNATIVE LENDERS?

Business-for-self

34%

Bruised credit

25%

Purchase for improvement

19%

New to Canada

18%

Secondary/ vacation home

15%

TURNAROUND TIME

S

BR

KE

ON LENDER

S

BR

O

Bronze Street Capital

O

S

18

BR

ON LENDER

RS

SILVER

KE

2018 average score 4.06

RS

ON LENDER

S

18

RS

KE

20

KE

20

O

SILVER

Silver Merix/ Lendwise

BR

18

BR

O

S

S

18

ON LENDER

ON LENDER

GOLD

20

RS

20

KE

RS

18

18

Gold First National Financial

O

ON LENDER

GOLD

20

O

RS

20

KE

TOP ALTERNATIVE LENDERS BR

TOP LENDERS

Gold Equitable Bank Silver Optimum Mortgage Bronze Home Trust

2017 average score 3.89

After previous feedback from brokers about the need for faster turnaround times, it seems that lenders have finally gotten the message. This category is one of the two most improved areas this year – hopefully a sign that lenders are doing much more these days to address what brokers have long considered one of their biggest challenges.

Still, time is so critical in this business that most brokers find it hard to be content with the status quo, although a few brokers did note that slower turnarounds could be the result of the B-20 regulatory changes.

Others remain frustrated with lenders who fail to communicate all the requirements right from the start, in addition to taking too long with document reviews. “[We need] prompt turnaround and effi-

32

cient [issuing of] documents on their end – for example, if you send a commitment, include the pre-authorized debit with it and all other forms needed,” one broker said.

Another explained that when lenders decide to tack on new conditions after commitment has been fulfilled, it ends up compromising the client’s perception of the broker. “This has me going back to the clients for more documents, which frustrates them and makes the broker channel look like a pain to work with.”

Meanwhile, several brokers agreed that most of the additional documents required seem unnecessary. As one respondent bluntly put it: “[They’re] asking for documents they don’t need to ask for. If they review the file, they will see that their question is answered [in] the docs already provided.” A number of brokers also wanted lenders to make use of available technology and work on improving their online portals to help brokers meet tight deadlines.

Others noted that monolines and some alternative lenders have plenty of room for improvement in terms of turnaround times. One respondent wished his lender’s “rate sheet could be clearer with regard to different scenarios (LTV, purchase price, rate premiums, etc.). This would alleviate the questions the BDM has to answer.” He added that “branch signing is a bit of a pain since there aren’t many locations in the GTA. Some clients have to drive 30 minutes just to sign, and the branch hours aren’t that good.”

“Easier access to their programs with details; some lenders are great, but others are really hard to sell to my clients, as I have little to no information” “Find more investors in the financing of refi and rental markets – we are currently very competitive in that space” “Reduce conditions/redundant documentation requirements” “Think outside the box and try harder to work with the broker to make a deal work” “Look at submission notes and understand them before committing” “Create educational seminars [for] new brokers”

HOW HAVE LAST YEAR’S MORTGAGE RULE CHANGES IMPACTED YOUR BUSINESS? 14% 13%

73%

Negatively Positively No impact

www.mortgagebrokernews.ca

22-37_Cover story-SUBBED_v2.indd 32

6/09/2018 8:09:13 AM

WHEN A BROKER WORKS WITH AN UNDERWRITER, THE UNIQUE QUALITIES OF THE DEAL MUST BE ACKNOWLEDGED,UNDERSTOOD, AND CONSIDERED. As a mortgage broker, you often make a personal connection with a customer. You’re helping them to buy their dream home, after all. MCAP understands this. That’s why brokers across Canada rely on us to help them make their customers’ dreams come true.

Contact your MCAP Business Development Manager or go to www.mcap.com/brokers today.

MCAP Service Corporation | Ontario Mortgage Brokerage #10515 | Ontario Mortgage Administrator #11692

22-37_Cover story-SUBBED_v2.indd 33

6/09/2018 8:09:21 AM

SPECIAL REPORT

BROKERS ON LENDERS PRODUCT RANGE

S

BR

18

IN

O BR

G

RS

ON LENDER

S

BR

O

N AT I V E L E N D

SILVER ER

KE

N AT I V E L E N D

IN

RS

ON LENDER

S 20

18

LT

A

Bronze Manulife Bank

KE

LT

A

ON LENDER

ER

18

RS

Silver RMG Mortgages

S

20

KE

20

O

SILVER

ON LENDER

G

BR

18

BR

O

S

RS

GOLD LT

A

ON LENDER

20

K

S ER

KE

18

18

GOLD

Gold Scotiabank

O

S

BR

ON LENDER

20

O

RS

20

KE

TOP ALTERNATIVE LENDERS

IN

G

TOP LENDERS

ER

N AT I V E L E N D

2018 average score 4.06

Gold Optimum Mortgage Silver Equitable Bank Bronze Home Trust

2017 average score 3.97

For the past three years, lenders’ product range performance has been on a slow upward trend, finally breaking into the ‘good’ range with a score of 4.06 this year.

Scotiabank remains the gold-medal winner among traditional lenders; RMG Mortgages and Manulife Bank took silver and bronze, respectively, while Optimum Mortgage, Equitable Bank and Home Trust were the top three among alternative lenders.

Many brokers expressed frustration over the fact that the lenders with the most extensive product offerings also seem to be the ones with the poorest service. “Some

IT/TECHNOLOGY BR

KE

RS

ON LENDER

S 18

18

GOLD LT

ER

RS

ON LENDER

BR

18

ER

RS

O

BR

KE

2018 average score 4.01

34

ON LENDER

S

www.mortgagebrokernews.ca

IN

G

Bronze MCAP

LT

A

S

18

BR

ON LENDER

IN

18

RS

20

KE

N AT I V E L E N D

20

O

SILVER

Silver First National Financial

SILVER LT

G

S

A

O

ON LENDER

18

RS

20

KE

IN

S

BR

KE

N AT I V E L E N D

20

O

A

Gold RMG Mortgages

O

S

BR

ON LENDER

GOLD

20

O

RS

20

KE

TOP ALTERNATIVE LENDERS

G

TOP LENDERS

ER

N AT I V E L E N D

Gold Home Trust Silver Optimum Mortgage Bronze NPX

2017 average score 3.92

THE MOST IMPORTANT BROKERLENDER ISSUE regional lenders have absolutely brutal processes on the back end … where they have pretty good product lines but the most painful process,” one respondent said. “You send your paper to a ‘black hole’ and pray for a good outcome.” On the flip side, others noted that there are plenty of lenders that are performing well in terms of service but need to step up in their product selection.

