CMP 14.08

MORTGAGEBROKERNEWS.CA ISSUE 14.08 | $12.95

COMMERCIAL

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What lenders are looking for when they receive submissions from brokers

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FROM BROKER TO EXECUTIVE

New Mortgage Architects head Dustan Woodhouse on how he plans to drive growth

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13/08/2019 3:20:47 AM

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ISSUE 14.08

CONTENTS

22 COMMERCIAL LENDING GUIDE SPECIAL REPORT

Where are the current opportunities for brokers in the commercial mortgage space?

CMP spoke to five veteran commercial brokers and lenders to find out

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ISSUE 14.08

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

CONTENTS

36

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

UPFRONT 04 Editorial

Is Vancouver’s market about to become even more unsustainable?

PEOPLE

34

BROKER INSIGHT

44

Deanne Whelan, co-owner of East Coast Mortgage Brokers, is blazing a trail for other female brokerage owners to follow

INDUSTRY ICON

As the new president of Mortgage Architects, Dustan Woodhouse has some fresh ideas about how to energize the network’s brokers

08 Head to head

Is Canadians’ growing HELOC debt cause for concern?

10 News analysis

Why it’s more crucial than ever to submit complete files to lenders How – and why – the stress test needs to be overhauled

14 Alternative lending update

THE FASTEST-GROWING MARKET

PEOPLE

Being able to afford a house is still a pipe dream for most residents in several major markets

12 Opinion

FEATURES

If your marketing strategy primarily focuses on millennials, you could be missing out on a potentially lucrative demographic of homeowners

06 Statistics

FEATURES

38

ARE YOU DROWNING IN MEETINGS?

If so, consider these five strategies your life raft

42

One industry firm aims to help brokers with their toughest deals

16 Technology update

Why brokers and technology should go hand in hand

FEATURES 40 Transform your culture in three steps

Actions you can take today to build a more supportive work environment

PEOPLE 47 Career path

As a broker, Eden Simari has the chance to make people’s lives better

48 Other life

18 2

Paddling away with mortgage agent and former Olympian Rhys Hill FEATURES

GET WHAT YOU WANT FROM DIFFICULT PEOPLE How to spin any confrontation to your advantage

MORTGAGEBROKERNEWS.CA CHECK IT OUT ONLINE

www.mortgagebrokernews.ca

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UPFRONT

EDITORIAL

Headwinds from Hong Kong

M

uch of the talk concerning international headwinds currently pertains to the ongoing trade war between the United States and China, but there’s another developing story that could have a major impact on Canadians in general, and Vancouverites in particular.

There are an estimated 300,000 Hong Kong residents with Canadian passports. Despite the fact that Hong Kong is an autonomous Chinese territory, recent Mainland encroachment upon their political system, in the form of a failed extradition law, might spur an exodus. Given that Vancouver is a Pacific Rim city with deep Cantonese roots, many could repatriate there.

Hong Kong money isn’t unprecedented in Vancouver. In advance of the British handover in 1997, a flood money poured into Vancouver in the late 1980s, and while many Hong Kong residents have returned to Asia in recent years, their roots in Vancouver are strong.

A mass wave of new arrivals, many of whom are moneyed, would only further shutter younger Vancouverites out of the market If such a mass repatriation were to happen, the city – and its millennial inhabitants – would likely face renewed affordability woes. One prominent Vancouver broker told CMP that millennials are, in addition to being sidelined by the city’s exorbitant prices, being punished by the B-20 rules, which further reduced their purchasing power. A mass wave of new arrivals, many of whom are moneyed, will only further shutter younger Vancouverites out of the market.

If a Hong Kong exodus does indeed occur, as many analysts predict, Toronto is also a likely destination. As Canada’s economic heartbeat, Toronto’s job market is, without question, more inviting. Nevertheless, the Vancouver brokers CMP spoke to are bracing for their city’s population to spike.

The Vancouver real estate market has been reeling for some time as housing prices have vastly outpaced wage growth, and newcomers could stimulate market activity. Still, Vancouver residents just starting their careers might have to reckon with the possibility of finding a new city to call home. According to one broker, the disillusionment among millennials in the city is palpable, and the provincial government’s decision to remedy the situation with a slew of new taxes will only exacerbate malaise.

www.mortgagebrokernews.ca ISSUE 14.08 EDITORIAL Writers Neil Sharma Joe Rosengarten Libby MacDonald Ephraim Vecina Darren Matte Copy Editor Clare Alexander

CONTRIBUTORS Joe Jacobs Brian de Haaff Anna O’Dea 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 Global Head of Communications Lisa Narroway 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 Publishing 20 Duncan Street, Suite 300, Toronto, ON M5H 3G8 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Sydney, Denver, Auckland, London, Manila, Singapore, 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 rebecca.pike@keymedia.com T +61 2 8437 4787

The team at Canadian Mortgage Professional

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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T D I G H E HA F O RA R VE ARD I TA E L I N N N T R E E AWF T H E Y O VAT O R O

13/08/2019 3:11:45 AM

UPFRONT

STATISTICS

Paying the price

WHERE ARE HOMES MOST AFFORDABLE? Canada’s pockets of affordability remain largely unchanged. In the Atlantic provinces, Manitoba and Saskatchewan, more than half of all families could meet the debt service standards for an average-priced home in the first quarter of 2019. By contrast, only a fifth of those living in Toronto and Victoria – and just 12% of Vancouver residents – have the median income necessary to afford a home.

While housing affordability is improving, it’s still far out of reach in Canada’s most popular markets BETWEEN MARKET-COOLING policies and a pause in interest rate hikes, housing affordability has gotten a recent boost.

According to RBC, housing affordability measures eased slightly in the first quarter of 2019, marking the second straight quarter of relief.

But prices are still at a high compared to the long-term average: Canada-wide, buyers would have to spend 51.4% of their pre-tax income on

a mortgage, property taxes and utilities.

The situation is even more untenable in the country’s priciest markets. In Vancouver, buyers would need to spend 82% of the median household income on housing costs, while Toronto buyers would need to spend 66%. Even condos are beyond the reach of almost two-thirds of Torontonians and nearly three-quarters of Vancouverites.

PROPORTION OF FAMILIES WHOSE INCOME MEETS DEBT SERVICE STANDARDS FOR AN AVERAGE-PRICED HOME

12%

Vancouver

51.4%

Proportion of income required to pay a mortgage, taxes and utilities on the average Canadian home

0.3%

7

Amount that figure has dropped since the fourth quarter of 2018

21%

3

Victoria

Major markets in Canada where Major markets in Canada where at least half of families can less than a quarter of families can afford an average-priced home afford an average-priced home Source: Housing Trends and Affordability, RBC Economic Research, June 2019

HOW MUCH INCOME IS NEEDED?

STRESS TEST BITES

For an average-priced home in Vancouver, families would have to dedicate 82¢ of every dollar of the median household income to the costs of owning a property.

At the other end of the affordability spectrum, Edmonton residents would only have to spend 34¢ of every dollar they earn on housing costs.

The stress test further eats into affordability; at the current qualifying rate, only 8% of Vancouver residents and 14% of Torontonians have the median income needed to afford an average-priced home in their city.

SHARE OF INCOME NEEDED TO COVER HOMEOWNERSHIP COSTS

PROPORTION OF HOUSEHOLDS WHOSE INCOME MEETS DEBT SERVICE STANDARDS UNDER THE STRESS TEST 40%

66.0%

82.0%

44.3%

Toronto

Vancouver

30%

Montreal

20%

41.1% Ottawa

39.7% Calgary

34.3%

10%

Edmonton

0% Source: Housing Trends and Affordability, RBC Economic Research, June 2019

6

8%

14%

30%

35%

39%

Vancouver

Toronto

Montreal

Calgary

Ottawa

Source: Housing Trends and Affordability, RBC Economic Research, June 2019

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43% Calgary

50%

52%

Winnipeg

Quebec City

55%

St. John’s

50%

Saskatoon

46%

53%

Ottawa

Regina

47%

52% Halifax

36%

Edmonton

Montreal

20%

56%

Toronto

Saint John Source: Housing Trends and Affordability, RBC Economic Research, June 2019

NO LONGER THE AFFORDABLE ALTERNATIVE Purchasing a condo has long been a way for first-time buyers to enter the market in more expensive cities, but even this option is becoming increasingly out of reach. Only about a third of Toronto residents and a quarter of Vancouverites have the income to meet debt service standards for an average-priced condo in those cities.

PROPORTION OF HOUSEHOLDS WHOSE INCOME MEETS DEBT SERVICE STANDARDS FOR AN AVERAGE-PRICED CONDO

60%

60%

63%

66%

61%

63%

61% 45%

38%

40%

64%

34%

20%

Vancouver Victoria Calgary Edmonton Saskatoon Regina Winnipeg Toronto Ottawa Montreal Quebec City

Q42018

49%

27%

0%

While the overall trend across the country was of improving affordability, three major markets saw affordability worsen or stay stagnant over the first quarter of 2019.

SHARE OF INCOME NEEDED TO COVER HOMEOWNERSHIP COSTS

80% 67%

GETTING MORE EXPENSIVE

St. John Halifax

Source: Housing Trends and Affordability, RBC Economic Research, June 2019

Toronto

65.7% 66.0%

Ottawa

40.7% 41.1%

Montreal

44.3% 44.3%

0%

20%

Q1 2019

40%

60%

80%

Source: Housing Trends and Affordability, RBC Economic Research, June 2019

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UPFRONT

HEAD TO HEAD

Is Canada’s historically high HELOC balance worrying?

HELOCs now rank only behind mortgages as the largest source of debt for Canadian households. Should brokers be concerned?

Robert Mogensen Mortgage consultant The Mortgage Advantage Financial Services

Clinton Wilkins Senior mortgage advisor Centum Home Lenders

Elan Weintraub Mortgage broker/co-founder Mortgage Outlet

“Canadians’ addiction to the HELOC has become very pervasive over my career as a broker. Clients have requested these with the best intentions, assuming the line of credit will be there when they need it on a rainy day when the proverbial leaking roof occurs.

In practice, though, these lines of credit have become like cash in the bank for spending on unnecessary items such as vacations, new furniture and other toys. This has led to many HELOC users never paying them down and carrying a balance that we ultimately end up refinancing into a new mortgage years later – not the intended consequence.”

“Generally speaking, a HELOC is the wrong product for most borrowers.

HELOCs are convenient and are offered at much lower rates than credit cards or traditional lines of credit. The issue is that interest rates for HELOCs are often 1% to 2% higher than mortgage debt, and most consumers don’t understand the product.

