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Banks on Brokers

2010

www.mortgagebrokernews.ca

October 2010, 5.10

lenders rall y ba The response to brok ck ers . sur vey ..

SPECIAL FOCUS Working with alt-B clients

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50 West Coast ways Heather Li takes a look at the mortgage market in British Columbia and what the differences may be compared to other parts of the nation

5. 10 issue

cover story

34 And on the lending side...lenders respond to broker’s survey There needs to be an open line of communication between brokers and lenders. In this issue, CMP gives the lenders an opportunity to have their say

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contents 8

excellence and has been recognized as one of Canada’s top employers

Letters & comments from mortgagebrokernews.ca: Some of the best stats and comments from CMP’s website

64 Insight: From paramedic to mortgage planning to robbing banks, Scott Peckford from Mortgage Architects talks about balancing brokering with his other aspirations

NEWS 10 News: Bigoted real estate listing, home-building activity, housing bubble, MLS challenges, Verico’s new mobile launch and more 56 Niche series – alt-B lending: Over the next few months CMP magazine will explore a variety of niche markets and how mortgage professionals can work within these areas to increase their business 62 Development equals income: Doren Aldana explores the information age and how to increase your income 66 White labelling - Make your mark: Brokers are under siege: market demand is slowing, commissions are being threatened and the cost of doing business is rising. When your back is up against the wall sometimes all you’ve got left is your good name.

PROFILES 60 Provider: After a successful launch in 2005, Paradigm Quest has a reputation for service

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28 the underwriter effect For your business to run smoothly, it is just as important to work well with your underwriter as it is to give clients the service and attention they deserve

72 Broker profile: CMP talks to Debbie Thomas who is the co-owner of The Mortgage Group 76 Guest Column: Calum Ross explores the concept of persistence and offers a few tips on how to go for your personal gold

regulars 16 International News 26 This time last year 79 CMP Service Directory

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We put you front and centre

in your local market.

When you join most superbrokers, you give up your local personality in favour of a faceless national brand. But at The Mortgage Centre®, we understand that your success is based on your relationship with your local market. Even though we maintain Canada’s longest-established national franchise network, we make sure all our programs and marketing tools spotlight you. To learn more about the exceptional independence we offer, contact sales@mortgagecentre.com The Mortgage Centre is a division of CIBC Mortgages Inc., a member of the CIBC group of companies. ® The Mortgage Centre is a registered trademark of CIBC Mortgages Inc.


Editor’s Letter

The realities of the industry Sometimes I am criticized because I choose to publish comments or news items that may not show the industry in its best light. It’s been said that I sensationalize some of the news, focus on some negative aspects and that I publish comments out of context. I believe it is really a matter of perception. I like to think that I publish the reality of the industry. When I decide what goes in the magazine and what doesn’t, I always ask myself if I’m being as impartial, honest and fair as can be. Most of the time I believe that I am. However, sometimes reporting on the realities of the industry may seem fair to me at the time, but in hindsight, the picture may look different What I will usually do is give the “other side” an opportunity to respond either by a Letter to the Editor or by printing a disclaimer or even writing a story showing another side to an issue. Last month we published the annual Brokers on Lenders survey where brokers got to pick their favourite lenders. Brokers also had the opportunity to comment on what they liked and didn’t like about lenders – some of those comments I published. It was brought to my attention that one of those comments was considered by the lender as inflammatory, which I don’t agree with. But I do agree it was a comment that needed more explanation, which I should have provided, or omit the entire quote completely. However, in the current issue, we have the lenders talking back to the brokers. It is a great opportunity for lenders to tell their side of things. Some lenders will address the comments while others won’t – that’s their choice. In my opinion, it’s important for us, as an industry, to not sugarcoat some of the issues, nor to hide them under the carpet. Because at the end of the day, it’s only the industry as a whole that suffers. When issues are out in the open, then they can be dealt with. This, I believe, will create a more robust industry and a much stronger relationship between brokers and lenders. ‘Til next time, Gina Monaco Editor Gina.monaco@kmimedia.ca

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5. 10 issue


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Quotables

“there’s a broad spectrum of lenders who differ on how they will treat that illegal income…Some lenders say, ‘We will not count on that illegal income in any shape or form.’ Others say they’ll take 50 per cent of the rental income and add it to the borrower’s income; while some will take 80 per cent, deduct it from the mortgage payments and see how you qualify to borrow after that.” - John Charbonneau, The Mortgage Group in Vancouver commenting on illegal basement suites. Page 50

“with B deals there is always a greater likelihood of surprises -surprises which can often derail the deal quite easily.” - Kam Brar, Verico Select Mortgage Corp. in Victoria on working with “B” clients. Page 56

“we don’t have documentation upfront a lot of times and when that documentation comes in, it’s actually different from the application information that we approved from…The incomes come in different or the mortgage payments, and then you’re under the gun to make sure it fits again and there’s a lot of reworking involved.” - Barbara Starr, team leader underwriter with Macquarie Financial Ltd. On the challenges they face. Page 28

October 2010 Publications Mail Agreement #41261516 Postmaster: Return undeliverable addresses to KMI Publishing, 100 Adelaide Street West, Suite 300, Toronto, Ontario M5H 1S3

EDITOR

Gina Monaco

Staff Writer

Heather Li

Staff Writer

Shane Buckingham

NATIONAL SALES MANAGER

CEO

Tim Duce Mike Shipley

Marni Parker

SUB-EDITOR

Rachel Naud Jacqui Alexander

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Advertising enquiries trevor.biggs@kmimedia.ca

Editorial enquiries gina.monaco@kmimedia.ca Printed by Solisco imprimeurs-printers www.solisco.com

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Readers Write Web comments

BoC raises overnight lending rate BoC is going against all economic logic in increasing the prime rate. Is it to scare small homebuyers and induce them to switch from variable to fixed rates? Whatever the reason behind the decision, it is not fighting the slowdown and not helping the economy and the housing market in particular. -George Janho Please, we need to increase sales, not to scare away people from purchasing, Keep rates low. No more than .25 per cent. Bank of Canada needs to reach out to the market to see what really is going on; making it hard and increasing the rate will not help anyone. -Kashif Toor Bigoted listing hits Calgary website The mortgage broker wasn’t targeted in the ad, they gave her advertising space like ad words on random listings. She’s just

making a name for herself, well either way good for her for using that site since it’s different. -Dave Deep down many people feel this way but it’s not politically correct to voice your opinion. -Bev What this person did was very clever actually. Has anyone thought that it might have been Craigslist themselves? Look at how much media coverage this got, and attention. Perfect marketing strategy, look at Hollywood - bad press is better than no press! -Anon Don’t generalize something by your observation. Show me proof that whites left a neighbourhood to get away from non-whites. I have friends who are non-white who live in these rich areas you speak of: Elbow Valley, Bearspaw, Bragg Creek. If you are not part of the solution, you are the problem. -Exodus 2009/2010 CAAMP Financials I am a member of CAAMP because my brokerage says I have to be, but as far as I can see it is just a giant money grab with little to no benefit to the individual brokers such as myself. I have seen no advertising in my community. I have received no increase in business by being a member. What exactly is CAAMP planning on doing with the $4.3 million they have of our money? -Anon I was sort of onside with the above comments until a year ago. That is when I reviewed a report where CAAMP “fired” a number of brokers/agents for conduct unbecoming. I read that the paid execs are replaced on a regular basis. At this point I joined. -John Kennedy said it best “Dont ask what your country can do for you instead what you can do for your country.” Instead of whining why don’t you come up with something constructive? Or run for election. You stand up on your soap box but won’t even sign your name. I have been a member since 2000 and fully see the benefit of CAAMP. -Faye CMP