In particular, brokers would like to see more rental and HELOC products from non-bank lenders.

Brokers also mentioned having difficulty parsing product limitations, which one respondent attributed to a transparency issue. “Very ‘wordy’ commitment packages with some difficult terms to understand and explain to the client,” he said. “There is no true port of variable terms unless it’s for the exact same value; I find this misleading, and so did recent clients. Restrictions on porting also limit the client to only be able to ‘port’ the existing balance into the same product line.”

In general, brokers cautioned lenders with limited product offerings that they might find it more difficult to compete in the market as brokers increasingly turn to lenders that are a ‘one-stop shop’ for all their clients’ needs.

The need for technology that gets the job done effectively and efficiently has not wavered among brokers, and some lenders appear to be keeping up with rising standards. Performance improved slightly this year over 2017, and First National, MCAP, Home Trust, Optimum and NPX all retained their spots on the medal podium, suggesting the top lenders are continuing to provide brokers with the best available technology.

Many brokers raved about their lenders’ superb tech offerings. “Portal is awesome,” said one satisfied broker, while another noted that “RMG and Home Trust are the best for technology. Another commented that “monolines overall are quicker to respond

CMP asked brokers what issues they thought would define their relationships with lenders in the next six to 12 months.

Consistent with previous years, brokers put the move to an efficiency ratio at the top of their list, though the rest were almost split between higher volume requirements and lender concerns about fraud.

Move to efficiency ratio 40%

Higher volume requirements from individual lenders 25%

Lender concerns about fraud 21%

Commissions 14%

and have more user-friendly portals for document uploading.”

While some lenders won praise for their online portals, others seem to be a sore spot for many brokers, mainly due to their limited capabilities. “Get a file portal that shows what has and hasn’t been signed off on or what’s outstanding,” one broker commented. “I think every lender should have online portals instead of the constant emails,” another said.

At the top of brokers’ wish lists for lender portal improvements were a process for streamlining shared documents worked on by multiple individuals and the ability to easily upload and access documents – and more user-friendliness is always welcome, too.

22-37_Cover story-SUBBED_v2.indd 35

6/09/2018 8:09:58 AM

SPECIAL REPORT

BROKERS ON LENDERS

SATISFACTION WITH CREDIT POLICY TOP LENDERS

O

ON LENDER

S

20 18

BR

RS

BR

O

S

GOLD

O

Silver Scotiabank

KE

RS

ON LENDER

S

18

18

KE

ON LENDER

BR

BR

S

SILVER

RS

20

O

ON LENDER

BR

RS

20

KE

Gold RMG Mortgages

KE

18

18

GOLD

SILVER

KE

RS

ON LENDER

S 20

Bronze Merix/ Lendwise

O

S

18

BR

ON LENDER

20

O

RS

20

KE

TOP ALTERNATIVE LENDERS

2018 average score 4.00

Gold Equitable Bank Silver Bridgewater Bank Bronze Haventree Bank

2017 average score 3.92

RS

ON LENDER

“First National Financial is really the only lender that can get the job done right every time” “RMG has a great platform for submitting documents” “Scotiabank knows how to approve the deal and review documents with the fewest amount of steps” “With Optimum, there is commonsense lending, great BDM support, and you always get a person when calling in” “Amazing underwriter and turnaround with Community Trust” “Merix is stepping up to the plate with some relaxed income guidelines”

S 18

BR

KE

Many brokers cited credit issues when asked about the biggest challenge they’ve faced with their lenders in the past 12 months; “terrible credit decisions,” “poor credit policy” and “stricter credit policies” were among the comments.

One broker suggested that lenders provide materials to better explain their credit policies to brokers to avoid future confusion and misunderstandings. This sentiment was echoed by a few other brokers, one of whom remarked: “Wish there was a better manual on income confirmation and rental policies.”

Some brokers felt lenders’ often confusing credit policies could be attributed to insurer influence, and they stressed that borrowers should not be affected by the lender-insurer relationship. A few lenders did stand out for their reasonable policies on credit, however.

“Sometimes [they make] exceptions on minor issues, such as bruised credit,” one brokers said of his lender.

20

O

Similar to last year, brokers are still frustrated by inconsistencies in their lenders’ credit policies, but there has been some improvement overall. Lenders achieved an average score of 4.00, and RMG Mortgages and Equitable Bank earned gold medals in their respective lending categories.

WHAT ARE LENDERS DOING TO SET THEMSELVES APART FROM THE COMPETITION?

SILVER IN

G ER

RS

ON LENDER

S 18

BR

KE

N AT I V E L E N D

20

O

A

LT

GOLD IN

G ER

RS

ON LENDER

Thank you to our brokers for your overwhelming support.

S 18

BR

KE

N AT I V E L E N D

20

O

A

LT

To find out what the fuss is about, get in touch at:

SILVER IN

G

A

LT

36

The results are in, and we’re honoured to receive a gold medal for BDM Support along with two silver medals for Satisfaction with Credit Policy and Transparency of Commission Structure.

ER

N AT I V E L E N D

BwBbrokerinfo.ca/contact-us.

www.mortgagebrokernews.ca

22-37_Cover story-SUBBED_v2.indd 36

6/09/2018 8:10:37 AM

INTEREST RATES TOP ALTERNATIVE LENDERS

ON LENDER

S

18

Bronze CMLS Financial

2018 average score 3.97

O

KE

RS

ON LENDER

S

18

O

RS

SILVER

20

20

BR

KE

18

S

S

20

ON LENDER

O

BR

18

K

S ER

Silver First National Financial

ON LENDER

GOLD

BR

S

20

O

ON LENDER

RS

18

RS

SILVER

KE

20

18

KE

Gold RMG Mortgages

O

S

GOLD

BR

ON LENDER

BR

O

RS

20

KE

BR

TOP LENDERS

Gold Optimum Mortgage Silver NPX Bronze Equitable Bank

2017 average score 3.84

Although lenders’ overall score on interest rates has improved since last year, this remains their weakest area; it was the only category to receive a rating of less than 4.