When used properly, HELOCs can offer much lower rates to cover short-term needs. Unfortunately, many Canadians use these for long-term debt and end up making interest-only payments, leaving consumers with a larger interest bill and far less equity in their homes.”

“There are two reasons I’m not concerned about high HELOC balances. First, the debt-to-income ratio is more interesting than absolute debt, and incomes are under-reported. In the gig economy, consumers rent/Airbnb their basement, drive Uber, earn cash, and bonuses/ part-time income are under-reported.

Second, I would articulate the American dream as owning a huge house, sports cars and more. In contrast, the Canadian dream is being mortgage-free.

Our attitude is different. Some Canadians overborrow, but more focus on pay-down. Plus, we smartly borrow to purchase assets – like adding a basement apartment – rather than buying toys.”

ON THE HOUSE In late June, the balance owed on Canadian HELOCs set a new record when it inched past the $300 billion mark for the first time. According to the OSFI, Canadians’ HELOC debt is up 7.56% since April 2018 and now accounts for the second largest share of the debt load in Canada after mortgages. Perhaps most concerning is where those HELOC funds are being used; the lion’s share ($268.38 billion of the $300.93 billion total) went to consumer debt for personal purposes. Yanchuk Oleksy, director of education and community awareness at the Credit Counselling Society, noted that “Canadian consumers reaching out to CCS for assistance are carrying average debt levels over $30,000. This is alarming, as two decades ago, the average was $12,000 of non-mortgage debt.”

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13/08/2019 3:12:57 AM

UPFRONT

NEWS ANALYSIS

The complete package For years, some brokers have taken liberties by submitting incomplete mortgage files to lenders – but lenders are beginning to push back

BROKERS ARE on notice: Packaging complete mortgage files before submitting them to lenders is more vital than ever, and lenders intend to hold brokers’ feet to the fire.

Incomplete files translate into lost time and money, so lenders are emphasizing efficiencies.

According to Rachelle Gregory, Merix Financial’s senior vice-president of originations, brokers are expected to submit files with full documentation – something that, while obvious on the surface, can be elusive.

“On average, before our underwriters can even properly underwrite a file, there’s a 20to 30-minute process of scrubbing a file, which is cleaning up data brokers left out of their applications,” Gregory says. “It comes down

they don’t have access anymore.”

Files with incomplete information or documentation can also create bottlenecks elsewhere in the process. “If the file is incomplete, we can’t submit it to the insurer,” Gregory explains.

“The postal code for the customer’s employer, for example, isn’t important to the broker, but if we fund the file and it doesn’t have that information, it doesn’t meet the insurer’s compliance requirement and is still in audit.

Underwriters look to meet all insurers’ requirements in high-ratio situations, and they have to fill that out themselves if it isn’t included.”

To keep brokers accountable, most lenders internally track which brokers are efficient and which ones aren’t. Merix, for example,

“Brokers are finding out that if they don’t meet our efficiency requirements, they don’t have access anymore” Rachelle Gregory, Merix Financial to dollars and cents for us in terms of efficiencies. There are a lot of brokers who are efficient and who package great deals, for sure, but as a company, one of our main pillars is selective access, meaning we don’t deal with every broker in the industry. Brokers are finding out that if they don’t meet our efficiency requirements,

10

issues its broker partners score cards every month and expects brokers to meet a certain threshold of funded files. Gregory stresses that the partnership between lenders and brokers must be mutually beneficial.

“Every lender does this, but our expectation or benchmark is that every broker should fund

a minimum of four and a half out of every five deals they submit to us,” she says. “There are brokers with amazing funding ratios, who fund eight out of every 10 deals, so we’re rewarding those brokers we partner with.”

Brokers filing through Filogix should take care to fill everything out, Gregory adds, including information not deemed essential.

“Filogix has yield signs, as opposed to the stop sign that won’t let you submit,” she explains.

“The yield sign, which is the little yellow triangle, will recommend filling out information, but it won’t prevent the application from being submitted to the lender. It should be filled out to enhance efficiency and help our underwriters.”

For RiverRock Mortgage Investment Corporation president and CEO Nick Kyprianou, professional decorum is the name of the game.

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WHAT ARE BROKERS FORGETTING TO INCLUDE?

Second jobs (important for KYCs)

New credit reports and updated debts on refinances

Gifted down payments (especially if the funds are of international provenance)

Title transfers RiverRock also keeps an internal score card on brokers and initiates discussions with those who have soft closing ratios. However, Kypri-

will be on your deals. Not everybody focuses on the relationship aspect of the business.”

Kyprianou says RiverRock will work with

“We’re all in this industry together, and a level of professionalism is expected because this is a business of relationships” Nick Kyprianou, RiverRock Mortgage Investment Corporation anou says, it’s a conversation the company can only have so many times.

“The bottom line is we’re all in this industry together, and a level of professionalism is expected because this is a business of relationships,” he says. “The better the relationship you have with a lender, the more flexible that lender

inconsistent brokers to make sure they understand every link in the chain. If a broker is new to the industry, they typically receive more leeway, but there are limits.

“We try to work with them for a while,” he says. “Some of them might be new, and we try to hand-hold them a bit. If you send us all the

Purpose of funds from refinances

information out of the gate, we can give you a faster answer with no conditions. If you send it piecemeal, it slows the process down, and you may not get as good of a deal. If we have to do more work to do your deal, it’s going to cost more.”

As lenders continue to leverage technology to achieve greater efficiencies, brokers will have little choice but to submit complete files or be left behind.

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13/08/2019 3:14:40 AM

UPFRONT

OPINION

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

A failing grade for the stress test School’s out – and the stress test in its current form should be, too, writes Joe Jacobs THE NOTION that more stringent qualifying requirements will provide the stability needed to handle an inevitable rise in interest rates and slow down an unsustainable housing market is a story that is easy to tell. Low interest rates, skyrocketing real estate markets and a continuing increase in debt-to-income ratios fuel the perceived need to slow things down, reduce borrowing power and, frankly, check ourselves before we wreck ourselves. The latest solution – the B-20 stress test – has been rolling for well over a year and is failing on three fronts.

First, the policy is disproportionately impacting smaller markets by painting the entire housing market with the same brush.

Yes, the GTA and GVA make up most of the real estate in Canada, but an attempt to slow down these markets with policy that governs the entire country is fundamentally flawed.

For example, Alberta continues to feel the pain of a weakened economy. Housing is stable, but prices are down and inventory is still high. With low job creation in the province, fewer potential buyers are looking to enter the market. The last thing Alberta needs is a tougher barrier for entry into homeownership. Alberta wasn’t in the middle of a hot real estate market in the first place.

The same story can be told in parts of BC, the rest of the Prairies, and many parts of Ontario, Quebec and Atlantic Canada. Macro national housing policy is easy to implement, but it misses the fact that real estate markets

12

are extremely micro. Further, it doesn’t solve the problem.

The hot markets have remained quite strong; Vancouver has seen a bigger drop, but this is likely due to the layering of multiple policy changes, both provincially and federally. What the policy has done more than slow down hot markets is push people into alternative lending options. Private lenders and MICs have seen record growth over the past 18 months.

Professionals Canada and others to have this number cut in half.

The bigger issue is that, fundamentally, the policy in its current state is not dynamic and cannot pivot quickly enough. It’s not surprising that a regulatory policy isn’t fluid, but the trouble is that rate markets are. Last year, a potential buyer would have been looking at five-year fixed rates of 3.50% and qualifying close to 2% higher via the stress test. The same buyer today would be looking at a much lower rate of about 2.70% but still qualifying at 5.34%, or 2.64% above their contract rate.

The easiest solution is to not use an arbitrary qualifying rate as a minimum and instead simply add onto the contract rate.

An equalling of the playing field, whether the mortgage is insured, insurable or uninsurable, would at least have all borrowers today qualifying at 4.70% instead of 5.34%.

The higher qualifying rate is concerning because lenders that use this posted rate when calculating payout penalties and have no interest in decreasing it when rates drop.

The larger discount they provide, the more runway they have to charge a larger penalty should the mortgage be broken mid-term.

Over the last six months, we have seen rates

“The bigger issue is that, fundamentally, the policy in its current state is not dynamic and cannot pivot quickly enough” Another problem is that the current stress test – at the greater of 200 basis points over the contract rate or the qualifying rate (currently 5.34%) – is simply too high of a number. The test reduces potential buying power by about 18%, and it can be argued that it does not need to be this much.

We are overshooting the impact of potential rate increases. In fact, with today’s stress test, we are accounting for almost a doubling of rates. As recently as April 2019, CIBC Capital Markets deputy chief economist Benjamin Tal questioned this number and suggested a rethinking of the stress test.

Much lobbying has been done by Mortgage

drop by close to 1%, yet the qualifying rate or posted rate has remained unchanged.

This opens up the potential for record-high payout penalty costs.

Perhaps we should turn the stress test on its head and put a stress test on lenders’ posted rates – namely, a posted rate cannot exceed 200 basis points above the discounted rate offered.

Joe Jacobs has been a mortgage broker since 2004 and is a partner with Mortgage Connection. He is a regular commentator for outlets such as MoneySense magazine, the Calgary Herald and BNN.

www.mortgagebrokernews.ca

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2019-07-09 1:28 PM 13/08/2019 3:15:15 AM

UPFRONT

ALTERNATIVE LENDING UPDATE NEWS BRIEFS Non-bank lenders hold a fifth of mortgages in Canada

In a recent analysis of Statistics Canada’s mortgage data for the fourth quarter of 2018, real estate blog Better Dwelling revealed that non-bank lenders accounted for one-fifth of institutionally held residential mortgages nationwide at the end of last year. According to StatCan, non-bank mortgage lenders held more than 1.7 million residential mortgages in the fourth quarter, totalling $325.5 billion. Of that amount, nearly two-thirds ($188 billion) is uninsured.

The StatCan data also showed that nonbank lenders originated 9% of all new mortgages during the quarter.

Alternative lender boosts lending capacity by $160 million

Neighbourhood Holdings Limited Partnership has announced the closing of a $110 million committed revolving credit facility with ATB Financial and an undisclosed financial institution, as well as an additional uncommitted $50 million accordion. The additional capital provides Neighbourhood, which currently offers alternative mortgages in BC, Alberta, Manitoba, Ontario and Quebec, with financing certainty as it looks to expand its national footprint. “This is a pivotal moment for Neighbourhood and a strong indicator that our efforts to change the way mortgage capital is distributed is resonating with Canadians,” said CEO Taylor Little.

Private lenders and MICs lead in mortgage delinquencies

While overall mortgage delinquency rates are low nationwide, they are considerably higher for certain nontraditional providers, according to CMHC data covering the third quarter of 2018.

