CMP 14.02

CYBERSECURITY SAVVY How to keep client data safe as online scams become more sophisticated MORTGAGEBROKERNEWS.CA ISSUE 14.02 | $12.95

ROOM FOR DEVELOPMENT The ins and outs of financing land development in Toronto THE MYTH OF MOTIVATION Why being highly motivated isn’t essential for success

2019

21 of Canada’s best independent brokerages reveal how to build a thriving operation on your own

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Not a fan of surprises?

(We lend consistency).

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ISSUE 14.02

CONTENTS 2019

SPECIAL REPORT

Twenty-one leading independent brokerages discuss the unique challenges and benefits that come with breaking free from the network model

22 Put our $2.5 billion where your mouth is.

Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $2.5 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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ISSUE 14.02

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

CONTENTS

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

UPFRONT 04 Editorial

The thriving commercial market is a goldmine of opportunity

06 Statistics

40

Consumers have much to learn about cultivating a good credit score

08 Head to head

PEOPLE

BROKER INSIGHT

44 UPFRONT

NEWS ANALYSIS

In an era of increasingly savvy email phishing scams, protecting clients’ financial information is becoming more difficult – and more crucial – than ever

Mortgage Savvy founder Rakhee Dhingra explains why she’s creating a new kind of brokerage

INDUSTRY ICON

First Source co-founder David Mandel talks about financing the development deals that built Toronto’s skyline

18 2

12 Technology update

Could AI inadvertently introduce bias into the mortgage approval process?

14 Alternative lending update Alternative lenders are providing a lifeline to gig economy workers

16 Opinion

Brokers can’t afford to take their eye off the ball when promoting their value

42

PEOPLE 47 Career path

FEATURES

PEOPLE

What responsibility do the brokers involved in the Fortress Real Developments scandal bear?

STRENGTHEN RELATIONSHIPS WITH YOUR TEAM Seven steps to building trust, respect and accountability

Whether it’s cosmetics or mortgages, Janna Dawdy has always gotten a thrill from selling

48 Other life

Getting political with Ontario broker and mayor Corinna Smith-Gatke

SPECIAL SECTION

FEATURES

44

WHY YOU DON’T NEED MOTIVATION TO SUCCEED No motivation? No problem – if you have the right systems in place

COMMERCIAL LENDING GUIDE MORTGAGEBROKERNEWS.CA CHECK IT OUT ONLINE

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They may get knocked down.

But they get back up.

Again and again.

They’re your clients.

And like you, we see the potential in hard-working Canadians.

We help mortgage brokers find flexible solutions for borrowers who put in the work.

The ones with bruised credit.

The gutsy career switchers.

And those brave enough to make a new start.

A bank for the grinders.

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UPFRONT

EDITORIAL

The case for going commercial

R

esidential mortgage brokering is much more difficult today than it has been in recent years, and there’s no shortage of brokers wondering whether the industry’s glory days are in the rearview mirror. Triggerhappy regulators might have created disquiet in the broker channel, but as the saying goes, when one door closes, another one opens.

The commercial real estate sector in Canada is thriving right now. Vancouver and Toronto have some of the lowest office vacancy rates in North America, but they aren’t the only cities where the demand for commercial properties is strong.

Edmonton had 624 commercial transactions in 2018 – a considerable boost over the 552 it saw in 2017. In addition, the city’s warehouses grew in both dollar sales volume and average price per square foot between 2017 and 2018.

One reason the Canadian commercial real estate sector is prospering is because it’s attractive to a fairly wide array of investors. There has been a major injection of capital into the commercial market over the past 18 months, resulting in record-high sales volume in Canada’s major urban centres, and commercial real

One reason the Canadian commercial real estate sector is prospering is because it’s attractive to a fairly wide array of investors estate firm Morguard predicts 2019 will be another robust year for the commercial segment. Consumer spending is still high, and the labour market is growing; both trends are expected to persist for several years, which bodes well for the country’s commercial sector.

Commercial brokering is clearly replete with opportunities – so how does one go about crossing the floor? The simple answer is mentorship. A commercial broker deals with many more variables than a residential broker does, and that makes assessing commercial deals more laborious. Documentation is more voluminous and requires closer scrutiny. Do you have any experience with environmental reports? How do you assess risk on a restaurant owner who wants to refinance his mortgage for extensive renovations? How can you forecast a property’s potential and assess whether it’s a readily marketable security with broad appeal if money needs to be recouped?

There’s no shortage of commercial mortgage veterans willing to help keen neophytes answer these questions.

www.mortgagebrokernews.ca ISSUE 14.02 EDITORIAL Writers Neil Sharma Joe Rosengarten Libby MacDonald Ephraim Vecina Heather Turner Copy Editor Clare Alexander

CONTRIBUTORS Lisa Pellerin John Eades Aytekin Tank

ART & PRODUCTION Designer Joenel Salvador Production Manager Alicia Chin Advertising Coordinator Ella Dayandante

SALES & MARKETING Associate Publisher Trevor Biggs Vice President, Sales John Mackenzie 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

neil.sharma@keymedia.com

SUBSCRIPTION INQUIRIES

tel: 416 644 8740 • fax: 416 203 8940 subscriptions@kmimedia.ca

ADVERTISING INQUIRIES trevor.biggs@keymedia.com

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, Seoul

Canadian Mortgage Professional is part of an international family of B2B publications, websites and events for the real estate and mortgage industries MORTGAGE PROFESSIONAL AUSTRALIA

The team at Canadian Mortgage Professional

melanie.mingas@keymedia.com T +61 2 8437 4787

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

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

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A huge thank you to all our lenders, partners and network for making the VISION2019 Tour the most successful VISION yet!

• 6 Locations • 6 Unique events

• Real skills and tools for our agents to take back to their business and implement

• Countless presentations

• Open forum conversations and idea sharing

• The best attendees

• A ton of coffee and snacks (like an unnatural amount)

Safe to say, we are more committed to our brokers than ever before and we are just getting started! Want to know how CENTUM does things differently? Reach out to us today!

thecentumnetwork@centum.ca | thecentumnetwork.ca ®/™ Trademarks owned by Centum Financial Group Inc. © 2018 Centum Financial Group Inc. The intent of this communication is for informational purposes only, and is not intended to be a solicitation to anyone under contract with another mortgage brokerage operation.

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UPFRONT

STATISTICS

Keeping score Brokers have a lot to teach homebuyers about how their credit score affects their ability to secure a mortgage

BROKERS MUST be willing to take on the role of educator when preparing the next generation of homebuyers to apply for a mortgage. A recent survey by Refresh Financial found that only 41% of Canadians know their credit score, and nearly 20% are too scared to seek this information out.

Millennials (those born between the early ’80s and mid-’90s) and generation z (those born from the early ’90s to mid-2000s) are

particularly uninformed about how to build good credit. Thirty-nine per cent of millennial and gen z respondents said they were more stressed about their credit score than they were a year ago, and 25% admitted they’re not sure what makes up their credit score. A third of 18- to 34-year-olds said they believe their credit score is holding them back from making important life choices such as purchasing a home.

MORTGAGE HOLDERS’ CREDIT SCORES RISE In an analysis published last August, CMHC found that the average credit score of Canadian mortgage holders has risen significantly over the past five years and is now close to the ‘excellent’ threshold of 780 in many metropolitan areas. In light of that, it’s hardly surprising that 75% of Canadians told Refresh Financial that they believe having a credit score below 700 is holding them back from important life decisions.

CREDIT SCORE, 2013 CREDIT SCORE, 2018 VANCOUVER

770 776 VICTORIA

96%

86%

of Canadians say that having a good credit score is important

are confident that they know how to build good credit

62%

of Canadians know how to check their credit score

27%

775

have felt anxiety, fear, hopelessness or panic about their credit score

780

Source: Credit in Canada, Ledger/Refresh Financial, 2018

AFRAID TO LOOK

WHERE DO CONSUMERS LEARN ABOUT CREDIT?

Nearly 20% of Canadians said they haven’t checked their credit score due to fear. But a 2018 TransUnion study offers a case for enlightening potential borrowers: 36% of Canadians were positively surprised when they found out their score.

Almost half of respondents told Refresh Financial they learned about building a good credit score the hard way: by making mistakes. Fourteen per cent received their education from a financial professional, suggesting that brokers have an important role to play in teaching their clients how to safeguard their financial health.

WHY DON’T CANADIANS KNOW THEIR CREDIT SCORE? 50%

I taught myself proactively (internet, reading) Friends/peers

40%

A financial expert (banker, mortgage broker)

30%

School/teachers

20%

I was never taught about credit

10%

Other I don’t know

0% They don’t know It’s not important They’re afraid to how to check it to them check it Source: Credit in Canada, Ledger/Refresh Financial, 2018

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I taught myself through experience (may have made a mistake)

0%

10%

20%

30%

40%

50%

Source: Credit in Canada, Ledger/Refresh Financial, 2018

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QUEBEC CITY

767 772

ABBOTSFORD-MISSION

761 OTTAWA-GATINEAU

771

765 770 KELOWNA

763 772

HAMILTON

758 772 MONTREAL TORONTO

763

765

768

775

Source: CMHC, August 2018

IGNORANCE ISN’T BLISS

THE MOST STRESSED

A credit score of 700 is an important threshold for securing decent rates and approval when applying for a mortgage – yet 42% of respondents said they weren’t sure what their credit score would be, and only 32% felt confident they’d be able to cross the 700 mark.

Prospective borrowers under 35 are more than twice as likely to be stressed out about their credit score than older Canadians.

WOULD YOUR CREDIT SCORE BE ABOVE OR BELOW 700 IF YOUR CREDIT WERE CHECKED TODAY?

10%

32%

50%

SURE My credit score would be above 700 My credit score would be around 700 My credit score would be below 700

37%

40% 30% 20%

UNSURE I have no idea what my score would be I don’t know/prefer not to answer

11% 10%

MORE STRESSED OUT ABOUT CREDIT SCORE NOW THAN A YEAR AGO

10%

39%

14%

Ages 18 to 34

All other age groups

0% Source: Credit in Canada, Ledger/Refresh Financial, 2018

Source: Credit in Canada, Ledger/Refresh Financial, 2018

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UPFRONT

HEAD TO HEAD

Are brokers who sold Fortress mortgages culpable?

In the twisted tale of Fortress Real Developments, should brokers bear any blame for selling the syndicated mortgages?

Trevor Daly President and founder DLC Home Capital Solutions

Sadiq Boodoo Principal broker and president Approved Financial Services

David Franklin Barrister and solicitor DavidFranklinLaw.ca

“Brokers who sold the Fortress product are absolutely culpable, for two reasons: Either they were too greedy and saw nothing but a way to make a quick buck with no concern for any potential negative outcome, or they didn’t research what Fortress was doing and perhaps didn’t understand what a syndicated mortgage was, despite selling them.

The second of these is the worst of the two, as it shows that these brokers were unwilling to educate themselves.

[Brokers should] be, get and stay educated and informed before selling something. Our industry should always represent integrity and transparency.”

“I tend to believe that brokers who sold for Fortress were working under the direction and guidance of the upper management of their company. Like any other sales force, the training, product knowledge and procedures are provided by the company for which they work – or in this case, by Fortress.

This would include project fact and term sheets, which would be utilized in the sales process.

Unless the brokers had authority or influence in the decision-making and direction of the company, there is no reason to hold them accountable for actions beyond their level of control and knowledge.”

“Fortress is culpable; so are the mortgage brokerages and sales force.

The broker is required to make sure that the investment is suitable for the client.

In 2004, the Ministry of Finance, which oversees FSCO, posted that syndicated commercial mortgages are riskier than residential mortgages.

Fortress sold syndicated mortgages as safe, secure investments, and the people who were purchasing them – some I have met – had never invested in a mortgage before. Another group that I have worked with do not speak English.

How can a broker sit down with such a person and get them to invest in complicated, high-risk products?”

STORMING THE FORTRESS As recently as January of this year, a legal representative for Fortress Real Developments denied the syndicated mortgage company had engaged in criminal activity.

“Over the past 10 years, Fortress has completed numerous real estate development projects throughout Canada using syndicated mortgages to finance early preconstruction or ‘soft’ costs, in which stakeholders, including syndicated mortgage investors, have been repaid,” said Fortress legal representative Scott Fenton after Morrison Financial took over the Collier Centre in Barrie when Fortress defaulted on a loan of almost $30 million. “In multiple projects where Fortress has completed its role, stakeholders have substantially benefited. It is simply a fiction to suggest that the risks of investing were not robustly disclosed.”

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UPFRONT

NEWS ANALYSIS

Gone phishing As phishing scams grow more sophisticated, consumers’ sensitive information is imperilled like never before – and the onus is on mortgage companies to protect it

FROM 2013 to 2018, global financial institutions lost an estimated $12 billion to phishing scams. The latest variation is known as ‘business email compromise,’ whereby shrewdly disguised emails are sent to a company’s employees with demands for urgent wire transfers. A recent heist, perpetrated by a hacker collective called London Blue, compiled a list of 35,000 chief financial officers from the world’s largest banks and mortgage companies, then hit them with money-transfer scams.

Robert Capps, vice-president and authentication strategist for NuData Security, has seen his fair share of scams over his 25-year career and has been on the frontlines of the battle against increasingly sophisticated online grifts.

“I’ve got the scars to prove it,” he says. “What traditional organizations are doing day-to-day

for really short emergency calls to action.”

