CMP 16.04

NETWORK NEWS

How the major broker networks have responded to shifting demands during COVID-19

MORTGAGEBROKERNEWS.CA ISSUE 16.04 | $12.95

THE RATE DIVIDE

Are the banks’ recent five-year fixed rate hikes a sign of things to come?

THE END OF AN ERA

Why number-one broker Dave Butler decided to step away from brokering

Mortgage professionals name the companies that consistently go above and beyond for their employees

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ISSUE 16.04

CONTENTS SPECIAL REPORT

Mortgage professionals tell CMP which industry employers stepped up to take care of their staff during a trying year

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ISSUE 16.04

CONNECT WITH US

CONTENTS

Got a story or suggestion, or just want to find out some more information? twitter.com/CMPmagazine facebook.com/MortgageProfessionalCA

UPFRONT 04 Editorial

Navigating the debate over fixed versus variable rates

32

08 News analysis

THE WEALTH EFFECT

10 Bank update

28 34

BROKER NETWORKS IN THE TIME OF COVID

From enhanced tech to marketing support, the networks have pulled out all the stops to help their brokers cope with the pandemic

PEOPLE

INDUSTRY ICON

After a four-year reign as CMP’s number-one broker, Dave Butler explains why he’s moving on to a new challenge

14 2

Key data that should be on your radar this month

PEOPLE

How Taurus Mortgage Capital’s George Hugh parlayed his background in capital markets into a successful independent brokerage

FEATURES

06 Statistics

Five-year fixed rates have begun to creep up. Is this only the beginning?

Economists at the big banks are sounding the alarm about potential market overheating

12 Legal update

Could the rumour of a capital gains tax on primary residences become a reality?

18 Opinion

Buyers in Ontario and Quebec face very different hurdles, but the end result is the same: a more difficult process

FEATURES FEATURES

PRIMED FOR SUCCESS

Why Equitable Bank’s prime mortgage division is expecting a big year in 2021

36 Leading from the front

How M3 is helping brokers adjust to the digital age

PEOPLE 40 Other life

Feeling the heat with broker and newly minted blacksmith David Clarke

38 FEATURES

SERVICE COMES FIRST RiverRock is rolling out a host of new options for borrowers – but its commitment to service hasn’t changed

MORTGAGEBROKERNEWS.CA CHECK IT OUT ONLINE

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COALITION OF INDEPENDENT MORTGAGE BROKERS OF CANADA

EMPOWERING INDEPENDENT

MORTGAGE BROKERS

TO BUILD THE VALUE OF THEIR BRANDS

WHAT CIMBC MEMBERS ARE SAYING!

“THE CIMBC MODEL BOOSTS THE GROWTH OF OUR BRAND WITH NO UNEXPECTED SURPRISES” - Joel Sida, iMortgage Canada

“THE INVALUABLE EXPERIENCE CIMBC OFFERS TO ITS BROKER PARTNERS IS UNIQUE AND TRULY UNPARALLELED IN THE BROKER SPACE”

- Marco Puopolo, Rock Mortgage

“WE SAW A PERFECT ALIGNMENT BETWEEN THEIR

TECHNOLOGY AND OUR TEAM’S NEED TO WORK MORE EFFICIENTLY”

- Lev Keselman, Peak Mortgage

“THE BEST KEPT SECRET BY DESIGN” CONNECT WITH US TO BECOME A PART OF THIS REVOLUTIONARY GROUP @CIMBC

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UPFRONT

EDITORIAL

www.mortgagebrokernews.ca ISSUE 16.04

The fixed versus variable debate

I

t’s the question on every mortgage professional’s mind at present: How long can the Canadian housing market continue at its current madcap pace? The demand for housing has shown no signs of slowing down, and even by the frenetic standards of 2020, this year has so far held the busiest opening months many mortgage brokers have ever seen, propelled in part by consistently low interest rates.

One of the most noteworthy early themes of the year has been the popularity of variable-rate mortgages. The Bank of Canada’s decision to keep its overnight rate steady at 0.25% means there’s little prospect of movement upwards for the foreseeable future – and that, in turn, is convincing many Canadians to swing toward a variable-rate option, or some combination of variable and fixed, for their mortgage.

Given the array of options currently on the table for borrowers, the role of mortgage brokers in the decisionmaking process has taken on even greater significance Does that mean brokers should immediately urge their clients to opt for a variable rate? Not at all. While the best fixed rates offered by Canada’s five largest banks are around 60 basis points higher than current best variable rates, industry figures are quick to point out that fixed rates are still extremely low by the usual standards. For many consumers, variablerate mortgages do represent an excellent option, with a unique opportunity to capitalize on slashed rates and a relatively low risk of unexpected spikes in the coming months. Others, though, might prefer the security and peace of mind offered by no-worries fixed-rate options at decidedly reasonable rates.

Given the array of options currently on the table for borrowers, the role of mortgage brokers in the decision-making process has taken on even greater significance. The onus is on brokers to sit down with clients and spell out the pros and cons of each option, find out what’s top of mind for the client in choosing a mortgage, and recommend the solution that best fits their needs.

No two clients are the same – and that’s especially true in the current fixed versus variable debate.

EDITORIAL

SALES & MARKETING

Managing Editor Paul Lucas

Vice-President, Sales John Mackenzie

Editor Fergal McAlinden

National Account Manager Corey Bahadur

News Editor David Kitai Writers Ephraim Vecina Mallory Hendry Copy Editor Clare Alexander

CONTRIBUTORS Chase Belair

ART & PRODUCTION Designer Joenel Salvador Production Coordinators Loiza Razon Kat Guzman Client Success Coordinator Cole Dizon

Sales Executive Alan Stewart Global Head of Media Marketing 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

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SUBSCRIPTION INQUIRIES

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

ADVERTISING INQUIRIES

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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

NZ ADVISER

The team at Canadian Mortgage Professional

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MORTGAGE PROFESSIONAL AMERICA katie.wolpa@keymedia.com T +1 720 316 7423

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

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UPFRONT

STATISTICS MORE CANADIANS COMING CLOSER TO INSOLVENCY

ANNUALIZED RESALE ACTIVITY IN CANADA

800,000

WILL MORTGAGE DEMAND REMAIN STRONG?

700,000

600,000

Spurred by pent-up demand that accrued during the first few months of the COVID-19 pandemic, the renewed appetite for housing and mortgages is likely to last beyond 2021, according to a recent forecast by Mortgage Professionals Canada. MPC chief economist Will Dunning noted that “exceptionally strong home-buying is currently resulting from a combination of record low interest rates and a strong desire by many of us to change our housing arrangements.”

53%

of Canadians are $200 or less away from not being able to pay their monthly bills and debt obligations, according to MNP’s latest Consumer Debt Index

500,000

400,000

300,000

2016

is the last time this figure from the MNP Consumer Debt Index hit such a high level

200,000

2010

30%

of Canadians told MNP they are essentially insolvent, with no money left for payments at month’s end

2012

NEW BORROWERS OVERLEVERAGED The proportion of highly indebted borrowers – defined as those with loan-to-income ratios of 450% or higher – in new mortgages has been steadily increasing, according to OSFI data. Market observers have warned that the pace of growth in this segment has essentially rendered the impact of previous market-cooling measures moot.

PROPORTION OF HIGHLY INDEBTED BORROWERS AMONG NEW MORTGAGE APPROVALS 25% 20% 15%

49%

of Canadians said they are “more relaxed” than usual when it comes to carrying debt Source: MNP Consumer Debt Index, April 2021

6

17.5%

18.2%

18%

Q1 2020

Q2 2020

20%

22.7%

10% 5% 0%

Q4 2019

Q3 2020

Q4 2020 Source: OSFI, Better Dwelling

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ECONOMIC GROWTH EXCEEDS EXPECTATIONS The ongoing wave of COVID-19 infections has been no impediment to Canada’s economic recovery – GDP growth at the start of the year exceeded expectations and gave further credence to the Bank of Canada’s recently announced steps towards dialling down its longrunning monetary stimulus.

1.0%

REAL GDP MONTHLY INCREASE

0.9% 0.8% 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0%

2014

2016

2018

November 2020

2020

While the majority of borrowers in Canada still opt for fixed-rate mortgages, variable-rate products grew in popularity during 2020, thanks to the Bank of Canada’s commitment to keeping its overnight rate low for the foreseeable future.

Fixed rate

Variable rate

January 2021

February 2020* *Forecast

Source: Annual State of the Residential Housing Market in Canada, MPC; CREA

HOMEBUYERS GRAVITATE TO VARIABLE RATES

December 2020

Source: Statistics Canada

BUSINESS SENTIMENT RISES Prospects appear bright for Canada’s commercial market in 2021, as business sentiment rose to near-record levels at the start of the year.

The Bank of Canada’s latest quarterly survey found that executives, fuelled by inflation expectations, have become more optimistic about sales and investment projections for the year.

BANK OF CANADA COMPOSITE GAUGE OF BUSINESS SENTIMENT

Combination fixed/variable 8

12%

3%

5%

6 4

18%

PURCHASES MADE DURING 2019

85%

2 0 -2

PURCHASES MADE DURING 2020

-4

77%

-6 -8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021

Source: Annual State of the Residential Housing Market in Canada, MPC

Source: Business Outlook Survey – Spring 2021, Bank of Canada

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UPFRONT

NEWS ANALYSIS

The interest rate game Much speculation has surrounded the future trajectory of interest rates after a host of banks hiked their five-year fixed rates at the beginning of March. Are further increases inevitable?