Private lenders and MICs together have a delinquency rate of 1.93% – approximately eight times larger than the 0.24% rate observed among banks.

However, other alternative lenders are more in line with traditional financial institutions; non-bank lenders posted a delinquency rate of 0.25%, while credit unions had the lowest rate of all at 0.17%.

Bank of Canada interest rate cut possible before 2019 ends

While the Bank of Canada chose to hold its benchmark rate steady at 1.75% in July, some observers are predicting a rate cut before the end of the year. Among them is Capital Economics economist Stephen Brown, who explained, “If we were only looking at domestic factors, we might think that the bank would soon start to consider further rate hikes. Economic growth is on track to outperform the bank’s forecasts in the second quarter, and core inflation has risen in recent months. But outside of Canada, trade tensions have grown, there are signs that US GDP growth is slowing, and the Fed has signalled that it will soon cut rates. We suspect that the next move will be a cut.”

CMI Mortgage Investment Corp. debuts on FrontFundr

CMI Mortgage Investment Corporation has announced improved access to its mortgage investment fund via the FrontFundr online platform. CMI COO Bryan Jaskolka hopes that FrontFundr’s crowdfunding opportunities will help CMI MIC gain greater capital for more client-facing ventures. “We are excited to join the FrontFundr platform and embrace the crowdfunding format so our clients and investors can access our investment product that, in the past, was not available to them due to geographical restrictions and/or investment amounts,” Jaskolka said.

Getting across the finish line A BC-based organization aims to support brokers in putting together alternative deals

Challenging mortgage files are all too common, but fortunately for brokers, there’s a support network that can help them get approvals. Based in Langley, BC, and serving brokers across Canada, The Funding Department launched in 2017 to help brokers secure funds from alternative lenders. According to co-founder Adam Coultish, there are a few reasons The Funding Department can do what some brokers can’t.

“Sometimes brokers just don’t know how to package the deal, so we help them with that,” Coultish says. “We also help brokers with deals they don’t want to do. For the sake of time versus money, they say, ‘Hey, here you guys go,’ and they get paid half. We’re here to make brokers’ businesses more efficient, and we also really push mortgage broker education. We constantly teach brokers how we do the deal and happily give away our system and information for free. We think transparency can help brokers be better brokers, and that’s our goal.”

The Funding Department teaches brokers which documentation to request upfront and how to put files together. It also drills into another important facet of broker education: managing client expectations.

“A lender is more likely to approve a file that’s properly put together,” Coultish says. “The second most important part is how to make sure a client is prepared to not get a 2.99% interest rate, but to understand that they will get a mortgage. If you educate your client well at the

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beginning, they’ll understand why you got them the approval you have. It’s all about transparency with your client, knowing what to ask for and knowing where to send your file.”

The Funding Department helps everyone from neophyte brokers to high-producing veterans. New brokers might need help assem-

“We think transparency can help brokers be better brokers, and that’s our goal” bling files, middle-career brokers might have tried 10 lenders to no avail, and high producers would rather close a few deals in under an hour than toil on one they know The Funding Department can take care of.

“We do our research – we’ve literally studied all of the lenders’ guidelines and we’ve put them in our own database, so when we package the file, we match them with the lenders we know will approve them,” Coultish says. “Lenders give us approvals where they may not for others because one, we send them full files, and two, we’ve built relationships with them. Most brokers get a challenging file on every eight or so deals, but every file we get is challenging, so lenders do things for us that they don’t for other people because they know that when they get one of our files, it’s less work for them.”

Q&A

ROBB NELSON Co-founder, CEO and broker FAMILYLENDING.CA

Years in the industry 19 Fast fact In his free time, Nelson is an avid traveller, downhill skier and golf player

An alternative option for land financing What unique advantages does FamilyLending.ca have over the competition?

We have a new arm called AgriRoots Capital Management, focusing on the agricultural market. We’re among the first ever alternative lenders organized in this fragmented space. We’ve put together a very strong team for the agricultural space, giving our brokerage another revenue stream while assisting a whole new market encompassing hobby farms and any estate that produces or processes food. We’re talking about massive amounts of land zoned for these purposes – far more land than anything that would ever be involved in a residential transaction.

For those who need extra capital, we’ll be working with them and financial institutions to provide starting capital and help grow their businesses – and keep Canadian farmers on their farms.

How did the first half of 2019 go for your brokerage?

Extremely well. The stress test has placed much higher pressure upon conventional funding, and FamilyLending.ca has immensely benefited from much higher activity in the alternative side of Canadian lending. It’s shaping up to be another strong growth year for us. The big thing is that our commitment-to-funding ratio is phenomenal – in the high 90s, around 96% or so. That shows that our staff is doing their due diligence to make sure that our clients are getting the right products.

What are some of the problems your clients most frequently encounter?

In some of the major markets, ownership is getting out of reach for more and more Canadians. We’re seeing more work in smaller markets with populations less than 500,000, as these places are considerably more affordable for first-time buyers. Really, the biggest problem that we’re seeing is the trend of high prices in the major markets, and I think it will continue to be a problem that will push more Canadians towards locations with less population.

How have new policies affected the way you go about your business?

These policies have made us more aware of what our clients need.

Thus, we’ve placed heavier emphasis on client relationships: spending more time with each client and getting a full understanding to determine the best solutions for their needs.

The policies are there as guidelines, and we continue to enlighten our clients about how these regulations affect them and how we can help. We believe that the stronger and more educated our community is, the better things will be for both us and our client base.

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13/08/2019 3:17:26 AM

UPFRONT

TECHNOLOGY UPDATE

Tech is no substitute for brokers Industry players argue that there will always be a need for experienced brokers to backstop technology

“It’s incumbent on the professional to make sure that their technologies and systems are properly integrated to provide a seamless, but better, mortgage experience for their clients,” Pinsky wrote. “The marriage between human interaction and providing a seamless experience through leveraging technology should dominate our thinking.”

Canada’s largest financial institutions are likewise confident that a combination of knowledgeable professionals and ever-advancing technologies is the way forward.

“Because mortgages are complex … borrowers are continually requesting human interaction”

While technology has proven to be a massive boon to the mortgage industry, DLC broker Eitan Pinsky recently warned that significant challenges remain. In a blog post on the network’s website, Pinsky noted that due to the nature of mortgages, any industry technology should always incorporate a human element.

“Because mortgages are complex, with timelines to follow and anxiety to manage, borrowers are continually requesting human

NEWS BRIEFS

interaction to answer their questions,” Pinsky wrote. “Although digital applications promise speed and ease of use, all mortgage files still have to have ‘eyes’ on an application. We’re not there yet (nor will we be for the foreseeable future) where humans do not have to touch mortgage applications for final approval.”

Pinsky stressed that the industry shouldn’t forget that technology is a tool, not a substitute for a broker’s education and experience.

PropertyGuys.com pursues further Canadian expansion

Major private home sales platform PropertyGuys.com has announced that it’s looking to expand further in Canada, particularly in Ontario. For 2019, the platform has scheduled the introduction of 20 additional locations nationwide. In addition to multiple Canadian provinces, the network is also looking at several parts of the United States for its next major expansion and is planning to introduce four master franchises. At present, PropertyGuys. com hosts more than 10,000 listings of properties located all over North America.

According to Pat Giles, vice-president of real estate secured lending at TD Bank, there will always be a need for a mortgage broker’s intuitive understanding of client needs, despite advances in artificial intelligence and machine learning.

“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,” Giles told CMP earlier this year. “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.”

Manulife focuses tech offerings on young adults

Manulife Bank is hoping to challenge the dominance of Canada’s Big Six banks through an assortment of tech-driven products aimed at millennials.

The institution has inked alliances with four fintech firms – two in Canada, one in New York and one in Singapore. The bank’s goal is to allow millennial customers to sign up for each of its bundled products – including travel insurance, a credit card, a high-interest savings account and an unlimited-transaction bank account – in just under a minute.

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Q&A

James Laird President and broker of record CANWISE FINANCIAL

Years in the industry 11 Fast fact Laird launched several successful entrepreneurial ventures prior to founding CanWise in 2014

How a CRM platform creates a virtuous cycle Can you describe how CanWise Financial’s CRM platform has impacted your business so far?

Once you get to a certain volume of leads and clients, the CRM becomes vital to servicing your client base effectively. Building our custom CRM to ensure that it can effectively handle the number of transactions that we deal with has been a key driver of us growing year after year.

How has your CRM platform changed since its introduction?

We have a team of in-house developers, and it’s not something that we outsource. We actually fine-tune the system on a constant basis; there’s probably not a week that goes by where we’re not adjusting or improving something or thinking about what we can do to stay in touch with our clients even better.

What aspects of this system have you found most helpful?

It probably starts with lead management. Knowing immediately when a lead has come in, knowing who that lead is and being able to assign it quickly to an agent who can help them all determine how successful you will be in closing that deal – and the CRM is what helps us offer speedy responses to leads.

What are your current targets and expectations for your system?

Continuous improvement, with the aim of making the mortgage process progressively easier for consumers, agents and lending partners alike.

TransUnion bolsters identity theft protection

Credit reporting agency TransUnion has launched TrueIdentity, a platform that helps organizations shield their customers from cyber attacks. TrueIdentity gives consumers unlimited online access to their credit information while protecting them against data breaches. Consumers also get access to TransUnion CreditVision Risk Scores and can receive notifications about changes to their credit files. TrueIdentity also includes educational resources on credit management, fraud victim assistance and identity theft prevention.

REMIC offers AI-supported courses

What challenges still need to be addressed?

The CRM can always, always be better. With the sheer number of leads and files and deals that we’re trying to manage, we can always do something in a better way – in any aspect, from the lead nurturing side of it to the postclose follow-up and everything in between. Everything the CRM does should be refined continuously.

In the mortgage industry’s rapidly changing technological environment, what do you think the role of the broker will be?

I don’t think that technology will make mortgage agents obsolete, definitely not. The way I see it, mortgage professionals using technology in an effective manner are able to fulfill the needs of a higher volume of customers than they have ever been able to before. And these mortgage professionals will be able to provide an excellent level of service with an accurate answer for each unique situation.

Technology’s importance is such that it allows you to actually improve on the quality of what you deliver to your clients. Any mortgage agent should be excited about the evolving technology landscape and eager to use it to ensure the further growth of the business.

What lessons do you think industry professionals could learn from your CRM experience?

Just embrace technology. It’s supremely powerful and extremely helpful. Mortgage agents who refuse to acknowledge and learn the tools of the trade are deliberately limiting what they can achieve in their business.