Protective measures have grown at least as, if not more, sophisticated than the scams. Email filers, blacklists and artificial intelligence are now being used to shield financial institutions from scammers. Capps notes that some companies have gamified their fight against scammers, rewarding employees with prizes when they report suspected scams.

“They’re making compliance fun, and gamification has led to a lot of consumers and employees paying more attention to potential risks,” he says. “Folks within the corporate executive offices at mortgage brokerages, lenders and realty brokerages – anyone involved with the mortgage industry or facilitation of the buying and selling of property – when they get instructions to take action, they can pick up

“[Phishing] preys on the human desire to want to help … Before anyone realizes what’s happened, the money’s gone” Robert Capps, NuData Security to protect against business email compromise is multi-faceted: There’s consumer education, and employees are basically taught what business email compromise and phishing looks like. They’re taught not to click on attachments and [not to] take emails from unknown addresses that ask

10

the phone and call the person from within the company who supposedly sent the email and find out if it was really them.”

A hallmark of phishing is to ask the target to take immediate action. Asked why more people don’t realize the blatantly bogus nature

of the scams, Capps says, “It preys on the human desire to want to help and the human desire not be fired from your job. What happens is people will often take action on something because they believe it’s come from legitimate source, and it [collectively] results in the loss of billions of dollars from the global economy.

Before anyone realizes what’s happened, the money’s gone, and it’s not coming back.”

Another scam in January, which resulted in more than 24 million mortgage and banking documents being stolen from US banks, highlights the carelessness with which sensitive documents are shared in the real estate and mortgage industries. Among the compromised information were social security numbers, birthdates and private addresses. The breach, which involved banks such as Citigroup, Wells Fargo and Capital One, has been traced back to a Texas-

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RECENT CYBER ATTACKS IN THE FINANCIAL WORLD

March 2018 BMO and CIBC were hit by cyber breaches that compromised the information of tens of thousands of customers. The hackers demanded $1 million in cryptocurrency from each bank.

December 2018 Cyber threat detection company Agari uncovered a scheme by the Nigeria-based hacker group known as London Blue to target 35,000 CFOs of banks and mortgage companies worldwide.

January 2019 Texas-based data and analytics firm Ascension was hit by a cyber attack that compromised 24 million mortgage and banking documents in the United States. based data and analytics firm called Ascension.

Breaches like this are all too common – even in Canada, says Trustifi CEO Idan Udi Edry.

“Sixty-nine per cent of attacks today start from

proof of income, information like social security numbers, their address – and a lot of Realtors happen to use Gmail, which is open-source.

Then they’re recommended to a loan officer

“If you’re scanning documents and then emailing them, hitting ‘send’ is akin to opening your wallet on the street” Idan Udi Edry, Trustifi simple email,” he says. “It can be malware, phishing; it takes a lot of different forms. It’s more important today than ever to encrypt emails because when an individual consumer applies for a mortgage, they’re beginning the process with a Realtor and delivering over email

who uses open-source emails like Gmail again, and they hand over more information than they gave to the Realtor.”

Consumers using unencrypted servers are blissfully unaware of how close to a ruinous precipice they are. Even though they’re sending

sensitive personal information to trusted Realtors and loan officers, they are putting themselves at risk of being defrauded, having their identities stolen or even having money stolen directly from their bank accounts. And the culprits could be from anywhere in the world.

“First, consumers need software to encrypt their emails completely,” Edry says. “Second, as a consumer, you should only send sensitive information to an organization that you’ve ensured is using tools to protect data. If I send my information to a Realtor, I want to make sure they protect themselves.

“If you’re scanning documents and then emailing them,” Edry adds, “hitting send is akin to opening your wallet on the street and letting anybody passing by see what’s inside your wallet.”

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UPFRONT

TECHNOLOGY UPDATE NEWS BRIEFS BMO forms new unit to tackle cybersecurity and fraud

As part of its continued drive to digitize and improve efficiencies, BMO has created a financial crimes division to address variegated digital threats.

Bringing together BMO’s existing capabilities around cybersecurity, fraud and physical security into an integrated central function, the new unit will work in cooperation with the bank’s anti-moneylaundering group. The team will be led

by Larry Zelvin, who previously served as managing director and global head of cybersecurity at Citigroup.

iA Financial Group’s app now available for mortgages

iA Financial Group recently announced the integration of mortgage capabilities into its iA mobile app. Clients with mortgage loans will now be able to see their loan balances and rates, the remaining amortization, payment and maturity dates, and other relevant information about their product. “We are also adapting our methods by promoting efficiency and the client and advisor experiences,” said iA Financial Group executive VP Renée Laflamme.

“Through technology, we are more accessible, information is closer to your fingertips, and transactions are easier.”

Mortgage companies’ tech avoidance hurting productivity

Canadian mortgage companies remain hesitant to adopt various technological innovations, and their productivity might be suffering as a result. According to John van Oosterhout, director of partnerships at appraisals company Value Connect, systems integration should be a priority throughout the industry, but it isn’t. “Standard in the industry

now for a mortgage broker or agent is they key something into whatever application they’re using and then key it in again into another system, but the technology exists to create a much simpler solution,” van Oosterhout said, pointing to application programming interfaces [APIs], which can create a bridge between disparate systems. “Once you build those APIs, the systems start talking to each other and you can build in automation, machine learning and all kinds of other great things.”

Ontario-based credit union to open digital banking arm

Ontario’s Meridian Credit Union has received authorization from OSFI to open a digital bank, Motusbank, this spring. Meridian said the digital entity will allow users to “benefit from better pricing and services because there are no shareholders expecting quarterly returns.” Motusbank will offer mortgages, loans and lines of credit, among other products. “Motusbank will treat members as true partners, offering an exceptional digital experience, along with some of the most competitive rates and fees in the country,” said Meridian CEO William Maurin.

US digital brokerage Redfin eyes Canadian launch

US-based real estate brokerage Redfin has announced plans to launch a Canadian real estate brokerage service in Toronto and Vancouver by March.

The company will also be launching mobile apps and a Canadian version of its industry-leading website. “Our website and mobile apps will show all the homes for sale via the local multiple listing services used by brokerages,” said Redfin CEO Glenn Kelman. “And Redfin will show sale prices for Toronto and Vancouver homes that for years had been unavailable to consumers.”

When AI becomes biased Faulty initial premises and potential decision-making errors can lead to artificial intelligence doing more harm than good

Touted by many as a tool that will redefine how industries work, artificial intelligence has attracted much attention in the Canadian financial system in recent years; AI research and development is one of the most active areas of fintech investment.

But as author and futurist Bernard Marr pointed out in an article published in Forbes in late January, artificial intelligence needs further refinement and scrubbing of any potential decision-making hazards before being rolled out for large-scale use in mortgage and other critical industries. While the common impression of AI is that it will be able to efficiently filter and organize the considerable volumes of information involved in the finance industry, Marr noted that the algorithms handling these tasks are still vulnerable to erroneous conclusions derived from faulty initial data.

“When computers are routinely making decisions about whether we are invited to job interviews, eligible for a mortgage or a candidate for surveillance by law enforcement and security services, it’s a problem for everybody,” he wrote. “Biased AI systems are likely to become an increasingly widespread problem as artificial intelligence moves out of the data science labs and into the real world.”

To demonstrate how easily things can go wrong when the technology is hastily applied, Marr recounted a recent ProPublica study that uncovered a troubling result: “An AI algorithm used by parole authorities in the US to predict

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the likelihood of criminals reoffending was biased against black people.”

He also pointed to the example of high-level corporate positions, where meritocracy is supposedly a guiding principle. “An algorithm might pick a white middle-aged man to fill a vacancy based on the fact that other white, middle-aged men were previously hired to the same position and subsequently promoted.

Q&A

Pat Giles Vice-president, real estate secured lending TD BANK

“Biased AI systems are likely to become an increasingly widespread problem” This would be overlooking the fact that the reason he was hired, and promoted, was more down to the fact he is a white middle-aged man, rather than that he was good at the job.”

This has significant implications for the mortgage industry, where AI is being hailed as a potentially powerful addition to the capabilities of brokerages. However, AI would not consider the human circumstances that led to problems such as delinquency or mistaken documentation, only the results of such problems.

In light of these potential biases, Marr stressed the importance of constantly “evaluating the consistency with which we (or machines) make decisions.”

“If there is a difference in the solution chosen to two different problems, despite the fundamentals of each situation being similar,” he wrote, “then there may be bias for or against some of the non-fundamental variables. In human terms, this could emerge as racism, xenophobia, sexism or ageism.”

Years in the industry 15+ Fast fact TD Bank launched its digital mortgage application nationwide on January 22, 2019

Going digital with applications How has the TD digital mortgage application been performing so far?

The digital mortgage application is gaining interest and visibility with consumers. We are thrilled with the level of immediate interest we’re seeing from Canadians, including existing and new TD customers.

We have a number of applications submitted and are helping our customers through the process with our centralized team of mortgage specialists.

What aspects of the application are you most proud of?

With TD’s digital mortgage application, Canadians can now complete their mortgage application online, when and where they want. The digital mortgage application is available on all devices, with features such as 24/7 access, save and resume, and document upload. Status tracking is also a highly valued feature, since it gives Canadians full visibility into what comes next in the mortgage application process. Consumers can also benefit from a 120-day rate hold within TD’s digital mortgage application, and they can complete the application at their own pace, with the option to complete the different sections in the order they want.

What impact did it have on your client base?

Consumers now have access to more digital tools than ever before, enabling them to do everything from browsing open houses and recently listed properties online to shopping around for mortgage options from their smartphone. Canadians have different needs when it comes to homeownership, and for the majority, their path begins by going online, with many wanting the option to start their mortgage application process there as well. As our customers’ expectations continue to evolve, it’s important for TD to continue building solutions that provide personalized, connected experiences in the home-buying process.

Amid the steady stream of industry innovations aimed at making transactions even easier for borrowers, what is the role of the mortgage agent or broker?

The digital mortgage application is the latest addition to TD’s expanding in-person and digital mortgage tools. This technology complements the advice and guidance offered by financial advisors and mobile mortgage specialists, allowing customers to collaborate with a financial expert while enjoying the benefits of features like document upload, application status and 24/7 access.

What are your expectations for the digital application?

It’s all about helping our customers feel more confident during one of the biggest financial milestones in their lives. Whether they choose to start their mortgage application digitally or face-to-face, it’s about making sure our customers have the right tools and the right advice to make the right mortgage decision to meet their specific needs.

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UPFRONT

ALTERNATIVE LENDING UPDATE

Gig workers rely on alternative mortgages Gig employees are a significant part of the workforce – and alternative lenders are often their only option

“Without regular paychecks or access to financial statements such as the T4 [tax form], gig workers have found themselves on the wrong side of conventional mortgage lenders,” Little wrote. “Unfortunately for gig workers, the issue of not having a steady income stream presents itself as a significant obstacle to becoming a homeowner. In the eyes of the conventional mortgage lender, having a good credit score or an annual income from multiple

“The issue of not having a steady income stream presents itself as a significant obstacle to becoming a homeowner”

Canadian mortgage regulatory standards are not equipped to address the realities of the gig economy, Neighbourhood Holdings CEO Taylor Little argued in a recent thought piece published by The Globe and Mail. Little noted that this crucial yet overlooked non-traditional workforce – which covers consultants, freelancers, independent contractors and selfemployed individuals – represents an estimated 20% to 30% of Canada’s working population.

NEWS BRIEFS

“Non-traditional workers in Canada are facing a harsh reality when it comes to applying for a home mortgage: rejection,” Little wrote, adding that much of the task of meeting these Canadians’ needs has fallen to alternative lenders. That’s largely due to the fact that most of the current regulatory regime relies upon standards established decades ago, in an era when the vast majority of Canadians had regular salaries.

Alternative lenders especially squeezed under B-20

According to Mortgage Intelligence broker Steve Garganis, alternative lenders are feeling the brunt of new B-20 rules more than banks are. “While the overall mortgage volume has slowed, the losers are the non-bank lenders because they must portfolio insure everything and they can’t insure refinances, houses over $1 million or rentals of single-unit properties,” he said. “The mortgage rule tightening by the Trudeau government has forced consumers to go to banks, as they lend their balance sheets and have lots of cash.”

sources that’s comparable to a salaried worker in aggregate is often still not enough to close the deal on a mortgage. Conventional mortgage lenders haven’t been able to effectively adapt to the changing labour market, therefore increasing the demand for alternative financing options for this next generation of workers.”

Little warned that the trend shown by the B-20 mortgage changes is representative of an ongoing failure “to adapt to the changing face of today’s workforce … Layer in the fact that many of the assets generally acquired through financing – leisure goods and services and, in particular, housing – are increasing in value, and we get a clear image of an economy in which tens of thousands of potential borrowers are being left on the sidelines.”

Morneau says no to new regulations on non-banks

Finance Minister Bill Morneau has denied reports that the government is planning to extend the B-20 stress test to private lenders. “We’re always looking at the entire mortgage space to make sure we have a system that is providing the adequate protections for Canadians,” he said. “That means we need to think about, obviously, the space that we are directly regulating and what our regulations do in terms of impacts on other parts of the provision of that sort of credit. But I don’t have anything specific in that regard right now.”

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Q&A

Lindsay Jurek Senior director, alternative sales MERIX FINANCIAL

Years in the industry 18 Fast fact In her spare time, Jurek enjoys cooking and baking

Innovative options for alternative clients How has Merix Financial been doing recently?