THE NEWS likely sent a shudder down the spine of some mortgage professionals across Canada: At the beginning of March, for the first time since January 2020, the lowest rates for five-year fixed rate mortgage products went up. The hike arrived on the heels of higher-than-expected inflation in the fourth quarter (9.6%, double the Bank of Canada’s forecast), stoking some fears that the country’s red-hot housing market could be set to cool considerably.

RBC senior economist Robert Hogue argued that those rock-bottom interest rates have helped spur the spectacular performance of Canada’s housing market, but warned

inflation objective of 2% – a goal that might not be achieved for two or more years.

While that means the rate for variable mortgages is likely to remain low, there are some concerns that fixed rates could continue to creep up. Steven Tulman, president of Ontario-based brokerage Clover Mortgage, says one of the reasons for those worries is the connection between fixed rates and US bond yields.

“As the US government and governments around the world go further into debt with the financial assistance that they’re offering employees, business owners and citizens during COVID, they need to recoup that

“If the US continues to raise its bond yields, then I think fixed rates will continue going up as we’ve seen in the past” Steven Tulman, Clover Mortgage that the outlook could quickly change if a swift economic recovery from the pandemic spurred further fears of inflation and rates rose dramatically.

The Bank of Canada eased some trepidation with its announcement that it would freeze its overnight rate at 0.25% until the national economy sustains the central bank’s

8

debt,” Tulman explains. “A lot of the time, they’re raising the yields that are paid out on bond investments. As the US bond yield has continued to grow steadily over the past couple of months, so have our fixed rates [in Canada].”

While variable rates are likely to remain at historically low levels, he believes fixed rates

could continue rising.

“If the US continues to raise its bond yields, then I think fixed rates will continue going up as we’ve seen in the past,” Tulman says. “If the US government steps in and decreases the bond yields, then our fixed rates will eventually decrease.”

The possibility of further movement on the fixed rate front is reportedly pushing many Canadians toward the flexibility and affordability of variable rates. Ratehub.ca recently registered a 36% increase in clicks for variable options over the previous month, compared to an increase of just 11% for fixed rate clicks.

DLC president Eddy Cocciollo believes that an eventual rise in fixed mortgage rates is inevitable – and will also be healthy in the long run.

“I think at the end of the day, a rising interest rate is necessary, especially when it comes to stability,” he says. “That could be one of the things we might provide

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FIVE-YEAR FIXED MORTGAGE RATES IN CANADA BEST DISCOUNTED FIVE-YEAR FIXED RATE April 2020

2.39% May 2020

2.14% June 2020

1.99% July 2020

1.89% August 2020

1.74% September 2020

1.64% October 2020

1.54% November 2020

1.54% December 2020

1.44% Canadians to slow down on what they feel is a pressure to buy or the FOMO [fear of missing out] effect.”

As has been the case since the beginning of the pandemic, there’s still no clear sign of what awaits the Canadian economy or

gage rates began to creep up – but some of that positivity has since cooled as COVID-19 case numbers have remained stubbornly high and several provinces have returned to harsh lockdowns.

Cocciollo believes there’s little chance

“I think at the end of the day, a rising interest rate is necessary, especially when it comes to stability” Eddy Cocciollo, Dominion Lending Centres the future of interest rates. Economic optimism rose in March as consumer confidence reached a three-year high; Nanos Research noted that the robust housing market and steady rollout of vaccinations led a third of Canadians to believe the economy would be stronger in six months. That confidence was viewed as one of the reasons fixed mort-

of a significant hike in interest rates until Canada’s economy shows tangible signs of improvement.

“Our economy is not going to come back until the vaccines are at least 60% to 70% [completed],” he says. “I think the Canadian government will keep the pressure on to make sure those interest rates stay low.”

January 2021

1.39% February 2021

1.39% March 2021

1.68% Source: Ratehub.ca

Tulman believes the sluggish pace of Canada’s pandemic recovery is likely to hamper its housing market in the long run – and that the future of interest rates is similarly uncertain.

“It depends on the vaccine rollout, which currently has been very slow,” he says. “If it picks up, and we’re able to exit this pandemic fast enough, I think we’re not going to see a big correction, if any at all. If this pandemic drags on for another year or two and the shutdowns keep rolling in and the government subsidies and aid diminish, then we will probably, in my opinion, see a correction over the next two to five years.”

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UPFRONT

BANK UPDATE NEWS BRIEFS Bank of Canada commits to rate freeze for the long haul

The Bank of Canada announced in March that it would keep its target for the overnight rate at the effective lower bound of 0.25% until the national economy sustains the central bank’s inflation objective of 2%, which might not happen until well into 2023, according to an earlier prediction by the bank. In a statement, the BoC said it also intends to continue its quantitative easing program – currently estimated to total at least $4 billion per week – until economic recovery is well underway.

Five-year fixed rates climb for first time since pandemic hit

In early March, Canada’s largest banks raised their five-year fixed mortgage rates for the first time since January 2020, according to Ratehub.ca. The rate hikes were triggered by higherthan-expected inflation, which came in at 9.6% for the fourth quarter of 2020 – double the Bank of Canada’s forecast of 4.8%. RBC moved its discounted fiveyear fixed rate from 2.04% to 2.24%, while BMO increased its five-year fixed rate from 1.93% to 2.09%. “If inflation continues to rise and as optimism builds around the vaccine rollout, Canadians should expect fixed rates to continue on their upward trend,” said Ratehub cofounder James Laird.

Scotiabank devotes $10 billion in funding to CMHC initiatives

Scotiabank has announced plans to deploy approximately $10 billion over the next decade in support of CMHC initiatives aiming to improve housing affordability across the country. The collaboration will see heavy involvement

from ScotiaRISE, the bank’s global community investment initiative.

Through this channel, the bank will support CMHC programs and establish partnerships aimed at promoting the needs of disadvantaged groups.

Scotiabank is the first major Canadian financial institution to align with CMHC’s National Housing Strategy.

RBC poll highlights the long-term fiscal risks of COVID-19

The COVID-19 pandemic has increasingly forced Canadians to focus on short-term financial matters like debt management, placing other priorities at risk, according to RBC’s latest Financial Independence poll. Forty-six per cent of Canadians told RBC that servicing existing debt is their top financial priority, a six-point increase from the same period last year. Significantly, 71% expressed fears over their ability to balance short-term versus long-term financial priorities, while 47% believe that they haven’t saved enough and 54% said they didn’t have a financial plan in place for emergencies.

TD Bank on the hunt for major deal south of the border

TD Bank CEO Bharat Masrani confirmed in a recent interview with Bloomberg that the bank is “very open” to a major bank acquisition in the US that would add to the company’s retail operations south of the border. “With respect to major mergers and acquisitions in the United States, we’re very open,” Masrani said.

“If we can find some opportunity that fits all our criteria, we will look at it very seriously, and our capital gives us that flexibility.” According to Bloomberg, TD currently has around $12 billion in excess capital that gives it “the financial capacity for a significant acquisition.”

Banks urge caution on market As the housing market continues to surge, economists at some leading banks are warning of overheating On the surface, things are looking rosy for the Canadian housing market. During the first months of 2021, the market kept up the same relentless pace of last year, with demand sky-high and prices continuing to rise by the month. Still, economists at the country’s top banks are preaching caution amidst the current exuberance, with warnings that low rates and high demand could be pushing the housing market dangerously close to overheating territory.

Benjamin Tal, deputy chief economist at CIBC, raised concerns that the current frenetic pace will adversely affect the market in the future. “It’s really about the supply-demand mismatch,” he told BNN Bloomberg in late March. “Basically, [buyers] are stealing activity from the future in order to be part of this low interest rate environment and take advantage of it.”

Other economists believe the Canadian government hasn’t taken stock of the possible repercussions of the Bank of Canada freezing its overnight rate at 0.25% for the foreseeable future. “Ottawa has been caught completely off guard in the magnitude of the housing response to very low financing costs,” Scotiabank economist Derek Holt wrote in a note to clients in early March.

The question of how Canadians will spend the savings they accumulated during the pandemic has also been a potent topic of late.

TD Bank CEO Bharat Masrani told share-

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holders at the bank’s virtual annual meeting that policymakers should encourage spending in small and mid-sized businesses to help the country’s rebuilding process.

Meanwhile, Amit Sahasrabudhe, COO at RBC Wealth Management, cautions buyers not to rush into the housing market without careful planning.

“Basically, [buyers] are stealing activity from the future in order to be part of this low interest rate environment” “It starts with reaching out to an advisor – having a plan in place, looking at what they can afford, understanding the external circumstances and their own financial situations fully,” he says. “Those are some of the key first steps to making the decisions.”

Sahasrabudhe says that with new lockdowns rolling in across parts of the country, it’s difficult to predict how another prolonged period of pandemic restrictions would affect the market.

“The thinking was [initially] that by the end of 2021 or going into 2022, we would see growth in activity and demand, but that it would be more moderated over time,” he says.

“How this third wave impacts it further or not – that’s a challenging question to consider alongside everything else that’s going on.”