The Real Estate and Mortgage Institute of Canada has added state-ofthe-art artificial intelligence applications to its online courses, enabling it to offer students constant support. The new REMIC Teaching Assistant Bot will ensure that REMIC students have access to answers when they need them, without having to wait for an instructor to respond. “We can [now] assist students 24/7/365,” said REMIC president Joe White. “Students can ask questions, get answers and progress in their courses without inconvenient delays.”

Fintechs at greater risk for money laundering

Fiscal watchdog FINTRAC has warned that fintech companies are at greater risk of money laundering due to a lack of mitigating measures on their part, according to documents obtained

by The Globe and Mail. At present, FINTRAC warned, many fintechs possess a “limited understanding” of their duties under Canada’s anti-money laundering regulations, which include ensuring that clients are readily identifiable, maintaining strict compliance programs and reporting any suspicious transactions.

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13/08/2019 3:18:13 AM

PEOPLE

INDUSTRY ICON

THE ARCHITECT OF BETTER BROKERING As Mortgage Architects’ new president, Dustan Woodhouse has a vision to propel his network to the top of the broker channel

DUSTAN WOODHOUSE was recently appointed president of Mortgage Architects – and, if his packed workshops are any indication, the broker network couldn’t have made a better choice.

The inception of Woodhouse’s career parallelled that of the Great Recession, when the federal government’s decision to slash amortizations from 40 to 35 years and eliminate zero-down-payment mortgages sent brokers and homebuyers scrambling. Entering the industry amidst rampant acrimony, Woodhouse showed immediate resolve.

“The 40-year amortization was down to 35, which is the equivalent of a 1% interest rate increase overnight,” he recalls. “A whole bunch of people were throwing their hands in the air, saying, ‘It’s all over.’ I put my head down, dialled the phone and found solutions. Like the Frank Sinatra song says, ‘If I can make it there, I’ll make it anywhere.’”

Becoming a better broker Over the past 12 years, Woodhouse has personally funded 1,695 mortgages worth about $775 million and has been imparting his acumen through a book series and workshops. Be the

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Better Broker, currently a trilogy with a fourth installment on its way, has catapulted Woodhouse to vaunted status, and his workshops are packed wall-to-wall.

“The three books led to speaking opportunities, but there was no plan,” he says. “I figured I’d write these books on brokering, and people could read them and figure out the basics. Soon

they’ve entered the right industry. It also includes practical, applicable lessons for existing brokers.

The second volume, Days 1-100 as a New Broker, is replete with scenarios every broker has experienced and serves as a guide to mitigating those trials. The third volume, Nuts & Bolts, is a step-by-step textbook wherein Woodhouse walks brokers through mortgage files.

“I don’t necessarily speak the language of corporate as well as one might expect from a president, but I do speak the language of our 1,377 mortgage agents fluently” after, I got calls to go speak at events, which I enjoyed, but I quickly realized 40 minutes aren’t enough to change hearts and minds, so I started doing six-and-a-half-hour, whole-day workshops and had brokers from all brands attend. In 2018, 1,624 people attended my workshops.”

The first volume of Woodhouse’s book series, subtitled So You Want to be a Broker?, helps brokers determine, among other things, whether

Up next is #ThisIsBrokering, which Woodhouse describes as a long-term survival guide.

“It’s a series of 17 short, punchy essays on what I’ve learned about the business,” he says. “The three books are 200,000 words on how to take an application and signing commitment from a client without ever talking about the rate because clients don’t actually care about the rate. They only think they do, and brokers allow

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PROFILE Name: Dustan Woodhouse Title: President Company: Mortgage Architects Years in the industry: 12 Career highlight: “Being given the Broker of the Year Award at the Canadian Mortgage Awards in 2017. That kind of recognition is nice.”

Career lowlight: “I’m a ‘glass half full’ optimist. Even when people kick me in the teeth, I think to myself, ‘I always wanted braces.’ There are no problems in life; there are only solutions.”

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PEOPLE

INDUSTRY ICON

them to operate under that delusion because brokers buy into the same delusion that clients only care about rates. Clients care about two things: being approved and how much the payment is going to be.”

Corporate moves Woodhouse’s growing reputation as the industry’s pre-eminent broker led to a conversation with Dominion Lending Centres’ Gary Mauris, who, in no uncertain words, told him how much value he could bring to the larger DLC network, of which Mortgage Architects is a lynchpin. In June, Woodhouse was installed as its president.

“The role of president of the Mortgage Architects network has given me the platform to

says. “We plan to get together, moving forward, on a quarterly basis, and I’m trying to create as many of those pods in our organization as I can.

“The one thing our network brokers can expect from me,” he adds, “is a complete understanding of what they’re experiencing, as far as the stress and pressure of getting a file across the finish line – and, more than that, understanding that I’m available to them for conversations. They can expect me to do all I can to create an environment where we support and interact with one another on a regular basis.

We’ll share our best practices and hone our skills on a regular basis. The number-one thing everybody in this industry who’s been in it for three or four minutes complains about is a lack

“Clients don’t actually care about the rate.

They only think they do, and brokers allow them to operate under that delusion because brokers buy into the same delusion” directly interact with a specific group of brokers, and I absolutely see what the direct results of those interactions are,” he says. “Arguably, I don’t necessarily speak the language of corporate as well as one might expect from a president, but I do speak the language of our 1,377 mortgage agents fluently, having completed 1,695 mortgages myself personally. Really, who better to lead 1,400 brokers than somebody who actually understands what they go through on a daily basis?”

One of Woodhouse’s key visions for Mortgage Architects is a series of quarterly mastermind sessions and workshops for brokers, unlike anything a Canadian mortgage network has offered before.

“Those mastermind sessions are groups of seven brokers sitting down for four hours with me and doing a deep dive into best practices, their biggest challenges and more,” Woodhouse

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of training. Our goal with the mastermind session and consistent workshops is to take that complaint and actually address it in a meaningful way.”

In rethinking the way things have been done, Woodhouse acknowledges that the growth he hopes to inculcate in network agents and brokers will come with accountability, which he says won’t always be comfortable.

“The challenge I want to create is having too much accountability, and I want us to be uncomfortable,” he says. “We all know in this business that if you pick up your telephone and make as little as 10 outbound calls every day, five days a week, you will be successful – how can you not be? Who do I call; when do I call; how do I stay motivated? That’s what we’ll be addressing in our mastermind sessions because we have people in those rooms who are successful and know how to make it work.”

DUSTAN WOODHOUSE’S INDUSTRY HONOURS

2012 Number 9 on CMP ’s Top 75 Brokers list

2013 Number 16 on the Top 75 Brokers list

2014 Number 8 on the Top 75 Brokers list

2015 Number 11 on the Top 75 Brokers list

2016 Number 11 on the Top 75 Brokers list

2017 Number 15 on the Top 75 Brokers list and named Mortgage Broker of the Year (25 Employees or More) at the Canadian Mortgage Awards

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It’s not about credit scores.

It’s about life scores.

Life happens. When a change in marriage, unexpected illness or even job loss come between your client and their dreams, we’re here. Let’s partner to look beyond their credit score and ask the right questions to understand the whole story. Together, we can find the best solution and help deserving clients focus on the scores that matter most in life. Visit hometrust.ca to learn more. Home Happens Here.

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13/08/2019 3:18:53 AM

SPECIAL REPORT

COMMERCIAL LENDING GUIDE

COMMERCIAL LENDING GUIDE CMP spoke to five key players in commercial lending to get answers to some of brokers’ most pressing questions CANADA’S COMMERCIAL lending space continues to be a hotbed of activity. Commerical investment volume rose from $43.1 billion in 2017 to $49.3 billion in 2018. The largest year-over-year increase occurred in the industrial sector, which rose from $7.4 billion to $12.7 billion, followed by multi-family, which jumped from $6.2 billion to $8.3 billion. As levels of immigration, employment, investment and tourism continue to climb in Canada, the country’s commercial real

estate sector should continue to see high demand.

That creates multiple opportunities for both experienced brokers and those new to the commercial space. With that in mind, CMP turned to experts from both the lender and broker sides of the commercial market to get their advice on common challenges commercial mortgage brokers face. Their insight can help both seasoned and freshly minted commercial brokers take their business to the next level.

CMP

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SPOTLIGHT: NATIONAL COMMERCIAL REAL ESTATE

INVESTMENT VOLUME – 2019 FORECAST

SQUARE FEET OF SPACE UNDER CONSTRUCTION 19m 18m 17m

$10.5 billion

$10.2 billion

Office

Industrial

Office (central 18.49 million and suburban) Industrial

17.68 million 16.72 million

16m 15m

14.63 million

14m 13m 12m

2018

2019 (forecast)

SQUARE FEET OF NEW SUPPLY

$7.6 billion

$7.3 billion

26m

Retail

Multi-family

22m 18m

Office (central and suburban) Retail Industrial

22.45 million

22.45 million

12m 8m

$6.8 billion

$1.2 billion

4m

Land

Hotel

1m

4.28 million

4.28 million 2018

3.77 million

4.77 million

2019 (forecast) Source: 2019 Canada Market Outlook, CBRE

EMPIRICAL CAPITAL CORP. (“EMPIRICAL”) is a private commercial real estate lender that was founded in May 2017.

BROKERAGE #12903 | (416) 840-6896

ABRAHAM (ABBY) STRAHL PRESIDENT & CEO

DAVID STRAHL, LL.B.

VICE PRESIDENT & MORTGAGE BROKER

4950 Yonge Street, Suite 1706 Toronto, ON M2N 6K1 www.empiricalcapital.ca

CMP Empirical Capital Corp EDITED.indd 1

EMPIRICAL specializes in providing land financing for residential / commercial land acquisition and debt refinancing while awaiting development approval, with loan amounts ranging from $3M to $25M. EMPIRICAL is a lender of choice for small to medium sized developers.

By applying the right mix of innovative and creative lending practices, experience and in-depth knowledge of the industry, EMPIRICAL maximizes Borrowers’ needs while meeting the risk considerations of its investors.

29/07/2019 11:53:40 PM

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SPECIAL REPORT

COMMERCIAL LENDING GUIDE proportion. Since financing of commercial revenue-producing properties is driven by first bite, debt-service ability has an effect on financing of these properties. It has driven down the loan-to-purchase price.

With the Toronto and Vancouver markets overheated, it has actually favoured other major markets in the rest of the country.

We see lenders being more aggressive on transactions out of the major centres, hoping to diversify their loan exposure in more stable markets, rather than increasing their exposure in oversaturated markets.

MICHEL DURAND President and principal broker Mortgage Alliance Commercial

What’s your take on the current state of the commercial market?

