CMP 16.08

Page 1

ALTERNATIVE LENDING RENAISSANCE

What brokers need to know as more consumers opt to bypass the banks

MPAMAG.COM/CA ISSUE 16.08 | $12.95

STAMPING OUT HARASSMENT

How the mortgage industry can tackle a pervasive culture problem

COMMERCIAL KNOW-HOW

The rewards of mastering the commercial lending sector

MORTGAGE PRODUCTS Mortgage brokers name 60 of the best products lenders have to offer

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ISSUE 16.08

CONTENTS

19

SPECIAL REPORT

MORTGAGE PRODUCTS

Brokers tell CMP which Canadian lenders are providing the mortgage products that meet all of their clients’ needs

Opportunity is often simply a matter of seeing it first. With over $3 billion under administration and ready for immediate deployment, Romspen is a boutique non-bank mortgage lender specializing in commercial real estate in Canada and the US. For your financing of $10 million to $400 million we bring speed, agility, and a commitment to complex execution you will not find in larger institutions.

Blake Cassidy or Pierre Leonard | 800 494 0389 | www.romspen.com

DATE:

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ISSUE 16.08

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CONTENTS

twitter.com/CMPmagazine facebook.com/MortgageProfessionalCA

34

UPFRONT 04 Editorial

An opportunity brokers can’t afford to squander

06 Statistics

Key data that should be on your radar this month FEATURES

30

LEADERS IN ALT LENDING

Equitable Bank’s Joe Flor explains how the company is helping brokers grow their business in the alternative lending space

Alternative lending is experiencing a fresh wave of interest – so how can brokers make sure they’re not missing out?

INDUSTRY ICON

Michel Durand has lived and breathed commercial mortgages for the past two decades, making him one of Canada’s foremost experts in the space

16 2

10 Bank update

No news is good news from the Bank of Canada on interest rates How brokers can prepare for enhanced regulation on fraud

14 Opinion

38

Why consumers shouldn’t fear the variable-rate mortgage

BUILDING A BETTER BROKERAGE

A new partnership between Filogix and Surex promises to give brokers access to multiple insurance options with a single click

PEOPLE

PEOPLE

The discussion around how to eradicate harassment from the mortgage industry continues

12 Legal update

FEATURES

INSIDE THE ALTERNATIVE LENDING BOOM

08 News analysis

At MoneyBroker Canada, Christine Xu has hit upon a winning formula for connecting clients with alternative lenders

42

FEATURES 40 Meeting of the minds

PEOPLE 48 Other life

Taking flight with BDM and avian enthusiast Jenny Bartlett

FEATURES

DITCH YOUR TO-DO LIST

Why endless lists can be counterproductive to getting the most important tasks done

MPAMAG.COM/CA CHECK IT OUT ONLINE

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FIRST SOURCE FINANCIAL MANAGEMENT INC. (LICENSE # 12594) FIRST SOURCE MORTGAGE CORPORATION PRINCIPLE BROKER (LICENSE # 10434) FIRST SOURCE FINANCIAL MANAGEMENT INC. (LICENSE # 12594)

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FIRST SOURCE MORTGAGE CORPORATION PRINCIPLE BROKER (LICENSE # 10434)

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UPFRONT

EDITORIAL

www.mpamag.com/ca ISSUE 16.08

A new era of opportunity

H

as the role of the mortgage broker ever been more important? The events of the past 18 months have brought the profession’s value into sharp focus – fully 40% of consumers used a broker when purchasing a new home in 2020, according to a recent report from Mortgage Professionals Canada. And the market is showing little sign of slowing down as ‘normality’ resumes. In CMP’s discussions with members of the industry across a range of different spaces, one of the biggest takeaways has been the abundance of business for brokers to explore. On the residential side, things continue to motor along at a strong pace for brokers; recent data from the Canadian Bankers Association shows that the annual rate of growth in the number of mortgages taken out by Canadians has reached its highest level in several years. The return of immigration as a major factor impacting the housing market is set to provide a significant boost to the mortgage industry, while many brokers have also highlighted the suburban market as one to watch as downtown offices reopen.

It’s vital that brokers send out the message to prospective clients that they’re the experts to trust when it comes to securing a mortgage On the commercial front, opportunities are also abundant, most notably in the multi-unit residential and industrial asset classes. Both new builds and refinancing in those spheres have remained strong, and a recent Altus Group survey showed that investment in the national commercial market increased by 25% in the first quarter of 2021, reaching nearly $15 billion in total volume during that period. With so many opportunities available, it’s vital that brokers increase their marketing efforts, get their social media outreach up to speed and send out the message to prospective clients that they’re the experts to trust when it comes to securing a mortgage. Taking these steps now can help brokers ensure the steady surge in business witnessed during the pandemic isn’t a one-off. Instead, proactive brokers will enjoy consistent volumes and growth that will make them the envy of their peers. The team at Canadian Mortgage Professional

EDITORIAL

SALES & MARKETING

Managing Editor Paul Lucas

Publisher Chris Anderson

Editor Fergal McAlinden

National Account Manager Corey Bahadur

Writers Ephraim Vecina Mallory Hendry Chris Davies Copy Editors Clare Alexander Roslyn Meredith

CONTRIBUTORS Leah Zlatkin Aytekin Tank

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

Sales Executive Alan Stewart 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

fergal.mcalinden@keymedia.com

SUBSCRIPTION INQUIRIES

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

ADVERTISING INQUIRIES

chris.anderson@keymedia.com

Key Media Canada (Mortgage) Ltd. 317 Adelaide Street West, Suite 910 Toronto, ON M5V 1P9 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Sydney, Denver, Auckland, London, Manila

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 claire.tan@keymedia.com T +61 2 8437 4772

AUSTRALIAN BROKER

simon.kerslake@keymedia.com T +61 2 8437 4786

NZ ADVISER

alex.rumble@keymedia.com T +61 2 8437 4708

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

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 LIQUIDITY REMAINS A CRITICAL ISSUE

30%

STEADY RECOVERY FUELS APPETITE OF HOMEBUYERS Anticipating a temporary rise in inflation, a growing number of Canadians expect to buy a home in the next 12 months, according a recent report from the Bank of Canada. Consumers now expect inflation to top 3% over the next year – a sharp rise from the 2.1% inflation rate they predicted in the previous quarter. Fourteen per cent of Canadians told the BoC they were planning to purchase a house or condo, up from 11% in the first quarter, which the bank attributed to “low mortgage rates, increased savings and pandemic-induced shifts in behaviour.”

HOME PRICE GROWTH EXPECTATIONS

of Canadians surveyed by MNP in the second quarter of 2021 reported being insolvent

5.73%

6%

4.79%

4.67%

5%

4.98%

4%

5.32%

3%

45%

2%

were not confident they could cover their expenses for the next 12 months without spending on credit

1% 0%

0.03% Q1 2020

Q2 2020

Q3 2020

Q1 2021

Q2 2021

HOW BAD COULD THE ARREARS RATE HAVE BEEN?

51%

were worried about their ability to pay off their debts

Mortgage deferral programs kept mortgage arrears from reaching unprecedented highs during COVID-19, although the Bank of Canada has warned that fiscal recovery from “a deep but short-lived recession” might prove to be a significant challenge for Canadian households.

ARREARS RATE WITH PAYMENT DEFERRALS

32%

of homeowners surveyed described themselves as ‘house poor’ Source: MNP Consumer Debt Index

6

Q4 2020

ARREARS RATE WITHOUT PAYMENT DEFERRALS

1.50%

1.50%

1.25%

1.25%

1.00%

1.00%

0.75%

0.75%

0.50%

0.50%

0.25%

0.25%

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Source: Bank of Canada

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LACK OF SAVINGS A MAJOR RISK AREA

SHORT-TERM (ONE-YEAR) INFLATION EXPECTATIONS

Many Canadians are spending a hefty chunk of their income on homeownership, which leaves them without savings to cover unexpected expenses, according to a new survey from RATESDOTCA and BNN Bloomberg. Nearly a third of homeowners said they would have to borrow money to cover an emergency expense.

3.5%

3.07% 2.86%

2.75%

3.0%

2.49%

31%

2.22%

2.5%

of owners would have to borrow to cover emergency housing costs

2.0%

4%

2.1% 1.5%

of owners said they would be forced to sell if mortgage rates rose uncontrollably

1.0%

4%

of households are spending more than two-thirds of their income on their home’s carrying costs

0.5%

13% 0%

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

are allocating more than half of their income toward carrying costs

Q2 2021 Source: Bank of Canada

Source: RATESDOTCA, BNN Bloomberg

RATE HIKES A THREAT TO FIXED-MORTGAGE RENEWALS

SECOND-HOME OWNERSHIP ON THE RISE

According to TD Economics, the likelihood of mortgage interest rates rising within the next few quarters, combined with consumers taking on more credit than anticipated once the pandemic eases, could push household debt-servicing costs to worrying levels.

A growing share of homeowners in Canada’s largest urban centres own more than one property, according to a recent Royal LePage survey – and a significant portion report using the equity from their primary residence to finance the purchase.

HOMEOWNERS WHO OWN AT LEAST TWO HOMES

RISK OF RISING RATES IMPACTING FIXED MORTGAGES ON RENEWAL Share of fixed-term mortgages coming up for renewal

Share of fixed-term mortgages at risk of higher interest rates

2021

3.3%

18.3%

2022

12.3%

17.8%

2023

16.6%

19.9% Sources: TD Economics, Bank of Canada

USED EQUITY FROM PRIMARY RESIDENCE TO PURCHASE

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

Canada

Montreal

Toronto Vancouver

0%

Montreal Toronto Vancouver Source: Royal LePage

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UPFRONT

NEWS ANALYSIS

Harassment in the mortgage industry As a conversation takes hold about an industry environment that some have described as hostile and aggressive towards women, what steps are needed to create real change?