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News Industry

Home-building activity expected to slow: Conference Board of Canada Canada’s home resale prices rose in June in the biggest monthly gain in 10 months. “June marks the largest monthly increase in 10 months. But we do not believe that acceleration in the Teranet-National Bank index will be sustained,” said Marc Pinsonneault, National Bank Financial senior economist. According to numbers from the Teranet-

National Bank Composite House Price Index, overall prices rose 1.5 per cent from May, the largest monthly increase since last August. Prices were up 13.6 per cent from last year. Teranet noted it’s too early to call the price increases of recent months a trend. It was the third straight month prices rose across all six surveyed metropolitan areas. CMP

100,000

Number of Realtors represented by the Canadian Real Estate Association

Canadian housing bubble still looms Though home sales are slowing, prices in six of Canada’s largest housing markets are in bubble territory. Home prices are sitting at 4.7 to 11.3 times Canadians’ annual income - much higher than historical comfort levels of between three and four times Canadians’ income, according to a report by the Canadian Centre for Policy Alternatives (CCPA). The report defines a bubble occurring when housing prices increase more rapidly than inflation, household incomes and economic growth. “To see all of the major markets outside of that comfort zone is very unique and concerning,” said David Macdonald, a research associate who wrote

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the report called “Canada’s Housing Bubble: An Accident Waiting To Happen.” Sales have fallen by 25 per cent since reaching its peak at the beginning of the year. But Canadian home prices were up 13.6 per cent in June from a year ago in Canada’s major cities. “The concern today is all six major markets, not just Vancouver and Toronto, are out of that comfort zone,” said Macdonald, including Calgary, Edmonton, Ottawa and Montreal. “All six major markets now have an average price of over $300,000.” The CCPA is an independent, non-partisan research institute concerned with issues of social and economic justice. CMP

Bigoted listing hits Calgary website A racist listing on a Calgary website has shocked locals and inspired numerous responses on Craigslist. The home, listed on CalgaryFinder.com, said the owners will sell to a “white buyer” only. The ad also stated the home was in a “highly rated white community” and promised a backyard that wouldn’t have “coloured people peeking through.” “That is absolutely unacceptable and it’s not the way Calgarians think and it’s not the way Canadians think. Ward 6 is a very diverse community,” said Area Alderman Joe Connelly. The ad led to an influx of posts to the rants and raves sections of Craigslist. “Shame on you, Calgary,” wrote one respondent. Nancy Steiner, a spokesperson for CalgaryFinder.com, said the listing was legitimate and paid for and that its policy is not to censor ads. “It’s our policy not to censor our ads, however if any ad is deemed unlawful it is removed promptly,” she said. CMP


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News Industry

13.6% Rise in average resale home prices across Canada from last year

MLS challenged by top brokerages The Canadian Real Estate Association’s hold on the country’s real estate listings is being challenged by three top brokerages as they develop plans to offer an alternative to Multiple Listing Service, The Globe and Mail reports. Century 21, Royal LePage and Re/Max met August 31 to discuss developing a new and improved website to pool their listings. The three brokerages want to build a website similar to Realtor.ca, which will allow them to control the site’s content without having to get the approval of CREA, an organization that represents 100,000 Realtors across the country. The meeting came a day after Yahoo Canada announced that it will offer listings on its main page using database and search-engine technology from Zoocasa.com. Many consumers are now visiting other websites, like Zoocasa, to get information not available on MLS, such as demographics, school zones and average prices for neighbourhoods. CMP

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UBS hopes to begin Canadian lending American-based UBS AG recently announced plans to offer lending to Canadian clients through its Canadian private-banking unit. “Now that [UBS CEO] Robert McCann has identified [mortgages] as part of the strategy to service the wealth-management clients, that gives us the impetus to initiate the offering in Canada,” UBS spokesperson Graeme Harris said. According to Harris, the company plans to explore the new market by either building a team internally, hiring mortgage specialists to run the business, or by coming to an agreement with another firm on outsourcing. UBS is in talks with several brokerages about possible arrangements and already has more than 40 advisers in Canada aiding affluent investors. CMP


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News

Industry

two-thirds of repeat homebuyers buy again and again More than two-thirds of repeat homebuyers believe their next house purchase won’t be their last, according to a new survey by TD Canada Trust. Out of 1,000 participants, more than 23 per cent said they plan to move again within six years ago. One in five repeat buyers has owned more than five homes. The survey participants either purchased a home that was not their first within the past two years, or intend to purchase a home that is not their first within the next two years. Roughly half of Canadians will look for a smaller house, while the rest want to upsize. Most intend to find a fully detached home for their next purchase. As a result, 51 per cent will need to take out a mortgage to finance their next purchase, said TD. CMP

Real Matters ranked 2nd fastest growing tech company in Canada Real Matters was ranked No. 2 on Deloitte’s 2010 Technology Fast 50 list that ranks Canada’s 50 fastest growing technology companies. The Markham, Ont.-based company designed a system to help property owners obtain cheap home appraisals, and its revenue grew by 40,532 per cent. “They’re really exploiting a specific niche,” said John Ruffolo, Deloitte national leader of technology, media and telecommunication, to The Globe and Mail. “And this way, when they focus in on the niche, they need less capital because Canadian businesses have far less capital.” ClickFree, a device plugged into your computer to back up files, was No. 1 with revenue growth of 64,240 per cent. CMP