Michel Durand: The commercial market today has more buyers than available assets for sale – that holds true for all asset classes. Industrial assets are selling and being built more quickly than ever.

Hospitality assets are also in demand.

As for the usual suspects, multi-unit residential properties, plazas and office buildings continue to be extremely active.

Commercial mortgage financing, in support of this activity, is quite healthy. I have not seen any lack of liquidity in the market to support good transactions and secure competitive bids, terms and conditions. It is still easily accomplished, but the secret remains making sure you are taking it to the lender that is the most motivated and has an appetite for that type of transaction in that part of the country. Most people forget that although every lender tends to finance all asset classes, they each have their preferences at any point in time and will only be competitive on certain asset classes.

What impact are the Toronto and Vancouver markets having on the national scene?

MD: Both of these markets have been hyperactive, driving prices out of

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For brokers, what skills are transferable from residential to commercial mortgages?

MD: I think the biggest difference is that a successful commercial mortgage broker needs to master and drive all aspects of the transaction diligently in order to get a deal funded. On the commercial side, your client is not just the borrower, but every

to take second chair and learn how to get it done right.

Are there any unique areas of the commercial market brokers should be aware of?

MD: If you want to get into commercial financing, pick one asset class to focus on. If you choose multi-unit residential properties, then only do those. You will be able to identify the challenges associated with financing that asset class, which lenders favour it and which professionals will help you underwrite and support the transaction to get the deal funded more quickly. Once you master that asset class, move on to the next.

I have been doing commercial mortgage brokering for 27 years, and one of my favourite sayings is, ‘If the deal has not died three times, it’s not ready to close.’ You can’t just give up after the first, second or third challenge. Too many brokers don’t finish their deals because they get frustrated and

“If you want to get into commercial financing, pick one asset class to focus on … Once you master that asset class, move on to the next” professional required in the transaction, as well as the lender. A commercial mortgage broker must completely underwrite the transaction in order to make it easier on the lender to get the loan approved. The broker needs to understand and mitigate all the challenges identified in each file. Lenders are not there to find solutions to challenges; they are there to follow policy. If you expect the lender to find the solutions, you and the borrower will be very disappointed because the lender’s priority is to ensure that policy is met, not the borrower’s needs.

Any residential broker who wants to take commercial mortgage brokering seriously should find a good, experienced mentor to work with instead of trying to figure it out on their own. There are plenty of experienced commercial brokers who are happy to share their knowledge; you just have to be ready

move on to a new deal that looks easier, and the cycle repeats.

What do you see in store for commercial lending in the future?

MD: I believe the future is extremely bright for good commercial mortgage brokers.

There are more transactions than ever in the market, and the lenders are struggling with processing those files – not just because of the sheer volume of transactions, but because of a shortage of experienced lender staff. Good commercial mortgage brokers will be able to bridge the gap between the borrowers’ and lenders’ needs. We see more lenders coming onto the market and new financial tools made available to borrowers.

Good commercial brokers will provide both the borrower and the lender an ally who will facilitate getting the transaction done.

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SPECIAL REPORT

COMMERCIAL LENDING GUIDE and multi-family residential sectors, with conversions continuing to provide an attractive source of opportunity.

What key issues are commercial lenders facing right now?

GV: Valuations across property sectors, particularly in primary markets, are an issue. For example, cities like Toronto, Vancouver and, to a certain extent, Montreal are seeing continued immigration numbers, which have fuelled demand. While it has been directly on the residential side, it’s also on the commercial side because these new residents are seeking out job opportunities, and that job growth fuels demand for commercial space: office, industrial, retail.

Occupancy rates are very high, suggesting that there will be a lot of demand for commercial property, creating competitive pressures in regard to capital and the pricing of it.

GREG VORWALLER President Trez Capital

What are the major trends affecting the commercial market today?

Greg Vorwaller: Canada’s economy appears to be doing well overall and has recently navigated through a soft patch, although it’s showing signs of slowing.

Provincially, there are a number of variances across the country, leading to differences in activity levels.

The other issue across the board is that there is a tremendous supply of capital in the marketplace, both on the

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equity side for acquisitions and on the debt side for lending. This affects how lenders look at the marketplace and balance their view of opportunities from a risk/reward perspective. What we see with competitive pressures is that all participants – private and public – are experiencing compression on spreads. That leads risk appetite levels and how you price the levels of risk to the forefront. With the low rate environment, the real estate market is fully valued, so the underwriting of risk is crucial to balance considerations on credit decisions in order to lend with confidence.

Due to these mixed market signals, Trez continues to focus on financing highquality projects across the office, industrial

What are some key differences between residential and commercial mortgages?

GV: One key difference is that commercial mortgages aren’t ‘standard,’ so therefore cannot fit into the templates that are often used on the residential side, from marketing to legal documentation. Since that isn’t necessarily the case with the commercial side, there is a need for brokers to be able to adapt to the particularities and to really focus on the diligence and presentation of an opportunity to the prospective lender.

Additionally, having a broad yet deep understanding of the particular sensitivities of each lender and project is crucial to delivering compelling opportunities to lenders on behalf of borrowers. On the commercial side, it’s a lot more targeted, personalized and specific than residential.

What does it take to be a good commercial lender?

GV: We approach the marketplace with specific guidelines to ensure the types of financings we’re interested in are aligned to our overall risk sensitivities; we take into

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consideration our existing portfolio, our risk appetite based on market indicators, our borrowers and what makes sense to us. Continually assessing our existing credit guidelines and modifying them when required allows our front-line originators to repeatedly target the market for the kinds of opportunities we’re looking for.

That’s what we feel makes a good commercial lender: one that equips their originators with parameters they should have the greatest success with, while also giving them the flexibility to uncover opportunities. We want to distinguish ourselves with regard to speed, creativity and personalization when working with our borrowers, along with being transparent throughout the entire process. It allows us to customize solutions that balance their

needs with our risk appetite, while being reliable in execution.

What do you see in store for commercial lending in the future?

GV: If you take the economic outlook

environment leads to an increased focus on yield. Our investors will be looking to us to generate opportunities that produce the target returns they demand.

We are one of many players in the debt space, and there is an abundance of capital.

“Having a broad yet deep understanding of the particular sensitivities of each lender and project is crucial to delivering compelling opportunities to lenders” suggesting that our economy will continue to grow, just at a slower pace, it’s not a bad place to be relative to opportunities that exist. On the other hand, a relatively low rate

That trend will persist. This challenges us, and others, to exercise creativity and prudence in terms of the ongoing balance between risk and reward.

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

COMMERCIAL LENDING GUIDE the residential market, which also creates an opportunity for higher referral fees.

What’s the best way for a broker to transition from residential to commercial mortgages?

DB: My advice firstly would be to invest in education. Commercial mortgages are more complex than residential, requiring a greater amount of due diligence. It is also essential that the broker be able to conduct the necessary pre-screening analysis.

Thankfully, there are numerous courses available that offer excellent introductions to commercial mortgage finance, such as the two-level course provided by Mortgage Professionals Canada.

DAVID BOYLE Vice-president, origination MCAP

How has the commercial market changed over the past year or two?

David Boyle: The interest rate environment has certainly changed over this period, with rates hitting a two-year low in June. At MCAP CMG, our core business has always been and continues to be multi-family rental apartment lending, whether it’s in the form of CMHC-insured, conventional or bridge financing. A key change in this space has been the shift in demand from five- to 10-year mortgages as borrowers have sought to take advantage of the flat yield curve by locking in lower rates for longer. The spread between the five-year and 10-year Government of Canada bonds has averaged just 0.13% over the past three months; this significant compression has made 10-year money very attractive.

On the conventional side, we have

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seen a flight to quality from the life companies and banks, who are strongly favouring A-quality assets in major markets, which provide a low refinance risk. Our outlook for the market overall remains positive.

What opportunities are there for brokers in the sector?

DB: Commercial mortgages offer brokers the opportunity to broaden the services they can offer to their existing clients, which in turn creates greater potential for new clients. This sector also offers greater expansion and diversification, as many more asset classes can be considered.

In addition to the ability to expand their business, commercial mortgages also offer a means to mitigate risk, as the broker is no longer solely reliant on the performance of the residential mortgage market.

The CMHC-insured multi-family mortgage segment is an excellent area to consider, as it offers a government program of insured mortgages for assets that are constantly in high demand. The average deal size is substantially larger than that of

“Commercial mortgages offer brokers the opportunity to broaden the services they can offer to their existing clients, which in turn creates greater potential for new clients” I would then recommend researching the market to find experienced lenders.

Once identified, work with these lenders to understand their program parameters, information requirements and timelines.

This will aid the broker in guiding their clients smoothly through the process while better managing their expectations.

At MCAP, we fund more than $1.5 billion of new commercial mortgages annually. A key component of this continued growth and success is our ability to form lasting relationships with mortgage brokers. We focus on enhancing the brokers’ capabilities

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SPECIAL REPORT

COMMERCIAL LENDING GUIDE by providing insight and sharing our knowledge on a regular basis.

What qualities does a standout commercial broker need?

DB: Standout brokers have the ability to source and maintain key relationships, such as finding and working with the right mortgage providers. The most successful brokers in our industry work with us repeatedly, as they can access competitive financing coupled with timely execution. Developing strong working partnerships allows commercial brokers to consistently deliver for their clients.

Attention to detail is another key quality. Gathering and presenting accurate information is of fundamental importance for any successful broker. This ensures that multiple financing options can be correctly presented, as they are based upon verified information. Inaccurate information can result in delays and/or can cause financing terms to change.

Finally, with multiple potential financing options available, a commercial broker must understand their respective market and stay up-to-date with the latest industry trends for that location and asset class.

What type of educational background does someone need to succeed in commercial lending?

DB: I’m seeing an increasing trend of new entrants coming into our industry who have completed university degrees that encompass a specific emphasis on real estate. This certainly provides a solid foundation and allows for a faster orientation. Equally, I have seen people from all kinds of educational backgrounds become successful in commercial lending, so there is definitely no ‘one size fits all’ approach. The common traits of successful people in our industry are those who are passionate about commercial real estate, are eager to learn, enjoy working in a dynamic environment, deliver on their commitments and have strong attention to detail.

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SKIP WALTERS Senior vice-president First Source Mortgage Corporation

What’s your take on the current state of the commercial market?

Skip Walters: Real estate is trading.

Lands are being bought and sold, zoning approvals are being passed, and densities and entitlements are being granted.

The problem we are seeing is that some developers or builders are overpaying

for product. Cap rates have risen from 12 months ago, and sale prices per foot have dropped. Many developers or builders are hoping they can sell the finished product at 2017–18 prices.