However, it seems that this year, brokers weren’t as concerned with the numbers as they were with a lack of clarity. Brokers called out their lenders for sending more than one rate sheet per day, not indicating clearly the number of basis points for buy-down and not notifying brokers if a rate special was removed. Brokers also expressed a desire for better rates for refinance deals.

A couple of brokers noted that monolines tend to struggle with maintaining rates or giving pre-approvals – or, if they

do provide good rates, it’s at the expense of a longer process, which makes brokers inclined to go with lenders that have higher rates but are able to deliver quick results.

“Rate wars are causing slow services,” one broker elaborated.

Overall, there was an overwhelming call for lenders to improve their rates, especially in a more competitive marketplace. One broker noted how government institutions are providing more enticing rates, causing brokers to turn away from independent financiers. Especially amid B-20 changes, the need for competitive rates for alternative clients is at an all-time high, causing brokers to be on high alert for any rate changes.

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

22-37_Cover story-SUBBED_v2.indd 37

37

6/09/2018 8:11:14 AM

SPECIAL PROMOTIONAL FEATURE

INTEREST-ONLY MORTGAGES

Staying flexible CMP caught up with Boris Bozic of MERIX Financial to find out how the lender’s Interest-Only Flex product has been performing in the market

CMP: It’s been two months since MERIX launched the Interest-Only Flex mortgage. What has the market’s initial reaction been?

Boris Bozic: The market’s initial reaction has been overwhelmingly positive. We’ve received a lot of kudos and props for innovation. For a number of years, lenders had no choice but to contract the number of offerings or shrink the boundaries of their products; therefore, coming up with something new, innovative and bold is noticed by our customers, and they seem to appreciate our intent to create products that meet market demands.

CMP: What kinds of clients are using this product the most?

BB: We are pleased to see that the InterestOnly Flex is appealing to many different customer profiles, as it validates the flexibility and extensive benefits the mortgage provides. We have an even split between purchases and refinances, and an even split between Western and Eastern Canada.

Most customers are maximizing their cash flow, with 67% of the mortgage balances in

38

interest-only payments. What’s interesting to note, however, is that the desire for better cash flow is not so much because of clients carrying heavy debt loads, but rather to use the improved cash flow for other assetenhancing reasons.

We appreciate that brokers are seeing the value of the Interest-Only Flex and referring it to their high-value clients. The average home value we are receiving is $850,000, and clients’ Beacon scores average very high at 795, with TDS/GDS averaging at 20% and 32%, respectively.

CMP: Was there the need in the market for this mortgage that you anticipated there would be?

BB: We believe the need exists. The challenge for us and for mortgage brokers is to identify the need for the borrower. In other words, the borrower might not even realize that they need this product.

CMP: Customers often approach brokers with a preconceived idea of what they want. What should brokers look for to identify a client who might

be better suited for an Interest-Only Flex mortgage?

BB: The only way to do that would be to do a comprehensive review of the entire application. The borrower might think, “I just want a five-year mortgage” because that’s all they know, but based on the profile of the customer – specifically, existing debts, other investment vehicles, lifestyle planning, etc. – that can all be addressed through the Interest-Only Flex mortgage. You just need to evaluate the situation in front of you.

CMP: At first glance, this product is very different. Do you have any tips for brokers on how to position it to their clients?

BB: The mechanics of the product may be somewhat complicated for a borrower, so it’s

www.mortgagebrokernews.ca

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6/09/2018 8:15:58 AM

years, becomes fully open?” Brokers should deal with the mechanics – borrowers should just think of the possibilities.

CMP: Was there anything that surprised you about this product after you launched?

BB: Well, we were pleasantly surprised with how well it was embraced and the encouragement we received from brokers. What we learned is that it’s not enough to explain the structure – we need to assist brokers in positioning this product to their clients.

We are also very pleased with the average mortgage balance, which is twice the size of our regular five-year fixed mortgage. This is a direct result of how we are able to compete in large urban centres like Toronto, Vancouver and Calgary because our maximum mortgage size is $2 million.

CMP: What kind of reaction have you seen from your competition?

BB: From what I’ve heard, the competition

“For a number of years, lenders had no choice but to contract the number of offerings or shrink the boundaries of their products; therefore, coming up with something new, innovative and bold is noticed by our customers” Boris Bozic, MERIX Financial critical to simplify the product in general. This is a cash-flow product. It’s the broker’s job to determine if freeing up cash flow is in the best interest of the customer. This enhances the value of the broker and the counsel they can provide. This puts them above being just a ‘rate broker.’

A broker could simply say to a customer,

“How would you like a mortgage where your monthly payments are the same as if you had a 50- or 60-year amortization?” or “How would you like a mortgage that frees up your cash flow to deal with this other expense or investment that is a greater priority or benefit to you?” or “How would you like a variable-rate mortgage that, after just two

has taken note of our efforts, and I suspect they may be watching closely to determine if they should try to go down the same path.

If they choose to imitate, we wish them well; however, this product wasn’t created overnight. It took us well over a year to finally bring it to the market.

CMP: What else is new at MERIX? BB: There are plenty of new things at MERIX. What’s old is new today, such as switch/transfers with $3,000 capitalization, accepting switch/transfers with collateral charges, harmonizing our policies to be in line with market demands, the Interest-Only Flex product on the A side, the Interest-Only ARM product on the NPX side, and our newest product, the MAX Mortgage in Ontario, which allows borrowers to qualify on the contract rate. We are also launching our new eXplore Broker Portal App. One of our four pillars is innovation. We’ve truly embraced that again this year. Why? Well, because today we can.

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PEOPLE

BROKER INSIGHT

The voice of the industry Dave Teixeira tells CMP how meeting DLC head Gary Mauris led to an unexpected but rewarding career in the mortgage industry

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

Dave Teixeira: I kind of fell into the industry. I knew Gary Mauris for a number of years from the community in Coquitlam; we did a number of philanthropic events together and both said we had to work together one day. For eight years before joining DLC, I ran my own boutique public and government relations and communications company. I mostly specialized in political campaigns and communications, but we also did a quarter of our business for no charge for non-profit organizations.

On January 1, 2015, I woke up and thought I needed a change from the political world, so I got in touch with Gary, and a month later I started at DLC as director of public relations and communications.