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News

International

U.S. home resales falls to lowest level in 15 years U.S. home resales fell to the lowest level in 15 years last month, the National Association of Realtors reports. July sales fell by more than 27 per cent to the seasonally adjusted annual rate of 3.83 million. This is the largest monthly drop on records dating back to 1968. Home sales were slightly on the rise in spring when the government offered tax credits. But the market has continued to struggle since the credits expired on April 30. At the current sales pace, it would take 12.5 months to sell the four million unsold homes on the market, according to the Associated Press. The median sale price was US$182,600, up 0.7 per cent from a year ago. CMP U.S. Wells Fargo asks for essay in mortgage application When Linda Falcão and her husband applied for a mortgage with U.S. Wells Fargo, they were asked to write a “motivational letter” with essay-like requirements explaining why they were moving. The company required them to include in the statement their plans to “increase/decrease in family” and property size. Falcão was shocked. “It is wrong and invasive to ask people about their family plans,” said Falcão, a civil rights attorney and founder of America Serves, a youth volunteer organization, to the The New York Times. “It very much offended me.” Basing a loan decision on a borrower’s family status or future plans actually violates the U.S. Fair Housing Act, which prohibits discrimination in lending based on disability, sex or family status. The couple were ideal loan candidates. Falcão and her husband, both 50, had high credit scores and no debt, and were making a down payment of more than 60 per cent on the new home. Though they tried to be excused from writing the letter, Wells Fargo required it since they hadn’t sold their existing home yet. They filed a complaint with the U.S. housing department but were eventually

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18,000 to 20,000

u.s.

approximate number of people who hold a broker licence, according to the Canadian Association of Accredited Mortgage Professionals

approved for the mortgage anyway -- and only after they submitted the letter. CMP U.S. homeowners risking foreclosure One in 10 households is facing foreclosure in the U.S., and more than two million homes have been repossessed since the recession started. The continuing job crisis means more Americans are still at risk of losing their homes. “Ultimately, the housing story, whether it is delinquencies, home sales or housing starts, is an employment story,” said Jay Brinkmann, top economist for the Mortgage Bankers Association, to the Associated Press. Nearly 10 per cent of homeowners missed at least one mortgage payment as of June 30, according to a quarterly report on delinquencies released by Brinkmann’s trade group. That’s more than double what it was before the recession. Experts think it’s only going to get worse as July was the worst month on record for new home sales and the worst in 15 years for sales of existing homes. Also, many Americans now own homes that are worth less than their mortgages. CMP U.S. mortgage applications increased U.S. mortgage applications for refinancing jumped 17 per cent last week, reaching its highest level since May 2009. Borrowing costs are still at near record lows but purchases fell 3.4 per cent, according to the Mortgage Bankers Association’s (MBA) index. The declining purchases are likely rooted in American unemployment that is almost at a 26-year high. “With the unemployment rate holding near 10 per cent, it’s not a good time to go out and buy,” said Scott Anderson, a senior economist at Wells Fargo Securities in Minneapolis to Bloomberg Businessweek, before the MBA numbers were released. “Where we are seeing a little more activity is on the refinance side.” The average rate on a 30-year fixed mortgage rose to 4.6 per cent after reaching 4.57 per cent the week before, its lowest in data going back to 1990. CMP


News Industry

Foreigners buy record share of Canada Housing Trust bonds A record share of Canada Housing Trust’s $2.25 billion bond sale was bought by foreigners. International buyers purchased 37 per cent of 3.35 per cent bonds due in December 2020, said Andrew Hainsworth, the director of debt capital markets at Bank of Montreal’s BMO Capital unit. It is the highest ratio of foreign buy since Canada Housing Trust began selling 10-year bonds in November 2008. “The international side, the outside-Canada placement, was very robust,” said Hainsworth, who was the lead co-ordinator of the sale, to Bloomberg. Canada Housing sold $3.55 billion of mortgage bonds in all, including the 10-year fixed bonds and another $1.3 billion of five-year, floating-rate debt. CMP

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Mortgage marketing company, JOLT Marketing, launches JOLT Marketing, a full-service marketing company specializing in helping Realtors and mortgage agents grow their businesses, has recently opened its doors. Started by Ingrid Menninga, a former Royal LePage Canada marketing manager and marketing specialist with Invis Mortgages, JOLT Marketing focuses on business from the client’s perspective. “Working with mortgage and real estate professionals since 2006 has helped to mould our understanding of what agents are looking for,” says Menninga. “We don’t create something and try to sell it to the agents. We ask the agents what they want, and build upon that to create something well beyond their expectations.” One marketing program currently on offer is the Business Booster Marketing Program, an agent CRM program that incorporates e-newsletters, mails note cards and follows up with phone calls to build an agent’s repeat and referral business. One client, Justin Aykler of Aykler Real Estate Inc. said, ”The last e-blast was a hit. A few clients e-mailed me right away even though we had lost touch for over a year. Some clients even complimented me on my new ‘professional graphic design’ skills!” JOLT Marketing also offers online and social media solutions including social media representation, Wordpress blog customization and social media profile customization. CMP


News

Industry

CIBC releases Global Positioning Strategy report

61,525 expected number of Ontario home starts for 2010

CIBC predicts Canadian overnight rates will not exceed two per cent next year as the U.S Federal Reserve rebounds. “Since a hike at every rate-setting date through 2011 would take rates substantially higher than two per cent, a pause is coming on the road to tightening...Forget about any rate hikes from the U.S. Federal Reserve until sometime in 2012 at the earliest,” said CIBC chief economist Avery Shenfeld. In the Global Positioning Strategy report, released recently, the bank says a weak U.S. economy may force the Bank of Canada to keep interest rates level after September. Shenfeld forecasts Canadian growth in Q2 and Q3 will fall below the BoC’s outlook. Canada leads the U.S., U.K. and Japan in first-half growth and has a substantial gap over the U.S. when it comes to working age population holding a job. CMP

License #11127

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News

mortgages in the press

Industry

The 2011 Canadian Mortgage Awards Mortgage broker headcount at peak? There are approximately 18,000 to 20,000 people who hold a mortgage agent and/or broker licenced in Canada, according to the Canadian Association of Accredited Mortgage Professionals. Ontario has the most with 10,000, while B.C. and Alberta have a combined total of 6,000. In Quebec, 1,000 people are licensed. Canadianmortgagetrends.com says the going assumption of how many are actually active is 10,000 to 12,000. Although Canada’s broker count has increased over the past three years, it’s been relatively stable in the last 12 months, said Jim Murphy, CAAMP CEO. There is speculation the industry will shrink because of increasing competition, falling home prices, rising rates, falling commissions and bigger bank sales forces. In the past few months, two brokerage CEOs have also said they believe broker numbers have peaked for the near future. CMP

BMO drops five-year fixed “low frills” rate BMO dropped its five-year fixed “low frills” rate yet again from 3.79 per cent to 3.59 per cent. The bank says this deal “saves homeowners over $60,000 in interest costs compared to leading competitors’ five-year special fixed rate at 3.89 per cent and 35-year amortization.” CanadianMortgageTrends.com notes the following to keep the rate in perspective: • Most people break their five-year terms early, and you can’t break BMO’s mortgage to go somewhere else. Plus, pre-payments are limited to 10 per cent a year. • Various competitors can match or beat 3.59 per cent on a five-year term. • A five-year term at 3.59 per cent may not be the lowest cost option. A mortgage broker can present clients with other alternatives. CMP