Q&A

Agostino Tuzi National partnership director, mortgage brokers HOMEEQUITY BANK

Years in the industry 20 Fast fact A mortgage veteran, Tuzi joined HomeEquity just over a year ago after a stint on the brokerage side of the industry

Reverse mortgages 101 Reverse mortgages proved hugely popular in 2020. Has demand continued at the same pace this year?

The demand is incredibly strong. Inquiries are up, and more and more partners and clients are looking to reverse mortgages as an option. March was the strongest month we’ve ever had in terms of funding. That continues to grow, and the overall interest in reverse mortgages has also increased.

Why do you think reverse mortgages have experienced such a surge in popularity of late?

One of the key reasons is the booming real estate market. Generally speaking, the 55+ demographic have held a lot of equity in their houses, and with house values rising at an even higher rate recently, they are able to access even more equity. In addition to the traditional reasons of paying off debt and supporting lifestyles, reverse mortgages have also become popular because many clients are taking equity out of their houses to help their adult children or grandchildren buy their first house or a bigger one. Our demographic is helping them make that first down payment.

Another factor is that a lot of our borrowers are taking equity out to be able to buy a recreational property to enjoy time away from the city.

What are the most common misconceptions about reverse mortgages?

One of the main misconceptions is that the bank takes ownership of the property. That is a complete myth – we are a mortgage company like any other. We register a charge but do not take ownership. Homeowners maintain complete ownership and control of the home for as long as they choose to stay.

Another one is that by taking on a reverse mortgage, clients will have nothing left to leave to their children or grandchildren as an inheritance. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid.

Specific to brokers, a key misconception is that brokers don’t have clients in the 55+ demographic. Statistics show that 44% of all homeowners in Canada are 55 and older – so the likelihood that there are no clients in that demographic is small.

Do brokers need to take a different approach with clients considering a reverse mortgage?

A more consultative approach is needed than with a traditional buyer or refinance client. For the 55+ demographic, choosing to take a reverse mortgage is a big decision, and they are deliberative with their finances. A lot of people in this demographic will be consulting their friends, families, lawyers and accountants. Brokers should also adopt that consultative approach and be aware that it can take a little longer than dealing with your typical purchase or refinance client. However, there is tremendous opportunity in this segment, and our BDMs are always there to support our broker partners.

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UPFRONT

LEGAL UPDATE

The capital gains tax question Would a capital gains tax on primary residences tame Canada’s housing market? Industry players doubt it

Real Estate Association, believes that talk of cooling the market by introducing a new tax is missing the point.

“The issue in today’s housing market is a lack of supply,” he says. “There’s real demand, and there will be even more demand when immigration resumes. What would happen with a capital gains tax of some kind is that it would discourage people from moving and would therefore restrict supply even more than we’re already seeing.”

“A capital gains tax … would restrict supply even more than we’re already seeing”

It’s an idea that’s almost universally unpopular in Canada’s mortgage industry: the imposition of a capital gains tax on the sale of primary residences. As the government wrestles with the question of whether to intervene in the sizzling housing market, a new report from BMO has suggested that speculative activity could be discouraged through a federally imposed ‘speculation tax’ if a homeowner sells their primary residence within the first five

NEWS BRIEFS

years after purchase – which would essentially function like a capital gains tax.

Ahmed Hussen, federal minister for families, children and social development, was quick to rule out imposing such a tax under the current administration. Still, with the idea gaining some traction in national media, the response in Canada’s real estate and mortgage industries has been predictably fierce.

Michael Bourque, CEO of the Canadian

BC law firm fined over foreign buyer tax advice

British Columbia-based real estate law firm Bell Alliance has been ordered by the BC Supreme Court to pay $74,700 to a client after it was ruled to have given poor advice about the province’s foreign buyer tax. The firm had advised Brazilian national Carolina Tellini to have her mortgage and property ownership transferred into her own name after separating from her husband, but it failed to realize that she was not yet a permanent resident of Canada and was therefore required to pay the tax.

Bourque says it would make more sense for the federal government to flex its legislative muscles through infrastructure spending.

“The government is currently spending about $15 billion a year on infrastructure,” he says. “With that money, they have a lot of leverage to insist that anybody that wants some of that spending for transit or other works should have conditions around that – for instance, to ensure municipalities make land available for building, reduce red tape and lower or eliminate taxes.”

Bourque adds that the chances of such a tax being imposed in the future remain slim. “We don’t believe it’s actually going to happen,” he says, “but we are against it for good, substantive reasons.”

IMF recommends anti-speculation tax in Canada

The International Monetary Fund has recommended that the Canadian government introduce legislation to address the risk posed by real estate speculators.

Citing the threat of rising home prices to the economy, an annual IMF staff audit noted that new taxes aimed at speculative activity could cool demand and level off sharp price increases. The report also advised that “provincial and municipal real estate taxes on non-residents could be eliminated or harmonized into broad-based tax measures targeted at speculative activity.”

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Q&A

Isaac Zisckind

Mortgage law and the pandemic

Lawyer, senior partner DIAMOND & DIAMOND LAWYERS

Years in the industry 14 Fast fact A basketball enthusiast, Zisckind is an avid Toronto Raptors fan

How did COVID-19 impact your firm on the mortgage side?

Tell us about the seminars you host for mortgage brokers.

When COVID first started, there was a big stall in transaction volume. There was a pause in terms of activity in general because we couldn’t do in-person signings, especially with a lot of banks and lenders alike requiring wet signatures.

Once the laws changed, allowing for e-signatures and Zoom messaging and other videoconferencing capabilities, it really affected the mortgage industry – not just from an efficiency standpoint, but also accessibility. When the use of new technology was approved, we were able to use our technological capabilities to help people who had no ability to travel or were just not able to have in-person meetings due to COVID restrictions.

We’ve done lectures on things that mortgage brokers should watch out for when they’re speaking to clients.

When you talk about big amounts of money, there’s always the risk of people trying to take advantage, so we do lectures about some red flags.

I also do a lot of seminars from the litigation side for mortgage brokers on how to protect themselves for the future – things brokers can do so that if they end up in a situation where someone is complaining about them, the broker has a checklist of things that were said and communications that were made so nobody can second-guess what their motives were.

What’s your most common type of case concerning mortgages?

Technology has really driven this market in the last year and a half, and it’s going to force the legal industry as a whole to either adapt or die. Those who can adapt to technology are going to thrive. There’s going to be more consolidation as it becomes easier and more efficient to do transactions.

I also think that mortgage laws in general are going to be looked at more frequently in terms of regulation because of the amount of transactions going up – that usually catches the eye of regulators. I think there are more regulations coming down the road in terms of administering mortgages, especially on the broker side.

Most commonly, if we’re talking about mortgages, it would be residential and commercial refinances, more so on the residential side than commercial. A lot of people are taking advantage of lower rates, even lower private rates.

With COVID as it is, I think people who are not getting the same income as before are using their equity in their home to pull out some cash and make sure that they’re caught up with bills and debts – especially when house prices have been soaring.

Alberta finance minister urges changes to B-20

Alberta finance minister Travis Toews continues to beseech the federal government to adjust its mortgage stress test, describing the B-20 guidelines as an “unnecessary barrier” to homeownership in the province. Toews has long argued that while the stress test might be beneficial in large markets, Alberta is being adversely affected because its prices have remained steady. Responding to a CBC question about Toews’ comments, the federal government said it is continuing “to closely monitor the health and stability of the housing market.”

BC police nab real estate scammer

What’s in store for mortgage law after the pandemic ends?

Police in Oak Bay, a suburb of Victoria, BC, have uncovered a scam in which a property was listed for sale and shown to prospective buyers without the consent of the legal owner. The fraudster communicated with real estate agents in the name of the real property owner without providing proof of identification, requesting by email that the house be listed for sale after a valuation was completed. The fraud was reported to police after a neighbour noticed a for-sale sign outside the property and contacted the real owner.

A tenth of Canadians willing to lie about income

Almost one out of every 10 Canadians (9%) thinks it’s acceptable to inflate their income on a mortgage application, according to a recent Equifax survey. The figure was even higher among millennials – 16% said they don’t see a problem with misrepresenting their income when applying for a mortgage.

Fourteen per cent of millennials, meanwhile, revealed they had lied on a credit application. The Equifax survey also found that 11% of respondents believe mortgage fraud is a victimless crime.

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PEOPLE

INDUSTRY ICON

THE NEXT STEP After 20 years of record-breaking success as a broker, Dave Butler tells CMP why he decided to move into an executive role

DAVE BUTLER likes to use a sports analogy to explain his new role at Butler Mortgage. The industry veteran is taking a step back from his previous position on the front line of the company’s mortgage operations, moving into a bigger-picture executive role that he likens to a coach transitioning upstairs to the boardroom in professional sports.

“You see it often in sports,” he says. “A guy goes from the coach to the general manager’s position because he’s better suited for that role and someone else will be better suited for the other role. That’s kind of how this all came about.”

Butler has enjoyed lavish success as the lead broker at Butler Mortgage, racking up more than $500 million in funded volume in 2020 alone, topping CMP’s Top 75 Brokers list for four consecutive years and helping cement Butler Mortgage’s status as a giant in the industry. Yet the gargantuan effort required to fuel that performance took its toll on Butler – much the same way that consistently competing at a sport’s highest levels ultimately wears down athletes.