It’s a good fit, and my background gives DLC something they didn’t have in the years previous.

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

DT: I have thoroughly enjoyed it. It has been a learning curve on the business side, but in everything I have done in my life, I have always considered myself a student. I always find people who are smarter than me to give me that expert advice.

I have no ego when it comes to doing that. I know what I’m good at, and I know

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what I’m not good at. I have no problem in reaching out on things I need assistance on.

Luckily, at DLC there are a lot of very smart, engaged and experienced people for me to lean on.

CMP: Can you tell us a little bit more about your role and what it entails?

DT: I look after most of the lender and vendor arrangements, communications, and I make sure the media and government are aware of who we are. In the past, a lot of politicians had no idea about what mortgage brokers did and who they were, so I wanted to get our industry more profile.

We have seen that happen. Gary Mauris did a 10-minute interview with Prime Minister Justin Trudeau on CBC, and Gary and I testified before the Standing Committee on Finance about mortgage rules. That was something mortgage professionals didn’t

think to do until very recently, and at DLC we have been a little ahead of the curve.

CMP: You were responsible for DLC’s award-winning “We’ve got a mortgage for that” advertising campaign. How did that come about?

DT: After being at DLC for two years, I realized that every Canadian could benefit from the services of a mortgage broker.

Whether you have good or bad credit or you are buying your first home or third, brokers can make the burden of finding a mortgage a lot easier. That’s where we got the idea for the campaign.

We then created seven commercials, and it was all about humanizing the business. A lot of the commercials I had seen for mortgage brokers talked about getting the best rate, but that doesn’t pull at the heartstrings or the funny bone, so that’s what we tried to do.

FIGHTING FOR JUSTICE Outside of the mortgage industry, Teixeira has spent 10 years working with the family of Darcie Clark, whose common-law husband murdered their three children in 2008. “He went to trial and was found not criminally responsible and ended up in a hospital,” Teixeira explains. “A year later, he was deemed safe to be released into the community. I saw the family struggling on television and I thought I could help.

“I had political connections and wanted to shed light on the criminally responsible laws,” he continues. “We managed to change the criminal code of Canada and kept him in jail.”

Teixeira’s success in advocating for Clark has led him to work with other families facing similar issues.

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FAST FACTS: DAVE TEIXEIRA

Has been Dominion Lending Centres’ communications and PR director since 2015

Responsible for DLC’s award-winning “We’ve got a mortgage for that” ad campaign

Regularly featured as a speaker at various industry events

Hosts weekly technology segments on Global TV, CKNW and CFAX radio in BC

“I realized that every Canadian could benefit from the services of a mortgage broker ... brokers can make the burden of finding a mortgage a lot easier” CMP: You’ve also been recognized for your community service efforts. Can you tell us more about those?

DT: When I was a young kid, my parents said I had to do four things: go to school, have a part-time job, do a creative pursuit or a sport, and give back to the community. So for years, I have been doing that.

For the past 15 years, I have headed up the Terry Fox Hometown Run, and

we have raised over a million dollars for cancer research.

Also, back in 2011, I created a website called Canucks Riots. After the Vancouver Stanley Cup riot, I used my social media and web design skills to bring together images and posts of people bragging about the damage they had caused. The website has been credited by the Vancouver police with identifying more than 150 criminals.

Has held leadership positions in various charitable organizations, including the Terry Fox Hometown Run and the Adoptive Families Association of BC

Co-founder of Pink Shirt Anti-Bullying Day

Earned the Queen Elizabeth II Diamond Jubilee Medal in 2012

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6/09/2018 8:18:08 AM

SPECIAL PROMOTIONAL FEATURE

LENDING

Full speed ahead CMP spoke to Derek Serra of XMC Mortgage Corporation to find out his vision for the company and why he’s excited to build brokers’ businesses

XMC MORTGAGE CORPORATION is here to stay. That’s the message coming loud and clear from new managing director Derek Serra. The lender, previously known as XCEED, was acquired in 2013 by MCAN Mortgage Corporation, Canada’s only federally regulated mortgage investment corporation and the only MIC with a deposittaking licence. MCAN, founded by the same group behind MCAP, is focused squarely on Canadian real estate, which Serra believes is a key advantage.

“We finance the development of communities, the construction of homes and invest our capital in communities across the country,” he says. “That’s not something many of our competitors can say.”

MCAN has historically repositioned itself during times of uncertainty, something Serra attributes to the company’s ability to be nimble and move quickly in response to the markets.

“We’re experts, and that’s a big deal for mortgage brokers looking for a lender who understands their community and the unique needs of their clients,” he says. “It’s also how we improve performance year-over-year.

In 26 years, we’ve never missed a dividend payment. We understand the Canadian real estate market from the ground up – literally.

It’s what we do.”

After MCAN acquired XCEED, it expanded it quickly and then, in 2016, hit

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reset in response to market signals. The lender relaunched last year as XMC Mortgage Corporation, in what Serra describes as a straightforward rebranding process.

“It didn’t take years of endless research – we knew exactly what we wanted to achieve,” he says. “It’s a nod to a company that survived when many others did not. We’ve built a team with decades of experience – big thinkers who changed the industry. Combine that with the expertise, leadership and significant resources of MCAN, and you’ve got a winning combination.”

Serra joined the XMC team as managing director of sales and marketing in April.

Formerly a regional vice-president with RBC, he has more than two decades of experience in leading enterprise growth and managing the development of RBC’s branch network, financial planning and, most recently, its mortgage specialist business.

“RBC provided a great foundation and exposure to the banking industry,” he says. “I was fortunate in my career to be exposed to many different lines of business and understand the advice and service Canadians deserve. The household balance sheet of customers is changing. Canadians need choices, and given our lineup of insured and uninsured mortgages, we have the solutions.

Ultimately, the big banks are looking for volume, looking for cross-sell opportunities.

We are experts in mortgages; all we do is mortgages. You’ll feel the difference when you talk to members of our team.”

Of his decision to join the leadership team at this pivotal moment, Serra says it was the challenge that initially interested him. Now, a few months in, he has no regrets.