We are very optimistic about this year. We experienced significant growth in 2018 and are projecting the same positive trajectory for 2019. This year is our 15th year in business, and it’s something that we’re very excited about. We are pleased to have provided homeownership to over 200,000 clients, as well as paid out more than $47 million in trailer fees to our broker partners. This is a year of celebration for us.

How have recent regulatory changes affected your business?

The regulatory changes have allowed us to go back to our roots and refocus on our core mission. It’s no longer about who offers the lowest rate; rather, it’s about providing solutions and innovative strategies to help our clients in any situation.

What are the most significant issues your clients struggle with?

At Merix, in addition to the homeowner, the broker is our primary client. One struggle we acknowledge is the difficult task they have qualifying the borrower at their preferred mortgage amount and interest rate due to all the recent financial and regulatory changes. Every day, borrowers are looking to buy their dream home or refinance so they can pay for a child’s wedding or some special occasion. Borrowers are not always up-to-date with changes, so when faced with going through these financial transactions, it falls on the broker to re-coach borrowers and manage expectations.

Alternative lenders’ market share expands

A recent analysis by the Bank of Canada has found that alternative lenders now account for approximately 8% of all mortgages nationwide, essentially doubling their market share since 2015. The BoC cited tighter mortgage qualification requirements as a leading factor. “These mortgage rule changes have made it more difficult,” said Michael Hapke of Ottawa-based private lender Advanced Mortgage Investment Corp., “and what we’re seeing on the private lending side is the quality of business that is coming over to us is second to none.”

It emphasizes the fact that brokers need to be seen as the experts and provide transparency as well as solutions to the homeowner. The struggle of the broker is being continually informed and educated on everything that is available and being able to accurately relay it to the end client.

What do Merix’s alternative mortgage offerings bring to the table?

I’d say our most unique offering would be the ability to give clients interest-only payments. As an alternative lender, to provide this kind of flexibility to our customers is definitely crucial. Before, a good number of prospective borrowers are unable to qualify, mostly due to blemished credit histories. These flexible options allow us to view a client’s unique circumstances on a case-by-case basis and apply the most appropriate solution. For the interest-only product, we might see some clients looking to have a large number of rental properties, as they want that increased cash flow. It’s about acknowledging their specific situations, rather than letting the issue of blemished credit dominate the discussion.

Another key offering that we’re proud of is what we call our NPX Max Mortgage. Basically, it provides the prime mortgage borrower – who might not necessarily meet the debt servicing guidelines under the current requirements – the ability to qualify at the contract rates and maximize their mortgage amount. When speaking to our broker partners, we ask them to think of it as ‘vintage qualifying’ – looking back to 2016 and how deals qualified under the rates back then.

Bank mortgages more costly than smaller lenders

According to LowestRates. ca, the lowest mortgage rates offered by the country’s leading banks are higher than those available from alternative lenders. In January, RBC cut its five-year fixed rate to 3.74%, but LowestRates.ca found that the best five-year fixed rate in the non-bank lending market was 3.23%. “Brokers and smaller lenders often drop their rates first to be more competitive, and banks are slower to implement changes because they know they own the market,” noted LowestRates.ca CEO and co-founder Justin Thouin.

Deposit proposal could harm alternative lenders

Recently proposed OSFI regulatory changes would compel banks to keep a larger volume of liquid assets in reserve to reduce the risk of collapse, but observers argue such requirements would have a more pronounced impact on smaller lenders. National Bank analyst Jaeme Gloyn compared the effect of this rule revision on Equitable Bank and Home Capital Group. If the proposal is implemented as is, he said, the institutions will suffer reduced earnings per share next year of around 10% and 4%, respectively.

www.mortgagebrokernews.ca

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UPFRONT

OPINION

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

Leveraging the point of difference The broker channel has become a force to be reckoned with – and now it’s up to brokers continue to deliver value, writes Lisa Pellerin OVER THE last few years, changes that have increased the number of hoops customers have to jump through to obtain a bank mortgage have given rise to an unintended consequence. It seems the banks might at last be realizing that they have competition in their own backyards in the form of expert mortgage brokers, who bring to the table a higher level of service and expertise, not to mention to the ability to offer clients competitive rates.

As brokers’ market share continues to grow, the banks have not been slow to respond. Many are streamlining the mortgage origination process and fine-tuning call centres to aggressively contact clients with offers of quick and easy ‘pre-approvals.’

I’ve always said that our greatest competition is the banks, not fellow mortgage brokers. They have deep pockets and massive marketing budgets – and they are not about to let go of this profitable market without a fight. While we do have partnerships with the banks in the broker channel, don’t think their goal is to keep us around forever. They would much rather acquire the mortgage business themselves.

Now is not the time to be complacent.

A powerful force is breathing down your neck that wants your clients and your business. Many people still have a strong level of trust that their bank is the place to go for

16

their mortgage, partly because awareness of our industry is still too low. These beliefs are deeply ingrained and won’t change overnight. We still have a lot of work to do to change that paradigm.

In 2019, I believe the housing market will continue to be soft, and we will see lower sales overall. What to do? Brace yourself

As mortgage brokers, we are fortunate to be in a position to truly offer clients the best possible care, attention and experience.

We can research and present options that are best suited to them, offering completely unbiased advice. We can take the time to understand their unique situation and then find a solution; this gives us a huge advantage over the banks. How fortunate that we aren’t limited to the same small number of mortgage product options for every single client. Our industry needs to leverage this point of difference to the max.

One important factor that I think is missing is for brokers to counsel clients on their finances, their spending habits and how to manage their cash flow so that when we refinance their mortgage, they walk away with information that can really improve their lives. This means we must be comfortable having the tough talks and offering advice that our clients didn’t necessarily come in for, but is undeniably in their best interest.

We live in a world of easy credit where consumers can buy whatever they want, whenever they want it. We have to stop relying on refinancing our homes and

“Many people still have a strong level of trust that their bank is the place to go for their mortgage … We still have a lot of work to do to change that paradigm” for a different year, plan and prepare. It’s incumbent on each broker to demonstrate their worth. How will you set yourself apart?

What value do you bring? Are there courses or licences you can obtain to represent yourself the best way possible to your clients and partners? What are your areas of weakness, and how can you strengthen them?

A market like this will weed out the brokers who are part-time, who aren’t serious or who have no idea what they’re doing. Our clients deserve to partner with someone who has the knowledge, skills and experience to provide them with the best possible options.

consolidating on secured lines of credit.

What happens when a client can’t do this?

Let’s offer this service and help our clients become more informed on overall financial planning. As Tony Robbins says, “Every day, work harder on yourself than anything else.

If you can become more intelligent, more skilled and more valuable, you can add more value to other people.”

Lisa Pellerin is a mortgage broker and team lead for Claystone Mortgage Team, part of Mortgage Architects. She has more than 20 years of mortgage experience and holds AMP, PFP and CSC designations.

www.mortgagebrokernews.ca

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LENDING GUIDE MORTGAGEBROKERNEWS.CA

COMMERCIAL LENDING Expert advice and key resources for winning more commercial deals

00_OFC IFC IBC OBC Commercial Lending-SUBBED.indd 1

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We envision.

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Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United Withmortgage over $2.7lender billionspecializing under administration, we offer Romspen Investment Corporation is States. a non-bank in commercial real customized mortgage solutions for term, bridge and construction financing from $5M to $100M. estate across Canada and the United States. With over $2.7 billion under administration, we offer customized mortgage solutions for term, and construction financing from $5M toLicense $100M. Blake Cassidy or Pierre Leonard | 800bridge 494 0389 | www.romspen.com # 10172 Blake Cassidy or Pierre Leonard | 800 494 0389 | www.romspen.com

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COMMERCIAL LENDING GUIDE

COMMERCIAL LENDER DIRECTORY COMPANY

WEBSITE

PHONE NUMBER

Canadian Mortgages Inc.

canadianmortgagesinc.ca

855-340-8543

Commercial Mortgage Corporation

commercialmortgagecorporation.ca

416-236-2222

Community Trust

communitytrust.ca

416-763-2291

Downing Street

downingstreet.com

416-248-6206

Empirical Capital Corp.

empiricalcapital.ca

416-840-6896

Equitable Bank

equitablebank.ca/commercial

866-407-0004

First National Financial

firstnational.ca/commercial

866-298-0929

First Source Mortgage Corporation

firstsourcemortgage.ca

416-221-2238

Gold Capital Corp.

goldcapital.ca

778-386-7264

MCAP Financial – Commercial Mortgages Group

mcap.com/commercial-mortgages/commercial-mortgages-group

800-387-4405

Rathcliffe Capital Corp.

rathcliffecapital.ca

416-787-1135

Reciprocal Opportunities Inc.

roigroup.ca

519-755-6252

Romspen Investment Corporation

romspen.com

416-966-1100

Trez Capital

trezcapital.com

877-689-0821 This list is not a complete directory of Canada’s commercial lenders. If you would like to be added to the next list, please contact Trevor Biggs at trevor.biggs@keymedia.com

Featured lender

Read Canadian Mortgage Professional anywhere, anytime

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www.mortgagebrokernews.ca

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COMMERCIAL LENDING GUIDE

A guide to alternative bridge lending Skip Walters of First Source Mortgage Corporation offers a crash course in bridge lending best practices

MARKETS FLUCTUATE, governing parties change, and approvals for land development can take years. Even as interest rates rise and land values remain flat or decline in this market, it’s not difficult to understand how commercial bridge lending operates.

A commercial alternative bridge lender lends funds for acquisitions or refinancing purposes on industrial, commercial or residential projects that are being developed or are in the process of ramping up leasing or other forms of cash flow in order to meet the debt service requirements of lower-cost institutional lenders. An alternative bridge loan can also be used for construction financing in the form of draws to complete the project.

Typically, the bridge lender lends money for a short period, usually 12 to 18 months, but sometimes as long as 24 months. These lenders typically require interest-only payments while working toward institutional take-out financing for a much longer term.

Simply stated, a bridge loan is a bridge to get to institutional financing. Alternative bridge loans are priced higher than institutional funding, based on the higher perceived risk attributed to the incomplete development or

2

non-stabilized income from the property.

It’s important for brokers to know where things stand in bridge lending at this point in time. Interest rates are rising, and land values are flat or even declining in some areas. Homes are not selling for what they did a year ago. Appraisals are based on a direct comparison approach, and most private lenders are extremely cautious about conclusions and who the appraiser is. Too often, the appraisal includes comparable properties that are outdated, and conclusions are largely speculative.

Most alternative and institutional lenders are at their limit with land financing. Unless the subject land is in a populated urban area, the lender can determine from the planner’s report that draft plan or site plan approval will be achieved within the term of the mortgage (typically 12 to 18 months) to provide an exit, and the borrower has significant skin in the game, the probability of a land loan approval from an alternative bridge lender is diminished. However, that being said, land loans are being approved, and alternative commercial bridge lenders are closing deals.

How can you better ensure your time is

not wasted when you think you want to work on an alternative commercial bridge loan or development financing? First, you should meet with the client directly to better understand their vision and expectations. Try to determine all you can about the asset being either acquired or refinanced.

Ask the right questions. For example, what did the borrower pay for the asset, when was it purchased (get a copy of the APS), and are there any environmental issues? What is the exact size and location of site, and how much of it is developable or what is the process to get to stabilization? Determine what work has been completed since acquisition and how much money has been spent

www.mortgagebrokernews.ca

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By meeting borrowers in person, you can often flesh out any issues in advance and deal with them immediately rather than when it could be too late and on what specifically.

Does the borrower have a current appraisal? Have they consulted with a planner (if the land is being developed) or completed a feasibility study, if applicable? Does the site currently meet the criteria of the city or township’s official plan, or does it need

rezoning? Has the borrower met with the city and discussed their plans and timing for approvals? Find out if a pro forma for the project has been completed and review it. Finally, is the borrower requesting a repatriation for any costs spent to date?

Asking the right questions instills confi-

dence. Use this information to better influence client expectations. The questions above represent a short, and certainly not exhaustive, list of information to consider. The answers will provide an important starting point for the lender’s underwriting team to assess the risk and viability of the loan. Use this information to draft a short summary, along with a request for the loan amount and term – and don’t forget to add the full corporate name and profile of the borrower with the full name of the guarantor and net-worth statement.

You should also comment on the history of the borrower and experience of the guarantor to bolster the likelihood of approval. If you are refinancing a property, you should include details of the existing financing, note why the current lender is to be discharged and give a detailed explanation of the use of funds.

At First Source Mortgage, we insist on meeting all borrowers, even if you have not. We want to hear from the prospective borrower about their vision for the project. Like you, we believe in the necessity of discussing the vision and the feasibility of the project in person with every borrower, as well as inspecting the property. By meeting borrowers in person, you can often flesh out any issues in advance and deal with them immediately rather than when it could be too late. The above due diligence process can kickstart your likely approval, as the information provides a great start for the lender’s underwriter.

Once all of this due diligence has been gathered and analyzed, our credit department will then review the underwriter’s full report and proceed to our internal approval process.

Best practices provide for increased approval and closing ratios, which is what you and your lenders are looking for.

Steven (Skip) Walters is senior vice-president of First Source Mortgage Corporation, as well as a licensed director of CMBA and chair of its education and professional development committee.

www.mortgagebrokernews.ca

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Thank you for a record number of nominations!

You nominated in huge numbers for the 13th annual Canadian Mortgage Awards and we’d like to thank each and every one of you for making your voice heard.