“I look at it like a professional athlete’s career,” he says. “I look at myself and I say, ‘Man, I’ve been doing this since I was 22 years

14

old.’ I’m 42 years old now. A professional athlete’s career is going to span anywhere from 10 to 20 years, depending on your sport.

The way that I was putting in the hours, it was like I was a professional athlete.”

The relentless intensity that Butler brought to his role – routinely working 17-hour days, six days a week, for more than

Change of pace Butler says he was “mentally exhausted” from brokering, worn out from the gruelling schedule required to reap the rewards. That led to discussions with his business partner, Daniel Patton, vice-president and director of sales at BM Select, ultimately resulting in a restructuring that put Patton in the

“I’m now going to take the position of trying to build the company, bringing in staff so that I can then go on social media, get a website, market and bring in double the volume” a decade – proved unsustainable, culminating in a brush with mortality. In 2018, he suffered a heart attack that led to a swift re-evaluation of his working habits.

“I had a heart attack at 39 years of age because of this business,” he says. “If you do the math, someone who’s working 16- to 17-hour days for 20 years, that’s the same as a regular person working eight hours a day for 40 years. You become long in the tooth very fast when you’re doing that.”

lead agent role, while Butler will take on the responsibility of building the brand.

“This is something we’ve had planned the last couple of years,” Butler says. “My partner, Dan, has become, each year, more and more an integral part of our side of the company [BM Select]. It just makes sense.

“I’m able to look at myself in the mirror and say, ‘Buddy, you don’t have it anymore,’” he laughs. “Dan’s better at it. Right now, I would say to you that Dan is a better mort-

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PROFILE Name: Dave Butler Title: CEO Company: Butler Mortgage/BM Select Years in the industry: 20 Industry recognition: After being named number one on CMP ’s Top 75 Brokers list every year since 2018, Butler says he’ll be surrendering that title in 2022. “I am retiring from the CMP Top 75 after finishing number one four years in a row,” he laughs.

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PEOPLE

INDUSTRY ICON

gage agent than I am today, and that’s simply because over time, I’ve slowly been starting to take a different role, while he’s been picking up the sales role.”

Butler’s passion for the mortgage industry hasn’t dimmed at all, though. He bristles with enthusiasm as he discusses the opportunity to grow BM Select, a division of Butler Mortgage that’s geared toward providing premium service to a select clientele. He believes BM Select’s potential has remained largely untapped to date – a fact that makes its stunning success all the more remarkable.

“BM Select has not had a website,” he

social media, get a website, market and bring in double the volume.”

Looking ahead As CEO of Butler Mortgage and BM Select, Butler is already laying the groundwork for the next two decades of growth in both divisions. He says the clear distinction between the two uniquely defined brands – one rate-oriented, the other service-focused – is a quality that will continue to help the brokerage stand out from the crowd.

“Most brokerages are based on a single brand,” he says. “The difference [at Butler

“Most brokerages are based on a single brand.

The difference [at Butler Mortgage] is that you’ve got a brokerage with two brands – and I think that’s going to provide us with a runway to differentiate ourselves” says. “I haven’t had a website for 20 years. I haven’t mined my database for 12 years. Just literally in the last six months, we started our first social media account. How does the number-one broker in Canada not have a website, not mine his database and have no social media presence?”

With BM Select’s business mainly pouring in through referrals, Butler saw a unique opportunity to enhance the division’s sales volume through the more conventional means of building a database and online presence, with the ultimate aim of shattering the $1 billion sales barrier at BM Select within three to five years.

“I’m now going to take the position of trying to build the company,” he says, “bringing in staff so that I can then go on

16

BUTLER MORTGAGE AT A GLANCE

Mortgage] is that you’ve got a brokerage with two brands – and I think that for the next 20 years, that’s going to provide us with a runway to differentiate ourselves from the rest of the industry.”

Building the BM Select brand is something of a passion project for Butler, arriving at a juncture in his career when he’s able to reflect with satisfaction on the path it’s taken so far.

“I’ve been working for 20 years in dealing at a really high level that’s been unmatched by a lot of people within the industry, so it just felt like this was the right time,” he says.

“It’s not about the money for me. Financially, I don’t need to do this anymore, so I thought, ‘Now I’m going to do what I want to do – and I want to take an opportunity to build the brands and build the business.’”

YEAR FOUNDED 1995

LOCATIONS Toronto, Oakville, Ottawa, Calgary and Vancouver

DIVISIONS Butler Mortgage, BM Select

AWARDS Dave Butler was number one on CMP ’s Top 75 Brokers list in 2018, 2019, 2020 and 2021

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UPFRONT

OPINION

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

Cross-border conundrum Buyers in the Capital Region are facing different but substantial problems purchasing on either side of the Ontario-Quebec border, writes Chase Belair IN MY hometown of Ottawa, condition-free offers are the norm. They could even be considered a requirement. I think any Canadian would say the same about their location right now, too – unless you live in Quebec, where there’s a different hurdle to navigate: mandatory financing deadlines.

Shopping for a home while straddling the border of Ottawa and Gatineau, right in the middle of the two most competitive and antibuyer markets I have ever participated in, has been a trying experience so far. There’s only a two-minute drive between the two communities, but the frustrations of buying a home in 2021 differ greatly based on which side of the border I’m on.

For an offer in Ottawa, I can either overpay beyond belief with conditions – or, more commonly, I need to go in without an inspection or financing condition, tens to hundreds of thousands over asking, and still face an uncertain wait to find out if any of the 40 or more other prospective buyers were willing to take on more risk than I was.

For an offer in Gatineau, unless I have a bank statement showing I can buy the property in cash, I’m married to a financing condition that averages 14 days. My primary concern is no longer overpaying or lacking conditions with my offer – it’s missing the 14-day financing deadline that can only be waived by absolute proof of unconditional financing or cash in the bank. The odds of working into the eleventh hour for a ‘file complete’ notification on a purchase are as high as the odds of needing an appraisal on a conventional file.

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In other words, buying a home in Ontario is an extremely stressful and risky process for the borrower, whereas in Quebec, the borrower is financially protected from these risks. Instead, their homeownership dream is at the mercy of a limited number of appraisers and lenders, who must take a file from submitted to complete within a 14-day deadline, while a Realtor continuously

in some cases.

In an ordinary environment, the main impact of Quebec’s limited options on the average borrower is the pricing. Nesto recognized an average rate discrepancy of 0.05% to 0.15% for the same transaction type between our two brokerages, which operate on the same model in each province. The second impact is the inability to meet financing delays without pressure and stress – or the inability to meet them at all in some cases, requiring an extension or loss of the property.

There are two broker channel lenders in Quebec that carry most of the origination weight. When they signal a delayed service level agreement, it takes less than five business days for all other lenders in the province to receive and try to manage the overflow. In February of this year, one of these larger lenders experienced an underwriter shortage that quickly turned into a backlog in processing incoming files.

While our objective is to ensure we have as close to a ‘file complete’ as possible prior

“Low inventory, high pressure, increasing rates, approval delays and evaluation concerns are not the pillars of an ideal mortgage experience, but they are the reality for many homebuyers today” reminds the would-be borrower that there will be no extension granted.

One would assume this financing condition makes a broker’s life easier and reduces stress. It could, but mortgage brokers in Quebec have two additional obstacles to face. First, Quebec brokers have a fraction of the lending options available to brokers in the rest of the country. The Quebec broker channel, with some exceptions, generally has access to one credit union, four monoline lenders and the usual broker channel banks. Second, of these available lenders, some are still getting used to the Quebec marketplace and trying to find their comfort zone, making them a bit harder to work with

to submission, imagine if you were suddenly forced to wait four to five days for a ‘first look’ from a lender when you have a 14-day financing deadline that cannot be waived by any other means apart from a ‘file complete.’

Low inventory, high pressure, increasing rates, approval delays and evaluation concerns – among many other items – are not the pillars of an ideal mortgage experience, but they are the reality for many homebuyers today.

Chase Belair is the principal broker and co-founder of nesto, a digital mortgage agency based in Montreal.

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SPECIAL REPORT

CONTENTS

CMP spotlights the best places to work in Canada’s mortgage industry – as chosen by the employees themselves

PAGE

Feature article .............................................. 20 Methodology ................................................ 20 Best Mortgage Employers 2021 ................ 24 Profiles .......................................................... 25 Last year’s winners ..................................... 27 www.mortgagebrokernews.ca

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SPECIAL REPORT SPECIAL REPORT BUSINESS STRATEGY

BEST MORTGAGE EMPLOYERS

THE NEW WORLD OF WORK LAST YEAR, the mortgage industry, like many others, experienced a significant upheaval to the traditional notion of the workplace. As the COVID-19 pandemic pushed brokers out of the office and into a remote working model, virtual meetings and conference calls took the place of lunchroom chats and in-person meetings. The traditional brick-and-mortar image of a workplace was replaced by a virtual arrangement that caused a variety of new challenges and opportunities to emerge.

But even with the disruption of the pandemic, some things didn’t change, including the expectations employees had of their employers. For this year’s Best Mortgage Employers survey, mortgage professionals from across Canada cast their votes on how their organizations measured up on a number

of key indicators – and the results suggest that the country’s top mortgage employers have maintained an admirable level of dedication and commitment to their staff, despite the travails of the past year.