“It’s exciting,” he says of the wave of change underway at the boutique lender. “It’s the best of both worlds. On one hand, you’ve got the strength and resources to invest in evolving the company, and on the other, you’ve got this startup attitude and size that lets us test new ideas and pivot when we see a threat or an opportunity. Unlike many of our competitors, our strong capital position can be deployed when opportunities arise. We may choose to dial back our growth target, or we might choose to increase it. We have that flexibility – many don’t.”

“We understand the Canadian real estate market from the ground up – literally. It’s what we do” Derek Serra, XMC Mortgage Corporation When asked if he expects the company’s growth to continue, Serra offers an enthusiastic “absolutely.” The keys to XMC’s success, as he sees it, are its ability to leverage its resources and expertise to offer brokers strategic partnerships.

“We are committed to understanding how we can help brokers and their clients in this new environment,” he says. “We lend responsibly and within regulator guidelines in the best interests of our clients.

Right now, we realize the huge potential of partnering with a select group of growthminded mortgage brokers – the ambitious ones serious about building their business.

The new mortgage rules have created many niche opportunities and growth markets, and we’ll continue to cultivate our partner broker network and find new ways to add value to those relationships.”

XMC’s efforts to engage with brokers won’t involve any over-the-top trips or merchan-

dise catalogues, however, which Serra views as a relic of days past. “No one wants to go on vacation with me!” he says. “We’re going to generate demand for our partners. Brokers are business owners – we want to encourage the entrepreneurial mindset and be your business partner. From end to end, XMC will deliver best-in-class service, great rates and the best compensation in the business.”

Investment in technology will be another significant part of XMC’s strategy to expand its reach nationwide through specialized insured and uninsured mortgage programs.

Serra isn’t interested in catching up to other alternative lenders; rather, he wants XMC to move way ahead with new technology and new products.

“We understand these clients better than anyone else,” he says, “and our broker partners have access to a team dedicated to providing a superior experience for their clients.”

The XMC team continues to expand in response to demand and in anticipation of continued growth in BC and mid-markets outside of the GTA. XMC also plans to keep creating innovative mortgage programs that reflect the realities of today’s clients and market trends, such as increased entrepreneurship, self-employment, construction models and emerging technologies.

“We’ve got the right team and the right partner brokers in place to offer Canadians a new way to move forward,” Serra says. “Not every deal will be a slam dunk, and some may take more work than others, but it’s worth it.

This is what we do, and we’ll continue to get better at it.”

For Serra, the end goal is obvious. “If we can support your business, then we’re confident that you will support ours, and customers will benefit from our engaged partnership,” he says. “Our mission is to develop an exclusive network of smart, high-performing, growth-minded mortgage brokers – the best in the business. We want to cultivate those relationships and continue to support near-prime clients throughout the entire real estate life cycle.”

www.mortgagebrokernews.ca

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FEATURES

PRESENTATIONS

How to create a winning presentation The key to an effective presentation is to make your message simple and genuine, writes professional communicator Emma Bannister

EVERY TIME I go to speak or train at a different company, I get the same response: “You make presentations sound so simple.

I get it, but I don’t get how I get buy-in from everyone else.”

The goal of any presentation is to influence your audience to act. Maybe you want your employees to get on board with your new vision or idea, or to motivate your client toward a new outcome. You want to make them feel excited, inspired or raring to go.

Yet nine out of 10 times, at the completion of a presentation, you’re probably met with chirruping crickets, blank faces or stifled yawns (if your audience hasn’t fled the room).

So what gives?

C

M

Y

Make a point

CM

You can only claim that you have a ‘winning presentation’ if your presentation achieves what you wanted it to achieve. If your audience does what you want them to do and they respond in the way you want them to respond, that’s how you measure the success of your presentation.

The problem most of us trip up on is that you need to think about the behaviour of your audience long before you start talking.

All too often, when I ask a speaker what their objective is, they don’t know. They can’t tell me why they are presenting (other than because they’ve been told to), or what they want the audience to feel, act or do after they have seen the presentation. You have to be 100% clear on the purpose of your presentation.

MY

CY

CMY

K

Be human The key challenge we all face, regardless of industry, is that the world is more and more competitive every day. It’s harder than ever to stand out and be noticed, and to communicate your point of view with the right people in the right way.

One thing that’s not going to help is using business or corporate jargon as a crutch. All

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Accelerate your business

We’re invested in your success. The XMC Partner Broker Program is built to drive demand and deliver the tools you need to help your clients move forward.

Better. Faster. Together. xmcmortgage.com FSCO 10406 Proudly owned by MCAN Mortgage Corporation

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FEATURES

PRESENTATIONS

this does is create unnatural, overcomplicated messages that people can’t engage with.

What the world needs today – what your customers, clients, stakeholders and team members are crying out for – is natural, human-to-human connection through compelling visuals and emotional stories.

In business, we’ve been taught to stick to the facts and leave out any hint of emotion, yet research proves that our decisions – whether we buy or buy into something – are influenced by our emotions.

Remember, people buy from people they like. So you need to make your audience feel something toward you other than the urge to flee the room. The best presenters are those who can use a combination of facts and emotions to explain a future place that everyone wants to work toward.

Use images and video to create excitement, inspiration or action, if it’s appropriate to your cause. Pair these with infographics and diagrams that sum up your main points and data. I’ve also seen people use videos to successfully create something that tugs at the heartstrings and lingers for a long time in everyone’s memory.

When you share your vision and goals through compelling stories and slides, you reduce fear and instill confidence in your audience. That’s when they will connect to a future they want to be a part of.

Own up and own it Many of us believe that sharing everything and anything and blinding our audience with numbers is the best way to be transparent and open when it comes to a presentation, but that couldn’t be further from the truth. This will only put off the people you are trying to engage and make them lose interest faster.

It’s more important than ever to cut out all the clutter from your presentation. A powerful presentation has content that is clear, easy to understand, and uses simple

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IDENTIFY YOUR PRESENTATION’S PURPOSE What’s your main message?

You should have only one. Less than 10% of a presentation is remembered, so if you start jamming in too many messages, you will lose your audience.

What’s your objective?

Are you trying to educate your audience, share results or sell something?

Again, you should only be doing one of these.

What are your audience’s needs?

Do you have a clear understanding of who you’re presenting to? What do you want them to think, act or feel after you present? You must assess their beliefs, values and motivations. What makes them tick? Get into their shoes at the start, listen to them as you walk through the presentation and gather feedback at the end.