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Nominations will soon be open for the 2011 Canadian Mortgage Awards, which are taking on a Vegas-inspired theme and is scheduled for April 29 at the Liberty Grand in Toronto. Anyone involved in the Canadian mortgage industry is encouraged to nominate candidates for this not-to-be-missed event of the year. There is one new category this year – National Broker Network of the Year. We made this decision based on comments about our Best Brokerage categories. Those categories are meant for individual brokerages (under 25 and over 25), which really left a void for the national brokerages. Hence, the new category. So far the response has been positive from sponsors who have already come on board. They include Bridgewater Bank, Genworth, TDMP, ING Direct, Macquarie, Home Trust, National Bank, Merix and ResMor. CMP

Canadian Mortgage Awards

2o11

Invis and Mortgage Intelligence surpass $100 billion in mortgages arranged Invis and Mortgage Intelligence have marked the milestone of $100 billion in mortgages arranged for homeowners across Canada. “This achievement is a direct result of the dedication and professionalism of our mortgage brokers at Invis and MI,” said Gord Dahlen, president and CEO of Invis-MI. “For the past decade our brokers have offered Canadians outstanding service, which is partly the reason why our clients stay our clients over the long term.” CMP

MAC Rally of Hope raises almost $90,000 for breast cancer research The MAC Rally of Hope, a cross-country motorcycle fundraiser ride from July 11 to 25, started in Port Moody, British Columbia and ended in St. John’s, Newfoundland. The riders travelled over 7,500 kilometres to raise over $88,000 for the Canadian Breast Cancer Foundation. Mortgage Alliance is already preparing for next year’s rally, which will start on July 17, 2011, in Vancouver, B.C. CMP


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CHIP Home Income Plan is provided by HomEquity Bank, a Schedule I Canadian Bank. HomEquity Bank is a wholly-owned subsidiary of HOMEQ Corporation, a TSX-listed company. TM Trademark of HomEquity Bank.


News Industry

Housing slowdown suggests prudent debt management: CIBC The housing slowdown suggests consumers are being more “prudent” with credit after accumulating a record amount of household debt earlier this year, said CIBC’s CEO. Gerry McCaughey is confident that Canadians can maintain meeting their payments and suggested that the mortgage lending slowdown is positive at an investor conference sponsored by his bank in Montreal. “The consumer is probably taking a pause and acting in a prudent fashion, and that’s what’s driving this slowdown in the housing market,” said McCaughey. “I think that is a good thing because interest rates will rise back to normal levels. It would be a good idea to have the level of total debt at a more manageable state.” Earlier this month, Statistics Canada reported household debt hit $1,481 trillion during the second quarter of 2010, up from $1.385 billion during the same period last year. CMP

Mortgage Alliance expands to commercial mortgages The Mortgage Alliance network has introduced Mortgage Alliance Commercial Canada as a new operation, strictly dedicated to the commercial segment of the market and specializing in projects ranging from $1.5 million to $100 million. This new division will be managed by Murray Wood, principal broker and managing director of Mortgage Alliance Commercial Canada, and his partner Michel Durand, president and managing partner of Multi PretsCommercial Quebec. Both principals, along with their team of experienced and commercial brokers, have engineered and simplified the lending process to ensure that every commercial borrower gets the right mortgage. CMP

Verico launches mobile mortgage app Verico has released the Mortgage Mobile Office application for iPhone, BlackBerry and iPad users. Mortgage professionals can use it to complete an application form for their client using a mobile device. This technology is fully integrated with Filogix, and also features mortgage news and tools, such as instant up-to-date rates, mortgage calculators, lender contacts and product information. It can be found at http://www. verico.ca/mobile-office. “With the increasing popularity of smartphones and tablets such as iPhones and iPads, we saw an opportunity for these devices to enhance how mortgage professionals do their business,” says John Kelly, COO of Verico Financial Group. “With VERICO Mobile Mortgage Office, mortgage professionals are no longer confined to completing a deal at their office. Now, they can provide full service for their clients and submit deals directly to Filogix anytime, anywhere.” CMP

22

mortgagebrokernews.ca   

most recent Composite House Price Index released Home-building activity is expected to slow down in the second half of the year as a result of declining affordability. In the recently released summer 2010 edition of the Conference Board of Canada’s Canadian Industrial Outlook, the board predicts profits to fall to $2.9 billion in 2010, the lowest level since 2005. Profits aren’t expected to return to pre-recession levels until at least 2014. “Most of the costs associated with home ownership, such as mortgage costs and insurance, are outstripping inflation and income growth. As a result, housing affordability in Canada, which has been deteriorating over the past decade, will continue to decline during the next two years,” said Michael Burt, associate director of Industrial Economic Trends. Revenue figures have returned to pre-recession levels but higher costs, mainly for labour and wood, have affected profit levels. CMP


$100 billion of experience behind every mortgage In 2010 Invis and Mortgage Intelligence reached the milestone of $100 billion in mortgages funded… a new record in the Canadian mortgage brokerage industry. Our experience and expertise is why Canadians trust us. When borrowers turn to one of our mortgage brokers, they’re in good hands. When you become part of Invis or Mortgage Intelligence, you join a national team of mortgage professionals who are proud to deliver outstanding advice and attention to each of their clients. There’s 100 billion reasons to join us.

Let’s talk

Learn more about joining our broker teams at www.invis.ca & www.bettersupportcanbeyours.com Head Office: 5770 Hurontario Street, Mississauga, ON L5R 3G5. Invis FSCO 10801 | MI FSCO 10428.


News

Appointments

appointments At Equitable Trust, the following new appointments have been made: Ian Silvester takes on the role as manager, residential mortgages, British Columbia. Sherry Mitchell has been promoted to regional sales associate in Calgary. Altaf Noorali and Lucy Tseng join as residential mortgage officers, Toronto

Real Matters welcomes new board member Real Matters, a property information provider, announced the appointment of Rob Burgess to the company’s board of directors. Real Matters, formerly Solidifi Inc., welcomes Burgess who was the former chairman and CEO of Macromedia Inc. and a board member of Adobe Systems Inc. According to Real Matters president Jason Smith, Burgess offers knowledge pertinent to the organization’s strategic direction. “Rob’s leadership experience in the technology sector will allow us to strengthen our business strategy so we can deploy our unique property information to new market solutions. Rob also has a successful track record growing great, world-class companies, so we’re excited to have him aboard,” said Smith. According to Burgess, Real Matters is rapidly establishing itself as an innovator in the property information services arena. He calls the organization impressive and progressive and says he looks forward to working with the other board members. CMP

Centum hires new director of business development Centum Financial Group announced the appointment of Paul Therien as director of business development. Therien has an extensive career in the finance and mortgage brokerage business, with over 12 years of related experience, with his most recent position as senior operations manager for the B.C. and Prairie region at FirstLine Mortgages. At Centum, his role will be to build direct relations with the company’s franchise system across Canada, and assist franchisees in building their businesses. Therien has demonstrated, in his past career, to be a hands-on manager and leader.  Centum hopes that over the next three months, Therien will have the opportunity to meet face-to-face with every Centum franchisee across Canada. CMP

24

mortgagebrokernews.ca   

Ian Silvester

Lucy Tseng

Altaf Noorali

20,500 estimated annual rural housing starts for Canada for 2010


Some people only see mortgage challenges. Our team sees the solutions. Yes,

at Equitable we’re a team.