THE DEBATE about bullying and misconduct in the mortgage industry was already well underway when multiple women contacted CMP to report their experiences of sexual harassment by fellow industry members. In those accounts, the women detailed a series of inappropriate and aggressive incidents – from unwanted advances to groping and being sent lewd material over social media – that had taken place during

suggestive comments were a common theme of many accounts. Each of the women chose to remain anonymous because of the risk that coming forward could pose to their careers in the industry. Those accounts followed CMP’s publication of an open letter, anonymously written by a member of the industry, that described multiple examples of harassment and sexual misconduct they had been subjected to

“The nature of the industry has always been overly flirty and handsy – even where alcohol is not involved” Laura Martin, Matrix Mortgage Global their time in the industry, both in the office and at events and conferences. One woman said she had been groped between 15 and 20 times during her work as a BDM. Another said she had been sent a link to a pornographic video by another industry member, despite asking the sender not to do so. A third said she had been kissed without permission. Derogatory and

8

during their time as a mortgage professional. The conversation about acceptable standards of conduct in the mortgage industry has been a prominent one in recent months, prompting two of the largest broker associations to quickly release statements condemning examples of harassment and bullying. The Canadian Mortgage Brokers Association (CMBA) said it planned to

reassess its code of conduct and ethics statements to address the matter, adding that addressing harassment, bullying and discrimination was a top priority for the organization. “The mortgage industry should be one in which we pride ourselves on our diversity, individual talent and skill that enables our members and the broader community to house and maintain the livelihood of their clients,” CMBA’s statement read. Paul Taylor, president and CEO of Mortgage Professionals Canada (MPC), likewise emphasized his organization’s zero-tolerance policy towards harassment and bullying, describing its commitment to “providing a safe environment for our staff, board, volunteers and everyone in the industry.” Much attention has been focused on industry events and conferences. Many of the women who spoke to CMP described a culture of unprofessional behaviour and excessive alcohol consumption that pervaded those occasions. One said that “any time there was

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FINDING A SOLUTION Industry members made several suggestions to CMP on the question of how to eradicate the problem of bullying and harassment in the mortgage space. An ongoing conversation

Mandatory training and education

Structures to safely report instances of harassment

A zero-tolerance policy for harassment across the industry

Greater focus on unprofessional behaviour at events

drinking involved” at an industry event, she had been sexually harassed, resulting in her unwillingness to attend such events in the future – even if it negatively impacted her career. Others emphasized that a conversation around misconduct at industry events

kiss or a bear hug? I’m going to say it’s not.” Veronica Love, national senior vicepresident of corporate development at TMG The Mortgage Group, agrees that bullying and harassment is a “big stain” on the mortgage industry, but she believes it’s not an

“All of a sudden, I’m seeing lenders and brokerages making public statements. I’m hearing of training that’s being done” Veronica Love, TMG The Mortgage Group shouldn’t distract from the fact that such behaviour was not confined to that arena. “I’ve been in the mortgage industry for 14 years, and the nature of it has always been overly flirty and handsy – even where alcohol is not involved,” says Laura Martin, chief operating officer at Matrix Mortgage Global. “Is it really necessary for someone who’s a very loose acquaintance to greet me with a

irreparable problem – and she’s been heartened by the response to the revelations. “All of a sudden, I’m seeing lenders and brokerages making public statements,” she says. “I’m hearing of training that’s being done with BDMs and management teams, and managers are saying to their people, ‘This is a safe place to work, and we want to make it safer.’ ”

Love believes continuing training and education are required throughout the industry to combat the culture many women have described at events and elsewhere. “I encourage all leaders to find ways to make their company events and workplaces safer for both men and women,” she says. Christine Buemann, a broker at The Collective Mortgage Group, believes a frank and honest discussion about harassment and bullying is required to eradicate this problem from the mortgage industry for good. “The purpose of my involvement is to open the conversation so that people feel comfortable setting their own boundaries and respecting those of others,” she says. “It’s about challenging what we accept as normalized behaviour. This industry feels like a roller coaster at the best of times, and it’s easy to listen defensively and react emotionally. I believe the strongest choice we can make in these moments is to choose to be calm and kind.”

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UPFRONT

BANK UPDATE NEWS BRIEFS Annual rise in mortgage numbers highest in 10 years

The annual rate of growth in the number of mortgages taken out by Canadians has reached its highest level in several years, according to the Canadian Bankers Association. Institutions associated with the CBA accounted for just over 4.9 million mortgages in April. This represented a 0.5% monthly increase and a 2.5% annual upswing. The year-over-year increase was the highest it has been in more than half a decade, according to real estate portal Better Dwelling. Outstanding mortgages posted an annual growth rate of 7.8% in April, the highest since 2010.

BoC’s Macklem assuages inflation worries

Bank of Canada Governor Tiff Macklem has assured Canadians that the central bank will act to curb inflation if current price pressures remain and begin to appear more permanent. Macklem said the central bank was expecting elevated prices to be a temporary state of affairs that would herald the return of the inflation rate to the bank’s longstanding 2% target. “As we reopen the economy, there are some imbalances,” he said. “Supply doesn’t respond at exactly the same pace as demand, and so you get some sharp price movements.”

RBC warns housing affordability is worsening

Canadian housing affordability has reached its lowest level in more than three decades due to accelerated demand, according to RBC Economics. The bank reported that homeownership costs as a share of median household

income spiked to 52% in the first quarter of 2021 – the highest level since 1990. For those in single-family homes, that figure reached 56.8%. RBC senior economist Robert Hogue noted that intense upward pressure on home prices would raise the ownership bar even higher for buyers in most markets.

Millennials prefer to get their mortgages from banks

More than half of millennial first-time homebuyers told mortgage insurer Sagen MI that they preferred to work with mortgage specialists at a bank. In its recent study of Canadians aged 25 to 40, Sagen MI found that 62% of buyers and 59% of prospective buyers preferred to work with mortgage professionals at a bank or credit union. However, the study also uncovered an increase in buyers who used a different lender than their main financial institution – 55% of respondents said they used a different lender than their main bank in 2020, compared to 54% in 2019.

Fitch downgrades assessment of Canada’s banking sector

Fitch Ratings has downgraded its assessment of Canada’s banking sector, citing surging levels of household and public debt. In a statement, the ratings agency said it had downgraded the Canadian operating environment for banks from AA to AA- in light of elevated levels of private and public sector indebtedness, which it viewed as “negative for longterm credit conditions and business volumes.” The overall downgrade caused RBC’s rating to slide from AA to AA- as well; the rest of the Big Five retained their previous AA- ratings.

BoC stays the course on rates Caution remains the name of the game for the Bank of Canada on interest rates Back in April, the Bank of Canada caused quite a stir with its announcement that it could begin raising interest rates again at some point next year rather than in 2023. But since then, consistency and caution have been the main theme of each of its rate announcements. The bank’s latest announcement in July made no change to that projection – the only noteworthy news was a furthering tapering of its bond program, reducing the weekly purchase of government bonds to $2 billion. Optimism on the economic front has been tempered significantly by the persistent prevalence of COVID-19 variants across the world and the fact that the global economic recovery has been highly uneven and still largely dependent on the future of the pandemic. That means the favourable environment for variable-rate products looks set to continue until 2022. A recent analysis by TD Economics noted that the pendulum could then swing towards fixed-rate mortgage holders, who will be largely protected from the impact of those increases as variable-rate mortgage holders see their payments rise. The report noted that many Canadians have become more financially vulnerable as a result of the pandemic, thanks to the housing and mortgage market’s increased sensitivity to policy rate adjustments by the central bank. Prior to the BoC’s latest rate announcement, CIBC deputy chief economist Benjamin Tal also highlighted the sensitivity of Canadians to higher interest rates,

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calling for a measured approach to rate increases to avoid the prospect of further market volatility. “The number-one risk facing the housing market at this point is if the Bank of Canada waits and waits and waits, and then starts raising interest rates very quickly in a panic – let’s say in 2023,” Tal said. “That would be very

“The number-one risk at this point is if the Bank of Canada … starts raising interest rates very quickly” devastating for the housing market if you have a rapid-speed increase in interest rates.” The risk of inflation has been cited as a very real concern if the bank drags its heels on increasing interest rates, but Tal told CMP he was heartened by the BoC’s intention to begin raising rates in 2022, rather than the following year. “If [the bank] starts earlier, then they don’t need to panic and raise rates too quickly,” he said. “I’m very encouraged by the fact that the Bank of Canada is talking about mid-2022 as opposed to 2023.”

Q&A

Doug Kenny Associate vice-president of sales HAVENTREE BANK

Years in the industry 20+ Fast fact Outside of the office, Kenny supports diabetes and cancer research and is a member of MPC and CMBA

Responding to customers’ new expectations What’s new at Haventree Bank in 2021? At the beginning of this year, we introduced an improved Elite Loyalty Program. We know our broker partners work hard helping their clients, which is why we designed the reward program to recognize our brokers on an individual level, with points and other exclusive benefits as they level up through the tiers. Throughout the year, we have also continued to enhance our capabilities to work remotely while expanding to offer our services in more locations across Canada, helping even more Canadians than ever before with home financing solutions.

What is Haventree’s unique value proposition in the mortgage space? We maintain an empathetic approach to customer care. As a result, our clients can feel relief knowing that Haventree Bank genuinely cares and has safety nets in place with programs like our Home Warranty Program included for free for the mortgage term. They also have access to our NextJob Program, which helps borrowers defer mortgage payments while recovering from job loss.

What are some of the main mortgage trends you see coming down the line? Over the last year, the industry has seen a continued shift to digitizing the mortgage funding experience. As we turn to different digital tools to support the process, we may continue to see less face-to-face interaction while brokers continue to get to know their clients. Leveraging technology could also shorten the amount of time it takes to review and approve an application. We have a new generation of homebuyers who are very technology savvy and expect a fast, easy experience; however, they face a challenging cost barrier to attaining homeownership. Therefore, mortgage industry partners that provide products and services that address this expectation will remain competitive.

What’s the best way for brokers to build an efficient partnership with Haventree Bank? We know that helping clients is important to our broker partners. They form a connection and get to understand their clients’ situations. The best way to build an efficient partnership with us is to provide all the information we need up front to find a positive solution as quickly as possible. Tell us the client’s story in the underwriter notes and supply the proper documentation for the application. If a broker has a complicated deal and they are unsure what to include, our business development managers and underwriters are always ready to help.