Lenders are cognizant of today’s lower values and may not lend as high of an LTV as requested. Lenders still want to see skin in the game, or more equity in from the purchasers. Politics and the economy can change quickly; we have had a number of very strong years, but will this continue? Is a recession or slowdown

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coming? My crystal ball says to remain cautiously optimistic.

Are there any unique areas of the commercial market brokers should be aware of?

SW: Infill sites for residential development are still very hot, where an assembly of a few contiguous lots adds tremendous value. Contaminated sites, where you know upfront what the costs are to remediate, can be a good buy if bought right. Land that is already approved, where getting in the ground is imminent, can make sense – again, if bought at the right price. My caution: Stay away from flips. Typically, all the profit is usually taken by the seller.

What are the biggest challenges in the sector?

SW: Costs are rising. Labour and materials have risen substantially and continue to rise in this environment. The previous two years were a boom market.

As a result, trades are demanding more.

It’s simple economics: When demand for labour is high, prices for labour rise.

A lot of the construction trades are unionized and, over the years, have driven up costs. Theses costs are passed on to and borne by the end user. This increase

must be presented in budgets to show a realistic profitability.

What are the best strategies to succeed in the commercial market?

SW: As always, buy low! Construction costs are what they are. The land purchase price is the one variable that can make or break a development project. Also, carrying costs to full approvals can really add up. We are seeing approvals in major markets take over

he’s acquiring. Lack of experience, whether it’s the purchase of a gas station or three acres of land to build on, makes any lender somewhat nervous.

What do you see in store for the commercial/residential market in the future?

SW: Given the influx of people coming to major centres, they all require homes, and they all need places to work. The

“When you send a request for a loan, do your homework. Does the loan request make sense? The more complete information you give to the lender, the faster and better the response will be” two years to site plan approval.

From a broker’s perspective, when you send a request for a loan, do your homework. Does the loan request make sense? Look at the comps, discuss and ensure the budget makes sense. The more complete information you give to the lender, the faster and better the response will be. A broker should determine what experience the purchaser/borrower has for the asset

commercial market will grow and expand further to tertiary markets, but possibly at a slower pace. Given the traffic congestion and technology, more people will work from home. Thus, residential developers are exploring and building smart homes.

I believe more and more borrowers will tap into the alternative lending market, as individual debt levels are rising, making it harder to secure institutional financing.

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SPECIAL REPORT

COMMERCIAL LENDING GUIDE market is going into a period of stagnation.

As result, construction activity for mid- to high-density residential properties has slowed in Vancouver, but Toronto and Montreal remain very active.

PIERRE LEONARD Consultant Romspen

What’s your take on the current state of the commercial market?

Pierre Leonard: The Canadian commercial real estate market has been on cruise control for an extended period and has experienced a significant upward trend in the past 10 years. An ample supply of capital, combined with a stable low interest rate environment, has led to a decline in vacancies, record investment activity and new construction in almost every market. Despite some regional disparities, market fundamentals for most property types are excellent.

As unemployment falls to its lowest level in 43 years – 5.4% in May 2019, according to CBRE – we are seeing the office asset class experience high absorption in downtown business centres and spur new development activity to meet demand. The industrial market segment is also benefiting from rapid expansion with warehouse and logistics facilities to meet the growing needs of e-commerce distribution and last-mile delivery.

Residential home sales were impacted by the introduction of various government and municipal policies, and several forecasters believe the housing

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What are the major trends affecting the market today?

PL: The commercial real estate market has attracted a significant amount of domestic and foreign capital seeking investment opportunities. In turn, this has led to a significant increase in land values, construction costs and unsustainable price increases for new housing inventories.

Given the longer lead time required to complete projects, developers are operating with tight profit margins. As a result, we are witnessing more residential condominium project cancellations.

and include all the pertinent documentation to support the loan application, to develop and maintain strong relationships with various different lenders, to manage expectations between the client and the lender, and to be proactive in responding to and following up on inquiries.

What are some common missteps brokers make when dealing with commercial mortgages?

PL: Some brokers don’t take the time to understand a particular lender’s service offering or lending parameters and continue to mass-market their deals in the hopes that it sticks somewhere. Another misstep is a broker’s rush to market a deal without a proper understanding of the facts and/or having vetted the information received by their client. Finally, we are often presented

“An ample supply of capital, combined with a stable low interest rate environment, has led to a decline in vacancies, record investment activity and new construction in almost every market” Technology is also impacting the commercial real estate market. This is creating both opportunities and challenges. For example, consumer buying preferences continue to shift towards e-commerce. Regional malls, faced with large retail department store closures, are repositioning their assets by bring in fitness centres, food and entertainment services to replace the vacant space. E-commerce is also fuelling the need for large logistics and fulfillment centres, as well as last-mile delivery warehouses.

What qualities does a standout commercial broker need?

PL: I think a standout broker needs the ability to size up a deal quickly and tailor financing solutions to their client’s needs, to prepare a complete loan proposal package

with the same loan inquiry from multiple mortgage brokers, which often leads to confusion, overexposure and an increased probability for a declined loan application.

What do you see in store for commercial lending in the future?

PL: Despite the fact that stock markets have recently rebounded to a new record level, the Canadian economic growth rate is slowing. The uncertainty with trade wars, mounting national debt, deficits and Brexit may lead to a worldwide economic slowdown, but most economists do not foresee an imminent recession. I see little change in the near term, given the amount of capital available on the debt side. Pricing is very competitive, and as result, this environment remains very favourable for borrowers in general.

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13/08/2019 3:23:40 AM

PEOPLE

BROKER INSIGHT

Making her mark Deanne Whelan, co-owner of East Coast Mortgage Brokers, tells CMP about the challenges and rewards of being a female leader in the industry

CMP: How and why did you get into the mortgage industry?

Deanne Whelan: After university, I joined Wells Fargo in 1995 and did their branch management training program. I started managing branches and did that right up until they closed in 2010. Then I was a senior manager at HSBC for two years. After that, it felt like it was time for my efforts to go to something that could benefit me, so I switched to the mortgage industry in 2012.

CMP: How would you describe your experience in the industry so far?

DW: It’s been amazing. In subprime lending, you had no choice but to work hard, learn people and learn how to sell. So being a mortgage broker was better because everything I was producing was for my own personal gain. The focus now was on my own growth and not some other company.

Last January, I became co-owner in the firm I work in.

CMP: How has being a co-owner changed the way you do things?

DW: It’s changed my perspective about women in the industry. My personal business didn’t change much, but my perspective did.

Right now, I think I’m the only female owner in Newfoundland. It makes you very aware that women have a lot of good qualities to put

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out there and that they need the support to go for it.

We have a lot of women brokers who we mentor. I try to be very active with women’s groups, whether they’re investors or Realtors – I try to create and be a part of groups that help grow the business. The women we’re connected with are the same kind of personalities – they really are interested in being big, in not just having a mediocre brokerage.

CMP: You were named a Woman of Influence by CMP a couple years ago.

What does that mean to you?

DW: That was the nicest award I have received to date. I’m used to getting top performer awards throughout my 25-year career, but that really meant that I’m standing out in a different way and I am

influencing in a way that can help women have it all. It’s good for other women to know that it can be done.

CMP: What has been your toughest time in the business?

DW: When the financing rules changed, that really hurt a lot of first-time homebuyers, so not as many people here were coming to the market. The affordability wasn’t there, and to make it more affordable, the builders and current homeowners had to lower their prices to accommodate it. I found that, as a general rule, prices dropped in Newfoundland.

CMP: How has business been in the province so far in 2019?

DW: I do all of Newfoundland but primarily focus on St. John’s, Conception Bay South

WHELAN’S ADVICE FOR NEW BROKERS “The first three years, you have to treat it like you just started school. Take the opportunity to learn as much as you can from all of the people who know the business well. Don’t assume what you know is best. You may want to do things in a certain way, but you need to take the time to learn the business properly in order to be able to overcome obstacles later on.

When you’re first starting, you don’t have a lot of clients, so each one is a huge learning experience, and you have to grow yourself and become very organized so you’re not asking the same questions over and over. Learn from the clients you’re dealing with and take advantage of the people who want to show you how the business works.”

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FAST FACTS: DEANNE WHELAN

BROKERAGE East Coast Mortgage Brokers

POSITION Co-owner/mortgage broker

LOCATION St. John’s, Newfoundland

“I try to be very active with women’s groups. The women we’re connected with … really are interested in being big, in not just having a mediocre brokerage” and areas on their outskirts. There have been way more refinances done in 2019 than in previous years. With the loss of work here, people struggled with maintaining their lifestyle, so they tended to get more into debt.

Now they’re in the process of cleaning that up and getting on their feet. That is the bigger focus this year. Purchases have increased, and sale prices are starting to go up, but my business is still half and half: half refinances and half new purchases.

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

DW: I am pretty strict on mostly just working Monday to Friday, 9 to 5. I really believe my family life is just as important. I am a fulltime mom and a wife and a daughter, so my spare time is spent with them. We are at our country cottage most weekends, on ATVs, Seadoos or Skidoos, and we spend a lot of time outside. It’s a lot of fun, and you have to make time for it.

YEARS IN THE INDUSTRY 7

PREVIOUS EXPERIENCE Branch manager for Wells Fargo and HSBC

INDUSTRY ACCOLADES Named a CMP Woman in Influence in 2017 and to CMP ’s Hot List in 2019

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13/08/2019 3:24:22 AM

SPECIAL PROMOTIONAL FEATURE

MARKETING

The fastestgrowing market: are you missing out?

Seventy-seven per cent of baby boomers are homeowners and control about $1 trillion in home equity wealth – but unconscious bias can keep brokers’ marketing efforts from reaching this important customer base

MARKETING IS vital for a growing business – but the wrong kind of marketing can end up neglecting a vast swath of your customer base.

According to a study from HomeEquity Bank and neuroscience research firm Brainsights, an unconscious age bias in media and marketing is leaving a generation of Canadian consumers out in the cold.

With 11 million Canadians falling into the largest and fastest-growing consumer segment, knowing the rules of engagement just makes good business sense. So how does that affect mortgage marketing? In an ever-competitive mortgage market, tapping into the nuances of marketing to Canadians 55+ will help set you apart, get your message heard and help increase your sales.

Boomers control a substantial amount of wealth and have formidable spending power.

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Forty-two per cent of all homeowners in Canada are 55+, according to StatsCan – that equates to about $1 trillion in home equity wealth alone, Gauci points out.

“By not appealing to this generation of consumers, brokers are missing out on a huge business opportunity,” she says. “I saw it during our focus groups – people visibly reacted when we discussed potential positioning statements for our brand that used the dreaded word ‘senior.’ Use the same statement without using the word ‘senior,’ and people smiled, were relaxed, in agreement and happy.”