We understand challenges, but focus on solutions. That’s why, for 40 years Canadians have turned to us for innovative residential and commercial financing options. Working together we overcome the obstacles, to make the deal work for you. At Equitable, you’re part of the solutions team, that opens doors for more customers.

www.equitabletrust.com Ontario 416.515.7000 1.866.407.0004

Western Canada 403.440.1200 1.866.940.1201


News subhead

www.mortgagebrokernews.ca

ISSUE 4.10

layeringyour

How diversification can make you a stronger broker

SPECIAL FOCUS ALBERTA: RIDING HIGH ON ENERGY

MARKETING 4 SOCIAL MEDIA SITES YOU NEED TODAY

PROFILE ED DOOLEY: POLITICIAN FAMILY MAN, BROKER

2009

26

this time last year Was Canada’s commercial real estate industry set for a comeback? Canada was seeing a 50 per cent decline in transactions through the first half of 2009 but there were some who voiced their optimism. “I’ve got more on the go than I’ve ever had in my career and I’m going to do more volume this year than I’ve ever done,” said Dale Bilton, a commercial broker with Mortgage Intelligence. “It’s a good time for buyers who have got strength.” According to Bilton, lenders were being very conservative with many going below appraised values for commercial buildings. He forecasted a “cautious” market forthcoming for hotels and plazas. Pierre Boiron, a real estate agent and developer, told Dow Jones that slowing demand, inventory peaks and price declines would lead to an acquisition phase (dependent on employment numbers). “It means that the mess is being cleaned up,” he said. One year later, Bilton says inquiries and requests for commercial applications have both increased, however, it has been difficult to place weaker requirements. “It’s been difficult to place a lot of the weaker applications. To sort of give you a feel for the commercial side, the banks are really being tough pushing plans out and I’m trying to save a lot of operations. I’m saving some, not all, the right ones are being saved, the ones that should be saved,” he said. According to Bilton, his business has been down a little bit but still remains similar to the past year. Commercial lenders are still being extremely cautious and haven’t significantly eased their requirements. Future investments, Bilton adds, may be best put in income properties. “I see some extremely good buys [on the horizon] for industrial buildings and income properties, there are no fire sales happening there. I work pretty exclusively in Ontario so I don’t want to quote outside the province. I would say that Ontario is, for the next 12 months, going to be very busy in terms of volume for the commercial side and for those who know how to place commercial deals.” CMP

mortgagebrokernews.ca   

RECA study reveals consumer satisfaction with brokers Last year, the Real Estate Council of Alberta (RECA) had just released a study reporting that most Albertan consumers had a positive view of the mortgage broker industry and trusted a broker to work in their best interest. “It appears that the majority of consumers go into the [mortgage] transaction with a reasonably accurate but very high level sense of what a broker will do for them,” the report said. Among the findings was the idea that most consumers perceived a strong broker-borrower relationship and believed their broker worked on their behalf. “The potential conflict of interest presented by the arrangement [between brokers and lenders] did not seem to trouble most respondents,” RECA said. “They continued to believe they were receiving elevated customer service and obtaining better mortgage rates and terms than they would obtain independently.” RECA planned to use the research to create more effective practice standards. One year later, According to Erica Lepan, a broker with TMG The Mortgage Group in Alberta, a broker’s negotiating skills, access to competitive rates, and their ensuring you get the best rates and terms are among the top reasons using a mortgage broker gets clients through the deal more comfortably. “As a first-time homebuyer, we were very leery of the process. Our broker took the time and answered all of our questions very effectively. Whenever panic struck, she was a quick phone call or e-mail away. She genuinely wanted to understand our personal financial situation, and find the perfect mortgage for us,” said Jerry and Kirstin (no last name provided) of Alberta on their broker. Jodie Hoy, a Calgary broker with Dominion Lending Centres, says that, when dealing with her clients, she always meets them and returns phone calls right away to get on their good side. She says Albertans still have faith in their brokers. “Based on me getting busier, I’d say confidence increased. Last year, I doubled my business so I’m assuming confidence is higher,” she said. CMP


Feature UNDERWRITERS

the

underwriter effect

As a mortgage broker, the primary person to please is the client. But there are other people in your professional life who can affect that, namely the underwriter who processes the deal. Heather Li speaks to underwriters to see how they work to serve the broker

28

mortgagebrokernews.ca   


On newsstands November 1, 2010 Fall issue: • Kitchen makeovers • Building your new home: land acquisition 101 • HGTV’s Scott McGillivray discusses adding value with an income suite • Pro advice from lawyers, realtors, mortgage brokers and home inspectors

For more information visit us at www.yournewhomemag.ca


Feature UNDERWRITERS

T

he image of a mortgage underwriter is often somebody sitting at a desk, waiting for deals to come in, plug in numbers, see if the application fits with the lender guidelines and deny or approve it for the broker. But in a service industry that is built on how relationships are made and maintained, an underwriter’s position is more than merely pushing electronic papers. As mortgage brokers, you know your work with the client can’t be accomplished without the underwriter. How the underwriter responds to you has a direct domino effect on how and when you can respond to your client. So for your business to run smoothly, it is just as important to work well with your underwriter, as it is to give clients the service and attention they deserve. One part of working well with your underwriter is understanding the dynamics behind that job and how it affects you without sometimes realizing it. The other part is seeing there are certain things an underwriter tries to do with you to make it easier for everyone involved.

“ so sometimes, as a broker it can be stressful when an underwriter doesn’t get back to one of your deals with a commitment as quickly as you would like ” What brokers may sometimes forget One of the biggest challenges anybody has in any industry is delivering when they say they will. And the reason why it can be that much more difficult is because what you’re delivering relies on other people to hand you a piece of the puzzle. So sometimes, as a broker it can be stressful when an underwriter doesn’t get back to one of your deals with a commitment as quickly as you would like. “Sometimes, it may seem like our turnaround time is a little bit slow,” says Melissa Coburn, underwriter with Paradigm Quest Inc. “But we could be dealing with anywhere between 10 to 15 deals a day and we have to find a process where everybody is getting the same turnaround time.”