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UPFRONT

LEGAL UPDATE

Is a regulatory crackdown coming? Regulators are taking a harder stance on fraud – so how can brokers ensure they’re staying in line?

noting that around 60% of all errors and omissions claims are related to private transactions. He believes more education is needed for brokers who may be unfamiliar with private mortgages to ensure they’re fully apprised of their regulatory requirements. “I think there needs to be more done [by regulators], and as an industry, around private mortgages – just making sure that brokers aren’t putting themselves, the investor or the customer in harm’s way,” Lee says. “When 60%

“Brokers should take notes, document things and undertake basic due diligence steps to avoid regulatory problems”

As financial services regulators increasingly adopt a zero-tolerance policy on mortgage fraud, a prominent broker advocate says it’s essential for mortgage professionals to ensure they’re doing the necessary due diligence in their daily work. According to industry legal expert Samantha Gale, regulators appear to be on the verge of stepping up their scrutiny with the arrival of new regulatory structures in Ontario and BC. “The problem that brokers are going to have is if they don’t comply with all of their due dili-

NEWS BRIEFS

gence requirements for processing mortgage applications, they will be scrutinized very carefully by regulators,” Gale says, adding that if fraud is uncovered on an application, “it’ll come out as some kind of failure of due diligence.” To combat this, Gale advises brokers to “take notes, document things [and] undertake some basic due diligence steps to avoid regulatory problems.” Dong Lee, DLC’s chief operating officer, pinpoints private mortgages as an area of significant regulatory concern for brokers,

Mortgage Alliance president faces fraud charges

Mortgage Alliance president Peter Aceto has been charged with offences, including fraud, in connection with allegations of unlicensed cannabis growing at CannTrust Holdings, where he formerly served as CEO. Former CannTrust chairman Eric Paul and former vice-chairman Mark Litwin have also been charged with fraud; Aceto and Litwin also face charges of making a false prospectus, while Litwin and Paul are charged with insider trading. If convicted, the men could face a five-year jail term, a fine of up to $5 million or both.

of our E&O claims are related to private mortgages, yet it only makes up maybe 10% to 15% of all transactions, I think that it’s a concern to all of us.” Meanwhile, a bill currently making its way through the Senate would reduce the criminal rate of interest in Canada from 60% to the Bank of Canada’s overnight rate plus 20%. Bill S-237, tabled by Senator Pierrette Ringuette, had its first reading on May 4 and must be approved by both houses of Parliament before being passed into law. Gale says the bill would have a “profound” impact on private lending and described it as “a bad idea all around.”

FSRA releases broker channel supervision plan

The Financial Services Regulatory Authority of Ontario (FSRA) has unveiled its new supervision plan for brokers, identifying two main areas where high conduct standards are required. Brokers working with buyers seeking private mortgages must clearly understand the options, risks and consequences of using private lenders; in addition, mortgage administrators must provide investors with timely and accurate information to ensure they make informed decisions and adapt investment strategies if needed.

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Q&A

Jonathan Hacohen

The secret to working with lawyers

Partner/lawyer KORMANS

Years in the industry 20 Fast fact When he’s not practicing law, Hacohen can usually be found at the gym, where he says “people often spot me based on my choice of footwear – I exclusively wear high-top OG Jordan 1s”

What are the main areas that Kormans covers in real estate and mortgages? Kormans looks after both residential and commercial real estate transactions. For residential real estate, we close thousands of transactions per year – new construction and resale transactions on houses and condominiums. For commercial real estate, we are involved with many types of properties, including industrial, retail and multi-unit/mixed-unit properties. We deal with many types of lenders and even have a department dedicated to privates. To close a real estate and mortgage transaction, Kormans digs deeper. We work with clients and their accountants to implement solutions.

What’s your advice on how brokers can help lawyers close deals as smoothly as possible? I have presented several times at seminars and conferences on mortgages, and this question comes up time and time again. In fact, I’ve presented just on this topic alone! The first step is teamwork. At Kormans, we work closely with mortgage brokers from start to finish. Communication and knowing when a mortgage or refinance is coming helps a lot. Also, set a realistic closing date to allow time for the law firm to receive the mortgage instructions and prepare for closing.

What are some misconceptions brokers have about lawyers’ work in the mortgage process? It’s surprising how many misconceptions there can

BC introduces single financial sector regulator

The British Columbia Financial Services Authority (BCFSA) has added real estate to its remit as of August 1, bringing BC’s financial sector under the purview of a single regulator. BCFSA, which was already responsible for regulating mortgage brokers, credit unions, pension plans and insurance and trust companies, will now oversee the education and discipline of real estate professionals. BC Finance Minister Selina Robinson said the move would help build “world-leading protections against money laundering and tax evasion.”

be on both sides of the fence. When we are busy as professionals in our own arena, we often do not understand the view from the other side. If I had to point to the top misconception brokers have about lawyers, it’s what law firms do as part of mortgages. We have many steps, from corresponding with clients, confirming property insurance, ordering title insurance, preparing closing documents and meeting with clients to signups to closing or reporting a mortgage and many more. That’s why it’s so important for the broker to make sure the law firm has enough time to get its steps completed.

What impact did the pandemic have on lawyers’ role in the mortgage process? The pandemic has created so many hardships in our society that will unfortunately be felt for years to come. However, one positive change that did emerge from this experience for the law profession was the push for virtual signings and paperless closings. Virtual signings are a reality for client appointments in the real estate and mortgage arenas. The move towards full paperless transactions and virtual signatures is also coming. The role of the real estate lawyer in mortgage transactions is needed as much as ever to close mortgage transactions safely and effectively. However, the way they close is extremely convenient for clients and brokers alike.

Mortgage fraud suspect withdraws guilty plea

Arnold Breitkreutz, the suspect in a multi-million-dollar mortgage fraud case, made a move in early July to withdraw his guilty plea. Breitkreutz said his decision was based on “the advice of several lawyers, including the lawyer who assisted me with entering this plea.” Breitkreutz, along with Susan Elizabeth Way, pleaded guilty in March in connection with activities at Base Financial, where they are alleged to have taken investments that were supposed to be secured by mortgages on residential properties but weren’t.

Toronto broker implicated in cocaine ring bust

An unnamed Toronto mortgage broker was one of the major figures in a drug ring operating in the city, according to the Ontario Provincial Police (OPP). The OPP arrested 22 individuals allegedly connected to a sprawling crime network, one ring of which was smuggling cocaine from Colombia under the pretext of importing textiles. Another affiliated group was sourcing drugs from the Caribbean and was allegedly operating several secret drug laboratories to process the cocaine into a sellable state.

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UPFRONT

OPINION

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

The case for variable rates There are many reasons why a variable-rate mortgage might be the best option for your client, writes Leah Zlatkin ON MY first call with a client, 95% will insist they want a fixed-rate mortgage. This often comes right before or after they stress that they want the lowest rate, too, and sometimes comes with a disclosure that “I want to be upfront and let you know I’ve been shopping around ...” As clients become better at doing their own research, brokers must learn to showcase our value better. Mortgages are no longer cookiecutter, and a true professional who eats, sleeps, lives and loves mortgages will view a file 50 different ways. My value starts with the variable-versus-fixed conversation and ends with the best product and rate for my client, along with a long-term strategy for our relationship together. Despite indications that the Bank of Canada’s overnight rate may rise in 2022’s fourth quarter, I’ll still advocate for variable mortgages nine times out of 10, and even have two variable mortgages of my own. In mortgages, there’s always some element of risk. The question is, do you want to see the risk upfront or get surprised by it later? A variable-rate mortgage comes with the upfront risk – your interest rate will change as the prime rate changes. Rate changes are usually announced at eight Bank of Canada meetings a year, with a typical change of 0.25%; very seldom have there been two consecutive increases, so there’s unlikely to be more than a 1% increase in a year. The surprise risk comes from the fixed rate’s IRD penalty – around 1% to 8% of your principal balance, depending on the institution. Many industry experts estimate that six

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out of 10 Canadians will break their five-year mortgage within three to four years, resulting in that penalty. Lifestyle is a good indicator of whether clients should take the risk upfront or later. I ask probing questions to understand clients’ circumstances. Red flags for fixed mortgages include the likelihood of the following within five years: children starting JK, G1, G8 or university; milestones like marriage, having kids and divorce; or older parents moving back home.

historical evidence suggests seven increases would be highly unlikely. Based on the amount of debt Canadians have incurred over the past 12 months, interest rates above 4% (which we haven’t seen for nearly 15 years) would also be highly unlikely, going by the latest Bank of Canada announcement. Even for the most change-averse client, if red flags crop up, I still recommend variable. A good coping strategy for rate-related anxiety is to recommend a variable product where the payment amount remains the same for the duration of the term, but the amortization changes if the rate increases. The payment is constant, but the amount of principal and interest within that amount fluctuates. Another strategy is to overpay the variablerate payment to match what you would have paid with a fixed product. Using the earlier example, that means paying $2,616 monthly into your 1.3% variable product instead of $2,348 – effectively, $268 more into principal each payment. If the BoC rate increases, you won’t notice it, as you’re already overpaying compared to that hike. You’ve effectively paid much more into principal, so the interest payments

“Despite indications that the Bank of Canada’s overnight rate may rise in 2022’s fourth quarter, I’ll still advocate for variable mortgages nine times out of 10” Let’s take two examples, using today’s fiveyear bank rates on a $700,000 mortgage. The first is a 1.30% variable rate with a $2,348 monthly payment, a total of $98,616 in principal payments at end of term and a $2,300 penalty to break. The second is a 2.09% fixed rate with a $2,616 monthly payment, a total of $88,563 in principal payment at end of term and a penalty of $6,400 to $56,000 to break. Assuming rate increases are equally spread out over the next five years, you would need seven increases for the total amount of interest paid on the variable mortgage to exceed the interest paid on a fixed mortgage. From 2010 to 2020, there were a total of eight rate increases and two decreases, so the

have decreased to the point that you’ll have outpaced your original fixed mortgage, even with an increase. Using the same example of a $700,000 mortgage where everything else remained constant, if you paid $2,616 monthly toward your variable-rate mortgage, you would have paid down the principal by at least $26,656 more than with a fixed mortgage. Their flexibility and versatility make variable-rate products an excellent option for your clients. Leah Zlatkin is the co-founder and principal broker at Brite Mortgage and a mortgage expert at lowestrates.ca.