The best presenters are those who can use a combination of facts and emotions to explain a future that everyone wants to work toward language and images to connect with and engage your audience through a balance of emotion and analytics. Your audience will leave the presentation feeling different – inspired or excited to act on what you want them to do.

A poor presentation, on the other hand, has content that is overloaded with facts, stats, numbers, corporate jargon and dense text. It leaves the audience feeling confused, turned off and disengaged. They will leave the room with no idea of what to do next – except never attend one of your presentations again.

You must be clear and honest in your presentation. It’s also important not to try to hide or cover up negative information or numbers. Nothing turns clients or customers off more than when you lie about your financial position.

You need to be future-focused and take ownership of any problems. Explain the steps

you’re implementing to turn things around to minimize loss, and get your team involved to help with this, too.

Be open and honest about where you are right now and what’s involved in the journey to get where you’re going – together. Leave your audience inspired, not deflated like it’s their fault or you’re looking for an out.

Bad slides and presentations are used like a security blanket to hide things under.

So start with small changes to your content and attitude, and stop hiding and hoping for the best. Your customers, clients and team members will respect you for that.

Emma Bannister is passionate about presenting big, bold and beautiful ideas. She is the founder and CEO of Presentation Studio and the author of Visual Thinking: How to Transform the Way You Think, Communicate and Influence with Presentations. Find out more at presentationstudio.com.

www.mpamagazine.com.au

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More Options. More Lenders. More Solutions.

The Financing Hub Brings Online Technology to the Commercial Mortgage Application Process Discover More:

www.TheFinancingHub.com In exclusive partnership with MERIX Financial

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6/09/2018 8:21:25 AM

FEATURES

PURPOSE

Five myths about purpose Everyone wants and needs to find purpose in their work. But according to Aaron Hurst, doing so requires shattering some common myths

MOST OF what we understand about purpose at work comes from Hollywood.

Stories are a powerful way to learn, but most of the stories we see on screen give us a romanticized view of the role of purpose in our work. They build myths about purpose that actually make it harder for us to focus on what matters. But perhaps the most unfortunate aspect of these myths is that they imply that purpose is not something for everyone, which – based on my experience working with thousands of professionals, as well as emerging research on the topic – couldn’t be further from the truth.

Myth 1: Purpose = cause In working with thousands of professionals seeking purpose, the greatest barrier has been the ubiquitous belief that they have to find their cause. When business professionals leave Taproot’s pro bono consultant orientations, they are usually fired up and want to get on a project immediately. They can’t wait.

That being said, on one of our earliest projects, we were having a difficult time getting any of our largely gen-x, pro bono marketing consultants to join a team. The project was branding and naming work for a critical organization serving low-income

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seniors in one of San Francisco’s most challenged neighbourhoods, the Tenderloin. When I pitched the project to our pro bono consultants, they begged for a different project.

“I totally get that seniors are important, but I’m 32, and it really isn’t an issue that gets me excited,” they said. “Do you have anything focused on kids or the environment? I am really passionate about helping kids and the

Francisco. It turned out they had not only done a world-class job with the organization’s brand, but they had become an ongoing marketing committee for the organization, and several of them had become donors.

So many of us who are looking for a cause think we have to find our one true calling. We want to know that our mission is to help save one-legged kittens or find a cure for cancer.

Purpose is about finding a direction, not a destination … We may never find one true calling, but we can understand the color of our purpose, which can help us have much more meaningful careers and lives environment. That’s our future.” We shared with them the dire needs of the organization and asked them to be open-minded and give it a try. If, at the end, they were unsatisfied, we would give them first dibs on the next round of projects. They reluctantly agreed.

Nine months later, I received a surprising email. The leader of the pro bono consulting team was urging me to attend a session at City Hall to protect funding for seniors in San

Hollywood stars helped popularize this notion with their high-profile focuses on particular issues, such as George Clooney (Darfur), Brad Pitt (New Orleans), Angelina Jolie (refugees) and Matt Damon (water).

I’m also guilty of feeding into this way of thinking. When you are seeking resources or attention, being able to point to your success as part of your destiny works incredibly well.

People want to hear that you knew you were

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money and security. Purpose is a universal need, and even those in challenging situations still make it a priority.

Arguably, the most famous advocate for purpose in history is Viktor Frankl, who wrote about the importance and presence of purpose in Nazi concentration camps, where he lived during the Holocaust. He found that purpose was key to his survival. “Everything can be taken from a man but one thing: the last of human freedoms – to choose one’s attitude in any given set of circumstances, to choose one’s own way,” Frankl famously wrote in Man’s Search for Meaning.

It turns out that in many ways, the prioritization of purpose is inversely correlated with wealth. Money often conflicts with finding purpose, as it creates a false substitute for defining success.

Myth 3: Purpose = revelation going to be a doctor/basketball player/president/entrepreneur the minute you took your first step, still wearing diapers. Once you’re successful, you’re expected to tell a version of your biography that supports this mythology.

Destiny makes for a powerful story, but this concept is not only misleading, it also does the next generation a great disservice, as it sets unrealistic and unhealthy expectations.

Nearly all the early-career professionals who seek an informational interview with me lament that they haven’t found their cause yet. And while there are certainly people who are driven in this singular manner about a cause, it is almost always the result of a personal tragedy or an experience that inspired them to act. Maybe they were touched by the death of their mother from cancer, or their child died from gun violence.

Still, this holds true only for a very small percentage of people, and it is by no means the only way to find purpose.

For the rest of us, seeking our purpose is about finding a direction, not a destination.

Purpose is a verb, not a noun. We may never

find one true calling, but we can understand the colour of our purpose, which can help us have much more meaningful careers and lives.

Myth 2: Purpose = luxury Why do the poorest Americans donate 3.2% of their income to charity, compared to the wealthiest, who donate only 1.3%? Why do people living in wealthier neighbourhoods appear to be less generous?

Why also are those with the least money, education and prestigious jobs more likely than their wealthy counterparts to say that they would keep their job even if they suddenly were financially set for life? Why would a janitor continue to work if he won the lottery and an investment banker take an early retirement?

If you talk to people in less prestigious jobs and in poorer communities, they aren’t surprised by these facts. They see it every day and experience it firsthand. As a reverend in south central Los Angeles told me, “Being poor isn’t so bad; it’s just inconvenient.”