A change in focus The importance of mental health and wellbeing came into greater focus in 2020 due to enforced social isolation and the grim daily pandemic-related news, and it’s clear that addressing those challenges was a high priority for Canada’s Best Mortgage Employers. Regular Zoom calls and virtual interactions featured prominently among the list of initiatives submitted by nominated employers. Home Trust’s Success @ Home program was among the measures aimed at delivering work, wellness

METHODOLOGY To find and recognize the best employers in the Canadian mortgage industry, CMP first invited organizations to fill out an employer form, explaining their various offerings and practices. Next, employees from nominated companies were asked to fill out an anonymous survey evaluating their workplace on a number of key factors, including job satisfaction, bonus and incentive programs, career development opportunities, and commitment to diversity and inclusion.

Each company was required to meet a minimum number of employee responses based on overall size.

Companies that achieved a satisfaction rating of 80% or greater were named a Best Mortgage Employer.

COMPENSATION AND INCENTIVES AT THE BEST MORTGAGE EMPLOYERS

96%

Does your organization offer any bonus or incentive programs?

68% YES

85% YES

of this year’s Best Mortgage Employers offer flexible work options

91% YES

99%

100% YES

32% NO

15% NO

10 to 25 employees

20

26 to 100 employees

82%

9% NO

101 to 500 employees

of the Best Mortgage Employers offer training, mentorship or leadership development programs

501+ employees

of the Best Mortgage Employers provide extra time off for volunteer work

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and fun to employees amid the challenges of the pandemic.

The reality of working from home meant that companies also had to find new and innovative ways to help brokers do their

jobs. Numerous organizations said they immediately acted to ensure that their staff had access to the technology required to work from home. Some also went above and beyond to keep their employees safe:

“There has to be some humanization of the business in these times – it can’t just be all work, work, work. There needs to be a good balance” Jill Paish, MERIX Financial

BC-based Blue Pearl Mortgage Group, for example, launched its own workplace screening app for employees in case office work was unavoidable.

Jill Paish, executive vice-president of national sales at MERIX Financial, a two-time Best Mortgage Employer, says maintaining connections and contact with staff has become more important than ever.

“I really like those scheduled calls on a weekly basis,” she says. “It’s really easy to lose touch with people if you’re not scheduling those calls – it’s all about trying to support the employees and make them feel that they are supported and make sure that we care for their well-being. There has to be some

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SPECIAL REPORT SPECIAL REPORT BUSINESS STRATEGY

BEST MORTGAGE EMPLOYERS

humanization of the business, too, in these times. It can’t just be all work, work, work.

There needs to be a good balance.”

Many companies found new ways to boost their employees’ morale during a trying time.

Ontario-based brokerage Mortgage District mailed a monthly gift, such as a businessrelated book, to employees. Private lender Magenta Capital Corporation created a new resource hub on the company’s intranet to

the pandemic was almost uniformly positive. “They handled COVID-19 really well, allowed us to work from home and have had open lines of communications to executives for questions,” one employee told CMP. “I feel valued as a person and not just for the results I can produce.”

Others expressed a yearning for more in-person meetings and group outings, but emphasized that they knew their companies

“Pay and benefits are important, but people have to like what they’re doing.

We have to know why we’re doing what we’re doing, and then we have to live that as a company” Jared Morrison, Alta West Capital connect employees to support and benefit information. Toronto brokerage Citadel Mortgages launched an online office with a combination of work and leisure features that helped employees remain productive and have fun at the same time.

The reaction from mortgage professionals to their companies’ efforts during

had little choice but to keep their staff working virtually for now.

Different year, same priorities While companies have been forced to rapidly and significantly adapt their workforce model due to the pandemic, numerous other factors that contribute to a happy and

EMPLOYEE DEVELOPMENT AT THE BEST MORTGAGE EMPLOYERS Does your organization offer career path plans or programs?

YES

NO

10 to 25 employees

72%

28%

26 to 100 employees

56%

44%

productive workplace haven’t changed. One word that cropped up again and again in employees’ feedback was ‘culture’ – an aspect of the workplace that Jared Morrison, chief operating officer at Alta West Capital, says is integral to companies’ success.

“It can’t just be about the metrics and the numbers and the typical business,” he says.

“Pay and benefits are important, but people have to like what they’re doing. We have to know why we’re doing what we’re doing, and then we have to live that as a company. If we do that properly, the staff will work for each other.”

According to CMP’s survey, the majority of Top Mortgage Employers (81% on average) offer continuing education programs or tuition reimbursement. Work and career path plans were also hugely popular, although it’s worth noting that just 56% of companies with 26 to 100 staff members offered such plans, compared to 100% of those with more than 500 employees.

Employee recognition and communication in both directions – from top executives to staff and vice versa – also featured prominently among employees’ appraisals of what their companies are doing well.

“I work in an outstanding workplace where upper, middle and supervisory management have a great working relationship with the people who carry out the tasks, working towards our common goals together,” one employee told CMP. Paish agrees that feedback and communication are important components of a strong workplace. “An extraordinary amount of effort can be spent on activity, but if that activity isn’t getting the results required, you’re spinning your wheels,” she says. “I think it’s really important to have conversations with people: ‘Tell me about your week, what you’re working on and what’s coming up.’”

101 to 500 employees

27%

73% 501+ employees

100%

22

The end of 9 to 5?

While the mortgage industry has traditionally been viewed as a male-dominated environment, this year’s survey responses indicate that companies have embraced

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CULTURE AT THE BEST MORTGAGE EMPLOYERS Does your organization offer any employee recognition programs or awards?

68%

93%

YES

YES

91% YES

100% YES

Does your organization offer any programs aimed at recruiting or retaining women, individuals from minority groups, people with disabilities and/or LGBTQ individuals?

10 to 25 employees

52%

32%

YES

7%

9%

NO

NO

26 to 100 employees

101 to 500 employees

NO

10 to 25 employees

DIVERSITY AT THE BEST MORTGAGE EMPLOYERS

45% NO

501+ employees

“An extraordinary amount of effort can be spent on activity, but if that activity isn’t getting the results required, you’re spinning your wheels”

26 to 100 employees

37% YES

63% NO

Jill Paish, MERIX Financial a commitment to gender equality and diversity. Men outnumbered women in only one category (companies with 101 to 500 employees), although more than one respondent expressed the view that greater female representation among senior staff would be a welcome development.

Perhaps amplified by the new realities of working from home, flexible work options are also increasingly prominent. All companies with more than 100 employees offered options such as a compressed work week, flexible hours or job sharing, and team-building and leisure activities also factored heavily into the mix.

Morrison believes the idea of a 9-to-5 job might not be as popular as it used to be – although he also points out that preferences vary from person to person.

“What I suspect the new norm will become is some sort of hybrid, whether that’s three or four days in the office and one day at home,” he says. “The mortgage industry is full of people who are very good at working from home, but there are others who want to come in and see their workmates. We will end up in some situation that allows them the flexibility to be at home some of the time, but also in the office when required.”

It’s been a long and often difficult year for mortgage companies and their staff, who have had to make the transition to working from home. That fact makes the achievements of CMP’s Best Mortgage Employers doubly impressive. Through thick and thin, each company on this year’s list truly had their employees’ best interests in mind.

101 to 500 employees

36% YES

64% NO

501+ employees

80% YES

20% NO

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SPECIAL REPORT SPECIAL REPORT BUSINESS STRATEGY

BEST MORTGAGE EMPLOYERS

10 TO 25 EMPLOYEES Approved Financial Services BlueShore Pacifica Alternative Mortgage Centre Calvert Home Mortgage Investment Corporation DLC First Pacific Mortgage

26 TO 100 EMPLOYEES Canadian Mortgages Inc. Phone: 888-465-1432 Email: info@thecmigroup.ca Website: canadianlending.ca/brokers 8Twelve Mortgage Corporation Alta West Capital

Green Mortgage Team

Blue Pearl Mortgage Group

Mortgage Architects

Citadel Mortgages

MortgagePal

Durhammortgage.com

Outline Financial

East Coast Mortgage Brokers

RiverRock Mortgage Investment Corporation

Elite Lending Corp.

Faris Team Real Estate & Mortgage Brokerage

VERICO Financial Group VWR Capital Corp.

Fisgard Asset Management Corporation Jencor Mortgage Corporation Magenta Capital Corporation

101 TO 500 EMPLOYEES

MERIX Financial MortgageLine

CWB Optimum Mortgage

Oriana Financial Group of Canada

Phone: 866-441-3775

Rock Capital Investments

Email: brokerinfo@cwbank.com Website: optimummortgage.ca

Sherwood Mortgage Group The Mortgage Coach

Bridgewater Bank Capital Lending Centre Compass Mortgage Group, powered by Tango Financial

TMG The Mortgage Group Xeva Mortgage

501+ EMPLOYEES

HomeEquity Bank

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Matrix Mortgage Global

First National Financial

Nationwide Appraisal Services

Home Trust Company

Paragon Mortgage, powered by Tango Financial

Manulife

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CWB OPTIMUM MORTGAGE

C

WB Optimum Mortgage VicePresident Rejean Roberge believes the company’s reputation as a firmly ‘people first’ organization shone through over the past year. Amid the challenges of the shift to remote work and the end of nearly all face-to-face interactions, Roberge says the camaraderie and compassion of the CWB Optimum team came to the fore to swiftly help employees adjust to working from home – while providing one another with constant support and attention.