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PEOPLE

INDUSTRY ICON

A COMMERCIAL MINDSET Michel Durand, founder and CEO of MCommercial, reflects on a career that’s helped him become one of the commercial mortgage sector’s leading lights

FOR MICHEL DURAND, commercial mortgage brokering isn’t just something you can dip your toes into. It’s a full-time commitment – a pursuit that requires the utmost dedication, devotion and professionalism in order to find success. Durand’s belief has been honed through his own experience; the industry veteran has been specializing in commercial mortgages ever since he entered the broker channel following a stint in banking as a commercial account manager. “From the very beginning, my first job was on the commercial side,” Durand says. “I felt really comfortable in that space and grew in it. I think it was definitely an advantage to stay there – it allowed me to master the asset classes in that area quicker. I don’t have 17 products that I’m trying to sell; it’s just one. So it allowed me to really focus, and I’ve found that people who focus, master their craft and work hard become successful.” It’s certainly proven a winning formula for Durand. After becoming a commercial broker in 2000, he went on to form the company now known as MCommercial, helming an organization with a specialty in negotiating and securing commercial mort-

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gages specific to various asset classes. His prior decade of experience in banking has served as an invaluable asset to Durand in his mortgage career, allowing him to see how lenders operate in the commercial sphere and helping open his eyes to the vitality of brokers. “I understood what could be done as a broker to continue supporting borrowers’ needs,” he says. “I supersized my toolkit to

depending on which province the transaction is in. For me, becoming a broker was just taking the next step from my banking career to perform better and offer more complete solutions to borrowers.”

Managing growth Headquartered in Durand’s hometown of Montreal, MCommercial also boasts a significant presence in Toronto and Vancouver.

“I don’t have 17 products that I’m trying to sell; it’s just one. So it allowed me to really focus, and I’ve found that people who focus, master their craft and work hard become successful” help borrowers. Instead of being limited to the policies and politics of one lender, I could now take a borrower’s needs and place it with whichever lender was motivated by those particular dynamics at that point in time. Lenders have different appetites for different asset classes, and their appetite changes

Its growth has been sizeable but managed; Durand quickly realized that a flourishing commercial brokerage isn’t defined by the number of agents at its disposal but rather by the expertise of each mortgage professional on an individual asset class. “I limited the brokers to those who really

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PROFILE Name: Michel Durand Title: Founder and CEO Company: MCommercial Based in: Montreal Years in the industry: 20+ Fun fact: A travel enthusiast, Durand already has four trips abroad lined up for next year

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PEOPLE

INDUSTRY ICON

took their craft seriously on specific asset classes that they mastered, instead of trying to be a jack of all trades on the commercial side,” he says. “We ended up significantly reducing the number of our agents but increasing volume and revenues. What I found to be a successful model for us was not adding a bunch of brokers or agents but rather making sure those agents know their craft well and, just as importantly, are supported by an awesome group that underwrites and supports all their administrative needs.” Durand quickly realized that on the commercial side, where 70% of an agent’s efforts are often spent putting a deal together,

space as something of a vocation: an area that can offer huge reward, but one that also requires a significant degree of dedication and sacrifice – particularly in the first couple of years, when profits can be hard to come by. For brokers hoping to get involved in the space, Durand says, there’s nothing more valuable than the influence and guidance of a mentor. He also advises not branching out into too many asset classes, as that approach can leave brokers overstretched and overwhelmed. “You need to be able to identify what’s going to work and what won’t,” he says, “and the only way to do that is to do it on the job

“You need to be able to identify what’s going to work and what won’t, and the only way to do that is to do it on the job” it was essential to provide top-class support, freeing up time for agents to focus on meeting clients, closing deals and targeting their market better. “Once you’re comfortable in your space, you quickly learn as a commercial agent that you have choices,” he explains. “You can work on ten $1 million deals or one $10 million deal. The revenues are going to be quite similar, but the workload is different. Once we started putting all the right tools in place, not only did we need fewer agents to grow the volume but it also allowed everyone to target the market better, and we continued to grow the volume by doing fewer transactions.”

Effort and reward The level of expertise and specialization in specific asset classes that’s required is part of the reason that Durand believes commercial brokering shouldn’t be combined with commitments in other sectors. Rather, he says, brokers should treat the commercial

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and have a mentor who shows you what to spend your time on and what to focus on.” Success in the commercial space also requires brokers to understand lenders’ appetite for specific deals and how it can change over time. Durand says his success has been developed through an innate appreciation of that phenomenon – and the reputation he and his company have carved out as professionals who will approach each deal methodically and meticulously to get the best outcome for lender, broker and borrower. “Over the years, we’ve been fortunate enough to earn a solid reputation with all the financial partners that we use, whether credit unions, insurance companies, conventional banks, pension funds or other lenders,” he says. “When lenders see our deals on their desk, they’ll have a tendency to grab that one first because they know it’ll be well prepared. We’ve earned a reputation where we’re considered good collaborators with them.”

MCOMMERCIAL AT A GLANCE

HEADQUARTERS Montreal

MAIN HUBS Montreal, Toronto, Vancouver

SPECIALIZATION Commercial projects from $1 million to $500 million

ACCESSIBLE LENDERS 100+

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SPECIAL REPORT

2021

MORTGAGE PRODUCTS CMP turned to brokers to find out which Canadian mortgage products are best in class

CONTENTS

PAGE

Feature article .............................................. 20 Methodology ................................................ 21 5-Star Award winners .................................. 24 Profiles .......................................................... 26 www.mpamag.com/ca

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: MORTGAGE PRODUCTS

THE COMPLETE PACKAGE “When brokers think beyond the mortgage and find low-cost flexibility for all the client’s debt, they are reducing financial stress and building long-term client loyalty, as well as referrals”

FOR LENDERS and brokers alike, there are few more critical aspects of the industry than the mortgage products themselves. They’re a defining factor in how mortgage professionals successfully present themselves to borrowers, and as mortgage seekers ponder their financing options, a range of considerations come into play, including quality of customer service, turnaround time and variety. In an effort to identify the lenders whose products best match the needs of brokers and their customers, CMP conducted a

Mario Cloutier, Manulife Bank

WHAT’S MOST IMPORTANT TO BROKERS AND THEIR CLIENTS WHEN CHOOSING A MORTGAGE PRODUCT? Processing and approval speed 80% Customer service 73% Rates 42% Fees 31% Online banking capabilities 27%

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wide-ranging survey, asking brokers for their opinions on some of the lenders and products they had used over the course of the previous year. To learn more about the key considerations for brokers and borrowers when evaluating mortgage products, CMP also asked brokers to rank their priorities when seeking out a product for their clients. So far in 2021, the mortgage market has largely maintained the same frenetic pace that it set in 2020, with frenzied bidding wars the norm in many markets and house prices rising in Canada’s hottest areas at a seemingly unstoppable rate. Even as things began to moderate in June, statistics from the Canadian Real Estate Association showed that actual housing market activity was up 13.6% year-over-year in that month, while the national average sale price posted a 25.9% year-over-year increase. It’s hardly surprising, then, that turnaround time came in at the top of brokers’

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list of priorities when selecting the best product for their clients. The ability to swiftly process and close deals has served as an indispensable asset for lenders in the current madcap mortgage market. When asked to rank their most important consideration when choosing a lender, brokers named processing and approval speed as a clear first choice, followed by customer service; rates came in a distant third. Eighty per cent of brokers said processing and approval speed was very important when choosing a lender, compared to 73% for customer service and just 42% for rates. Thirty-one per cent of brokers said fees were a very important consideration, while 27% said online banking capabilities were critical.

It’s not just about rates It would be a mistake, then, to assume that the lowest rate automatically represents the best option for clients. Andrew MacKillop, vice-president of business development at B2B Bank, notes that it’s essential to recognize the factors most relevant to clients’ needs, and avoid a one-size-fits-all approach. “While interest rates are a very important consideration in financing a home, there are several other things that top brokers consider based on their individual clients’ needs,” he says. “These include choosing a fixed or variable mortgage, lender fees, features and benefits of a product, such as prepayment flexibility and portability, and the ability to get the deal done, especially if there are unique client circumstances to consider.” Mario Cloutier, head of broker sales at Manulife Bank, adds that while many Canadians are swayed by the fact that lower rates mean lower payments, brokers can provide greater value to their clients by finding out what’s truly important to them in a mortgage. “With the rising cost of homes, it may be payment flexibility,” he says. “It could be

a desire to be debt-free as soon as possible, or a client may want to always be able to access their home equity tax-free to pursue other opportunities. “Brokers can have a huge impact on their recommendation when all factors are considered. It’s not always the interest rate – it’s the interest you pay.” When asked to elaborate on the most important thing they look for when selecting a mortgage for their clients, some brokers mentioned interest rates, although one of the most common factors was flexibility in the conditions offered. MacKillop notes that flexibility and “providing a variety of product types to meet specific clients’ needs consistently” are key considerations for mortgage brokers, and any lender that offers a range of different options has the potential to keep brokers coming back for more. “From insured to conventional and alt-A with reliable funding and an evolving product suite, a lender that can be a one-stop shop for brokers and their clients can be very beneficial,” he says. Cloutier said flexibility was “one of the most important factors” in reducing financial stress, particularly in unexpected cases like a client losing their job, a family member getting sick, or where there might be significant financial loss. “When brokers think beyond the mortgage and find low-cost flexibility for all the client’s debt, they are reducing financial stress and building long-term client loyalty as well as referrals. The lender should have both flexibility and a variety of products to serve both the broker and the clients.”

METHODOLOGY To determine Canada’s best mortgage products, CMP conducted an online survey, asking brokers about their preferences and priorities when recommending a mortgage to their clients. The survey was open to brokers across Canada, who were asked to provide product recommendations in a range of different areas, including fixed- and variable-rate products, commercial and refinancing. For each lender they nominated, brokers were asked to rate the offerings they provided on a scale of 1 (poor) to 5 (excellent). They also identified the most important factors they and their clients consider when choosing a mortgage product, as well as their most significant area of growth this year. Products and companies that received a score of at least 4.00 in each category were named 5-Star Award winners.