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mortgagebrokernews.ca   

This is one key thing to remember when dealing with an underwriter. And no matter how special you may think you are, you can’t really change the order and process an underwriter needs to go through to review a deal and send a commitment, and balance that with every other deal she is working on. “Also, sometimes there could be a delay with the insurer,” adds Coburn. “Or there may be something on the deal that triggers it to go on to a manual underwriter on the insurer side so it’s not an automatic approval. There are other parties involved for us too but we’re trying to be as efficient as possible for everybody.” So though you can’t make an underwriter work faster for you, you can manage this expectation level for the client to let them know it’s being processed as quickly as possible and what the average turnaround time may be. To make the underwriting process faster though, a broker can be more detailed in submission notes so there isn’t any confusion initially. “We don’t have documentation upfront a lot of times and when that documentation comes in, it’s actually different from the application information that we approved from,” says Barbara Starr, team leader underwriter with Macquarie Financial Ltd. “The incomes come in different from the mortgage payments, and then you’re under the gun to make sure it fits again and there’s a lot of re-working involved.” Starr, who’s been an underwriter for nearly 20 years, suggests that brokers take the time to have a really thorough interview with the client upfront to know them and what their needs are. “Sometimes, it can be last-minute panic on everybody’s part,” adds Starr. An abundance of customer information and clarity in the application means your deal can be processed more smoothly. Since an underwriter is working on more than one deal, if there’s a lot of back and forth for an application that wasn’t clear the first time around, you may be waiting around for a commitment longer than you hoped. “If it’s not really clear what the broker is looking for, it may end up being a file that has to be rewritten countless number of times,” adds Coburn. “Errors made in the beginning lead to deals having to be delayed in their approval.”


Feature UNDERWRITERS

Any rookie brokers without established underwriter relationships shouldn’t be wary of underwriters out to get them either by providing too much information. “Most underwriters want to get deals done as much as brokers do,” says Briar Robertson, underwriter with First National. “Some brokers think we’re trying to look for fault in the deal, which is not the case at all. But we also have audits and guidelines that we have to follow. Every deal is different, nothing is cookie-cutter and we have to balance between the broker and the lender.” So when you prepare all the information upfront, it gives the underwriter the chance to see the entire picture and only have to go through the process once so you aren’t delayed with your client. “The greater detail of information is more for continuity. We have to make sure if our files were to be looked in by anybody that it makes sense,” says Robertson. “Every file is like a little story. Two people, how old they are, what they do, where do they live, where are they going to work every day. Does it make sense?” And any background checks underwriters have to do isn’t about investigating further to find a thread to pull that will make the deal unravel. It’s about confirming the information just to make sure everything is true and accurate.

products and rates being offered only differ so much. So what makes a lender stand out the most is the service provided. Generally, there is personality matching going on as underwriters have a certain number of dedicated brokers they are serving exclusively. So styles of service may differ from person to person, but there were a few common themes on what makes the best broker-underwriter relationships.

Relationship strategies Many underwriters acknowledged that the borrower is the broker’s client, and their client is the broker. Although there are many different lenders available nowadays, the

2. Constant communication A smooth working relationship is based on managing expectations. When it comes to turnaround times for underwriters, sometimes all a broker needs is a little

“ every deal is different, nothing is cookie-cutter and we have to balance between the broker and the lender ”

1.

Be direct and upfront As the broker, if you have a problem, question or concern with the deal, the underwriter wants to help. The underwriter is there to make your job easier, not more difficult. “There’s no secrets between me and my brokers,” says Robertson. “We tell it how it is.” So the most effective working relationship is an honest one.

mortgagebrokernews.ca  

31


Feature UNDERWRITERS

Beyond the typical broker-underwriter dynamic One underwriter, who has been in the business for over 20 years, compares the brokerunderwriter relationship to most other ones you have in life. “Relationship is a two-way street, as it would be with a spouse or significant other,” says Greg Tkach of Scotiabank. “Our relationships with our brokers have transcended simple business relationships to a point where we make certain demands of them as well. If they are to demand the total dedication of underwriting, adjudication and followup of their files from me, then I would expect all their I’s dotted and T’s crossed when submitting a deal.”

“ relationship is a two-way street, as it would be with a spouse or significant other ”

heads up that things are moving along. “As soon as I get a deal, I am calling or e-mailing the broker at every step of the process so they know what’s going on,” says Coburn. “I try to communicate at every step so they’re not worried their deal is being sat on or lost in the shuffle, and because of that the trust builds.” 3. E-mailing versus phone calls There are people who prefer to communicate by phone and others by e-mail, but the underwriter’s job is to use both to suit the broker and the need of that situation. In some cases, a phone call is best. “I’ll try to have that conversation with the broker over a difficult deal by phone,” says Coburn. “Sometimes just by e-mail that gets lost in translation and things can be misinterpreted.” Though a lot of the relationship-building lies with the underwriter working to serve the broker, in some cases that bond means the broker may have to start giving back in return.

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mortgagebrokernews.ca   

Tkach admits he has a stronger personality than others are used to but has come to be known in the industry as being very good at what he does. He deals exclusively with five brokers, some for over 10 years, and is responsible for about $200 million in bookings annually. He has also built relationships with his brokers that are more personal. “I’ve been to their weddings, christenings, birthday parties, barbecues, cottages,” he says. “And I’ve written their personal mortgages. There is no better testament in my opinion, of a broker who really sees the value of the relationship when they give you their own personal business.” Most broker-underwriter relationships probably will not cross into this special realm Tkach has managed to create with his brokers, but it’s the greatest example of what happens when underwriters and brokers are matched up and work well together. Since the broker industry is built on how you deal with your clients, it can be broken on how you interact with your underwriter. But more often than not, the underwriter wants to help you as much as you want to be helped. CMP


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Cover

Brokers on lenders

lenders

The response

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cover

brokers on lenders

s ral l y b e to b a roke c k rs s urv ... e y

CMP had the opportunity to speak to many of the lenders named to the Top 10 in Canada by mortgage brokers across Canada. They told us about the programs they implemented in 2010 and what they thought led to their success, and they discussed new programs they hope will have a positive impact on broker relationships.

mortgagebrokernews.ca  

35


Cover

Brokers on lenders

Merix Category

2010

2009

difference

Approval/ loan turnaround times

4.32

3.33

+.99

BDM support

4.78

3.91

+.87

Broker support (training, information seminars etc)