Research volunteers viewed more than 117 pieces of video content for the study, including ads, movie trailers, news clips and more, and the volunteers’ brainwaves were recorded every two milliseconds. The study

monitored participants’ levels of attention, emotional resonance and comprehension.

According to Brainsights, the study revealed four key actions for marketers to better understand boomers and bust age bias.

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Ditch old-age stereotypes

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Generation-tailored nostalgia works

Images of helplessness, frailty, fumbling through the latter part of life – these are typical in the media but couldn’t be further from the boomer experience. Boomers are living longer than ever before. Many of them want to work much further into their lives than previous generations. They’re educated, capable and enthusiastic.

Age-based identities are just social constructs about how differently aged people should behave. But those constructs might not have much to do with boomers’ lived experience. Indeed, research suggests that even words like ‘elderly,’ ‘senior’ and ‘old-aged’ tend to stigmatize and stereotype consumers, Gauci says.

Marketers need to understand and avoid the unconscious biases that stereotype Canadians in this demographic. Boomers should be represented in marketing as they see themselves – not as a younger generation sees them.

“With their 1970s-inspired photo filters and propensity for wearing vintage rock T-shirts, millennials are often the first to come to mind if you think of appealing to a segment with nostalgia,” Gauci says. “But nostalgia is a powerful theme for boomers, too.”

As part of the study, Brainsights screened six pieces of content tagged as ‘nostalgia’ for boomers. The study found that the nostalgiatagged material drove 11% greater attention, 9% greater emotional connection and 13% greater memorability than the average.

“For boomers, as well as for millennials, these are uncertain times – periods in

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Employing ageist biases with your 55+ clients risks alienating them. And that could mean leaving a lot of lost revenue on the table life where reassurance and self-esteem are needed,” Gauci says. Marketers that understand and tap into that need can succeed in getting their message across.

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well” with boomers, according to the study.

“Themes of parenthood that communicate moments of personal development, learning and growth, on the other hand, show strong promise,” Gauci says.

Invoke parental legacy

Themes of parenthood seem to engage baby boomers, according to the report – but marketers need to be careful about how they present those themes. Boomers tend to respond well to more positive messages about parenthood, while younger adults showed no preference between positive and negative.

In general, marketing content that deals with the struggles of parenthood “doesn’t land

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Manage the message

Science proves that as we age, we require more cognitive resources to process information. So, while the 55+ demographic likes information, it needs to be presented in smaller chunks. This may mean several conversations, leaving time for clients to digest what they’ve just heard.

“Manage the message – ensure you are not

overloading the audience with too much information,” Gauci says. “Aging is a continuum, and science proves our brains process things differently as we age. We even saw differences within our own demographic – 55 and better versus 70 and better. This is a best practice for everyone – be focused on how much information you are trying to convey.”

The moral here is clear: Employing ageist biases with your 55+ clients risks alienating them. And that could mean leaving a lot of lost revenue on the table. Knowing your clients and how to empower them will only help make you more successful in the long run.

Want to gain more insight on connecting with the 42% of Canadian homeowners who are driving the fastest-growing portion of the residential lending market? Join HomeEquity Bank’s live webinar on September 12, hosted by Vivianne Gauci, VP of marketing at HomeEquity Bank. This webinar will showcase how to grow your pipeline and increase your business with the 55+ demographic. For more information, visit chipadvisor.ca/agebias.

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13/08/2019 4:00:58 PM

FEATURES

MEETINGS

Are you drowning in meetings?

If meetings are taking up most of your day and preventing you from doing your real work, Brian de Haaff explains how to regain control

YOU VERSUS your calendar: You’re fighting for time to get your real work done.

Nervously eyeing the clock. Each day is a relentless sprint from meeting to meeting, but the calendar always wins. It goes something like this: 8 a.m.: Start work 8:15 – 12 p.m.: Booked with meetings 12:15 – 12:30 p.m.: Lunch (while catching up on email) 12:30 – 5 p.m.: Booked with meetings You wearily plead with your boss for help, but he’s just as busy with his own meeting schedule. Eventually, you resign yourself to the fact that you won’t begin your actual work until the end of the day, when the meeting reminders mercifully cease (at least

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until the morning). You surrender your workdays to an endless loop of meetings.

There’s a reason these meetings all seem the same. The organizer has no agenda, no clear goals, no questions or action items for attendees. The meeting drags on and on, wasting valuable time for everyone involved.

These meetings are stealing something valuable from you – the time to think deeply and be productive.

Now, I’m not suggesting we say goodbye to meetings overall. On the contrary, I think it’s important for teams to connect often – sometimes even daily. The problem arises when meetings are consuming more time than the actual work.

I recently faced this problem myself. My calendar was filling up fast. I expect this as the CEO of Aha!, even though we spend as little time in meetings as possible. I enjoy checking in with the team, customers and

potential job candidates.

But I had less and less time to think through the big issues that affect the team and the company. So I blocked off Wednesdays as meeting-free on my calendar.

I call it Wonder Wednesday. It’s my time to work and think deeply about the business.

I realize that not everyone is able to block off a full day on their calendar. But here are five things you can do to lighten the load when you’re drowning in meetings.

Block off time You might not be able to block off an entire day each week, but I bet you have a few hours here and there. It’s reasonable to carve out chunks of time to do your work (or even to take a lunch). This doesn’t mean being inflexible if a teammate needs you during one of these chunks. It’s simply ensuring that you have enough time to get work done or take a needed break.

Hit pause Before you automatically hit ‘accept’ on an invite, take a moment to think about why you’re needed. If this isn’t totally clear, ask the organizer why they included you: “What is the purpose of this meeting? How can I help specifically?”

You might find that your attendance is not actually necessary to move the work forward. For example, the organizer might need information that you could easily share via a document or report. Or perhaps they’re looping you into a project that you’ll only have peripheral involvement in. In this case, ask for meeting notes instead.

Set parameters Even if you’re not the organizer, you can help keep things productive by

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you have one of these on your calendar, think about what you could do to improve it. Maybe it’s automating a report for a weekly status meeting or emailing ahead with prepared talking points to help encourage others to stay on track. Also, consider asking the organizer if you’re still needed at these meetings.

Perhaps there’s a recurring meeting that no longer requires your attendance or only needs you for a few minutes at the beginning or end.

Talk to your boss

Before you automatically hit ‘accept’ on an invite, take a moment to think about why you’re needed. You might find that your attendance is not actually necessary to move the work forward setting parameters — show up on time, stay on topic and follow up with any tasks that come out of the conversation.

Also, consider asking the organizer for an agenda beforehand. Even if it’s not a formal document, simply having some bullet points about the topics of discussion and desired goals for the meeting can help move things

along. Don’t be afraid to kindly redirect the conversation back to the agenda when it takes a turn.

Evaluate regularly Everyone has experienced the ‘standing meeting’ that starts off as necessary and grows ineffective over time. If

If you’re truly drowning in meetings each day, talk it over with your manager. Have an honest conversation about how these meetings are impacting your schedule and explain that you need more time to get work done. Who knows – maybe your manager is struggling with the same issue. The epidemic in your workplace may be symptomatic of larger organizational issues, and your honest assessment could help prompt action.

You may not be able to overhaul a meetingheavy culture, but you can protect your own corner of it. Do what you can to ensure you’re getting to the work that really matters.

It’s worth it to take steps to protect your time and work. Is attending that meeting the only way you can learn something critical?

Are you crucial to decisions that need to be made in that meeting? If not, don’t go. The calendar may be a mighty force, but it doesn’t always have to win.

Brian de Haaff is the co-founder and CEO of Aha! and the author of Lovability. His two previous companies were acquired by well-known public corporations. De Haaff writes and speaks about product and company growth and the adventure of living a meaningful life. For more information, visit aha.io.

Author photo by Chris Yeh

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13/08/2019 3:25:23 AM

FEATURES

CULTURE

Transform your culture in three steps Anna O’Dea offers three ways to make your workplace a more supportive environment

CLIENTS OFTEN ask me how they can introduce initiatives in their workplace to make it a more supportive environment for their team.

Being in the business of marketing, advertising and digital, I know that written content helps to develop relationships and build trust. In fact, I spent $50,000 on content to learn about what issues were really important to people at work in a bid to help develop that trust.

But developing a culture that champions and rewards transparency is not as easy as writing a few blog posts on diversity. It’s about the actions you take as a business and putting your money where your mouth is in terms of reflecting how your team feels.

Genuine connection comes down to how vulnerable we are willing to be with others.

It is the act of sharing stories, vulnerabilities and even fears that helps bring us together.

When you reveal something about yourself that is not widely known to others, you’re showing that person or audience who you really are. You’re demonstrating that you trust them. This, supported by consistent behaviour

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that demonstrates integrity, builds trust.

So many impressive leaders in my network have faced adversity in different forms and balanced this with growing a business and, more often than not, significant personal challenges going on behind the scenes: sickness, loss of a loved one, trauma, and financial and emotional setbacks. These experiences, which have shaped who they are as individuals, have gone on to influence the type of leaders they are and the team they attract.

I believe any business can be transformed by listening and leading by example. Here are the lessons I’ve learned since spending $50,000 to find out what’s important to my community and team.

Never make assumptions about people’s lives I’ve learned from tech entrepreneurs that one of the most common mistakes is investing in a solution without asking customers what they want. For example, when we started the #LeadingLadies series, instead of dictating the content we thought would be relevant, we asked interviewees to share their

own stories that they hadn’t had a chance to share before.

We told them they had access to a blank canvas and nothing was off limits. The floodgates opened. We discovered that issues such as bullying in the workplace, racism, homophobia, sexism, parental leave and negotiating a pay raise were affecting many workplaces, and these brave individuals wanted a platform to address them.

I realized that perhaps many workplaces still create initiatives without actually asking their team what’s important to them. It’s tricky for many employees to verbalize what they need without fear of consequence.

I think the bravest question any leader can ask themselves is, “Have you asked your team what they need, or are you making assumptions based on your own point of view in a position of privilege?” Does your team feel they can tell you what they need, or are

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changing people’s perceptions of themselves.

It made me realize that perhaps we could all do a better job of showing our team that it’s OK to be human at work. That it’s possible to be yourself, open, honest, and transparent and still be liked, respected, and rewarded.

Workplaces with greater diversity deliver higher returns. Could you do a better job of more accurately reflecting the diverse range of opinions and influences that no doubt exist in your business? Are decisions reflective of what’s important to the wider team or just a select few?