300+ Total nominations received from brokers

1% Brokers who said rates are not important when choosing a mortgage product

A trusted lending source

22%

Survey respondents also emphasized that confidence in the lender is a significant priority for their clients, along with low penalties, transparency regarding fees and penalty calculations, and strong service. Cloutier says the client experience should

Brokers who said online banking options are not important when choosing a mortgage product

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: MORTGAGE PRODUCTS

BROKERS’ TOP AREAS OF GROWTH

Alternative lending

Refinancing

High-net-worth programs

Remote lending

“[Brokers] tell us loudly and clearly that good service is table stakes for a lender to be part of their consideration set. Speed, ease and reliability are often mentioned as key elements of broker choice” Andrew MacKillop, B2B Bank

Insured switches

Multi-residential insured mortgages

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Rental properties

Semi-retirees

be “a fundamental part” of a mortgage broker’s decision to recommend a product and lender, going beyond the service provided during the underwriting stage. “When brokers are able to provide multiple options with a full suite of products with the same lender, it’s a great starting point for a valued experience,” he says. “As fintechs and online mortgage providers become more prevalent in Canada, the customer service the broker can provide through a quality, brand-named lender becomes increasingly important.” MacKillop adds that the focus on service is telling. “[Brokers] tell us loudly and clearly that good service is table stakes for a lender to be part of their consideration set,” he says. “Speed, ease and reliability are

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often mentioned as key elements of broker choice. Having the right product that aligns with the client’s situation must be part of the solution.”

Areas of growth CMP also asked brokers to identify the biggest growth areas they had witnessed in their mortgage business between this year and last. The rise of alternative income and lending since the beginning of the COVID-19 pandemic was identified as a

strong growth area for many brokers, while insured switches, refinancing, high-networth programs and rental properties all featured heavily as well. Other significant areas of growth included the multi-residential insured market and remote lending, as well as semi-retirees getting their credit house in order before retirement. MacKillop says that ultimately, brokers have proven their mettle in using their skills and experience to deliver the best

mortgage solutions to fit their clients’ individual needs. “The great thing about mortgage brokers is that they are experts in their field and understand clients’ needs, expectations and goals,” he says. “Many leading brokers tell us that truly understanding, assessing and delivering on their individual clients’ circumstances paves the way for a positive experience, building a strong and sustainable growth business.”

ai16275730659_FN_ResidentialBroker_2021_CMP_Half_July_2021.pdf 1 7/29/2021 11:37:46 AM

We can’t thank you enough for this recognition! C

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Over 30 years ago, First National started as a small company with a clear vision and an unyielding commitment to brokers – to be our best for you so you can be your best for your clients. Today, we’re bigger in size and scope, but still dedicated to that same vision and still unwavering in that commitment.

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CM

MY

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

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CMY

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In this year’s CMP Magazine’s 5-Star Mortgage Products survey, First National was recognized for our fixed rate, variable rate, first-time homebuyer, commercial and Excalibur products. Your respect, appreciation and acknowledgment reaffirms what we’ve invested in since 1988 and inspires us to continue to be our best in the next 30+ years and beyond. firstnational.ca

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: MORTGAGE PRODUCTS

MORTGAGE 2021 PRODUCTS LENDERS B2B Bank

B2B Bank

Phone: 800-263-8349 Email: questions@b2bbank.com Website: b2bbank.com

CMLS

Canadian Mortgages Inc.

HSBC

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

Lendwise

HomeEquity Bank Phone: 866-522-2447 Email: marketingrequests@heb.ca Website: chipadvisor.ca Manulife Bank Phone: 844-239-4677 Email: brokersales@manulife.ca Website: manulife.ca XMC Mortgage Corporation Phone: 416-364-7944 Email: hello@xmcmortgage.com Website: xmcmortgage.com CIBC CMLS Financial CWB Optimum Mortgage Desjardins Equitable Bank First National FirstOntario Credit Union Haventree Bank Home Trust HSBC ICICI Bank Canada MCAP Meridian Credit Union MERIX Financial/Lendwise/NPX Radius Financial RBC RMG Mortgages Scotiabank TD Canada Trust

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FIXED-RATE MORTGAGES

First National

Manulife Bank MCAP Scotiabank TD Canada Trust

VARIABLE-RATE MORTGAGES B2B Bank Desjardins First National HSBC Manulife Bank MCAP Scotiabank TD Canada Trust

FIRST-TIME BUYERS Canadian Mortgages Inc. Home Trust First National Manulife Bank MCAP Meridian Credit Union MERIX Financial RMG Mortgages

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REVERSE MORTGAGES Equitable Bank Reverse Mortgage omeEquity Bank H CHIP Reverse Mortgage anulife Bank M Manulife One

REFINANCES CIBC Home Power Mortgage esjardins D Versatile Line of Credit SBC H 5-Year Fixed Manulife Bank Manulife One ERIX Financial M Adjustable Rate Mortgage D Canada Trust T Home Equity FlexLine

INVESTORS B2B Bank Net Worth Program CMLS Financial CMLS – Connect Mortgage Desjardins

COMMERCIAL MORTGAGES CMLS Financial Conventional Term Desjardins Multi-Project Option First National Conventional Fixed-Rate Mortgage FirstOntario Credit Union 5-Year Closed Term Manulife Bank Manulife One MCAP Conventional Commercial Financing Solution Meridian Credit Union Commercial Owner-Occupied Lending (COOL) RBC Commercial Mortgage

ALTERNATIVE MORTGAGES B2B Bank Alternative Suite of Mortgage Programs CWB Optimum Mortgage HOMEWORKS Equitable Bank The EQB Evolution Suite First National Excalibur Haventree Bank NextJob Program Home Trust 1- to 5-Year Fixed Rate ICICI Bank Canada 1- to 5-Year Fixed Rate

Manulife Bank Manulife One

NPX TEND Mortgage, XTEND+ Mortgage, EXACT Mortgage, X AXIS Mortgage, XTREME Mortgage

Scotiabank Scotia Total Equity Plan (STEP)

XMC Mortgage Corporation Uninsured Mortgage Options

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: MORTGAGE PRODUCTS

HOMEEQUITY BANK Phone: 866-522-2447 Email: marketingrequests@heb.ca Website: chipadvisor.ca

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hen it comes to mortgage products, Vivianne Gauci, HomeEquity Bank’s senior vice-president for marketing and contact centre, describes the company’s value of “customer obsession” as its utmost priority. The reverse mortgage giant, whose products cater to the needs of the 55-plus homeowner demographic, is fully focused on helping improve the quality of its customers’ lives, making the key considerations of financial independence and the ability to age in place top of mind. “Those customers have unique needs,” Gauci explains. “Some have limited income or investments they would rather not dip into that trigger tax implications. Aging in place, in particular, is very important for Canadian homeowners over the age of 55. They also want and need flexibility, and that’s why we design and provide a suite of products to satisfy that requirement.” The company’s experience in reverse mortgages, and its 35-year track record in lending to Canadians over 55, ensure that it’s uniquely

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positioned to supply specialized, focused solutions to that demographic. “Because of this expertise, we are fast and efficient,” Gauci says, “and our solutions-driven culture and technical know-how allow us to go deep on issues and solve almost any problem we may encounter through the mortgage process.” A prime example of that flexible approach is the company’s Income Advantage product, part of its highly popular CHIP Reverse Mortgage. It offers a customizable solution that allows customers to access up to 55% of the value of their home and receive the funds in the amount they desire – either as monthly or quarterly instalments, in addition to an initial lump-sum deposit to their bank account. HomeEquity’s customer-obsessed ethos is also reflected in its relationship with its partners. “This means strong collaboration to ensure we provide a best-in-class set of product options for their customers who are in a very unique stage of life,” Gauci says.

She adds that reverse mortgages represent an excellent solution for mortgage professionals dealing with the 55-plus demographic, whether for purchases, to avoid costly capital gains taxes, for bridge financing, or even as an annuity. “Make sure you reach out to your BDM if you have a client that is 55 or over,” she says. “You’d be surprised at the kinds of solutions we have.” HomeEquity can even say that it’s written the book on reverse mortgages. Brokers can request a copy of Home Run: The Reverse Mortgage Advantage, authored by CEO Steven Ranson and EVP Yvonne Ziomecki, by contacting their BDM. HOMEEQUITY BANK AT A GLANCE

1986

Year founded

250+

Number of employees

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MANULIFE BANK Phone: 844-239-4677 Email: brokersales@manulife.ca Website: manulife.ca

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iona Campbell, a mortgage broker and industry pioneer currently in her fifth year as national director of mortgage brokers at Manulife Bank, embodies Manulife’s philosophy of “decisions made easier, lives made better.” Part of a growing team dedicated to transforming the bank into a top-tier lender, Campbell is committed to helping brokers provide their clients with unique solutions. “In a complex world, we help people make clearer, easier decisions so they can live better,” Campbell says. “In this age of uncertainty, flexible repayment terms that can handle unforeseen financial surprises are now just as important as a great rate.” Campbell also identifies and certifies brokers who will carry Manulife Bank’s full product suite. “Manulife Bank works with mortgage brokers to expand conversations about homeownership affordability,” she says, adding that a sound education strategy is key to achieving this. The lender has implemented several measures in line with this strategy, including creating a dedicated broker channel for its business development efforts and enlisting personal coaches to provide advice to new brokers. It also recently launched the insurable Manulife Bank Select conventional program, a flexible mortgage with a choice of low fixed- or variable-rate terms, generous prepayment options and an optional high-interest chequing account.

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

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hat matters most to me is people,” says Bryan Jaskolka, founder and CEO of private lender Canadian Mortgages Inc. (CMI). “Whether it’s with employees, partners, clients or the community at large, business is about fostering relationships built on transparency, fairness and integrity. These values are woven into everything we do.” Since 2005, CMI has provided mortgage solutions for every type of borrower and is recognized for treating customers and broker partners with “utmost care and respect,” Jaskolka says. To date, CMI has funded more than $800 million in private mortgages across Canada and is among the country’s fastest-growing alternative lenders. Jaskolka credits CMI’s team of dedicated professionals for the company’s success. “Innovation fuelled the origin and growth of CMI, but our strength – and the key to our success – is our people,” he says. The team’s client-focused approach allows the lender to provide “exactly the right solution for their clients’ unique needs,” Jasolka adds. “That ability to be flexible and to customize solutions is not only what sets private lenders apart from traditional lenders but also what sets the best private lenders apart from the rest of the pack.”