Purpose isn’t a luxury only for those with

Connected to the myth that purpose is about a cause is the myth that we discover our purpose in one fell swoop. We’re just walking along, minding our own business, when – bam! – our life’s calling is transmitted to us like a bolt of lightning from above.

True, this is usually how superheroes find their purpose. Batman saw his parents murdered, and it became his purpose to fight crime in Gotham City. Superman discovered that his people were wiped out because of civil war and found his purpose in fostering peace and civility. But the reality is that this is not how it usually happens for us mere mortals.

“We don’t receive wisdom; we must discover it for ourselves after a journey that no one can take for us or spare us,” Marcel Proust famously observed. When I shared this insight with a group of international graduate students at Oxford, they suddenly became visibly disturbed. Noticing the change in mood in the room, I asked them what had happened.

After an awkward pause, one woman raised her hand and answered that she had come to graduate school looking for a revelation. She

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FEATURES

PURPOSE

didn’t know what she wanted to do in her career but figured that she would leave with clarity about her purpose.

Slowly, everyone started nodding their heads. They had had the same realization – that one of their main reasons to attend graduate school (and go into debt) was to have a revelation.

Most of us will work for 45 to 50 years.

Think about that for a second. That’s the same amount of time it would take to attend college 12 times. And it’s increasingly true that during that time, we will hold many different jobs, and for more and more of us, those will be in a range of fields. We have so many opportunities to find the work that best suits our perspective on the world and the way we most enjoy contributing.

Myth 4: Purpose = only some work Administrative assistants spend their days supporting executives and have little autonomy or control over their workflow. Much of their work is repetitive and stressful, but it pays the bills and enables them to have the income they need to support the rest of their lives. It’s just a job – a 9-to-5, right?

Well, yes and no. It turns out that this is true, but only for about a third of administrative assistants, and perhaps more surprisingly, it’s also true for about a third of every occupation. What we do is not nearly as important as how we do it and what attitude we bring to the work. As the saying goes, “Wherever you go, there you are.” What we get from work has more to do with us than the work itself.

Work plays very different roles in people’s lives. For some people, a job is simply a job.

For them, work is a paycheck, and they don’t seek anything else from it. It enables them to have the money to enjoy their lives outside their job – they aren’t looking to derive meaning from their work. Those with careers

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care more deeply about their work as a way to get ahead within their profession or function.

It brings social status and power, which boosts their self-esteem. Finally, those with callings fully integrate their work into their lives and values. They see work as integral to who they are and part of their lives.

Amy Wrzesniewski and her colleagues found that across occupations, there were

monotonous practice. Winning the race or game is amazing, but their satisfaction stems from their deep investment.

With athletes, the relationship between pain and gain is clearest, but the same holds true of doing any work where we are experiencing high levels of purpose. Even when doing work that is making a big impact, if there is no skin in the game, the depth of

Purpose isn’t a luxury only for those with money and security. Purpose is a universal need, and even those in challenging situations still make it a priority fairly even divides between people who saw their work as a job, career or calling. It reinforced previous research that demonstrated that the ways individuals view work may be more tied to their psychological traits than to the work itself.

Another study by Wrzesniewski showed correlations between experiencing work as a calling and overall well-being and health. This implies something very important: It is in your best interest to see work as a calling, and as a society, we need to shift more toward calling-based work.

Myth 5: Purpose = easy Running a marathon hurts. There are the blisters, the chafing, the body aches. And yet, completing a marathon is something that many report as being incredibly meaningful. It pushes runners to their limits, both physically and emotionally.

Professional athletes make it look so easy.

When we watch them, they appear natural and effortless. In reality, athletes work incredibly hard and endure tremendous pain to be successful. As fans, we rarely witness the injuries or watch the thousands of hours of

purpose is diminished. Viktor Frankl also said, “Man’s main concern is not to gain pleasure or to avoid pain, but rather to see a meaning in his life.”

As Jennifer Benz put it, “Purpose doesn’t free you from working hard and being challenged – it will actually inspire and drive you to put yourself further out of your comfort zone. The falls will be harder, but the wins will feel so much better.”

The truth about purpose Purpose is for everyone, regardless of our profession or socioeconomic status. It is not about a cause or something that we discover by revelation. It is a challenging and rewarding journey.

Aaron Hurst is the foremost expert on the science of purpose at work. In 2014, he brought global awareness to the rise of the fourth economic era in history, the purpose economy. He is the author of The Purpose Economy: How Your Desire for Impact, Personal Growth and Community Is Changing the World and the co-founder and CEO of Imperative, the technology platform for leaders in the new economy. For more information, visit imperative.com

www.hrmonline.ca

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WHAT’S THE REAL VALUE OF A 3-BEDROOM HOME IN KITCHENER?

A

IC-designated appraisers are Canada’s real estate valuation experts. We apply proven, professional standards to keep the value of real estate grounded in reality. Mortgage professionals rely on us for unbiased and independent opinions of value to secure mortgage financing. If it involves real estate, involve an AIC-designated appraiser. Find an AIC-designated appraiser by visiting us online.

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6/09/2018 8:24:36 AM

FEATURES

FLEXIBLE WORK

Is too much flexibility killing productivity?

Are your employees taking a flexible work policy too far? Anna O’Dea offers some tips for getting productivity back without taking away a desirable benefit

IN TODAY’S digital world, employees expect the opportunity to work at times and in places that suit them. The days of being chained to a desk from nine to five are disappearing as companies embrace the digital tools that free their talent to work from anywhere at any time, yet still stay connected.

cracks are showing. Some leaders are worried that productivity is taking a hit and team culture is dying, as people aren’t as present in the office. They know some employees are taking too many liberties, but they don’t want to snatch back the benefit.

If this sounds familiar, it might be time to

When setting boundaries, look at your own behaviour first. Are you being responsive when off-site, taking interest in your staff so they feel energized?

Strategy planning in a cute café, a conference call in transit to save time, skipping train delays to sort spreadsheets from the couch – the appeal is obvious.

The employers I talk to at Agency Iceberg know that offering freedom is a competitive way to attract and retain great people. But

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tighten up flexibility in your business. Here are some questions to consider.

Are my employees taking advantage?

If you’ve hired well, you should have committed people. But talent of all

tenures, generations and personal situations can lose focus when you loosen structure.