When it gets uncomfortable, think of what others will learn from you

Perhaps we could all do a better job of showing our team that it’s OK to be human at work. That it’s possible to be yourself, open, honest, and transparent and still be liked, respected, and rewarded there opportunities to create an anonymous feedback loop so you can better learn how to support them?

Realize that people can’t be what they can’t see After months of research, writing, profiling senior women in leadership positions, transcribing interviews, commissioning countless photo shoots and developing content, some interesting things started to happen.

I started to receive emails from people, saying our stories had helped to shine a light on an issue that was pertinent to them. I received phone calls from people in tears, saying they’d faced similar adversity and for the first time they didn’t feel alone. People told me they felt heard and that the series showed them what was possible.

I realized countless men and women, from junior professionals to executives, were seeing themselves in these stories, and that was

When I told people I was going to invest so heavily in content, not everyone loved the idea.

I was told I was nuts. It wouldn’t generate ROI. Interestingly, and perhaps more reflective of my industry, I was also told to be careful about what I had to say.

When you do something new, you bend, you grow and sometimes you fall over. You might even fail. But if you don’t do that new, scary thing, you’ll be exactly what other people expect of you and no further away from those doing the same things.

If you really want to be competitive and attract and keep the best talent, ask yourself this: Are we communicating our initiatives internally and externally to let people know there are great workplaces like ours out there? And if we aren’t, is there a reason for that?

A recruitment expert and the founder and director of Agency Iceberg, Anna O’Dea has placed thousands of employees in the best workplaces.

O’Dea is also the founder of #LeadingLadies, an award-winning interview series featuring C-suite professionals’ career journeys.

Follow her on LinkedIn at linkedin.com/ in/annaodea.

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FEATURES

CONFLICT

How to get what you want from difficult people Difficult people are a fact of life. Aytekin Tank offers three guidelines that can help you defuse even the most uncomfortable confrontations

ACCORDING TO Dr. Rick Brinkman and Dr. Rick Kirschner, authors of Dealing with People You Can’t Stand, there are several challenging personality types that make our lives harder: The Tank: Confrontational and angry The Sniper: Makes you look foolish The Grenade: Explodes into fury out of nowhere The Know-It-All: Authoritative and must have things done their way The Whiner: Points out everything wrong in vague terms You might be thinking of a person to put

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one of these labels on. They could be a friend, co-worker, customer or family member (circa that tense Thanksgiving of 2016).

Still, according to executive consultant Tim McClintock, only about 10% of the people you encounter are categorized as difficult, even if some days that number feels much larger.

The other day, I was standing behind a guy dressed in a tan suit at a coffee shop. He was on his phone while simultaneously rambling off a complex drink order. Between the mumbles at the barista and the chatter into his wireless earbuds, I think all of us waiting in line knew what was going to happen next.

At the end of the bar, he picked up his coffee, took a sip and immediately lost it over the ‘extra foam’ now destined to ruin his day. Unkind words were exploded across

the counter, leaving the barista temporarily frozen. A Tank – confrontational and angry – was on the loose.

I watched as the barista listened to what he said, put his head down and redelivered the order to the man in just a few moments.

He handed the cup over kindly, watched for his approval, nodded and then went to his next order as the man walked out the door, still talking on his phone.

The barista had gotten what he wanted.

He kept his goal in mind, and by listening and then taking action in the face of verbal accosting , he got him to leave.

When you’re communicating with any difficult personality, being in the moment is hard.

At JotForm, we have over 3.5 million users, and some of our users give us a difficult time

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Listening, combined with the intent to understand what is being sought, gives you a prime opportunity to end the interaction while achieving your goals almost every single day. The following guidelines help me defuse situations, from handling our customer relations to managing our team of more than 108 employees.

1

Listen and understand the end goal

At first, the barista froze to avoid conflict. We’re all hard-wired like that. Every last one of our brains still defaults to fight-

flight-freeze when something highly stressful or unsettling occurs. However, when a person is acting unreasonably right in front of you , being like the barista works perfectly.

He was able to not only move through this automatic response of fight-flight-freeze, but also get clear on what he wanted and execute flawlessly. Listening, combined with the intent to understand what is being sought, gives you a prime opportunity to end the

interaction while achieving your goals.

The barista understood that no matter what the man said, what he really wanted was to have his coffee the way he asked for it. He listened past all the yelling to delineate how he could fix the situation while achieving his goal of watching him walk out the door.

The feedback was harsh, but this barista was a pro.

2

Focus on what you can do

You might not be able to avoid what difficult people have to say, but you have control over what you do and, more importantly, what you ask. Asking questions puts you in the driver’s seat to let the person air what they have to say while guiding them to what you can do anything about.

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FEATURES

CONFLICT

Asking questions puts you in the driver’s seat to let the person air what they have to say while guiding them to what you can do anything about Difficult people, especially the ones Dr. Brinkman and Dr. Kirschner refer to as Whiners, require a lot of directed questioning so you can understand their desires and what actions are available to you. On the flip side, during this intense questioning, you might end up uncovering something about yourself you wouldn’t have known otherwise.

We decided to test this process by conducting face-to-face interviews with our users. In one of our first interviews, we came up close and personal with the Whiner. This person drained our time, providing vague descriptions while sprinkling them with unpleasant commentary.

We didn’t give up – we kept digging, always keeping in mind our goal of how we could create a better product. An hour later, we struck gold. We found out this customer had been using JotForm as a productivity tool.

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Customer after customer shared similar tales as our interviews continued over the following weeks. By continually asking deeper questions of a difficult customer and not giving up, we not only found a new focus, but we also discovered the difference between challenging people and unpleasant comments.

3

Make a distinction between a difficult message and a difficult person

Earlier this year, a customer made several new feature requests and was pretty adamant about their unhappiness with our functionality in a support thread comment. Good news: They felt comfortable enough to let us know where we didn’t meet their expectations. Bad news: Yikes.

I didn’t take the grievances shared on our forum personally. I did, however, take them

seriously. I don’t usually jump into support discussions, but this was a critical moment to examine whether this person was being difficult or giving us an opportunity for improvement. Further, what if by challenging our platform and strategies, this customer was giving us a huge gift? I needed to find out.

I saw this as an opportunity and stepped into the forum to respond to the customer’s experience. I provided details on what was going on with the platform that could be causing their issues and also offered my email address for further discussion.

It always helps to get clear on the difference between a difficult message and a difficult person. What couldn’t be seen on the thread was us listening to their issues and ascertaining their end goals through deepdiving questions.

You will always come across challenging people, but by listening to them, asking questions, understanding their goal and focusing on your actions, you can put yourself in the best position to succeed in getting what you want. It won’t always happen in the most pleasant way, but keeping these guidelines in mind helped us handle challenging moments both with our users and within our organization, and hopefully they’ll help you grow, too.

Don’t freeze and walk away, but instead engage head-on with these personalities.

They will push you to innovate, make things better and fill in gaps you didn’t know were there before they arrived. I’d say that’s a gift worth getting at the expense of an uncomfortable confrontation, wouldn’t you?

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

License # 10172

We make buildings appear and problems go away.

Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $2.7 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 46 www.mortgagebrokernews.ca

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PEOPLE

CAREER PATH

A BRIGHTER FUTURE Eden Simari’s primary goal is to make people’s lives better – and in the process, she’s made her own pretty great as well Simari took up swimming as a child, and her rapid progress and fondness for the water led her to pursue the sport competitively at the national level for the next decade.

“I loved the water; I was a fish. I would cry if I had to miss a meet.

I love setting ridiculous goals and crushing them; I like to push the bar and excel. That experience taught me perseverance, time management and teamwork.”

1992

CRUSHES HER GOALS

2003

CONNECTS WITH FIRST NATIONAL

2009

FINDS HER PERFECT FIT While at First National, Simari moved through several different departments before finding her ideal fit in external sales.

“Almost every year I was moving, and I really loved external sales. I have the gift of gab, and I love working with people. I had six years working closely with brokers; I saw how to be a successful broker.”

After studying business and economics at university, Simari was connected to First National Financial by a family friend who heard the firm was looking for a receptionist.

“I was looking for a 9-to-5 job and had no idea where it would take me.

The company was growing wildly; I had to wear many different hats over the years. I loved it there and never saw a reason to leave.”

2015

MAKES A BIG DECISION While on maternity leave, Simari made the decision to leave her old job at First National and become a broker.

2016

BECOMES A BROKER When the time came to make the transition, Simari knew she wanted to start her broker career at Quantus, a company she’d worked with closely while at First National.

“I didn’t hesitate; it was like leaving one family to go join another one. They were very supportive – my biggest cheerleaders even when I thought I would never make it. I grew a great business that I love like a child.”

“I knew I had hit my glass ceiling and wanted to trailblaze for my daughter like my mom did for me. Now, I help consumers learn all I learned on the lender side, and lenders know that I have walked a mile in their shoes” 2016

2019

RECEIVES RECOGNITION Being nominated for Young Gun of the Year at the 2019 Canadian Mortgage Awards was a standout achievement for Simari.

“Some of the brokers and lenders who nominated me sent me what they wrote about me, and I [was so flattered I] didn’t care if I won after that. I was honoured to be part of [the Young Guns] group when I saw who else was nominated in that group.”

JOINS THE BOARD Simari was invited to join the board of Community Key, a charity that helps families pay their mortgage and rent while they care for critically or terminally ill children.

“It was instilled in me that if you had your health and your youth, you had to give back. We would make two turkeys every Thanksgiving and take one to a homeless shelter.”

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PEOPLE

OTHER LIFE

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

ON THE WATERFRONT For mortgage agent and former Olympian Rhys Hill, kayaking is more than just a pastime WHEN RHYS HILL’S outdoorenthusiast parents signed him up for a kayaking and canoeing day camp at the age of 10, none of them anticipated the impact it would eventually have on his life: The Ottawa-based mortgage agent’s passion for paddling took him all the way

to the 2008 Beijing Olympics.

But even the end of his competitive career wasn’t enough to separate Hill from his kayak. In 2012, a trip into the Arctic with his mom turned into a fiveyear summer gig, guiding groups of up to 10 people to savour the solitude in remote

northern Canada.

This summer, Hill is enjoying family time with his newly born baby, but he still takes his kayak out at least a few times a week, either on one of the bodies of water around Ottawa or on regular trips to the family cottage.

9th

Hill’s placing in canoe sprint at the 2008 Olympics

5th

Hill’s best placing, in the 200m relay at the 2011 World Championships

10

Number of times Hill won the National Championships

Hill says he loves both the competitive nature of paddling a nd the quest to “mesh with tea mmates who are trying to do the exact sa me thing – you ca n seize the moment, or you ca n let that practice slip away from you.”

48 www.mortgagebrokernews.ca

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