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: MORTGAGE PRODUCTS

XMC MORTGAGE CORPORATION Phone: 416-364-7944 Email: hello@xmcmortgage.com Website: xmcmortgage.com

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lients are always top of mind for XMC Mortgage Corporation in its approach to designing mortgage products; in fact, the customer experience is “at the forefront” of every decision the company makes, says Avish Buck, vice-president of residential lending. That dedication to the customer, Buck says, is part of XMC’s DNA: an ethos that drives the company’s short- and long-term strategies and its commitment to going above and beyond to provide outstanding service. “Service is important to every lender; we take it a bit further,” Buck says. “Providing stellar service consistently is what XMC strives for and is something we are constantly looking to improve – it’s our North Star.” XMC is a wholly owned subsidiary of MCAN Mortgage Corporation, which has a lengthy track record that gives it an invaluable edge in the Canadian mortgage industry. Buck says that experience has allowed XMC to keep abreast of market developments and trends that directly inform product design and future growth.

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“We’ve been doing this for a long time, so we benefit from data and insights from almost 30 years of lending and investing across Canada,” he says. “The last 18 months have accelerated trends that directly impact Canadians’ housing needs and preferences: work from home, entrepreneurship and digitization, to name a few.” The company’s approach to mortgages is also strongly influenced by its relationship with its partners, which Buck says is a key focus for MCAN’s leadership and board. This means XMC never loses sight of its focus on its stakeholders. XMC fosters what Buck describes as a “relentless commitment” to creating a spectacular experience, continuously improving and streamlining its mortgage approval process for brokers and their customers. That dedication flows through all parts of the business. “If we are successful, our partners will be successful,” Buck says. “Our residential team is well known for their get-it-done dedication to our partners in the broker network and their clients. That matters. Ours is a model of part-

nership built on trust and mutual success. We’re committed to building better mortgage solutions that make sense and make life simple. Affordability is a significant issue in the housing industry – we’re focused on affordable housing and mortgages for unique situations.” Buck believes each of those factors makes XMC “the best lender partner for mortgage brokers and the best mortgage provider” for Canadians seeking a trusted alternative to traditional banking institutions. “We are obsessed with building a better experience for our clients,” he says. XMC MORTGAGE CORPORATION AT A GLANCE

2013

Year acquired by MCAN

124

Number of employees

1

Number of offices

www.mpamag.com/ca

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FEATURES

SECTOR FOCUS: ALTERNATIVE LENDING

Inside the alternative lending boom CMP spoke to two leaders in the alt lending space to find out more about the sector’s transformation – and why mortgage brokers need to get involved 30

AS DEMAND for housing went through the roof in Canada during the pandemic and national home sales continued to shatter records throughout 2020 and during the first half of 2021, it was perhaps inevitable that more Canadians would start turning to alternative financing. The inability of many borrowers to qualify for a traditional bank mortgage, coupled with a red-hot market that required rapid turnaround times, made alternative lenders an increasingly attractive option for prospective buyers. Mike Forshee, executive vice-president of underwriting at Home Trust Company, has seen the alternative marketplace expand significantly as a result of the pandemic. COVID-19 brought a range of disruptions

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move forward and pull out of the pandemic,” he says. “I think it’s just changed the whole marketplace and the whole economy, which has expanded the need for the alternative lending space.” Steven Lang, national sales manager at VWR Capital Corp., which specializes in alternative residential mortgage financing, believes Canadians’ eyes have been opened to the benefits that alternative lending can bring, and many brokers are also beginning to realize the value in exploring the alternative side. “I can’t tell you how many times I’ve talked to brokers who weren’t aware of this option – the opportunity to grow their

lot of no-subject bids, and that’s where we came in.”

What brokers need to know The alternative space is one that’s ripe for broker involvement, although Lang noted that despite the rapid turnaround times that can often be offered by non-traditional lenders, it shouldn’t be taken for granted that a deal will get approved immediately. “We’re trying our best to get the word out about closing and the need to get conditions in as soon as possible, because the property is the most important [thing] for us,” he says. “Yes, we can fund quickly, but we still do need to make sure we get the conditions in.

“When you look at broker-based lenders and mortgage brokers in general, I think people have been seeking advice, and that need for advice is only going to intensify as we move forward” Mike Forshee, Home Trust Company – from Canadians losing jobs to becoming newly self-employed – that allowed alternative lenders to step in and provide solutions where traditional lenders couldn’t. “We’re seeing it in the daily intake in applications, not to mention job disruption, which led to overleveraged or bruised credit,” he says. “It doesn’t mean that these people have a bad credit risk – they just need a chance to get back on their feet.” The rise of alternative lending isn’t likely to be slowed by Canada’s emergence from the pandemic, according to Forshee. “When you look at broker-based lenders and mortgage brokers in general, I think people have been seeking advice, and that need for advice is only going to intensify as we

business and not just turn somebody away but actually help them,” he says. That awakening has been driven in part by the pace of real estate and mortgage market activity across the country. Borrowers are often required to secure a loan as quickly as possible after a bid has been accepted, and many traditional lenders are unable to approve mortgages in the tight time frame required. “There was this explosion in the market and a need to get on a property as quickly as possible because they were selling very quickly a few months into the pandemic,” Lang says. “The time to close at banks and credit unions became longer and longer, and if you didn’t fit within a certain box, you would have trouble closing. There were a

We still do have some requirements, and it’s an adjustment for the brokers to understand our process. In many markets, the appraisal – the valuation of the property – is one of the most important documents. If we don’t have that, that can create some unrest for brokers’ clients as well.” Forshee advises brokers to think of borrowers in the alternative space as clients who need mortgage financing but don’t meet specific criteria. He praises the broker channel’s performance with alternative lenders throughout the pandemic, noting that they helped steer clients through troubled waters and contributed to a smooth experience for lenders and borrowers alike. “What we found through the pandemic

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FEATURES

SECTOR FOCUS: ALTERNATIVE LENDING

NON-BANK MORTGAGES BY THE NUMBERS

$337.5 billion

Total value of outstanding residential mortgages held by non-bank lenders in the fourth quarter of 2020

$196,261

Average value of outstanding non-bank mortgages in the fourth quarter

40.7%

Increase in the number of residential mortgage loans extended by non-bank lenders between the second and third quarters of 2020

17.2%

Growth in the total value of residential mortgage loans extended by non-banks between the second and third quarters Source: Statistics Canada

“I can’t tell you how many times I’ve talked to brokers who weren’t aware of [the alternative lending] option – the opportunity to grow their business and not just turn somebody away but actually help them” Steven Lang, VWR Capital Corp is that not only were the clients seeking the mortgage brokers’ advice, but in return, the mortgage broker was translating that client’s situation better to us in application submissions,” he says. “It actually took some pressure off the underwriting staff because the applications were fuller and we could assess as they came in. I think the mortgage brokers did a great job during the pandemic in narrowing down the client need and being able to translate that to the lender.”

On the horizon The pandemic also caused technological advances to accelerate rapidly in the mort-

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gage industry, and Lang believes that progress is likely to continue, particularly now that clients have new expectations around approval speed and ease of access. “I think what the pandemic has done is lead everybody to believe that speed of delivery is possible and even more front-ofmind – from your Amazon delivery to your food to a mortgage,” he says. “There’s still a demand to get things done quickly. In the private space, with so many different variations, the need to be adaptable, be accessible, to get the speed for the broker and the client is key.” Forshee says another recent development

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with significant implications for the alternative lending sphere is people leaving their full-time jobs to go into contracting gigs and business-for-self, usually in the same line of work they had previously been employed in. With gig-type opportunities, contracting and consulting work becoming more common, Forshee says alternative mortgage solutions will represent an ideal option for many individuals. “They need to find a home for financing,” he says. “They may just fall out of that traditional bank or prime space, and [alternative lending] is a good bridge for a couple of

years. Those clients are not a bad credit risk – they’ve pivoted in their career, and much of the prime market doesn’t support that for the time being. They need to find a home for financing short-term before they move back to the prime space.” For brokers, the message from the alternative lending space is clear: Brokers who aren’t up to speed on alternative lending simply can’t present a full and comprehensive range of solutions to their clients. “My main advice is to get to know it, because you’re missing opportunities [if you don’t],” Lang says. “You’re maybe not

providing the best advice if you don’t know about it.” Forshee adds that the future of alternative lending appears bright for brokers, lenders and borrowers alike. “I think the mortgage broker network is in a great position, and if you look specifically at the alternative lending space, there’s a lot of fantastic and varying options there,” he says. “Not every alternative lender plays in the same sandbox. So you have a multitude of lenders that can support any clientele that you get – and I just think that’s fantastic for the industry as a whole.”

www.mpamag.com/ca

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FEATURES

SECTOR FOCUS: ALTERNATIVE LENDING

Leaders in alt lending Equitable Bank’s Joe Flor talks to CMP about the company’s new initiatives to support brokers as valuable partners in its alt lending business

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IT’S LITTLE SURPRISE that a key priority for Equitable Bank – a company that’s long championed its service-focused approach – has been placing mortgage brokers front and centre in alternative lending this year. Joe Flor, associate vice-president, national partner relations, says a commitment to service is and has always been a “core value” for Equitable and an essential aspect of its status as “Canada’s Challenger Bank.” It’s part of the reason that the lender’s communication with the broker community has been so extensive in 2021.

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“This year, we’ve really prioritized listening to our broker partners on what’s working, what’s not and what they want to see from us,” Flor says. “That’s a big part, because they’re our partners. It’s not just a case of coming out with what we think they want to see – it’s also hearing what they want to see from us.” That approach has led Equitable’s sales and credit teams to undertake activities to help brokers streamline their processes in the current hectic mortgage market. The company has also made great leaps on the digitization front this year. “That’s been one of the true focuses we’ve had this year: How do we bring more digitization to our brokers, and more tools to help them do their jobs more efficiently so they can move onto the next file?” Flor says.