The massive reaction to our call for nominations is testament to a thriving Canadian mortgage industry.

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26/02/2019 1:25:51 5:14:47 AM AM 26/02/2019

COMMERCIAL LENDING GUIDE

Cross-Canada index Check out the commercial lending options in your province Ontario

Newfoundland

Empirical Capital Corp.

Alberta Romspen Investment Corporation

Manitoba Romspen Investment Corporation

Romspen Investment Corporation

First Source Mortgage Corporation Reciprocal Opportunities Inc. Romspen Investment Corporation

New Brunswick Romspen Investment Corporation Prince Edward Island Romspen Investment Corporation

Saskatchewan British Columbia Romspen Investment Corporation

6

Romspen Investment Corporation

Quebec Romspen Investment Corporation

Nova Scotia Romspen Investment Corporation

www.mortgagebrokernews.ca

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CMP

EMPIRICAL CAPITAL CORP. empiricalcapital.ca Michael Baratz: 416-840-6892 David Strahl: 416-840-6894 mbaratz@empiricalcapital.ca dstrahl@empiricalcapital.ca Lending markets: GTA, Golden Horseshoe

Customer type: Experienced builders and developers

Minimum Beacon: None Terms: 12 to 24 months

Property type: Land designated in the official plan as residential and/or capable of being rezoned for residential uses within two years Purpose: Bridge loans until construction financing is available

Niche/focus: Commercial land financing Maximum LTV: 60% to 65%

Rate type: Fixed Maximum amortization: Interest-only Fees: Varied, competitive Preferred loan amount: $3 million to $25 million

Products: First mortgages

FIRST SOURCE MORTGAGE CORPORATION firstsourcemortgage.ca

developers, real estate investors and business owners

416-221-2238 Lending markets: Ontario – London to Ottawa; prefer population centres of 25,000+ Niche/focus: Non-bank commercial, multi-residential, development land, retail, industrial, gas stations, hospitality

Property type: Development land, industrial, commercial (including stores and apartments, plazas, flagged gas stations, and flagged hotels)

Products: First mortgages

Purpose: Acquisitions, construction projects, renovations of existing properties, refinances, equity take-out or bridge financing against future development or future sales

Customer type: Experienced builders,

Maximum LTV: 75%

Minimum Beacon: None Terms: One to two years; lender fee; closed six months, then open on one-month bonus Rate type: Fixed Maximum amortization: Interest-only Fees: Varies; competitive Preferred loan amount: $1 million to $10 million

www.mortgagebrokernews.ca

7

COMMERCIAL LENDING GUIDE

RECIPROCAL OPPORTUNITIES INC. roigroup.ca

Lending markets: Across Ontario

Purpose: Acquisition, refinance

Darren Neziol: 519-755-6252

Niche/focus: Non-institutional commercial

Maximum LTV: 70% Minimum Beacon: None

dneziol@roigroup.ca Products: First mortgages

Terms: Up to three years Customer type: Real estate investors, builders, developers and business owners Property type: Development land, construction, industrial, multi-residential, commercial

Rate type: Interest-only or amortization Fees: 2% lender fee plus legal costs Preferred loan amount: $500,000 to $10 million

ROMSPEN INVESTMENT CORPORATION romspen.com

Lending markets: Canada and the US

Maximum LTV: Up to 75%

416-966-1100

Niche/focus: Commercial mortgages

Minimum Beacon: N/A

Products: Term, bridge, construction mortgages

Terms: Up to five years Rate type: 7.75% and higher

Customer type: Commercial borrowers Property type: Commercial, industrial, development, hospitality, specialpurpose properties

Maximum amortization: Interest-only and flexible amortizations available Fees: From 2% of loan amount, plus lender’s legal fees and disbursements

Purpose: Purchase, refinance Preferred loan amount: $5 million to $100 million

Direct funding from $500,000 to $10,000,000 Across Ontario COMMERCIAL • CONSTRUCTION • DEVELOPMENT Direct Direct funding funding from from $500,000 $500,000 toto $10,000,000 $10,000,000 Across Across Ontario Ontario COMMERCIAL COMMERCIAL • CONSTRUCTION • CONSTRUCTION • DEVELOPMENT • DEVELOPMENT

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For all deal Inquiries contact:

ForFor all all deal deal Inquiries Inquiries contact: contact:

Darren Neziol 519-755-6252

Darren Darren Neziol Neziol 519-755-6252 519-755-6252

dneziol@roigroup.ca

dneziol@roigroup.ca dneziol@roigroup.ca

roigroup.ca

roigroup.ca roigroup.ca 26/02/2019 5:15:19 AM

I I

It’s not about credit scores.

It’s about life scores.

Life happens. When challenges like personal or family member’s illness or disability occur, they can affect your client’s credit and confidence in their future. Let’s partner to look beyond the credit score and ask the right questions to understand the story. Together, we can find the right financial solution to help deserving clients focus on the scores that matter most. Visit hometrust.ca/lifehappens to learn more. Home Happens Here. www.mortgagebrokernews.ca

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MAGAZINES

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PEOPLE

INDUSTRY ICON

A DEVELOPER’S DREAM As co-founder of First Source Mortgage Corporation, David Mandel has helped finance many of the towers that are emblematic of Toronto’s rise

DAVID MANDEL has always had an entrepreneurial spirit. Inspired by his father, who was in the variety store business, Mandel was running his own business by Grade 3, taking hockey and baseball cards on consignment, then flipping them for a premium.

“We sold a lot of those cards,” Mandel laughs.

“Those were the early, early years. I eventually ran ski tours to Quebec City and nightclub parties once we got there because nobody knew where to go.”

But he had bigger plans. By the time he earned a degree in economics and an MBA, Mandel knew there was no way he could become an employee. “I started a marketing company doing door-to-door sales, and it grew to be national within two years,” he says.

In 1989, after falling out with his business partners, Mandel pursued an altogether different venture, becoming a mortgage broker. He would soon be plunged into Ontario’s infamous real estate crash, when prices fell precipitously for seven straight years, but Mandel had seen the industry’s potential. He had, moreover, made sound investments in real estate and joined a sister-in-law’s mortgage company.

After spending nearly a decade there, which he describes as being like a family business, Mandel founded First Equity in 1998.

“I grew First Equity from a one-man show

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to as many as 21 brokers,” he says. “Coming into the business in the late ’80s, there were a lot of new agents and brokers who came in as well, from all walks of life, but a lot of them didn’t have the knowledge and discipline you get from running your own business. That’s likely what led me to do more sophisticated private and commercial lending early in my career and allowed me to grow to a point where,

“We tried and looked at setting up a mortgage mutual fund trust, but unfortunately, the underwriting company imploded and set us back about two years,” Mandel says. “My late partner, Lionel, was fed up with his construction development business, so I threw a deal on his desk, saying, ‘Let’s just start and put a deal together.’ First Source became licensed and away we went, never looking back.”

“It was as if investors couldn’t get enough of the relative safety and high yields of private mortgage investments, where we focused almost exclusively on first mortgages. We found a niche, particularly in later-stage residential land development” after many years, we finally launched First Source in 2006.”

Mandel’s business partner in First Source was the late Lionel Larry, “a phenomenal real estate lawyer who also worked as a builderdeveloper,” he says. “It was the perfect partnership.” However, Mandel and Larry’s initial attempts to launch the company floundered.

Building a new city Shortly after First Source launched, Toronto began ascending as an international hub of commerce, as manifested by myriad new skyscrapers that have rendered Hogtown virtually unrecognizable from its pre-2000s state.

The partnership between Larry and Mandel allowed the nascent company to capitalize on

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PROFILE Name: David Mandel Title: President and co-founder Company: First Source Mortgage Corporation Based in: North York, Ontario Years in the industry: 30 Career highlight: “My involvement in IMBA (now CMBA) and working my way from being a director all the way through to being a past president.”

Career lowlight: “It was a learning experience when my family and I took our eye off the ball and had a few substantial losses in mortgage investment.”

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PEOPLE

INDUSTRY ICON

the building boom, leveraging their reputations and acumen to produce eye-popping yields for investors.

“There was incredible demand for yield, as people were exiting the stock market due to its volatility,” Mandel says. “It was as if investors couldn’t get enough of the relative safety and high yields of private mortgage investments, where we focused almost exclusively on first mortgages. We found a niche, particularly in later-stage residential land development. We’d done quite a bit of work with smaller and mid-sized developers at a time when the Ontario government’s housing policy wasn’t keeping up with rising housing demand due to immigration and rising fundamentals. We’d start out at 60% to 70% LTV, and by the time these borrowers

notes that everything from site plan approvals to marketplace adaptability are straightforward.

“You have a lot more control, and along with that business comes industrial and other commercial opportunities,” he says. “We’ve found a niche in gas station financing. You have a borrower who buys a non-flag operation and basically guts it, renovates it, adds all the new equipment through remediation, then builds a new convenience store with a food option.

They’re worth a lot of money.”

Specializing in this niche has also allowed Mandel to witness the Canadian dream in action. “I’ve never seen so many relatively new immigrants become multi-millionaires in the petroleum industry in such a short period of time, and as borrowers, they don’t get any better,”

“You have a lot more control [in land development], and along with that business comes industrial and other commercial opportunities” were moving through the development stage, our loan-to-value was 30% to 50% LTV. “We were making really good risk-adjusted returns,” he continues, “typically in the 9% range, for investors with little to no risk of loss in all our first mortgage investments. The appetite for the syndication of these products among our growing investor base was insatiable, and we’ve never had an issue raising money to fund a transaction in all of our years. Our success and organic growth helped us launch our first commercial mortgage mutual fund trust in spring 2017, which has likewise experienced steady growth.”

A new niche First Source’s focus on financing land development is by design. In contrast to construction financing, development financing puts fewer variables outside the firm’s control; Mandel

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he says. “They come to Canada, work in warehouses or anything they can find. It’s tough, and they understand the value of hard work, and they slowly put together enough money to participate in the acquisition of their first gas station. Or they’ve worked in the gas station until they’ve saved enough money to buy it.

They even employ their whole families. Your risk associated with loss on these is very slim because all the flag petroleum companies have it down to a science where they can tell based on traffic and historical information how many litres of gas the station will pump and how much revenue the convenience store provides.”

Chartered banks typically shy away from these operations, but not B lenders. “We think it’s a reasonable risk to help people get to that point as something we understand intimately,” Mandel says. “It’s risk-adjusted from our perspective.”

DAVID MANDEL’S CAREER HIGHLIGHTS

1989

Becomes a mortgage broker

1998 Starts First Equity and grows it to 21 agents and brokers

2006 Co-founds First Source Mortgage Corporation with more than $120 million in assets under administration

2008 Serves as president of CMBA Ontario (then known as the Independent Mortgage Brokers’ Association)

2017 Launches a mutual fund trust and grows it to more than $50 million in assets under administration in a little over a year

www.mortgagebrokernews.ca

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2019-02-11 10:03 26/02/2019 4:46:43 AMAM

SPECIAL REPORT

TOP INDEPENDENT BROKERAGES

2019

Bigger isn’t always better. These 21 independent brokerages prove that success is possible without the backing of a large network

INDEPENDENCE DOESN’T make sense for every brokerage, but for the 21 brokerages featured on the following pages, it has been the key that has unlocked success.

The appeal of going independent varies from brokerage to brokerage. For some, independence grants the opportunity to build a distinct brand, while others simply want to service clients on their own terms. With many challenges still present in today’s market, breaking from the networks might appear to be a risky move, but these brokerages know there’s no reward without risk.

Read on to find out what did this year’s Top Independent Brokerages have to say about their path to independence and how it has built a strong foundation for their business.

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ABOUT THE SPONSOR

The Coalition of Independent Mortgage Brokers of Canada [CIMBC] was created in November 2014 to strengthen and expand the presence of independent brokers solely under their brand. Since 2014, the core values have not changed: bringing

independent mortgage brokers together to share knowledge and information to enable brokers to increase their profitability and build a business with long-term value.

The model is simple: CIMBC’s focus is on building wealth for members. The model is broker-centric, doesn’t operate as a brand, and members operate under their own firm name and business model. CIMBC recognizes the independence of members in support of expressing their member brand in the communities where they live and work. CIMBC’s independent model is

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FAST FACTS: TOP INDEPENDENT BROKERAGES How long have you been an independent brokerage?

1–5 years

45% 14%

6–10 years

18%

11–15 years

23%

15+ years

Would you consider joining a broker network?

14%

YES

86%

NO

BESPOKE MORTGAGE GROUP

Have you always been independent?

Headquarters: Toronto, ON

32%

NO

68%

CIMBC

@cimbccanada

CIMBC

@CIMBCCanada

Leadership: Ryan Dennahower (left) and Simon Lyn (right), co-founders

YES

becoming the model of choice; those seeking to build value under their own brand should take the time to learn more about the CIMBC model by reaching out through CIMBC’s social media platforms or by emailing info@cimbc.ca.

CIMBC will also be hosting the 2019 Canadian Mortgage Awards as the premier sponsor of the event.

CMP: What’s the biggest advantage of being independent?

Bespoke Mortgage Group: As an independent brokerage, we’re able to establish our own identity and brand on our terms. Being a member of the Coalition of Independent Mortgage Brokers of Canada has its perks in terms of having access to lenders at top-tier status and through a comp structure that can’t be beat. By collecting 100% of commission, we’re able to allocate funds towards specific areas that we believe in, such as marketing and business development.

CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

BMG: Not at all – we feel that by owning

our own independent brokerage, we are building a brand that is ours. Being part of a network, you are marketing another brand and are a franchise of that brand.

Bespoke Mortgage Group is all about laying down the red carpet for clients by way of delivering exceptional service and building meaningful relationships.

CMP: What are the biggest issues facing the broker channel today?

BMG: Access to balance-sheet funds – not many options are available to the broker channel. [Other issues are] regulatory changes and fair playing levels between the broker and branch channels.

CMP: What does Bespoke Mortgage Group do differently to stand out from the competition?

BMG: Bespoke Mortgage Group takes pride in outstanding customer service, and [we have] built our business on referrals from satisfied clients and referral sources. Being part of Bespoke Mortgage Group is a lifestyle and not a job. We are a family that lays out the red carpet for anyone who walks through our door.

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SPECIAL REPORT

TOP INDEPENDENT BROKERAGES CMP: What’s the biggest advantage of being independent?

Mortgage Edge: Aside from the autonomy in operating my own business, the margins are much higher without having to pay for the next to no value a network provides. We are members of CIMBC, which is a coalition of self-branded independents with access to all lenders and the power of volumes [and] no threats of infringement of data.

CMP: Do you think brokers affiliated with a network have an easier time building a brand?

ME: Not for an independent brokerage, they

MORTGAGE EDGE Headquarters: Richmond Hill, ON Leadership: John Bargis, executive vice-president

don’t. The networks are about branding the network and ultimately controlling the franchise. The infringement of data is a concern under a network brand that houses the database of each franchise.

CMP: What are the biggest issues facing the broker channel today?

policy and code of conduct for others to follow according to industry requirements; monitoring compliance, which helps in improving the quality and standards of the industry practice; providing employment to others; and [having] the freedom, liberty and discretion to proceed as you wish with the vision that you foresee without having to compromise or make concessions.

CANADA MORTGAGE & FINANCIAL GROUP Headquarters: Mississauga, ON Leadership: Ameera Ameerullah, CEO/ broker/lender

CMP: What’s the biggest advantage of being independent?

Canada Mortgage & Financial Group: Having flexibility and control of being paid on time; setting business

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CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

CMFG: I believe there is brand power, which can be of assistance to everyone who has a business. For us, branding is the people – being affiliated with a resourceful team who has integrity and is passionate will set you up for success. With that said, it is also possible to attain the same type of recognition on your own. It takes time, understanding and tenacity, and to believe in yourself and stay focused on the end goal to get there. At CMFG, our transparency, care and response

ME: Readjustment in the way business needs to be conducted from a quality and process perspective. Too many in the industry have not come to the realization that our world has changed. Although volume is still paramount, embracing the new B-20 rules, which most find to be a challenge [that will] not be going away anytime soon, is the way to go.

CMP: What does Mortgage Edge do differently to stand out from the competition?

ME: Having access to all lenders is key, along with maintaining high quality. We take pride in our training program and hands-on approach, which ensures the strong success of our agents. Tight relationships with a variety of lenders help brokers navigate with a broader view of the market, which is paramount in this unstable and challenging environment. Brokerages that failed to concentrate on running their business properly are feeling the pain today.

time stand out, which our clients and business affiliates can attest to.

CMP: What are the biggest issues facing the broker channel today?

CMFG: Too many agents are licensed who are incompetent and not knowledgeable about mortgage products. There should be more educational requirements and experience before one can be licensed. There is a lack of any field-related experience, and the incompetency of such agents is a reflection on the industry. This is causing issues for other professional brokers.

Other major issues facing the broker industry stem from the rules and regulations imposed by the government. While they have merits, there are serious fallouts for people when dealing with these changes, which are hard to resolve. Also, another factor is that people have lost the vision and understanding of mitigation and proceeding with deals and situations that don’t fit the box. We are not all cookies made from the same cookie cutter – everyone is unique and has to be viewed as such with proper diligence and consideration.

www.mortgagebrokernews.ca

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CMP: What made you decide to be an independent brokerage?

MC: In May 2017, we made the decision to launch our own mortgage brokerage. The

“We thrive on education and, more specifically, financial literacy. We discuss only relevant ideas, and we make sure the clients are guided every step of the way”

MILLENNIAL’S CHOICE Headquarters: Vaughan, ON Leadership: Matthew Ablakan, broker of record/owner (right); Danny Ablakan, partner and mortgage broker (left)

CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

Millennial’s Choice: Not necessarily

MORTGAGEGUYS. COM Headquarters: Guelph, ON Leadership: Chuck Nash and Dario Di Renzo, co-founders

– because they’re already part of a larger brand, building their own brand can be more difficult because of the limitations the larger company imposes on them.

We engage with our audience through our different channels. We thrive on education and, more specifically, financial literacy. We discuss only relevant ideas, and we make sure the clients are guided every step of the way. More recently, with the launch of MC University, we have been working with high schools and educating high-school students in areas related to financial literacy and entrepreneurship.

CMP: Do you think brokers affiliated with a network have an easier time building a brand?

MortgageGuys.com: Our brand is built with our great name that sticks and is easy to find. It is also built through a reputation for service and how we make people feel.

Network brands have no advantage, as

moment that determined this was the idea of building a brand that could be vertically integrated to better assist clients. It only made sense to launch the mortgage brokerage in unity with our future real estate brokerage and life insurance agency.

CMP: Have you experienced any challenges related to being independent, and what did you do to overcome those hurdles?

MC: Right off the bat, getting your name out there is extremely difficult. We were blessed to have achieved the recognition of Innovator of the Year from Mortgage Professionals Canada at the 2017 National Mortgage Conference. This got us recognized and allowed us to propel ourselves into the mortgage industry.

they allow franchisees to put their own brand beside it, which dilutes the network brand.

CMP: What are the biggest issues facing the broker channel today?

MG: Educating people on the advantages of using a broker. The majority of the public in Canada still doesn’t know.

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SPECIAL REPORT

TOP INDEPENDENT BROKERAGES

ORIANA FINANCIAL GROUP OF CANADA Headquarters: Toronto, ON Leadership: Michael Hall, president

ONTARIO LENDING SOLUTIONS Headquarters: Ancaster, ON Leadership: Ben Bilato, principal broker (left); John Wilkinson, director (right)

CMP: What are some common misconceptions you hear about being independent, and how do you respond to them?

Ontario Lending Solutions: [One of the] common misconceptions of being independent is that you must do it alone; nothing is further from the truth. Not only is there a strong network of support externally, but within Ontario Lending Solutions, we have many creative minds who just love to share how best to put a deal together. Many of our agents have backgrounds in finance, real estate and, of course, mortgage lending. This combination of multiple disciplines only makes us stronger and better. We get many brokers coming to us, seeking the best way to structure their specific deal, and we are always open to help.

CMP: Did you have an ‘aha’ moment that made you decide to be an independent brokerage?

OLS: I wouldn’t say there was an ‘aha’ moment that made us want to be

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an independent brokerage. I believe it was a combination of things such as the opportunity to build your own ‘shop’ and brand your own operation as you feel it should best represent you.

Coming from many years in the banking industry, we knew exactly what the points of contention were for most agents and clients. What we have built, and continue to build, is a culture and mentality that is opposite of what you would find from the normal brokerage – or, for that matter, from your average bank. We review files as a team; we work for the benefit of each agent in conjunction with the benefit of both the client and our referring partners.

The mentality is simple; it’s a win-win-win scenario, and that’s our formula for success.

CMP: Have you experienced any challenges related to being independent, and what did you do to overcome those hurdles?

OLS: One of the challenges we have experienced is building a system and process that makes the task of underwriting a deal and getting paid on a deal simple and efficient. Always keeping in mind what is best for our mortgage agents, we believe we are on the right path. We don’t pretend to have all the answers, but what we do is seek the best possible means to give [agents] all the tools and intel [needed] to be successful.

CMP: Do you think brokers affiliated with a network have an easier time building a brand?

Oriana Financial Group of Canada: Not for themselves, as [network brokers] are always promoting their parent brand.

We allow our agents to market themselves with the power of our brand behind them.

CMP: Have you experienced any challenges related to being independent, and what did you do to overcome those hurdles?

OFGC: One challenge we encountered was choosing a CRM program that helped our agents grow their business. Many brokerages do not utilize the contact technology available to them. Our lender partners want us to engage and retain our past clients. We did our research and now use one of the best CRMs in the business.

CMP: What are some common misconceptions you hear about being independent, and how do you respond to them?

OFGC: Over the years, I have heard that joining a national mortgage company is the way to go; however, if your organization has an excellent funding and arrears ratio, the independents will get paid exactly like national organizations – or even better through other financial support means.

www.mortgagebrokernews.ca

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CREATE AN ADVANTAGE WITH A CIMBC MEMBERSHIP CONNECT WITH US TO BECOME A PART OF THIS REVOLUTIONARY GROUP! facebook.com/CIMBC

instagram/cimbccanada

linkedin.com/company/cimbc/

twitter.com/CIMBCCanada

COALITION OF INDEPENDENT MORTGAGE BROKERS OF CANADA

cimbc.ca | info@cimbc.ca | 1.888.423.0315

BRINGING INDEPENDENCE BACK TO BROKERS TO MAKE MEANINGFUL CHANGE TOGETHER. THE CIMBC MEMBERSHIP ADVANTAGE

CIMBC IS THE BEST KEPT SECRET IN THE INDUSTRY

☑ Access to more Lenders to help you grow and diversify your business ☑ Industry leading total compensation with all lender partners, including corporate bonuses ☑ Additional revenue opportunities for Broker Owners and their Agents ☑ Build your brand, and your business, not theirs ☑ Strong lender partnerships to help us succeed together ☑ An exclusive and collaborative membership model that supports member’s growth ☑ No exorbitant fixed network fees or Agent fees ☑ Exclusive industry partnerships and programs ☑ Learning opportunities to help you run a more successful and profitable business ☑ Strong BDM and Underwriting support across all partners

We are an exclusive group of independent brokerages that have come together to empower independents of all sizes.

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MORTGAGE AGENTS AND MORTGAGE SPECIALISTS We can show you how to grow your personal brand through partnership with a CIMBC member brokerage.

WHY NOT TAKE A MOMENT TO LEARN MORE ABOUT HOW CIMBC CAN WORK FOR YOU Contact us today to learn more about CIMBC.

26/02/2019 5:47:18 AM

SPECIAL REPORT

TOP INDEPENDENT BROKERAGES given us the opportunity to excel in this area. Given this edge, it is in our best interest to stay independent and grow the boutique business.

CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

SLC: Well, it’s relative. In my opinion, a brand does help you build a mainstream business, but if you wish to specialize in a certain aspect of mortgage brokering, such as commercial lending, being an individual brand comes in handy. We pride ourselves [on being] a boutique that offers one-stop solutions for mortgage needs.

CMP: What are the biggest issues facing the broker channel today?

SLC: Mortgage brokers are dealing with

SYNDICATE LENDING CORPORATION Headquarters: Vancouver, BC Leadership: Inam Qureshi, founder (pictured); Varsha Sharma, senior lending analyst; Nasrin Zahir, lending analyst; Amy Ng, lending analyst

CMP: What has been the biggest advantage of being independent?

Syndicate Lending Corporation: Our brokerage specializes in commercial mortgages. Over the years, we have developed deep ties with various commercial lenders, trust fund managers and various private lenders that have

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several issues, such as growing competition, uncertainty in the real estate sector, rising interest rates, toughening of creditgranting guildelines, etc. The biggest issue is standardization of our profession. Although we are accepted by most lenders, there has been a trend where most banks have now adopted the approach of employing their own in-house mortgage specialists; traditional independent mortgage brokers aren’t able to work with them anymore.

In my opinion, this limits us from various lending policies. My goal is that in the future, every institution opens their doors to us so that we can offer even more options to our clients.

CMP: What does Syndicate Lending Corporation do to stand out from the competition?

SLC: We have adopted an approach when we deal with applications to classify them accordingly and always provide a plan A, B and C. This way, no stone has been left unturned, and our clients have explored every viable opportunity before they take on additional debt. In my opinion, this approach is very important, considering the rising debt levels in the Canadian economy.

MORTGAGE ASSOCIATES ONTARIO Headquarters: Toronto, ON Leadership: Amir Kay, president

CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

Mortgage Associates Ontario: No, I don’t think brokers affiliated with a network have an easier time building a brand. In fact, I think it’s easier building a brand independently. You are building and establishing an identity from the get-go. As an independent brokerage, you are always referred to by your own name rather than the name of your network. I strongly believe a brand is built through user experience. At each and every opportunity, we take time to build relationships and really listen to and understand our clients’ needs and wants, while giving financial guidance and building long-lasting friendships.

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CMP: What are the biggest issues facing the broker channel today?

MAO: I don’t think there are really any major issues facing the broker industry.

Our industry is an ever-evolving industry.

It will continue to present challenges and hurdles to jump over, so it’s imperative to keep your eyes and ears open to any potential changes or updates in the rules and regulations that will affect your business and prepare accordingly.

CMP: What does Mortgage Associates Ontario do differently to stand out from the competition?

MAO: We focus on the user experience over and above anything. From the first interaction with a client, our goal is to

leave an everlasting impression while ensuring we maintain a clear and thorough line of communication and always keep them in the know.

“I think it’s easier building a brand independently.

You are building and establishing an identity from the get-go”

SOHO MORTGAGE Headquarters: Toronto, ON Leadership: John Cocomile, owner and broker

CMP: What’s the biggest advantage of being independent?