“We saw those values [people first] reflected in our team’s resiliency and dedication over the past year,” Roberge says.

“They aren’t just words on a wall; they’re who we are, and they’re what’s always guided our approach.”

Some of CWB Optimum’s key priorities include clear and transparent communication at all levels and responsiveness to employees’ needs. Conversations with employees and openness to new ideas have resulted in programs that provide worklife balance.

“CWB has offered flexible working arrangements for our employees well before the pandemic forced more than

Phone: 866-441-3775 Email: brokerinfo@cwbank.com Website: optimummortgage.ca

80% of our staff to be working from home; these include staggered start times and compressed working weeks,” Roberge says.

“We really pride ourselves on having an extremely collaborative approach, whether we’re talking about a new product, how people are doing in general or how we can better support our clients.”

The company is fully committed to employees’ career progression, whether that’s helping them take the next steps toward a new role or giving them the tools to further succeed in their current one. Yet its attention to employees has always extended beyond job performance to encompass wellness, mental health and overall happiness. Among CWB Optimum’s several employee-represented groups is one aimed at removing stigmas around mental health and creating safe spaces for people to have frank conversations.

“That’s just another example of having a caring and inclusive environment so that our team feels supported,” Roberge says.

“We understand the demands that are asked of our team members, and we want to make sure that we can support them when they need it.”

Those forums have proved invalu-

able during the past year in keeping teams connected, and the company has also prioritized employees’ well-being through yoga, meditation and mindfulness sessions. Not only that; in addition to making sure all members of staff could access the equipment needed to comfortably work from home, CWB also granted 12 extra days of sick leave that employees could access if they needed time off for unplanned school closures or mandatory isolations, which Roberge herself was able to use during the past year.

“Our people at CWB Optimum support each other without needing to be asked,” she says. “I think that speaks to the culture that we have here.”

2004

Year founded

2

Number of offices

116

Number of employees

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BEST MORTGAGE EMPLOYERS

CANADIAN MORTGAGES INC.

F

or Bryan Jaskolka, CEO of Canadian Mortgages Inc. (CMI), the company’s ranking among the top mortgage employers in Canada comes down to its biggest strength: its people. CMI maintains a strong focus on both understanding and respecting its employees’ backgrounds, strengths and motivations, making sure to present opportunities for continuous education and career advancement.

“By ensuring our employees have the tools they need to excel, we provide them with a platform for success where they can grow and advance, both personally and professionally,” Jaskolka says.

Having operated in an entirely virtual capacity since its inception in 2005, CMI was ideally placed to embrace the workfrom-home shift brought about by the pandemic. The company has long recognized the benefits that telecommuting can bring, from more flexible schedules to a reduced carbon footprint. Jaskolka says working remotely was “business as usual” for CMI’s staff – and the company’s familiarity with the model gave it a “significant advantage” when that became the only

26

Phone: 888-465-1432 Email: info@thecmigroup.ca Website: canadianlending.ca/brokers

option after the COVID-19 outbreak.

Of course, that virtual environment presents its own challenges as well as opportunities, something Jaskolka says CMI addresses through clear and frequent two-way communication.

“That helps empower employees to remain engaged, effective and productive at their job,” he says. “We make a strong effort to remain aware of any issues and find accommodations. Our leadership makes a concerted effort to remain available for staff to discuss concerns and offer support and transparency – focusing on making employees feel empowered and more at ease.”

CMI also maintains a focus on the overall employee experience, celebrating the success of teams and holding online team-building activities. That emphasis on values and culture is crucial to the company, Jaskolka says – and it includes a strong philanthropic aspect. Over the past year, CMI has offered support to frontline healthcare workers and community organizations during the difficulties of the pandemic. It also contributed to Food

Banks Canada and sponsored more than 1,000 meals for those in need – even stepping in to pay for repairs to a vandalized food bank delivery vehicle last November.

CMI also promotes employee-driven community support by making monthly contributions to causes chosen by its staff and providing paid volunteer days.

“We play a significant role in building communities, and we feel we have an equally great responsibility to support them,” Jaskolka says. “The pandemic has really elevated our sense of responsibility – and we’ll continue to find ways to increase our presence, community involvement and contribution.”

2004

Year founded

1

Number of offices

65+

Number of employees

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THE 2020 BEST MORTGAGE EMPLOYERS 8Twelve Mortgage Corporation

Centurion Mortgage Capital Corporation

Lendesk Technologies

Paradigm Quest

Approved Financial Services

Citadel Mortgages

Matrix Mortgage Global

RiverRock Mortgage Investment Corporation

Bayfield Mortgage Professionals

CWB Optimum Mortgage

MCAP

Rock Capital Investments

Blue Pearl Mortgage Group

DLC Elite Lending

Millennial’s Choice

Safebridge Financial Group

Canadian Mortgages Inc.

DLC Forest City Funding

Mortgage District

The Mortgage Coach

CanWise Financial

Haventree Bank

Mortgage Scout

The Mortgage Professionals

Capital Lending Centre

Jencor Mortgage Corporation

MortgageLine

True North Mortgage

Capital Mortgages

Lend at Ease

MortgagePal

VWR Capital Corp.

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FEATURES

SECTOR FOCUS: BROKER NETWORKS

Broker networks in the time of COVID The leaders of Canada’s major broker networks fill CMP in on how they’ve adapted since the pandemic – and what the future holds for the network model

OPERATING A mortgage broker network is a challenging task at the best of times, requiring constant communication with members and clear messaging from the top – not to mention the ability to keep many plates spinning at once. Yet the harsh reality of the COVID-19 pandemic has brought about an even bigger readjustment for broker networks, removing the ability of network leaders to visit brokers and ushering in a new era of digital meetings and conferences.

Despite the trials and tribulations of the past year, several network heads told CMP that they’re optimistic about the future and the opportunities that digital transformation has brought about for the network model – but also clear-headed about the challenges that lie in store.

For CENTUM president Chris Turcotte, the early stages of the pandemic amplified one of the most important aspects of running a network: “Communication, communication, communication. In those first few months, it was about weekly meetings to support and encourage our brokers that we were getting through this together. As it became clear that the market was going to be a busy one, we then shifted to providing tools, support and

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marketing that kept them busy.”

Mark Squire, VERICO’s president and COO, faced a similar challenge: providing support to licensees and agents during an unprecedented time for the entire country.

The company was able to rapidly shift its focus to the new realities of interacting with its network digitally.

“We quickly adapted to Zoom meetings

DLC president Eddy Cocciollo says his travel schedule went from “over 100 days a year to zero” as the pandemic forced visits to brokerages to move online, while also placing a new emphasis on giving brokers the tools they needed.

That pivot to a digital environment brought about one overwhelming positive: It accelerated many brokers’ engagement with

“I think [technology] was a gamechanger. We don’t see how we can go back in time now to the same process, the same approach as before the pandemic” Luc Bernard, M3 and hosted various webinars throughout the year,” Squire says. “We introduced weekly communications to keep our members informed, arranging one-on-ones with many members across the network – though, of course, in the end, nothing replaces that human-to-human contact.”

technology – not just within their networks, but also with clients.

“I think [technology] was a gamechanger,” says M3 chairman and CEO Luc Bernard. “We don’t see how we can go back in time now to the same process, the same approach as before the pandemic.”

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A process that might otherwise have taken a number of years – getting brokers adjusted to the digital space and the reality of interacting with both clients and networks virtually – was accelerated tenfold by the pandemic, Bernard says.

“Brokers have embraced that change, and we’re very bullish and confident about the role that the broker will play [on the digital side] moving forward.”

Challenges ahead Other than the rapid evolution of digital connectedness, many of the questions confronting network leaders remain the same as before COVID-19.

Cocciollo believes that distribution is one of the most significant aspects of the broker network model.

“It will always be a powerhouse,” he says.

“The more brokers, mortgage professionals and distribution power you have is really

“The main challenge for many brands going forward is the justification of their fees that they charge” Chris Turcotte, CENTUM important. Then there’s technology – that’s essential in order to make transactions as smooth and efficient as possible. That’s not only at the cost of coming up with tech that’s going to satisfy the client transaction, but it also concerns the maintenance and upkeep of that technology.”

The issue of fees, meanwhile, is clearly one that isn’t going away. “The main challenge for many brands going forward is the justification of their fees that they charge,” Turcotte says. “If you’re charging a flat monthly tech or marketing fee on top of a recurring royalty or monthly membership fee, then you’re going

to have an uphill battle. With tech being what it is today, there’s no reason to take that much out of a broker’s pocket – opportunities are abundant.”

Turcotte expresses dismay at broker networks that continue to market “like it’s 2005,” saying that the detrimental impact on franchisees’ business is clear.

“It’s disheartening knowing that those are hard-earned broker dollars going up in flames,” he says. “Understanding the consumer and how their network can create a memorable experience before – and long after – the transaction is critical.”

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FEATURES

SECTOR FOCUS: BROKER NETWORKS

The broker-network relationship

CMP’S TOP 75 BROKERS BY NETWORK 40%

38%

30%

20%

17% 13%

10%

0%

8%

DLC

VERICO

Independent Mortgage Centre Canada

7% Mortgage Architects

Squire says VERICO’s flat fee model is designed to keep as much money in the hands of broker-owners as possible.