Innovative new products One of Equitable’s most significant initiatives has been the launch of an evaluation program that enables brokers to have a property value automatically determined in advance by the company. That helps eliminate the need for an appraisal piece in the process if the estimated value is supported – and if the value isn’t supported, brokers can get an evaluation from an approved appraiser. Equitable will waive the fee for the automated value obtained prior to the commitment going out, and the client simply pays for the appraisal. “The broker gets the best of both worlds,” Flor explains. “That’s an example of us thinking about the experience: being mindful of cost, trying to improve the broker journey and making the client experience easier, too.” The company has unveiled a new extended ratio program that allows it to take an 80% LTV deal to a 60% TDS ratio – currently being offered in the Greater Toronto and Vancouver areas – with further

expansion, advancements and improvements also anticipated. In another example of its responsiveness to broker needs, Equitable has also launched an innovative new product that’s billed as its answer to non-conforming offerings currently in the market. It is currently available in Ontario and British Columbia. For Flor, those products – and other new releases in the pipeline – demonstrate how the company is fully committed to maxi-

packaging deals. “From a pipeline management standpoint, they work with brokers to make sure their deal gets across the finish line,” he says. “In this very high-pace environment that we’ve been seeing, it’s very difficult for brokers to consistently be working with their underwriter or mortgage officer to get deals completed. The sales team has been instrumental now more than ever in supporting our broker partners. With Equitable, we’ve

“This year, we’ve really prioritized listening to our broker partners on what’s working, what’s not and what they want to see from us” Joe Flor, Equitable Bank mizing brokers’ speed and effectiveness in performing their daily roles when their job has arguably never been busier. “Our focus is really thinking about how we can make things more efficient for brokers and how we can go through this more digital world to get transactions done quicker and more smoothly,” he says. “We’re combining digitization with enhancements to processes to make sure that we’re not having multiple unnecessary touchpoints. Ultimately, it’s about improving the broker journey.”

Top-class support The quality of Equitable’s sales team, according to Flor, is one of its strongest value propositions for the mortgage broker community. Among its business development managers are former underwriters, many with a credit background – the kind of experience that’s an invaluable asset for brokers in terms of structuring and

always been proponents of making sure our sales team has been capable of going through a transaction and steering them in the right direction.” That means that even if a BDM isn’t able to find a place for a deal, they’ll often provide a broker with guidance on where they might turn next – a consequence of Equitable’s focus on the success of its broker community. “Ultimately, we want the broker to grow their business,” Flor says. “That’s the whole purpose of us trying to help our broker partners – making sure they don’t lose a deal and that they know where they could potentially send it.”

The rise of alt lending The alternative lending sector has witnessed strong growth in recent years, and Flor notes that it offers abundant opportunity for brokers, particularly given the potential for solid referral business when transacting in

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FEATURES

SECTOR FOCUS: ALTERNATIVE LENDING

KEY NEW INITIATIVES AT EQUITABLE BANK New evaluation program letting brokers have a property value automatically determined in advance Extended ratio program allowing an 80% LTV deal to be taken to a 60% TDS ratio

New product in response to non-conforming offerings, currently available in Ontario and British Columbia

and he highlights the importance of leveraging Equitable’s sales representatives when discussing options with referral partners.

“We’re combining digitization with enhancements to processes to make sure that we’re not having multiple unnecessary touchpoints. Ultimately, it’s about improving the broker journey” Joe Flor, Equitable Bank that sphere. “Alt clients are the ones that really stick,” he says. “They’re the loyal clients that you’re trying to transition to help their financial circumstances, to move from the point they’re at, potentially to a prime lender. The word of mouth that ends up coming from that referral is huge, so there is massive potential for brokers in the alt space.” Flor recommends that brokers make sure their referral partners are gaining as much awareness and information as they can about potential solutions for their clients,

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“Many Realtors, and some of the financial planners, work off calculators that are designed for prime lending,” he says. “It’s important to understand what other solutions are available so that the referral partner is leveraging the broker when they have a client that might not necessarily be prime. “That would be my suggestion to brokers: make sure your referral partners are also getting as much information as they can. We’re a huge proponent of going out and educating our referral partners, again emphasizing how we’re here to help brokers

grow their business.” That’s especially important given the recent surge in alt lending, with the gap ever narrowing between prime and alternative solutions in the Canadian market. The space could also see an uptick in activity as a result of recent regulatory amendments – most notably the mortgage stress test hike – with the possibility of further changes down the line. “Ultimately, if we’re seeing this increased split between prime and alt, it would be a good time to start getting those referral partners more versed in the alternative space,” Flor says. “This is the best time for brokers, because now, with more regulations, clients are needing to come to them more for advice.” For brokers, one of the most valuable steps in the current climate is therefore to ensure they and their partners are fully apprised of all the options that are out there in the alt space for clients – helping them increase their value in the sphere and bring in new business. “Education is important,” Flor says. “That means making sure you’re versed in the products that are available to you as a broker and what you can bring to your referral partners so they can constantly be leveraging you to give you more leads.”

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PEOPLE

BROKER INSIGHT

Building a better brokerage Christine Xu, president and owner of MoneyBroker Canada, tells CMP about her eventful career in mortgages – and some of the unique factors that give her boutique alternative brokerage its edge

IT’S FAIR to say that it’s been a whirlwind journey for Christine Xu since she joined the mortgage industry in 2000. A job advertisement for a broker role – emphasizing “no experience required” – was the catalyst for her to leave behind a successful but trying career as an investment advisor. Since then, she’s gone from strength to strength, immediately making a name for herself by recording spectacular deal volume – outperforming all the other agents at her first employer – before finally opening her own brokerage, MoneyBroker Canada, in 2018. For Xu, the key to success is straightforward: a tireless work ethic, perseverance and a constant willingness to innovate and develop new skills. “First of all, I’m a really hardworking person – even a workaholic – and am very inspired to learn new stuff,” she says. “There’s also the sense of helping people. Our job is to provide solutions for people’s problems.” MoneyBroker Canada currently has around 40 agents and 10 full-time staff working out of its Toronto office. For Xu, one of its most unique selling points is its status as a boutique brokerage in the alternative space – MoneyBroker has a strong reputation in the

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industry for providing the utmost support to agents in getting a deal over the finish line. “Our office is really very strong,” Xu says. “We help lots of our new agents to close their deals. As soon as a deal comes in, we know how to close it. Alternative mortgages aren’t straightforward [products] that people can walk into the bank to get, so we emphasize the solutions provided by alternative ways to get financing.” MoneyBroker is committed to alternative mortgages on both on the residential and commercial side, and customer service and education are key components of its approach to the business. “We always try to provide solutions for the problems,” Xu says. “With mortgages, most

people don’t know what to ask. The only thing many people know to ask is, ‘I’m buying a house – what’s your interest rate?’ A lot of the time, though, that’s not their real question. It’s actually, ‘How do you even get a mortgage?’ So we look at the whole picture of what’s happening – trying to be solution providers, instead of just offering the cheapest rate.” Xu believes many mortgage brokers would benefit from focusing on alternative lending, particularly given the many strengths of the space – which have been especially apparent over the past year. “We have lots of ways to help clients,” she says. “It’s really to people’s advantage to come and see a mortgage broker – we have so many resources we can use to help the client.

THE MUTUAL TRUST FACTOR In addition to its brokering endeavours, MoneyBroker Canada is supplemented by its mutual fund trust, the Ready Capital Mortgage Investment Trust, which offers an invaluable asset in helping close last-minute deals. Launched in 2019, the fund targets annual returns of around 8% and provides investors with monthly returns. Christine Xu describes it as a “very good vehicle for investment,” powered by the brokerage’s expertise and experience in private mortgages.

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FAST FACTS: MONEYBROKER CANADA

LEADERSHIP Christine Xu, president and owner

LOCATION Unionville, Ontario

SPECIALTIES Residential, commercial, refinance, reverse mortgages, second and third mortgages, private mortgages, high-interest secured investments

“The only thing many people know to ask is, ‘I’m buying a house – what’s your interest rate?’ A lot of the time, though, that’s not their real question. It’s actually, ‘How do you even get a mortgage?’” For brokers, I think our emphasis should be on the alternative side. On the private mortgage, the lowest available interest rate is less than 4% – that’s incredible and a gamechanger. The private side is almost the same rate as the B side right now.” MoneyBroker also prides itself on its fast turnaround times. Xu says the ability to take quick action is another reason behind the

recent popularity of private mortgages. “In other spaces, maybe brokers would need a month to close their clients’ deals, but on the private side, it’s only a week or two weeks,” she says. “Which do you prefer? Do you want to save a 1% fee or interest rate and wait a month, or do you want your money now? It was never like that before. I think that’s a huge difference today.”

AREAS SERVICED Toronto, Brampton, Pickering, Markham, Woodbridge, Newmarket, Mississauga, Ajax, Oshawa, Woodbridge, Vaughan, Unionville

NUMBER OF AGENTS AND STAFF 50

AWARDS Xu was named Alternative Lending Broker of the Year three times at the Canadian Mortgage Awards; CMP’ Top 75 Broker for eight consecutive years

www.mpamag.com/ca

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SPECIAL PROMOTIONAL FEATURE

TECHNOLOGY

Meeting of the minds How Surex and Filogix are shaping the future through integration, evolution and digitization DEDICATED INSURANCE specialist Surex and mortgage solution provider Filogix have already made a huge impact on the Canadian business landscape – but on July 24, this impact grew as Surex became integrated into the Filogix Expert platform. It’s a significant step forward for both organizations and for the mortgage and insurance sectors as a whole, but how did this integration come about? “We launched in 2012 with the idea of being an early adopter of online insurance in the Canadian market,” says Jeff Hill, VP of business development at Surex. “It’s a very similar product to a travel aggregator or any other comparison site, where you put your information in and get multiple quotes for your home or auto insurance, and then you have the ability to bind online and obtain instant digital proof of insurance. I think the reason we can be successful in this integration is we bring a true brokerage experience to online insurance.” Ryan Spence, director of strategic accounts at Filogix, adds that “Filogix has been the industry standard for almost 25 years. We’re the backbone of connectivity within the entire mortgage industry, from brokers to lenders to

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vendor partners.” Such an illustrious history hasn’t stopped Surex and Filogix from looking ahead, however, and recently the notion of teaming up was born. “One of our co-founders is the one who really started this journey,” Hill says. “He got in touch with Filogix, and we were able to explain

ence to all Filogix Expert users and thus bring their clients value on their home insurance at the time of mortgage origination. With our integration into the Filogix Expert platform, users will be able to obtain up to 10 quotes on their clients’ home insurance at the click of a button. There is a revenue-sharing component to this, so it’s not only value, it’s not only timesaving, but there’s also a compensation factor as well for the broker sending us business.” Spence says the decision to bring Surex into the Filogix Expert fold is “all about choice. We know having more choice and more opportunity for clients is ultimately better. The more comfortable the consumer is with their mortgage broker, the more likely they are to refer their friend to them and strengthen the number of transactions coming through the broker channel as a whole. When a broker can be the one person the consumer trusts to look after their interests, and provide advice and solutions … that helps them get through a number of different challenges in this transaction.” So, what’s next for this new endeavour – and for both Surex and Filogix? “The overall goal is to educate brokers of who we are, our value proposition and what we can bring them and their clients at the time of mortgage origination,” Hill says. “Getting the integration done was just the first step at the base camp of Mount Everest. The rest is educating brokers about what happens when they push the button and the value we