Soho Mortgage: Total freedom in terms of processes and marketing, etc.

CMP: What does Soho Mortgage do differently to stand out from the competition?

SM: Impeccable service and regular communication with Realtors, lawyers and title insurance companies.

C

M

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CM

MY

CY

CMY

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SPECIAL REPORT

TOP INDEPENDENT BROKERAGES CMP: What’s the biggest advantage of being independent?

Syndicate Mortgages: Having an independent mortgage brokerage allows you to step outside of your comfort zone and implement new and innovative strategies to provide a better customer experience.

CMP: What are the biggest issues facing the broker channel today?

SM: Tightening lending guidelines is one of the biggest issues in the mortgage industry.

Fortunately, there are many more mortgage options through the broker channel than the major banks for all sorts of borrowing needs.

SYNDICATE MORTGAGES Headquarters: Toronto, ON Leadership: Max Afzalimehr, broker of record

OBSIDIAN MORTGAGE CORPORATION Headquarters: Toronto, ON Leadership: Richard Samuels, president and principal broker

CMP: What’s the biggest advantage of being independent?

Obsidian Mortgage Corporation: The flexibility of staying lean and focusing on the quality of our work, [and being] unencumbered by the corporate distractions/differences that some of the superbrokerage networks sometimes impose.

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CMP: What does Syndicate Mortgages do to stand out from the competition?

SM: We have recently expanded our operations to the United States to service our Canadian clients who are interested in

purchasing properties south of the border.

CMP: Did you have an ‘aha’ moment that made you decide to be an independent brokerage?

SM: It was more of a series of moments in which we realized we had to have our own independent firm in order to serve clients the way we wanted. We did a lot of reflection on what we truly enjoyed and realized that becoming an independent firm would give us the opportunity to be different and to do what we have great passion for in our way.

CMP: What have you done to overcome the challenges of being independent?

SM: Running an independent mortgage brokerage has its own unique challenges. In recent years, we have joined the Coalition of Independent Mortgage Brokers of Canada to overcome any related challenges.

CMP: Do you think brokers affiliated with a network have an easier time building a brand?

OMC: Some would suggest it may be just

housing market, and the further saturation, segmentation and regulatory intervention within our industry.

as challenging for brokers affiliated [with] a superbrokerage to stand out and differentiate themselves from their peers. I would like to believe it’s our level of service that helps to differentiate us from some of the other, bigger broker-affiliated brands. I would

CMP: How do you maintain a competitive edge?

OMC: We work together to assist those in the industry, mortgage agents and brokers alike, to [succeed]. This is done through our determination to consistently evaluate,

“I would like to believe it’s our level of service that helps to differentiate us from some of the other, bigger broker-affiliated brands” like to also commend CMP for placing the spotlight on independent brokerages on an annual basis. This too helps cultivate our brand in a world where bigger might not necessarily mean better.

CMP: What are the biggest issues facing the broker channel today?

OMC: Rising interest rates, a slower

develop, and underwrite effective and practical products that bring value to our clients and our broker community, such as our private mortgage financing, which, at the time of launch, was the only private 90% LTV financing available. We try not to compete with our competition as much as we try to work with our industry to provide clients with better solutions from OMC’s toolkit.

www.mortgagebrokernews.ca

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BROUGHT TO YOU BY

our business strategy, and we didn’t want to seek approvals to make our own business decisions.

The other critical factor that enabled us to start as an independent brokerage was our strong lender relationships. For example, we were able to qualify for top status from day one. It would be difficult for an independent brokerage to succeed without having these connections and an established reputation in the industry.

“There are definitely benefits to joining an established brokerage/ network, but flexibility and control were critical to our business strategy, and we didn’t want to seek approvals to make our own business decisions” CMP: How have you overcome the challenges of being independent?

MO: The biggest challenge to being

MORTGAGE OUTLET Headquarters: Toronto, ON Leadership: Shawn Stillman, co-founder and principal broker (right); Elan Weintraub, cofounder and mortgage broker (left)

CMP: What are the biggest issues facing the broker channel today?

Mortgage Outlet: Automation/ digitization has not disrupted the mortgage industry in Canada – yet. The

industry is highly complex, and some agents are poorly trained and do not understand mortgage brokering.

CMP: What made you decide to be an independent brokerage?

MO: We always wanted to be independent and control our own destiny and build something from the ground up. There definitely are benefits to joining an established brokerage/network, but flexibility and control were critical to

independent is the time commitment, especially when starting out. Nobody is giving you the tools you need (CRM, phone system, blogs, logos, websites, etc.).

That being said, we knew that starting something from scratch would require a large time investment, but we are thrilled with the results. We have grown our volume tremendously, and we have a stellar reputation among clients and lenders.

Perhaps most importantly, we have a strong relationship with our staff and agents and provide some of the best training in the country. We set high standards and are committed to our team’s success, and we are very fortunate to work with such amazing people.

www.mortgagebrokernews.ca

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SPECIAL REPORT

TOP INDEPENDENT BROKERAGES MONSTERMORTGAGE.CA Headquarters: Toronto, ON Leadership: Vince Gaetano, principal broker; Nick Ametrano, vice-president; Cristina Minatel, sales director

CMP: What’s the biggest advantage of being independent?

MonsterMortgage.ca: The biggest advantage of being independent is that smart lenders value our offerings for the benefits we provide them. The fact that we don’t cost lenders more to deal with is an advantage that has benefits beyond compensation. We can be part of the solution to enhance efficiencies and the client experience. We do believe that offering a relationship to a lender that

CMP: What’s the biggest advantage of being independent?

GreenFlow Financial Corp.: The biggest advantage of being independent is having the freedom to really build your niche in a way that you see fit. For example, at GreenFlow Financial Corp., we strictly target self-employed individuals and business owners via our marketing efforts; hence, we can better build our company brand completely around that niche. Our social media posts, regular newsletters and events all revolve around our specific niche target market.

CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

GFC: It really depends on the network.

GREENFLOW FINANCIAL CORP. Headquarters: Toronto, ON Leadership: Reza Ghazi, CEO

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Some networks do give you the flexibility to build your brand, and some need you to build your brand around the network’s brand. GreenFlow Financial is part of CIMBC, and the reason we joined this network was due to the fact that we had the freedom to cultivate and build our own brand without any interference from

the network. As such, those that join a network like CIMBC have an easier time building brand.

CMP: What does GreenFlow Financial do to stand out from the competition?

GFC: By becoming so specialized, we have been able to present a stronger proposition, address customers’ needs better and learn the minutiae of the target market in which we interact. Such an attitude has led to generating a successful practice over the past five years. By focusing on business owners and alternative/private mortgages as solutions, our transactional processes have become much more efficient due to more streamlined products, which in turn has increased the number of funded deals.

Over 90% of our clients are business owners, and the majority of the remainder require alternative lending. Borrowers can access both mortgage services as our core competency and be introduced to other non-bank financial services as a complement simultaneously. This marketing approach helps us interact with more potential clients and be seen as a trusted financial concierge.

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is committed to improving the client journey and not solely based on top compensation is a win-win for our lender relationships.

CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to make your brand memorable for clients?

MM: We don’t think brokers affiliated with a network have an easier time building a brand.

MonsterMortgage.ca puts its money where its mouth is and has been recognized for it. As longtime resident experts of the weekly real estate call-in show Hot Property on CP24 and three-time winners of the Canadian Mortgage Awards’ Mortgage Brokerage of the Year, we are recognized annually with various industry and lender achievement awards for our customer service, education and expertise. In addition,

we have partnered with the City of Toronto since 2006 in helping to raise over $5 million for Toronto’s seniors through the annual MonsterMortgage.ca Toronto Challenge.

CMP: What are the biggest issues facing the broker channel today?

MM: Adapting to change and lack of training would be at the top of the list. We find that setting the proper expectation in the new mortgage lending landscape is key to enhancing the client experience. Lender response times are impacted by mortgage brokers’ inability to adjust to the new rules and policies in place. Training should have been paramount prior to the rule changes by all mortgage brokerage houses, which could have anticipated the bottlenecks experienced in 2018.

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

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SPECIAL REPORT

TOP INDEPENDENT BROKERAGES individual brokers can get lost in the corporate brand. I really love being known as a local Saskatchewan brokerage.

CMP: How have you overcome the challenges of being independent?

YML: Being a smaller independent organization means that you don’t always have a mentor group that you can bounce different mortgage situations off of. This can be a challenge on more complicated deals.

With Facebook, mortgage brokers from all regions and different companies have come together, and we use it as a forum to position challenging mortgages and help each other create solutions. This gives us the benefit of a large network of support, while still having a local independent presence in our community.

YOUR MORTGAGE LINK Headquarters: Saskatoon, SK Leadership: Marcel Brossart, owner and director/principal broker

CMP: Did you have an ‘aha’ moment that made you decide to be an independent brokerage?

Your Mortgage Link: I was working for a big bank mortgage brokerage with a limited number of products and found that clients would often get directed into a product and rate that might not suit their needs. That’s when I realized an independent brokerage with access to over 20 lenders Canada-wide would provide more options and better solutions for my clients.

Being an integral part of the commu­ nity has always been important to me, and I find that in large networks,

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“In large networks, individual brokers can get lost in the corporate brand.

I really love being known as a local Saskatchewan brokerage” CMP: What are some common misconceptions you hear about being independent, and how do you respond to them?

YML: People think independent brokerages don’t have access to the same lenders or can’t offer the same rates as the national networks. In fact, we do have access to all the same lenders across Canada, and we offer competitive rates. Being a smaller independent brokerage allows us to create close relationships with our lenders, which in turn allows us to get mortgages fully completed on an exception basis, sometimes in only a couple of days, which may not be possible with larger firms.

TAURUS MORTGAGE CAPITAL Headquarters: Markham, ON Leadership: George Hugh, president and CEO

CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

Taurus Mortgage Capital: Building a brand when part of a network is definitely more difficult due to co-branding requirements, etc. My branding is built around the education and customer experience that our clients have come to expect.

CMP: What are the biggest issues facing the broker channel today?

TMC: The largest issue facing the broker

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channel today is lending options. With the tightening of guidelines, I find that most lenders are interpreting these guidelines in the most conservative way, which creates less flexibility for our industry to service our clients in an economical way. At the end of the day, people are still getting financing, but with options that are putting at risk their debt servicing ability, which puts our economy at risk.

“Our entire offering is built on wealthbuilding options.

We don’t offer services that don’t build one’s wealth” CMP: What does your company do to stand out from the competition?

TMC: Our entire offering is built on wealthbuilding options. We don’t offer services that don’t build one’s wealth.

CMP: Why did you choose to be independent?

TMC: I entered the mortgage business eight years ago and decided to become an independent mortgage broker from day one. I really wanted a chance to implement a model and value proposition that incorporated my previous 15 years of experience working in capital markets. It was challenging at times, but being surrounded by many lender and broker friends, I was able to execute my dream.

CMP: How have you overcome the challenges of being independent?

TMC: The market has been challenging, but being part of the CIMBC network [has made] many of the challenges that I used to face alone easier to deal with. Not only do we collectively deal with today’s problems, we actively work for ways to deal with the problems of the future.

NUBORROW Headquarters: Vaughan, ON Leadership: Adam Ross, president and principal broker

CMP: What are the biggest issues facing the broker channel today?

NuBorrow: Perception is the biggest issue for brokers today. Media reports of a declining market, tighter bank rules and the threat of web-based solutions can feed the public’s perception of our industry.

Fitting education into your sales process is key to growth and brand reputation.

CMP: What made you decide to be an independent broker?

NB: Choosing to be independent can appear challenging, and to be honest, many of the larger group models make a strong argument for remaining under a franchise licence. We had worked so hard on building a brand outside of our expiring franchise agreement, and after sitting down with a few of the larger groups, it hit us – we needed support and access to lenders far more than we needed a brand on top of our own. Signing on to some of the generously weighted programs for what was offered in return just wasn’t registering with us, and it was at that moment that we started to ask ourselves tougher questions that led to remaining independent.

CMP: Have you experienced any challenges related to being independent?

NB: We have been very fortunate to not lose a single step since going independent; in fact, I feel we are stronger without dragging around a brand that we didn’t put as much love and care into as we have in NuBorrow, which we recently rebranded from Freedom Lending. Reaching out to our bank and non-bank lenders took only a small ramp-up time, and I was surprised to learn that many of the current lenders did not necessarily provide any better programs with or without a franchise tag.

CMP: What are some common misconceptions you hear about being independent, and how do you respond to them?

NB: I think fear is likely the largest misconception when considering to be independent: Who will recognize our brokerage and our people, and how will we get clients without the help of a franchise?

The truth is you will need support, but being independent doesn’t mean you have to be alone. If you have a strong marketing platform, good internal processes and have the ability to hash out your own path, being independent is a very rewarding decision.

The big franchises have a way of spelling out certain doom if you choose to do it alone, but if you are an entrepreneur at heart, being independent removes the ceiling and pushes you to go after it.

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SPECIAL REPORT

TOP INDEPENDENT BROKERAGES with our borrowers and investors, but we have also become a source of private funds for our industry peers. I believe that being independent is the best way to be successful as a niche-type brokerage.

MORTGAGE PARTNERS CORPORATION Headquarters: Toronto, ON Leadership: Kash Toor, president and broker of record (center)

CMP: Why did you choose to be independent?