3.60

3.21

+.39

Interest Rates

3.85

3.94

-.09

IT and electronic/ technology

4.54

3.43

+1.11

Overall service level to brokers

4.21

3.60

+.61

Product Range

4.41

3.34

+1.07

Satisfaction Index on Overall credit policy

4.44

3.38

+1.06

Transparency of commission structure

4.44

-

Underwriter support

4.48

3.51

Overall Performance

4.44

3.54

+.9

Merix won the top spot this year and its president, Boris Bozic, discusses the company’s win. “Merix has noticed a shift in the mindset in brokers. They are evaluating who they are doing business with, and if it’s good for their business in the long term,” Bozic said. “When you look at value, Merix creates this through trailer fees paid over the life of a mortgage, and through higher customer retention. We have been one of the benefactors of the shift in mindset over the last 12 months.” Selective access approach Bozic also credits the Merix selective access approach with improving service levels. “In order to do a good job, we can’t be available to all mortgage brokers. Over the past year, mortgagebrokernews.ca   

Scotia Mortgage Authority Category

2010

2009

difference

Approval/ loan turnaround times

4.27

-

-

BDM support

4.17

-

-

Broker support (training, information seminars etc)

4.2

-

-

Interest Rates

4.58

3.43

+1.15

IT and electronic/ technology

3.86

3.33

+.53

Overall service level to brokers

3.86

-

-

Product Range

4.17

3.85

+.32

Satisfaction Index on Overall credit policy

4

Transparency of commission structure

3.3

3.68

-.38

Underwriter support

4.5

3.33

+1.17

Overall Performance

3.45

-

-

+.97

Merix

36

Merix has carefully chosen who we wanted to do business with. Individuals that will garner volume and efficiency are who we are interested in.” “This year we saw a significant retrenching and adherence to our selective access principle. We parted ways with 650 brokers in 2010, the people who had the lowest efficiency ratings. These individuals still had $600 million in volume over the course of a year, but we had to give up that volume because of poor efficiencies.” While saying no to $600 million in potential volume seems radical, the culling allowed Merix to unclog their pipes and improve their service levels, according to Bozic. “We couldn’t improve service levels if we were constantly chasing phantom files. Efficiency ratios went up 75 per cent year over

-


An Open Letter from the President of MCAP Service Corporation This past year MCAP has focused on improving our service to brokers. We believe we are on the right track but in the final analysis, judgement rests in the hands of you - our valued brokers. The results of the survey indicate that you too believe we have made good progress. I would like to thank MCAP staff for their work, dedication and commitment to service improvement, and you - our brokers - for your support and vote of confidence. I commit to continuing on this track of improvement and look forward to hearing from you in 2011.

Ronald D. Swift, AMP, CMB President, MCAP Service Corporation o

MEDALS D L IN O G

MCAP Service Corporation

Ontario Mortgage Brokerage #10515

Ontario Mortgage Administrator #11692


Cover

Brokers on lenders

year. For customers, it means that we took phantom files and deals that were clogging up the system out of the system, which allowed more time to work on real deals.” Freeing up this time to work on their core customers was absolutely key to Merix’s stunning success in the survey.

Boris Bozic

Merix Concept Two At the same time as they were getting rid of phantom deals, Merix introduced Merix Concept Two, a system that replaced the minimum volume requirement and replaced it with a higher efficiency ratio. Merix would rather see a broker submit five deals that all closed rather than looking at fifty deals and only 10 close. “The industry has moved to volume requirements. Volume does not equal efficiencies,” Bozic says. “If you can’t guarantee volume, guarantee efficiencies. You know what is and what isn’t a Merix deal. High efficiency ratings also involve getting us the supporting documentation as quickly as possible.” The Merix Concept Two program gave opportunities to grow relationships with brokers who didn’t have access to other lenders. The combined strength of the selective access approach and the move to efficiencies rather than volumes led to a domino effect for Merix, which meant more service on the adjudication side, and better service overall. BDM program Merix’s BDM success was no accident; they invest substantial resources in hiring the right people and training them the Merix way. Junior people enter the BDM stream through the Associates program in an entry level position. From there, they are trained until they have domain expertise. Merix challenges them to learn not just Merix policies and procedures, but general information about the mortgage industry. In addition, they are asked to learn about sales and the process of sales and to relay that information to their customers.  The Merix training program is “Well worth the time, effort, and monetary investment,” Bozic says. “A BDM’s every meeting must have purpose and must create value. “We do not take a coffee and cupcakes approach. Our meetings with our customers are not about socializing, but about creating value for our brokers.”

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Technology gains One of the areas in which Merix saw great gains was in the technology sector. Bozic attributes this to the implementation of a technology training program. “We came to the realization that we were less than effective at communicating the value of our technology. We actively trained customers on our system so that they could see the benefits that we inherently knew about but hadn’t communicated.” Every new signup must now go through a technology training session with Merix with Explore, their deal-tracking system. They marketed and trained their brokers in Explore more effectively in 2010. Listening to customers “We spent a great deal of time asking our customers how they wanted to hear from us, and realized one size doesn’t fit all so we set out to find out how they

Home Trust Category

2010

2009

difference

Approval/ loan turnaround times

4.16

3.52

+.64

BDM support

3.44

3.41

+.3

Broker support (training, information seminars etc)

3.46

2.98

+.48

Interest Rates

3.86

3.50

+.36

IT and electronic/ technology

4.04

-

-

Overall service level to brokers

3.46

3.61

-.15

Product Range

4.07

3.36

+.71

Satisfaction Index on Overall credit policy

3.7

3.43

+.27

Transparency of commission structure

4.23

3.73

+.5

Underwriter support

4.4

3.72

+.68

Overall Performance

3.42

3.39

+.03


Winning is a team effort

Thank you for making MERIX #1 With the input of originators like you we have developed innovative lending products, support initiatives and compensation programs. As a result, MERIX has been awarded more gold medals and more medals overall in the 2010 CMP Brokers on Lenders survey than any other lender. We are proud of the achievements that we have created together and will continue to work hard and provide originators with the tools they need to succeed.

Approval/Loan Turnaround Times

BDM Support IT and Electronic/Technology

Overall Performance

Product Range

Underwriter Support

Satisfaction Index on Overall Credit Policy

Transparency of Commission Structure Broker Support Overall Service Level to Brokers

Find out how rewarding partnering with MERIX is. Call 1-877-637-4911 or email info@merixfinancial.com today. Follow us on Twitter at twitter.com/MERIXFinancial


Cover

Brokers on lenders

wanted us to communicate with them and met those demands,” says Bozic. “We are pleased with where we are today directionally, the way the industry has viewed us, rated us, and given us the gold medal. We would like to say to our customer base that the best is yet to come,” he said. “All of us are humbled by these results. It is extraordinary that Merix could garner these results after just five years in the business. One of the key things a company can do is to win hearts and minds of their customers. We’re a smaller lender but we try really hard.”

First National

Karen Biernaski, Director of Marketing at First National Financial, had this to say about the wins in many categories and the #2 spot overall in our survey: “We are really pleased to again be named the best leader in Overall Performance, and are happy that all of our work and efforts have been recognized by the broker community.”