“[Brokers] will be able to obtain up to 10 quotes on their clients’ home insurance at the click of a button” Jeff Hill, Surex how, as a national digital brokerage, we would be the right fit because of our national coverage and ability to give the consumer the same option of choice for their home insurance that they’re getting for their mortgage. “This integration will send the home insurance lead to our system, then we run the quote and follow up with the client. Surex allows customers to buy online and send instant proof of insurance to the client and their broker. We can now bring a true brokerage experi-

can bring their clients into their business when they do.” As for Filogix? “We’re in the process of the next evolution of Filogix Expert that will ensure technology innovation for the mortgage broker for many years,” Spence says. “The most likely thing that you’ll see in any community is a mortgage broker using Filogix Expert to submit applications to lenders and, through our mortgage marketplace, connecting to partners that help their business succeed.”

www.mpamag.com/ca

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Ten home insurance quotes with one click Introducing a new integration with Filogix Expert that will allow you to request home insurance quotes with just the click of a button. Helping you protect your clients by providing instant access to quote and buy insurance online through Canada's Insurance Marketplace. TM

With the Surex + Filogix home insurance integration, peace of mind is now just one click away. To learn more about the partnership and how you can start earning referral compensation, book a demo today!

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FEATURES

PRODUCTIVITY

Ditch your to-do list Feeling buried under a to-do list that will never be done? You’re not alone. Aytekin Tank explains why you’re better off without it THERE’S A horror story out there. Man is feeling overwhelmed, begins compiling a to-do list. Three bullets turn into 10. Ten bullets turn into 20. Moments later, he finds himself in hand-to-hand combat with a

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to-do list so long and so vast it resembles the spiralling tentacles of a giant squid. He loads himself up with enough caffeine to fuel an entire city and begins his slow, tedious descent to the bottom, crossing each

line off the to-do list one at a time. Shortly into his battle, he makes a terrifying realization: The to-do list is like a regenerating monster right out of a terror flick – for each line he crosses off, another three lines appear at the bottom. He screams. He jumps out of his office window. Thankfully, he is on the first floor, so he essentially just steps into a large shrub, scaring a small family of opossums. As he begins to sob hysterically, he hears the unravelling of the wretched to-do list drawing ever closer. He turns, it envelops him, then pulls him back into the deep, dark depths of his office. He is consumed by a monster of his own creation.

Race to the bottom Nearly all of us have fallen victim to the endless to-do list at least once in our lives.

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BPAM


E A SY. FA ST. SI M PL E. ON E A P P L I CAT IO N , T WO LEN DIN G O P T IO N S.

BlueShore Pacifica Alternative Mortgage Centre is jointly owned by BlueShore Financial Credit Union and Capital West Mortgage Inc. All applications are subject to credit approval and the properties meeting Lender credit criteria. Mortgage rates and terms are subject to change without notice.

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FEATURES

PRODUCTIVITY

After all, the go-to piece of advice we’ve been given since grade school when we’re feeling overwhelmed is to “make a list and start crossing things off.” While it sounds lovely in theory, once we set off on our to-do writing journey, we quickly discover a major problem. In our race to the bottom of the list, we realize there is no bottom. This fascinating phenomenon, along with a handful of others, is what makes to-do lists so incredibly unproductive. Let me explain. We are terrible at estimating how long tasks take. Elon Musk is arguably one of the most brilliant minds alive today, yet even he has an issue with underestimating how long a task may take. Time and time again, he has

With to-do lists, what happens is that we optimistically assume most of the day’s tasks will take less time than they’ll actually take. And, in our caffeine-fuelled to-do-list scribbling, we load up the day with lengthy tasks we think we can get done in a few minutes. This, of course, causes the to-do list to roll into tomorrow … which brings me to my next point: When was the last time you actually crossed everything off your to-do list? In addition to horrible time estimation, the reason to-do lists roll into the next day is they place us into a mindset where everything must go on the list, regardless of the level of impact it has on our day – or how much value it adds. In many ways, to-do lists cause us to be

To-do lists place us into a mindset where everything must go on the list, regardless of the level of impact it has on our day – or how much value it adds set a date for the release of a new model or a production number. And time and time again, he has missed the deadline. In an interview with The Washington Post, Musk said, “I think I do have, like, an issue with time … I’m a naturally optimistic person. I wouldn’t have cars or rockets if I wasn’t. I’m trying to recalibrate as much as possible.” If you ask his brother, Kimbal, this complicated relationship with time has been present since childhood. When they were children, Kimbal Musk (who currently sits on Tesla’s board) would actually lie to his older brother about the time the school bus would arrive, knowing that Elon would show up late. Elon Musk isn’t the only adult alive today who grew up missing the bus and still suffers from lingering time estimation problems. A recent study found that only 17% of the population can accurately estimate the time something will take.

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overly proactive in our thinking. Which, in turn, causes us to put a greater emphasis on tasks that, in the broader scheme of things, aren’t that important. In addition, they also hinder us from feeling a sense of completion with our day and our work. Nobody who trudges home with a half-completed to-do list feels like they owned the day. Instead, they feel like the day owned them. To-do lists also allow us to avoid the most important tasks of the day – they aren’t unlike email in that way. Take a look at the to-do list I put together below as an example. Let’s pretend it belongs to a sales professional who works for a technology startup. • Get email inbox to zero • Catch up on Slack messages • Follow up with Paul about lunch tomorrow • Stop by the grocery

• Meet with the marketing team for a brainstorming session • Make 50 cold calls to potential leads • Do a couple loads of laundry • Clean the house Now, it doesn’t take a productivity guru to recognize that the most important task on the list above is to “make 50 cold calls to potential leads.” Sure, cleaning the house, doing the laundry, grabbing groceries, following up with Paul and managing your email inbox might be nice, but they aren’t going to create the most impact on your work day. If you’re a sales professional (where you get paid to make sales), you better make sure you’re knocking out your 50 cold calls for the day. Many times people use to-do lists to avoid doing the things they don’t want to do. Which is unfortunate, considering that the things we don’t want to do tend to be the things we actually need to be doing.

To-do lists’ better-looking brother Scheduling works differently for everyone. If to-do lists work well for you, keep making them. However, I would like to offer an alternative. I call it the ‘hunter’ strategy. Long ago, before we had a fridge full of food within arm’s reach at all hours of the day, people survived by hunting. If the hunter made a successful hunt that day, his family would eat. If not, they wouldn’t. It was that simple. He didn’t have time to check email, attend time-sucking meetings or send follow-up emails. And he certainly didn’t have time to make to-do lists. No, he had to wake up every single day with one goal in mind: to make a successful hunt. When it comes to scheduling, this is a great mindset to have. Instead of writing down dozens of tasks that you need to get done each day, choose one that must get done and will deliver the most impact. In Gary Keller’s best-selling book, The One Thing, he argues that “long hours spent

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FEATURES

PRODUCTIVITY

Instead of writing down dozens of tasks that you need to get done each day, choose one that must get done and will deliver the most impact checking off a to-do list and ending the day with a full trash can and a clean desk are not virtuous and have nothing to do with success. Instead of a to-do list, you need a success list – a list that is purposefully created around extraordinary results.” While this concept might seem a bit abstract, executing it is simple. You begin by thinking about the one thing you can accomplish today that would have the most impact. If you’re having trouble thinking of something, I’ll give you a hint –

46

it’s usually the thing you least want to do. Once you’ve thought about this thing, I recommend buying a fat stack of sticky notes and keeping them in your desk. When you walk into your office, pull one of those sticky notes out and write down the one big high-impact goal you would like to achieve for the day. Put the sticky note somewhere on your laptop and start working. Anytime you feel your mind start to wander or the urge to mindlessly check email well up inside of you, stop. Look at

your sticky note. Then refocus on the day’s hunt. You can always go back to executing other low-priority or operational tasks once you’re done with the day’s hunt. Practice this strategy for a few weeks with the goal to cross off the one thing on your sticky note each and every day. Once those few weeks are up, stop and reflect. Do you feel more fulfilled? Do you feel like you’re making more of an impact? If the answer is yes, keep on hunting.

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

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In addition to caring for her pet cockatiels, Bartlett trained a fa mily of robins to visit her deck and request grapes last su mmer

60+

Number of different bird varieties Bartlett has spotted in her backyard

60–80

Average years lived by the larger parrot breeds

80

Number of English language words that budgies can learn

AVIAN INSPIRATION HomeEquity Bank BDM Jenny Bartlett's passion for birds has taught her a lot about working with people JENNY BARTLETT, business development manager for brokers at HomeEquity Bank, has two decades of high-level experience in the mortgage space – but she’s been working with avian life for even longer. “I’ve been studying and working with birds for over 30 years and have had four cockatiels living with me during those years,” Bartlett says. “We’ve had some good conversations – the average cockatiel has an intelligence level equal to a two- to three-year-old human, and they definitely have a sense of humour. My cockatiel Boo would always tell me he was being ‘good’ when he was getting into trouble, and sometimes he would even laugh.”

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Long before she entered the mortgage industry in 1998, Bartlett had her first fulltime job in pet retail sales, eventually becoming manager of a store specializing in exotic pets like birds, lizards and rare fish. “I had the opportunity to interact with parrots on a daily basis, and I was very drawn to them for their level of intelligence, shining personalities and long lifespans,” she says. “Birds of all species became one of my life’s passions; we still have so much to learn about them. “My knowledge of avian health is at a very experienced level as well,” she adds. “I was considering owning my own pet store or becoming an exotics vet in my

younger years, and I did a full course in animal husbandry.” Bartlett says her love of birds has had a significant influence on her approach to the mortgage business. “My most recent pet bird – named Spero, which is Latin for ‘I hope’ – is a rescue cockatiel,” she says. “He is a slightly disabled, previously neglected bird, so he needs extra care and patience to help him build trust. Every bird has their own story and personality – just like our clients. When you can take the time to get to know them and find out what motivates them as an individual, you can build mutually rewarding long-term relationships.”

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