Watch for signs such as missing meetings, being difficult to reach online or via mobile within agreed hours, not hitting targets, or failing to meet deadlines.

Keep an eye on increasing requests for flex-time favours that don’t suit your business. Too many Friday afternoons off, despite the promise of making up time on the weekend, is unlikely to suit clientfacing roles.

How much flexibility suits what we do?

Think about the type of work that must be done, and when and where it’s best performed. Consider the ideal situations for teamwork, client meetings and mentoring.

What’s the right mix of in-person or online interactions for each – for example, daily in-person WIPs, weekly face-to-face strategy sessions or continual dialogue online?

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Should flexibility be earned?

If you give freedom to one part of the business, you should give it to all, with awareness of what’s appropriate for each role. But for new hires, it could help to set a probation phase. You can understand their working style, build trust and ensure they know what’s expected.

How can I get some discipline back?

When setting boundaries, look at your own behaviour first. Are you being responsive when off-site, taking interest in your staff so they feel energized? Then ask your team how they view the situation, as they could be struggling to adjust to digital life, and you can think about how to better manage the change.

Easy ways to get structure back include

booking regular in-person meetings and agreeing on hours employees must be available to clients and colleagues. Set expectations for response times, regardless of where the employee will be working from.

How can technology help?

You can keep everyone in easy reach by supplying quick messaging tools (such as Skype for Business, Slack or Google Chat) and video conferencing capabilities. Project management cloud platforms such as Toggl are great for time tracking, and workflow dashboards such as Trello help you see what everyone’s up to on projects.

How can culture help?

You want people to be self-motivated and happy to come into the office,

and to stay focused on their work when off-site. Culture can play a big part in getting momentum back. Set up workshops to share insights, challenges and encouragement. And there’s nothing wrong with team lunches and Friday celebrations to bring back the spark!

Flex is the future – but within reason.

Digital freedom is here, and everyone wants to embrace the benefits. Considering these questions should help you offer flexibility while keeping productivity high and a great company culture alive.

A recruitment expert and the founder and director of Agency Iceberg, Anna O’Dea has placed thousands of employees in the best workplaces. O’Dea is also the founder of #LeadingLadies, an award-winning interview series featuring C-suite professionals’ career journeys.

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PEOPLE

CAREER PATH

BLAZING A TRAIL

With more than four decades in the industry under her belt, Rena Malkah has come a long way

Are you changin

Malkah’s first job – combing the hair of mannequin wigs for $1 an hour at age 13 – was followed by a string of positions that whet her appetite for sales 1974 “I was only 16, but [the jewellery store] would trust GETS A TASTE FOR Learn how you can FINDS MORTGAGES me to sell diamond rings because I would get the sale.

SALES the financial freedo When I worked in a clothing store, someone would At a friend’s suggestion, Malkah turned her ambitions to real estate but come in for one thing and walk out with five things. soon found herself drawn to the mortgage side of the industry I got a real feeling of satisfaction from making the deal”

1968

1975

GOES OUT ON HER OWN After scoring a 93% on her broker’s exam, Malkah jumped through several hurdles to open her own company “I needed $3,500 to rent an office and set things up, and the bank wouldn’t lend it to me because I was young and it was a startup – my lawyers had to sign on the loan for me. I didn’t have furniture; I sat on a stack of phone books and rang every real estate broker in the yellow pages, asking for business”

“The guy next to me [the brokerage’s mortgage agent] was getting thousand-dollar cheques every week. The walls were paper-thin; I could hear his conversations – it didn’t sound that hard. I made $36,000 my first year”

1984

CLIMBS TO THE TOP Malkah marked a personal and professional milestone when she became the first female president of the Ontario Mortgage Broker’s Association “When I was the only female [member of the association], they thought it was a joke when I said, ‘One day I’m going to be president of this association.’ It was my vendetta. I worked my way up from much lower positions in the association”

1989

RISES FROM THE ASHES Toronto’s 1989 property crash hit Malkah hard; the dramatic reduction in property values nearly decimated her business “It was a very rough time – in my 44 years in business, I have never seen anything as bad as that. I just kept working, making money and getting back on my feet. It was hard, but I’m not afraid of hard work. I would pull all-nighters or work 10 to 12 hours a day”

2015

WINS RECOGNITION Years of hard work and reputation-building paid off when Malkah was named the number-two commercial mortgage broker in the country by CMP for two years running and saw her brokerage ranked among the country’s top 10. Large deals became commonplace, including a $65 million transaction that represented 100% of the purchase price 54 www.mortgagebrokernews.ca

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2003

REBUILDS HER LIFE

A divorce forced Malkah to take on a mountain of debt; for the next five years, she focused her A trend you don’t w energy on work, paying down her ex-husband’s debt and slowly rebuilding.

The decade also marked her start as a property investor: After renting for What Canadians 65 a while, Malkah purchased a small home and gradually traded up to larger and larger houses, eventually bolstering her portfolio with condos, a townhouse in Oakville and a house in Florida want to continue living in their hom throughout retir

93%

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PEOPLE

OTHER LIFE

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

GO FLY A KITE When he’s not brokering mortgages, Richard Smith can often be found floating high above it all RICHARD SMITH is no stranger to challenging himself in the great outdoors.

Based out of Salmon Arm, BC, Smith, a broker at Tekamar Mortgages, has long been a fan of mountain biking, skiing and whitewater kayaking. Ten years ago, he first caught a glimpse of people borne aloft by kite and found himself with a

$1,200

Cost (in US dollars) of Smith’s first kite, board and line

20

Tallest height (in feet) Smith has ever flown

hankering to try kiteboarding.

Although Smith admits that selfteaching – his preferred learning mode – and the fact that he’s only been able to get airborne while on vacation has made his progress in the sport a bit slow, he says that as soon as he “stopped fighting it, it all came together.”

These days, Smith gets his kiteboarding fix by travelling either to a warm-water destination down south or to the Hood River, where he revels in the sensation that comes with unpowered flight.

“There’s a feeling of freedom about it,” he says. “There’s nothing quite like being 16 feet up in the air and coming down soft.”

7

Number of kites (“of all different sizes”) Smith owns

The first time Smith kiteboarded, he la nded almost 10km from his car a nd had to take a bus back with his board u nder his arm

56 www.mortgagebrokernews.ca

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