Mortgage Partners Corporation: I wanted to be able to build my own brand and develop my own business model. Not only have we built an exceptional reputation

“We have proven to our clients that we are able to offer competitive rates and suitable products just like any other brokerage” CMP: Have you experienced any challenges related to being independent, and what did you do to overcome those hurdles?

MPC: Yes, like any business, building your brand can be difficult. Having existing

by the actions of an agent flying under the same brand in a different brokerage over which we, or a network, have no control.

Having won Canadian Mortgage Awards for Customer Service in 2015 and Brokerage of the Year in 2017, independence clearly has not held us back.

CHAMPION MORTGAGE Headquarters: Guelph, ON Leadership: Doug Adlam, partner; Alec Bowes, partner; Dylan Furlong, partner; Cathy Okrafka, experience manager

CMP: What’s the biggest advantage of being independent?

Champion Mortgage: Being an independent brokerage keeps us in control of our image and reputation. Our reputation by association is not tarnished

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CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

CM: Brokers who affiliate with a network brand essentially don’t have to build their brand – it is done for them. This is great for those who don’t want to take the time or [don’t have] the expertise to build a brand themselves; they can just focus on building business. Our brand, Champion Mortgage, is easily recognized and recalled in the communities we serve. We ensure our brand experience is consistent throughout

referral sources helped, but we also had to advertise, network and knock on doors to build our brand. Developing a system to manage the day-to-day operations of a brokerage was challenging. As an independent, you do not have the support that you would have as a franchise. We learned fast and found ways to be more efficient, and we continue to watch the Mortgage Partners brand grow rapidly throughout Ontario.

CMP: What are some common misconceptions you hear about being independent, and how do you respond to them?

MPC: A common misconception we frequently hear is that we do not have access to lenders. We have been incredibly resourceful and have been able to maintain volume commitments and establish relationships in order to offer the best service possible for our clients. We have proven to our clients that we are able to offer competitive rates and suitable products just like any other brokerage.

the entire mortgage process and continue to deliver value throughout the term of the mortgage. All forms of communication, including community sponsorships, client appreciation events and all typical marketing media, reinforce our brand experience.

CMP: What are the biggest issues facing the broker channel today?

CM: Rule changes and low lender profitability on the A side of the business have pushed a lot of A business to Alt-A and B business.

Brokers need to be more knowledgeable than ever to help secure the best possible financing for their client’s situation and have a mastery of A, B and private lending solutions. The truth is, experienced brokers are still getting most of their mortgages approved with A lenders, whereas the less experienced are not.

Unless newer brokers find solid mentorship or work in a business model that provides underwriting expertise, they will not survive in this industry.

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I met and worked with many mortgage brokers, and it was through them that I discovered what a great industry this was. It offered the opportunity to earn a great living and continue helping people with their financing needs, and it allowed for a much more flexible lifestyle. As an avid traveller, being able to work from

network brand and not a brand unique to them. It’s more difficult for them to differentiate themselves from the network, and they do not appear to be as independent.

CMP: How have you overcome the challenges of being independent?

CNMC: The challenges of being

“It’s definitely more work and can be challenging wearing so many hats, but the rewards are priceless”

independent have varied over the years.

In the early days, it meant no support staff and having to create everything from scratch. The key to overcoming this was by establishing key relationships with others to do things on a contract basis that one normally hires support staff to do.

By networking, I was able to find service providers to fill in the gaps of support staff while I worked through the learning curve.

anywhere with an internet connection was very appealing. I’ve been able to work on deals while sitting on the beach in another country. I don’t know of very many careers that offer this luxury.

CMP: What are some common misconceptions you hear about being independent, and how do you respond to them?

CNMC: There are many misconceptions

CMP: What inspired you to become a mortgage broker?

Canadian Northwest Mortgage Corp.: While working as a branch

CMP: Do you think brokers affiliated with a network have an easier time building a brand? What do you do to cultivate your brand and make it memorable for clients?

CNMC: No, brokers affiliated with a

manager for a financial services company,

network are building a brand within the

about being an independent brokerage, and while it might work for me, it’s not for everyone. It’s important to do your research and make your own informed decision about whether this will work for you. It’s definitely more work and can be challenging wearing so many hats, but the rewards are priceless.

CANADIAN NORTHWEST MORTGAGE CORP. Headquarters: Abbotsford, BC Leadership: Crystal Foti, president

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SPECIAL PROMOTIONAL FEATURE

LEADERSHIP

Leading to make a difference Dominion Lending Centres outlines how it’s leading Canada’s mortgage industry into 2020 and beyond

BY NOW, the story of Steve Jobs and Apple is the stuff of legend. In the ’90s, the company he co-founded was struggling and close to going out of business. Jobs took over as CEO in 1997; within a few years under his leadership, Apple had changed the way we all communicate forever.

Where would Apple be today without the leadership of Steve Jobs? We’ll never really know, but Apple’s tale is an obvious example for any business or corporation: Good leadership is vital for success. But what is good leadership, and how can an organization cultivate leadership and put it to good use?

While the talent and genius of someone like Jobs might only come along once in a generation, everyone has the capacity to lead if given the opportunity. Leadership doesn’t always have to be about the big idea that transforms society. Good leaders set the example, no matter their role. Good leaders work hard, take pride in their labour, and inspire and empower their peers to be their best.

But being a leader isn’t easy. Good leaders

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can also be disruptors. Leadership is standing up to the status quo when opportunity presents itself and shifting course when the conventional wisdom says otherwise.

The entire tech industry is built on this idea. Who would have thought to share their photos and status updates for the entire world to see? In the early 2000s, Facebook’s Mark Zuckerberg knew the world would want to, and the rest is history.

While Dominion Lending Centres isn’t

Leadership doesn’t always have to be about the big idea that transforms society. Good leaders set the example, no matter their role Apple or Facebook, we are Canada’s leading mortgage company, originating billions of dollars in mortgages every year and making the dream of homeownership a reality for Canadian consumers. When DLC was founded by business partners Gary Mauris

and Chris Kayat in 2006, the mortgage broker industry, while long established, was still fledgling and ripe for major growth.

Only about a quarter of mortgages at that time involved a broker. By 2018, according to CMHC’s most recent survey, 55% of first-time

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homebuyers were using a mortgage broker.

The two men recognized the opportunity, and within a few short years, DLC had the biggest broker network in the industry. The company’s quick ascent was centered on the leadership of Mauris and Kayat and the duo’s constant push to innovate and challenge the status quo in the industry. DLC broke new ground with the first-of-itskind national advertising fund. We secured hockey legend Don Cherry and launched a national commercial campaign unmatched

by any other national mortgage network. The success of this campaign cemented the DLC brand in the minds of Canadians.

At the same time, Mauris and Kayat were also busy building relationships with national lending firms and various brokerages across the country. The pair was able to share their vision with the heavyweights in the industry and bring them into the DLC fold. These partnerships are not only the key to DLC’s success, but they’ve continued to strengthen over time.

As the company grew, a familial culture took root that emphasized the leadership qualities of every individual within the company, from head office staff to the brokers network-wide. Everyone who joins DLC is part of Team Blue and is encouraged to lead in their own way.

Part of being a leader is knowing when to pull in talent and give them an opportunity to be leaders in their own right. Recently, DLC has undergone a leadership change. Mauris remains the CEO but is stepping back from his day-to-day role as president and passing the torch to Eddy Cocciollo, formerly the president of Mortgage Centre Canada.

Cocciollo began his career as a mortgage broker, eventually assuming the mantle of MCC president in 2008. Under his leadership, MCC grew to more than 1,300 brokers and $9 billion in overall volume. Cocciollo is building on the legacy of DLC’s founders by continuing to focus on new products and technology for brokers and consumers alike.

Along with Cocciollo, a number of senior positions in DLC’s marketing, technology and operations divisions are being replenished with emerging talent from within, who are bringing new ideas and a fresh set of eyes to the company.

As the 2010s come to a close, every industry will be tasked with figuring out its path in the decade ahead. If you’re a leader in the mortgage industry, you have your own questions to answer. Where do you fit in? Which organization has the best tools and team in place to set you up for success?

Choosing the right network – one that aligns with your core values and vision for the future – is imperative.

At Dominion Lending Centres, our goal is to educate Canadians on the benefits and expertise that mortgage professionals provide to their clients, while continuing to build upon great leadership and pave the way for the future of our industry. Our commitment is simple: We help you build your empire.

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PEOPLE

BROKER INSIGHT

Becoming the solution Mortgage Savvy founder Rakhee Dhingra tells CMP about how a single frustrating phone call led her to open her own brokerage

CMP: How did you first get into the mortgage broker industry?

Rakhee Dhingra: I called our bank a year after we had secured our mortgage, when I was on maternity leave, because I needed some support to put some strategies in place.

My husband and I wanted to leverage prepayments to pay off our mortgage faster. I was also interested in potentially leveraging the equity we had built to purchase some investment properties. I would ask the questions, but nobody would ever respond with answers.

There was a massive gap. A first-time home purchase was the largest financial decision I ever made, and that’s probably the same for most others, and people are not getting the support they really, truly need.

I had an undergraduate degree, and I was working in corporate banking, but I felt the mortgage industry was very transactionalfocused. I felt that if I could come in and focus on building relationships and building advocates around me, I could make a difference.

CMP: What led you to start Mortgage Savvy?

RD: In late 2015, I did the agent course and, a week later, the broker course. During the broker course, they engage you to define what you want your brokerage to look like, and it was during that week that Mortgage Savvy was born.

My intention was to do one or two trans-

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actions a month to subsidize being a stay-athome mom. My husband does really well, but I wanted to be generating some income on my own, and I really enjoyed the human connection piece in building relationships. Before I knew it, I had done $25 million in my first year on my own. It all happened very quickly.

CMP: Have you been able to maintain that level of growth?

RD: Absolutely. We did $100 million last year, which was very exciting. My brokerage model is very team-oriented, and we have a small, tight-knit group. In 2017, it was just me and an assistant, and I struggled to put the right team together – I brought on a few people and had to let them go. But in 2018, I brought on two other agents, and we did $100 million in business.

CMP: You started the business while on maternity leave, and now it’s

blossoming. How does that feel?

RD: It’s a mix of excitement and pride. Mortgage Savvy has taken on life of its own, and it’s not just defined by me anymore. It’s defined by my team, which is incredible. They have so much energy, dedication and drive.

CMP: It must be a challenge finding the right people. What’s your recruitment strategy?

RD: We do DISC assessments before we hire to make sure we get the right personality.

I am a driver but also have an ‘I,’ meaning I have very strong interpersonal skills. I am still a ‘D,’ but I can hide that when I’m with my clients, but in a team dynamic as a leader, that’s a good mix. As I have grown, I’ve realized that hiring ‘CI’ or ‘DI’ personalities is the perfect mix for the role of an agent; however, when I’m looking for an underwriter, I’m generally looking for someone who is more of a ‘C.’ Before we bring on a new hire, we have

DHINGRA ON HOW SHE’S GROWN HER BROKERAGE “We have a unique way of doing business. We host lunch-and-learns, educational seminars, and train our agents and real estate agents to be good at going out and converting. My business partner is the head of our marketing department, and she makes sure we are continuously doing touchpoints with our existing database and that we are all using our system. Every agent I have starts the day on their dashboard, finding out who they need to connect with. We have the proper systems in place.”

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FAST FACTS: RAKHEE DHINGRA

COMPANY Mortgage Savvy

JOB TITLE CEO and broker of record

YEARS IN THE INDUSTRY 3

“I felt that if I could come in and focus on building relationships and building advocates around me, I could make a difference” them interview with everyone on the team, regardless of their role in the organization, so that we have buy-in and support from the entire team.

firm in a co-working space for Realtors, where people will naturally come together. Our next goal is expanding and taking on some commercial space.

CMP: What are you goals for 2019?

RD: Doubling our numbers and taking

CMP: What do you get up to in your spare time?

RD: We have one daughter, who is absolute

over the world! This year, we are looking at securing a space on King Street West in Toronto because we are finding that there’s a steady number of transactions happening in the core. We are looking to team with a law

perfection, and my second baby is Mortgage Savvy. I have been with my husband for almost 23 years, and he is definitely my rock. We love to travel – we play hard and work hard.

LOCATION Toronto

PREVIOUS EXPERIENCE Worked in corporate banking

MORTGAGE SAVVY’S 2018 VOLUME $100 million

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FEATURES

TEAMWORK

How to strengthen relationships with your team If your relationships with team members are suffering, you might be approaching them the wrong way. John Eades outlines seven things managers can do to turn things around

NO ONE wants to go to work every day dreading the amount of time they’re going to spend with their boss. At the same time, I don’t know any sane leader who looks forward to having bad relationships with team members. So the question then becomes, why are so many relationships between team members and their leader a major part of the reason people are unhappy at work?

The answer: Most leaders have the equation wrong. The majority of leaders believe team members are responsible for the relationship with their leader. This belief puts the ownership of worthiness, trust, ability, respect and work ethic on the shoulders of others.

The correct equation is: Leaders are responsible for the relationship with each individual team member.

In this drastically different approach, leaders know they are ultimately the ones

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responsible for building relationships based on trust, respect, work ethic, forgiveness and accountability. These leaders model the behaviours they want to see, communicate well with their team and allow their team members to choose to meet or exceed the standards set. This doesn’t mean the relationship isn’t a two-way street, but it means the leader takes the ownership and responsibility in it.

Knowing that ownership and responsibility of work relationships starts with leaders, here are seven wise habits you can leverage to strengthen those relationships.