“We know the margins can be thin for many brokerages, so having a flat fee model makes the most sense,” he says. “The majority of the VERICO firms carry their own brand, so we do not charge high marketing fees and extra add-ons – just one monthly fee.”

That model, Squire says, is also aimed at giving brokers as much control over their businesses as possible, allowing them to receive commissions directly from lenders and affording full choice on the technology they implement.

“The licensee is truly in business for themselves,” he says. “We just provide them with a variety of options and tools that they can pick and choose from.”

Turcotte says it’s also crucial for networks to constantly evaluate the quality of their marketing to ensure they’re maximizing opportunity for their franchisees.

“The brands that understand technology

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7% CIMBC

3%

3%

3%

CENTUM

Mortgage Intelligence

RMA

1% TMG

Squire believes the most important aspect of the relationship between networks and their members is simple: respect.

“We summarize VERICO’s core pillars as truth, trust and transparency,” he says. “We hold ourselves to those standards, and we ask that our members hold themselves and ourselves accountable to these.”

That also means listening and responding to the need of each individual member, he says – and acknowledging that not all will have same issues.

“As the industry evolves, so must we,” he says, “and I think it’s imperative that we continue to evolve to meet the changing needs of our licensees.”

Turcotte agrees with that sentiment, saying it’s crucial to stand by brokers through thick and thin. At CENTUM, that means

“As the industry evolves, so must we, and I think it’s imperative that we continue to evolve to meet the changing needs of our licensees” Mark Squire, VERICO and where it’s going – and I’m not talking a deal origination system and CRM – and the way that you market in today’s world will win the day,” he says.

For Bernard, that commitment to digital marketing, along with educating brokers about how to optimize their approach, is also top of mind.

“Brand recognition for the broker community is key,” he says. “We have an enormous opportunity to demonstrate clearly to stakeholders the value that we’re creating and adding to the process. In digital marketing, it’s really important that we capitalize on that.”

offering full support during challenging times, as well as the successes.

“It’s about being there for the big moments,” he says. “I don’t mean the celebrations; I mean the pivotal moment in their business, whether that’s good or bad. That also means being there when they lose – because it will happen.”

Cocciollo ultimately sees the brokernetwork relationship as a reciprocal one.

“It comes down to value,” he says, “and if we can put value in the hands of our franchises, that relationship will always remain.

They’ll always need us, and we will always need them.”

www.mortgagebrokernews.ca

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First impressions matter.

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PEOPLE

BROKER INSIGHT

The wealth effect Taurus Mortgage Capital president and CEO George Hugh tells CMP how he built an independent brokerage from the ground up – and why he will never sacrifice service in pursuit of profit

GEORGE HUGH calls it his “edge”: his background in capital markets and banking, which preceded his career as a mortgage broker. Hugh started Taurus Mortgage Capital from scratch, working initially with one underwriter to build the company’s client base and value proposition. What set him apart, he says, was his 20-plus years of banking experience, including a stint as vice-president of treasury and head of mortgage origination at ING Canada, which gave him insight into a side of the mortgage industry that few brokers have seen.

“With my different background – accounting, finance, risk management – the way I spoke about a mortgage was very different,” Hugh says. “That immediately separated me from the others. So when, for example, I talked about fixed versus variable mortgage rates, it was very detailed.

With the explanations that I gave, speaking a language in a very simplified way, people started to trust me.”

While Hugh was a relative newcomer to the broker world when he founded Taurus, his time as head of ING’s mortgage broker channel afforded him another advantage: invaluable interaction with some of the nation’s leading mortgage professionals and a firsthand look at their approach to the industry. That gave him an inside glimpse into what worked and what didn’t in the broker space.

“I got to meet some amazing brokers from

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across the country while I was in charge,” Hugh says, “and I realized that everyone had a different view on how they drove their business. I took a little bit from everyone and created Taurus. Not every model worked for me, but through my learnings of how the different brokerages operated – what they were good at, what they weren’t and what I thought they could do better – I developed my model for Taurus. It’s an amalgamation of all the different views and ways and strategies that people have.”

From that blend of ideas came the company’s client-focused approach, known as The Taurus Way. It’s a core value that has permeated the company’s ideology during nearly a decade in business, centred around simplifying complex mortgage issues for clients. Hugh quickly realized that knowing what’s right for a customer starts with one task: getting to know them.

“I would say that a lot of people spend maybe half an hour with their clients getting

to know them,” he says. “I spend a minimum of an hour and a half. I do put the work in upfront because I’ve got to demonstrate that I am different and you need to come to me.”

Taurus’s approach is one that Hugh describes as “wealth-building”: taking the time to expand clients’ knowledge and, consequently, their wealth.

“If I give you the knowledge, you get the guts,” he says. “When you get the guts, you start doing the right things. That’s the whole model. I spend a ton of time trying to provide my clients with information that they don’t know. I think that’s the gamechanger, because AI technology and blockchain technology are designed to remove the middleman. The question is this: We as brokers, as professionals – what are we going to offer that AI can’t do?”

Taurus’ growth since 2011 is ample proof that this client-intensive approach has served Hugh well. In fact, he says, it’s an ethos he’s not willing to sacrifice – even at the expense

FROM BANKER TO BROKER One of the biggest changes George Hugh witnessed when he went from working in capital markets to founding his own mortgage brokerage was the shift in focus from shareholder to customer.

“On the treasury capital markets side, it’s about maximizing deposits and revenue for the bank,” he explains. “When I came to Taurus, I took my skill set and gave my clients unbiased opinions on what I thought they should do to build wealth. I didn’t have shareholders on the other end where I had to make sure that they were making money.”

www.mortgagebrokernews.ca

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FAST FACTS: TAURUS MORTGAGE CAPITAL

YEAR FOUNDED 2011

PRESIDENT AND CEO George Hugh

HEADQUARTERS Markham, Ontario

“If I give you the knowledge, you get the guts. When you get the guts, you start doing the right things” of potential expansion.

“I can double my business tomorrow,” he says. “But the reason why I haven’t done it is that I refuse to sacrifice the level of service that I give to each and every one of

my clients. I will not grow and sacrifice the service levels; I find that the level of service in all aspects deteriorates the busier you get.

You start to sacrifice – and service should not be sacrificed.”

APPROACH The Taurus Way – Trust, Accountability, Unparalleled knowledge, Respect, Undivided attention, Service

ACCOLADES Named one of CMP ’s Top Independent Brokerages for four consecutive years; winner of the 2019 Top Choice Award for Best Mortgage Brokerage in Markham

www.mortgagebrokernews.ca

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SPECIAL PROMOTIONAL FEATURE

LENDING

Primed for success Equitable Bank’s Anne Jones tells CMP why the lender’s prime operations are ready to take the market by storm in 2021 FOR ANNE JONES, Equitable Bank’s senior director of residential prime credit, there’s one thing that sets Equitable’s dedicated prime team apart from its competitors: quality of service. Jones, a 16-year Equitable veteran who’s headed the company’s prime operations since the beginning of this year, says her team’s devotion to finding the right resolution for clients makes the lender an excellent option for brokers and borrowers alike.

“Where we win is really the service we provide,” she says. “We have an amazing team of underwriters and mortgage officers who I would describe as go-getters, always trying to find solutions for their brokers. At Equitable, we’ve always been about the service.”

The lender’s prime operation, launched in

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2014, aims to appeal to a range of salaried, salaried-plus-commission or self-employed Canadians with its EQB Evolution Suite.

The division has grown steadily since its launch, establishing itself as a strong alternative to the prime space’s traditional giants – a position worthy of Equitable’s status as Canada’s challenger bank.

“We’ve come a long way in making ourselves known in the general market,” Jones says. “When I started in 2005, Equitable was a smaller name, more concentrated on the alternative side. We’ve grown a lot since then, and our prime product is really aimed at expanding our client base and continuing that growth. It’s important for us to have a solution for everyone.”

In addition to consistently competitive rates, Jones says one of the key elements of Equitable’s approach to the prime segment is its commitment to being a one-stop shop for clients and brokers.

“At all stages of the clients’ and brokers’ experiences with us, we want it to be a positive and efficient one,” she says, “whether that’s when your first deal comes in, renewals, working the documents or signing you up for your EQ Bank digital savings account. We want to tie it all in together for our clients and give them the best service we can.”

It’s been an eventful time for Jones to join the prime division, given the ongoing pandemic and continuing tumult in the Canadian housing market. Still, she says her transition from the alt side to the prime division has been a smooth one, as Equitable’s prime product has been going “strong and steady” since the start of the year.

“We’re seeing some great volume,” she says. “Things have been going very well, given everything that’s been going on in the market.”

With travel restrictions and remote work here to stay for the foreseeable future, the first few months of 2021 have seen a continuation of a trend that began in the early months of the pandemic: people moving away from Toronto’s downtown core and toward the city’s outskirts. Jones believes this urban exodus presents a good reason for brokers to familiarize themselves with Equitable’s insured prime offerings.

“Those clients looking for lower purchase prices outside the city can be a good match for our prime product,” she says.

Equitable celebrated its 50th anniversary last year, and Jones says that as the company continues to grow, it recognizes that customer service will play a fundamental role in that growth.