1

Remove your ego

Ryan Holiday, the author of Ego Is the Enemy, defines ego as “an unhealthy belief in our own importance … the need to be better than, more than, recognized for far past any reasonable utility.” If this is

you, your people won’t want to follow or work hard for you. It’s that simple.

When I had Cy Wakeman, the author of No Ego, on the Follow My Lead podcast, she said, “Ego puts a filter on the world that corrupts your relationship with reality.” If you can remove ego from the equation, you’ll remove barriers in your relationships with your team.

2

Focus on trust with each team member

When I ask in our Welder Leader workshop, “Who is responsible for the bond of mutual trust between leader and team members?”, the overwhelming answer is “team members.” And they’re wrong. Trust is built between leader and team member by the actions and behaviour of the leader, not the other way around. People will judge your trustworthiness by your character, expertise

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and how well you share your expertise with each team member.

3

Be a good coach

4

Put your phone away when interacting

One of the most important habits any leader can improve is their ability to coach the individuals on their team. Author and executive coach Michael Bungay Stanier says any leader can be a better coach just by “staying curious a little bit longer and rushing to advice-giving a little bit slower.” Positivity impacts your relationship with your people if you can coach them to improve a skill gap.

No one likes to see someone else pick up their phone in the middle of a conversation. When this happens, it makes us feel much less important than whatever is happening on the phone. I can only write this because I am guilty as charged, and changing

Trust is built between leader and team member by the actions and behaviour of the leader, not the other way around this habit is an ongoing challenge.

5

Embrace the journey of each team member

It’s easy for leaders to get in the habit of assuming every professional on their team is in the same place in their life’s journey. Just because a 30-year-old and a 40-year-old might be doing the same job doesn’t mean they are in the same place on their journey. One could be single, while the other is married with kids. Those things absolutely matter. Get in the habit of putting your-

self in the shoes of where your people are on their life’s walk.

6

Ask for feedback about yourself

The number one competencydeficient area we have found in our Welder Leader assessment is asking for feedback from the team. This is so important because people want to feel like their opinion matters. The ability to be vulnerable in front of your team will instantly improve the relationship. One caveat: You must be humble when accepting

feedback, rather than becoming defensive, or the act of asking for feedback will put your relationship at a deficit.

7

Model what you want to see

If you only remember one thing, remember this: People watch everything a leader does, whether the leader likes it or not. So the example you model is exactly the behaviour you will get from your team.

John Eades is the CEO of LearnLoft, a full-service organizational health company whose mission is to turn managers into leaders and create healthier places to work. He is a speaker, host of the Follow My Lead podcast, and author of F.M.L.: Standing Out & Being a Leader and the upcoming book The Welder Leader. For more, visit learnloft.com.

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FEATURES

MOTIVATION

Why you don’t need motivation to succeed Ayetkin Tank offers three foolproof ways to get things done without relying on motivation

I’M NOT highly motivated. I don’t have amazing willpower or self-control. I don’t get up at 6 a.m. to read, meditate, drink a green smoothie and run a 10K. That’s because I don’t believe in motivation. Instead, I’ve built systems and habits that remove my internal drive from the equation. So whether or not I feel ‘motivated,’ I can still be productive.

I realize that systems and habits are not a glamorous topic, but honestly, they work.

They’ve fuelled every step of my entrepreneurial journey over the last 12 years. If you create reliable systems and continue to improve these systems (instead of your willpower), you don’t even have to think about motivation.

Let’s break it down a little. First, what the

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heck is motivation, anyway? In the simplest terms, motivation is your desire to do something. It’s a sense of willingness that exists on a spectrum, from zero interest to a burning desire to take action. When your desire is strong, motivation feels effortless. But when you’re struggling, just about anything sounds better than starting the assignment, making a tough phone call or hitting the gym.

Procrastination takes over – until the agony becomes overwhelming.

As Steven Pressfield writes in The War of Art, “At some point, the pain of not doing it becomes greater than the pain of doing it.”

I love this quote because I suspect we’ve all felt this painful moment – when it’s harder to stay on the couch than to get up, put on your sneakers and go outside.

In his 2011 book Drive: The Surprising Truth About What Motivates Us, author Daniel Pink splits motivation into two different types: extrinsic and intrinsic.

Extrinsic motivation is external. It’s money or praise or trying not to look clumsy on the tennis court. Intrinsic motivation comes from within. It’s the desire to act, even when the only reward is the activity itself (or completing a task). Intrinsic motivation implies that you’re acting for authentic, honourable reasons. For example, you start a business to help people or solve a problem, not because you’re dazzled by visions of fame and fortune.

Motivation gets in the way, though, when we rely too heavily on it. No matter how much you love your business, there are probably moments when you don’t want to take action. Maybe it feels scary or impossible, or the task at hand is downright boring.

That’s when systems can do the heavy lifting. Here are a few strategies that have helped me to build sustainable systems so I don’t have to rely on motivation.

Choose your focus areas – and ignore the rest Focus and motivation might seem like two different topics, but they are closely intertwined. For example, last year I had three work priorities: hiring really great people, creating quality content and equipping our users to work more productively. These themes informed everything I did. If a project or an opportunity didn’t fit into one of these three buckets, I said no.

Distractions slipped away, and I could make real progress.

For example, I spend the first two hours of every workday writing out my thoughts.

It might be a problem I’m trying to solve or a new idea. I don’t book meetings during

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Your feelings don’t have to match your actions — especially when you truly want to move forward this period, and I definitely don’t answer emails. But if I arrive at work feeling less than inspired, I give myself permission to do something else — as long as it fits within my three focus areas. Instead of writing and

problem-solving, I can read articles or books on these topics, meet with a product team or watch a lecture.

All that thinking and exploring soon makes me feel more engaged. Once I’m

engaged, I come up with better ideas. And good ideas inspire me to take action.

This process isn’t accidental. It’s a simple feedback loop I use to get moving on days when my brain feels stuck in neutral.

Remember that motivation is optional In a 2016 article for The Cut, author Melissa Dahl wrote that “the only motivational advice anyone has ever needed [is] you don’t have to feel like getting something done

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FEATURES

MOTIVATION

in order to actually get it done.”

It’s surprisingly brilliant. Your feelings don’t have to match your actions – especially when you truly want to move forward. You could feel tired but still put on your goggles and go for a swim. You could feel like you’d rather staple yourself to the chair than build another PowerPoint deck – and you still get the presentation done.

Dahl also quotes Oliver Burkeman, author of The Antidote: Happiness for People Who Can’t Stand Positive Thinking, who writes: “Who says you need to wait until you ‘feel like’ doing something in order to start doing it? The problem, from this perspective, isn’t that you don’t feel motivated; it’s that you imagine you need to feel motivated.”

Once again, this is where routines can outsmart feelings. Sure, you might feel like watching cat videos, but every morning, you sit down at your computer and open a blank document. You write for two hours (or whatever your routine entails) and you don’t bother taking your emotional temperature. Progress ensues. Then you repeat, repeat, repeat.

Delegate whenever possible The other day, I had a great idea during my morning workout. It was one of those eyebrow-raising light-bulb moments. Unfortunately, it had nothing to do with my three focus areas I mentioned above. So I made a note in my phone and asked our COO to follow my mental thread.

I was tempted to chase it myself, but I knew I had to stay focused.

I realize that delegation isn’t always possible, especially when you’re just starting out or money is tight. But when it’s possible, delegation can pay off big time. Offload an activity if: • You can regain precious time, energy or focus and apply it to something that will truly move the needle for you. That kind of work is priceless. Stretch yourself

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a little and measure the results. You can always test delegation in baby steps.

• Someone else can do it better. In my case, there’s almost always someone on our team who has more knowledge or niche expertise than I do. They’ll create a stronger result in less time – and again, I don’t get distracted from my goals.

The importance of enjoying the ride I’ve talked a lot about everyday motivation, but how do you sustain your drive for the long run? It’s an important question.

The answer will look a little different for

but the experience was nearly effortless. “Yes, discipline is critical, just like all the teachers say,” Piver says. “And there is definitely stuff that needs doing that is just never going to be fun, like paying bills and cleaning the cat box. But I suggest that instead of being disciplined about hating on yourself to get things done, try being disciplined about remaining close to what brings you joy.”

Talk about a perspective shift. We all go through tough times, work at jobs we don’t love and endure genuine unfairness. But if you’re struggling to do something you care deeply about, go easy on yourself. Tap into why you started your business or why

If you’re struggling to do something you care deeply about, go easy on yourself. Tap into why you started your business or why you’re flexing your creative muscles in the first place. It’s a much happier way to move through your days everyone, but ultimately, we’re all motivated by joy and meaning.

The Antidote author Oliver Burkeman first led me to Buddhist teacher Susan Piver.

Tired of forcing herself to be ‘good’ and master the daily to-do list, Piver decided instead to focus on the pleasure of her work.

“Once I remembered that my motivation is rooted in genuine curiosity and my tasks are in complete alignment with who I am and want to be,” she says, “my office suddenly seemed like a playground rather than a labour camp.”

She asked herself what would be fun to do and then focused on what she loved about each activity. In the end, her day looked the same as it did when she was ‘disciplined’ –

you’re flexing your creative muscles in the first place. It’s a much happier way to move through your days.

To recap: Establish your systems and habits. Stay focused on what matters.

Delegate and tune out the noise. Your motivation will grow. And if it doesn’t? You don’t need it anyway.

Aytekin Tank is the founder and CEO of JotForm, an online form creation software with four million users worldwide and more than 100 employees. A developer by trade but writer by heart, Tank shares stories about how he exponentially grew his company without any outside funding. For more information, visit jotform.com.

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PEOPLE

CAREER PATH

BORN TO SELL

From hawking Avon to her friends’ moms as a teenager to marketing mortgages today, Janna Dawdy has always been a natural saleswoman Dawdy was drawn to sales early – at age 13, she was selling Avon to her classmates and their moms before getting her first job at 15.

“In high school, I wanted to do a co-op at a car dealership so I could sell cars. I tried RBC instead and picked it up really quickly. I started the week telephone banking launched; we had to sell it at the wicket.

It was very exciting, and from that moment I loved banking.”

1995

2001

POPS UP Drawn by TD’s initiative to install pop-up branches in Walmart stores, Dawdy made the move to another Big Six bank.

“They were sales-driven branches. I thrived on the competitive nature of the operation, even though it was challenging at times.

I’ve always been like that – I like to prove to myself that I can do difficult things” 2005

GETS A REALITY CHECK Dawdy tapped her network of contacts, neighbours and daycare parents for potential mortgage clients. Despite performing well, she found her pay didn’t stack up.

“One paycheque, I closed a million dollars in mortgages and the commission was only $2,300. I thought, ‘There’s got to be something more.’

LEARNS TO SELL

2000 LAUNCHES HER FIRST BUSINESS When her then-husband was transferred to Kitchener-Waterloo, Dawdy moved to a local RBC branch. Later, while working part-time after the birth of her first child, she founded her first small business.

“I thought I would make some money on the side; I started experimenting with making my own candles. I made them in the basement and had my own marketing campaign; I’d hold home parties in the evenings.”

2003

DECIDES ON MORTGAGES At home with her second baby, Dawdy expanded her business horizons further by opening an in-home daycare facility. Despite running a small business, Dawdy found herself missing finance, and her interest was piqued when a mortgage specialist position became available at TD. “I thought to myself, ‘No way am I doing my own mortgages’ – not realizing that it was on commission. I decided then that when I got back from maternity leave, I would sell mortgages.”

2008 2018

OPENS HER OWN BROKERAGE Last year Dawdy struck out on her own by opening her own brokerage, JC Mortgages, which was an instant success.

“We’re seeing continuous growth – 50% comes from referrals from happy clients. I have grown over $10 million already, and that was before the end of the first year. I had to hire a broker – she was a colleague at the Walmart branch back in the day. The two of us have always had the same values and goals.”

MOVES TO RMA After two years with Mortgage Intelligence, Dawdy made the switch to Real Mortgage Associates; the change in fortune was immediate.

“I’ll never forget my first paycheque – I thought I’d won the lottery. I was able to pay off my line of credit with one paycheque! And I was able to continue with my marketing efforts because I could pay for them. I never focus on the dollars; I focus on the growth of deals. If we’re growing, that means we’re doing awesome.”

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PEOPLE

OTHER LIFE

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

“My friends call me Cory,” Smith-Gatke says, “but when I put the chain on, people call me ‘your worship’”

2,151

Total votes cast for Smith-Gatke in the election

48%

Percentage of the vote she won – double the closest competitor

12

Age at which Smith-Gatke ran her first meeting

MADAM MAYOR When she’s not closing deals, Corinna Smith-Gatke is donning the chains of office to preside over Leeds and the Thousand Islands WHEN CORINNA SMITH-GATKE’S husband persuaded her to run for mayor of the Township of Leeds and the Thousand Islands, the Brockville, Ontario-based mortgage broker never imagined she’d end up winning the top job in a landslide.

Despite the surprise nature of her

mayoral run, Smith-Gatke is no stranger to politics. At college, she was elected president of the student government, and her first job was on staff at Queen’s Park. And her childhood involvement with 4H and Junior Farmers of Ontario, which taught her how to run a meeting before she started middle school, imparted experience that

she says she still draws upon today.

But local government seems to have a special place in Smith-Gatke’s heart. “I used to say that if you think government works slowly form the outside, you should see it from the inside,” she says. “The cool part [of local government] is being able to effect change quickly.”

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