“Any broker who tries us really is impressed by our service,” she says. “It’s just a case of giving us a go and getting that first deal in the door. Brokers’ clients are happy, and we can accommodate some smooth closings; that’s very important in this day and age. Everyone who tries us is taken aback by the quality of what they see from our team and our service.”

www.mortgagebrokernews.ca

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EQB

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SPECIAL PROMOTIONAL FEATURE

TECHNOLOGY

Leading from the front With its digital innovation, M3 is positioning itself at the forefront of the mortgage industry’s technological transformation THE BROKER channel is undergoing a profound digital revolution – and M3 is right in the thick of it. The mortgage giant has always been an industry pioneer on the technological front. Now it’s taking the next steps in transforming the digital landscape through the introduction of its proprietary Your Mortgage Market solution, which is set to usher in a new way of generating leads for brokers across Canada, as well as relaunching several of its websites with enhanced features.

Billed by M3 as the industry’s first mortgage prequalification tool, Your Mortgage Market allows customers to instantly calculate how much they can afford to pay for a home based on their creditworthiness with lenders. It also acts as a digital referral service that generates leads for brokers through that prequalification.

Brian Hutton, the company’s AVP of digital marketing, says the platform’s development was spurred by the realization that consumer behaviour has evolved significantly in recent years, not least because of COVID-19.

“From a lead generation perspective, we’ve seen a huge shift in consumer behaviour – not just in the mortgage industry, but across all sectors,” he says. “In the past, a consumer might have visited two or three websites before making a decision or noticed a sign in the street and decided to give their vendor a call. Now a consumer is typically hyperdigital, using the internet much more and visiting upwards of 20 sites before they pick a vendor. That really informed our approach with Your Mortgage Market.”

Meanwhile, M3’s rebranded, revamped

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websites – TMAC, Invis, Mortgage Alliance and Multi-Prêts in Quebec, with more expected to follow suit – have introduced added flexibility for mortgage brokers. Hutton describes their enhanced customization and site metrics as “best in class” – and the reaction among the broker community has already proved overwhelming.

“The SEO for the sites has been fantastic,” he says. “We’ve had many brokers say that they’ve got more leads off those websites in the last year than they have had over the previous

Hutton and his team dedicate much of their time to providing webinars, education sessions and one-on-one consultations to mortgage brokers, a service he describes as unique in the industry. The goal is to help brokers adjust their business approach to fit today’s altered landscape, from how they deploy their marketing budget to how they choose which partners and agencies they work with.

M3’s appetite for big new ideas has always been clear; its “Broker first … always” mantra is a neat summation of its reputation in the

“Our focus is on providing brokers with an insight into digital marketing and shifting their mindset to a more modern approach on that front” Brian Hutton, M3 few years combined. We’re happy to say that we haven’t gotten a negative review yet.”

Hutton also emphasizes that M3 puts a strong focus on educating mortgage brokers and helping them obtain the digital knowledge required to succeed in the new era.

“Our aim is to be there for brokers,” he says.

“We do everything from vetting agencies to looking at their digital footprint, giving advice and helping them with their social media.

Our focus is on providing brokers with an insight into how they should approach digital marketing and trying to shift their mindset from a traditional to a more modern approach on that front.”

mortgage industry. Hutton says the company has always maintained a strong focus on helping brokers acclimate to the digital landscape, but that mission became doubly relevant during the COVID-19 pandemic.

“There was always the focus on tackling digital projects, but with the pandemic, we definitely had to step it into high gear,” he says.

“It’s clear that the normalization of financial purchasing across Canada is not going to go back to the way it was prior to the pandemic.

With that in mind, we want mortgage brokers to know that we’re here and will continue to invest in innovative technology to help them through the transition.”

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SPECIAL PROMOTIONAL FEATURE

PRIVATE LENDING

Service comes first RiverRock president and CEO Nick Kyprianou tells CMP why service will always be at the forefront of the lender’s relationship with brokers RIVERROCK IS going places – and it wants to take brokers with it. Nick Kyprianou, the mortgage investment corporation’s president and CEO, affirmed its commitment to the broker community as it expands its range and pricing, with a host of new products and features offering what Kyprianou describes as an “excellent” opportunity for brokers to partner with RiverRock.

That expansion of RiverRock’s services includes an April promo of 5.99% for first mortgages up to 80% LTV, which Kyprianou

of assessment; for RiverRock, a self-declared letter of income is sufficient.

“We’re extremely flexible,” he says. “If we like the house and we feel that there’s a reasonable exit strategy, we’ll make the deal work. That’s our approach.”

That flexibility also allows RiverRock to lend up to 80% LTV on residential properties for both first and second mortgages in urban and suburban areas in Ontario. Its partnership with FCT, meanwhile, means borrowers are not required to use an external solicitor,

“I don’t think anybody gives faster service.

We have a turnaround of less than two hours on answers” Nick Kyprianou, RiverRock Mortgage Investment Corporation says demonstrates the company’s commitment to flexibility and openness in finding the right mortgage for the right client. Yet he also notes that the main reason for brokers to do business with RiverRock is the speed and efficiency of service the lender offers.

“I don’t think anybody gives faster service,” he says. “We have a turnaround of less than two hours on answers. This week alone, we’ve gotten a couple of deals in and closed them on the same day – that’s something we often do.”

That lightning-fast turnaround time is driven by the company’s commitment to keeping things simple and straightforward.

Kyprianou notes that some lenders, even after indicating that they require no income proof, request additional documents such as notice

38

saving them time and money.

“We allow clients to use their own lawyers,” Kyprianou says, “so unlike other MICs where you have to use the MIC’s lawyer, clients can save a couple thousand bucks just by using their own.”

Kyprianou says RiverRock’s dedication to the broker community is exemplified by its BDMs’ constant engagement with brokers: generating new connections, building relationships and constantly seeking feedback on ways to improve.

“If we were getting business from a broker, and then all of a sudden it drops off,” Kyprianou says, “it’s the BDM’s responsibility to go out

there and say, ‘We noticed your business has dropped off. What happened? Tell us if we did something and what we can do to correct or fix it.’”

With the company’s underwriters also working diligently with brokers on what they need to grow business and push deals through, Kyprianou says RiverRock offers a collaborative and responsive relationship with the broker community.

A 30-year veteran of the mortgage industry, Kyprianou clearly knows a thing or two about brokers’ most common missteps.

He emphasizes, for instance, the need for brokers to constantly communicate and follow up with their clients.

“In any kind of sales, they say you should make contact with your client a minimum of four times a year to remember you,” he says.

Similarly, with statistics indicating that the number of Canadians using a broker substantially drops off after their first mortgage, he says brokers should think carefully about the lenders they choose for their clients.

“Your client is your business,” he says, “but some companies are just going to put a big hug around that client, cross-sell them, and then you’ll never get them back.”

For RiverRock, the relationship with its broker partners remains top of mind as it moves toward its next phase, multiplying its volume and range of offerings for clients.

Kyprianou says brokers should take note of those plans.

“We’ve tweaked our pricing to become more and more competitive,” he says, “and we’re looking to do big volume.”

www.mortgagebrokernews.ca

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*

* + 2% Lender Fee

+ 2% Lender Fee

www.riverrockmic.com | (416) 504-1886 The Manager, RiverRock Management Inc., is licensed as a Mortgage Administrator through FSRA (Financial Services Regulatory Authority of Ontario).

Mortgage Administrator License # 12514

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PEOPLE

OTHER LIFE

Clarke does most of his blacksmithing outside, but “on rainy days, you can sharpen knives and work on handles,” he says.

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

HEAVY METAL Blacksmithing has taught Nova Scotia broker David Clarke the value of striking while the iron is hot FOR DAVID CLARKE, owner of Dartmouth, Nova Scotia-based Clarke Mortgage Group, the art and science of blacksmithing has underscored the singular importance of precision in all aspects of one’s work.

Clarke was initiated into the craft by a friend, who provided him with the starting gear he needed – but the road to becoming deft at striking the anvil wasn't easy. “I watched a lot of YouTube tutorials, and I made lots of mistakes,” Clarke says.

Thankfully, this toil wasn’t fruitless, and Clarke eventually grew into an able craftsman in his own right.

“I was able to make handles, hooks and brackets that I used on my own farm,” he says. “It was fun to make my own hardware.”

Working in the smithy has also highlighted the value of planning ahead. “You need to think about what you are going to do before you do it,” Clarke explains. “A heat only lasts so long, so you need to plan your blows. If you keep going when the metal is too cool, it is brittle and can break. So pick your goal, plan your steps and go for it.”

2020

Year Clarke started blacksmithing (when the pandemic hit)

40

30

Approximate number of pieces he’s made so far

2,300°

Maximum temperature (in Fahrenheit) of the furnace Clarke uses

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CMA2

APRIL 29, 2021  ONLINE

CONGRATULATIONS TO THE 2021 WINNERS AND EXCELLENCE AWARDEES After another extraordinary year for the mortgage industry, mortgage professionals have continued to raise the bar in terms of service, innovation, professionalism and leadership. And nowhere is this more evident than in the Canadian Mortgage Awards 2021 winners and excellence awardees.

CMP and MortgageBrokerNews.ca, along with our esteemed award sponsors, extend warm congratulations to them all.

Winners and excellence awardees will be profiled in CMP Issue 16.06 out in June, which will take an in-depth look at their achievements.

For the full list of award recipients, visit

www.canadianmortgageawards.com

Award Sponsors

Official Media

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