First National Category

2010

2009

MCAP Category

2010

2009

difference

Approval/ loan turnaround times

4.63

3.60

+1.03

BDM support

4.3

3.44

+.86

Broker support (training, information seminars etc)

3.4

2.93

+.47

Interest Rates

3.85

3.95

-0.1

IT and electronic/ technology

2.99

3.60

-.61

Overall service level to brokers

4.54

3.45

+1.09

Product Range

4.38

3.41

+.97

Satisfaction Index on Overall credit policy

3.77

3.65

+.42

Transparency of commission structure

4.85

3.83

+1.02

Underwriter support

4.85

3.45

+1.4

Overall Performance

3.50

3.50

-

difference

Approval/ loan turnaround times

4.85

4.48

+.37

BDM support

4.09

3.76

+.33

Broker support (training, information seminars etc)

4.32

3.44

+.88

Interest Rates

4.25

3.80

+.45

IT and electronic/ technology

4.11

4.38

-.27

Overall service level to brokers

4.52

4.22

+.3

Product Range

3.94

3.35

+.59

Satisfaction Index on Overall credit policy

4.11

3.87

+.24

Transparency of commission structure

4.48

4.26

+.22

Underwriter support

4.56

4.22

+.34

Overall Performance

4.59

3.98

+.61

MCAP

CMP spoke with Gino Tieri, Vice-President of Sales at MCAP about the gains that MCAP had made in the 2010 survey. “In 2009, MCAP realized the need to get back to basics on customer service, which included that we focus on improving our service to brokers.  It’s clear from the survey results that we have made significant progress in this area,” Tieri said.  “MCAP has focussed efforts in 2010 to listen to the voice of the broker.  This means that our underwriting team will continue to focus on providing a high level of service to brokers on a day-to-day basis and our sales team will be taking a more consultative approach and move discussions beyond a singular focus on product and sales.” Gains to approval times Significant gains by MCAP were seen in the area of

40

mortgagebrokernews.ca   


Choices.

At Macquarie Financial, brokers choose their compensation.

Ask about our commission options. We’re on Your Side!

Call 1 877 462 3788 www.MacquarieFinancial.com

Macquarie Financial Ltd. (MFL) is not an authorized deposit taking institution for the purposes of the Banking Act (Cwth) 1959. MFL’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MFL, unless noted otherwise. MFL is not regulated as a bank or other financial institution or as a holding company thereof.


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Brokers on lenders

approval turnaround times. “Brokers told us that approval turnaround times were important to compete with the approval speed of the retail banking channel, and as a result, we made that a priority last year.  Our internal departments focussed on making our approval process more efficient and our underwriting teams focussed on reducing approval turnaround times. We are very proud of the gains that we have made in this area and will continue to look for opportunities to improve.” ”MCAP gave me more support than my own office” This statement was made by one particular broker and Tieri credits the support of the underwriting team at MCAP as an important part of the foundation of  MCAP’s success. “We’ve made an ongoing effort to elevate the standards of our sales and underwriting teams to go beyond a traditional approach to working on a deal.  Our team approach involving sales,

underwriting and the broker fosters a great degree of support for brokers.” Our focus in 2010 is to understand a broker’s needs and finding ways to help them grow their business. Our consultative approach asks brokers questions such as how can we train agents to be more effective when working on a deal and elevating performance of their own sales channel.” Gold medal in service level   “From our perspective, it’s all about service, and so we are very pleased to be recognized for overall service levels,” Tieri adds. “We take this as an indication that we are on the right path.  We also received a gold medal for underwriting support and believe that this also sets our service apart from others in the marketplace.” Overall, MCAP Is extremely excited by these results, and will continue to strive to be a broker’s most valuable partner.  “The industry is in evolution, mortgage broker market share remains flat, we are at a moment in time where we can take it to a different level, and as a lender MCAP needs

Gino Tieri

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Brokers on lenders

to support those efforts. Our focus is to help brokers grow their business, and to help the overall broker community increase market share. “

Macquarie Category

2010

2009

difference

Approval/ loan turnaround times

4.2

3.39

+.81

BDM support

3.77

3.64

+.13

Broker support (training, information seminars etc)

3.2

3.13

+.07

Interest Rates

3.5

3.64

-.14

IT and electronic/ technology

2.5

2.91

-.41

Overall service level to brokers

3.2

3.48

-.28

Product Range

4.27

3.05

+1.22

Satisfaction Index on Overall credit policy

3.3

3.25

+.05

Transparency of commission structure

3.2

3.74

-.54

Underwriter support

3.2

3.44

-.24

Overall Performance

3.39

3.37

+.02

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Macquarie

“Macquarie is very proud of being recognized in the mortgage market in Canada, in a survey in which we didn’t have ability to affect the outcome,” says Grant MacKenzie, CEO of Macquarie Financial. “We won a bronze for product range, we are clearly quite proud of that. It is difficult to be innovative with product range in a saturated market.” Macquarie was innovative in such a product landscape by offering non-traditional products. One of these was their no-fee refinance product. It introduced a variation to an established product that was out in the market. BDM support training Macquarie drew excellent commentary for their BDM support. MacKenzie attributed this to good training and a keen eye for relationship management. “We spend a lot of time training staff. One of the things they concentrate on is to have a focused approach to relationship management. They look for ways to add additional value to the relationship between originator and underwriter. We are very proud of the fact that three of our BDM’s were recognized in CMP awards last year.” 2010 programs “Macquarie’s sole focus on mortgage brokers drives the outcomes seen in the survey. There is no retail branch network to contend with, no potential conflict. Macquarie’s raison d’être is solely mortgage brokers. We are not here to take the broker’s customer.” With the firm being only five years old, MacKenzie was very happy with the headway his organization has made.

Grant MacKenzie

George Hugh


ING Direct

George Hugh, President of ING Broker Services, was pleased with the placement within the Top 10 lenders in Canada and the prevalence of ING throughout most categories. “The last two years have been successful for ING Direct. We wanted to understand what the brokers wanted in the market, and as an advocate for the broker channel we wanted to improve. It’s great to get this external feedback on what we were doing. ING ranked in all categories, people are recognizing us as a top lender in the market. This is very positive feedback.” ING is using their knowledge to understand the needs of brokers, lenders, and the market in order to build a model for the long term success of the industry. ING’s ratings went up quite a bit in the BDM area. Hugh attributes this to “continuing to strive and concentrating on areas such as service, communications, and technology.”

ING Direct Category

2010

2009

difference

Approval/ loan turnaround times

3.56

3.56

-

BDM support

4.25

3.45

+.8

Broker support (training, information seminars etc)

2.95

-

-

Interest Rates

4.54

3.87

+.67

IT and electronic/ technology

2.87

3.03

-.16

Overall service level to brokers

3.75

3.51

+.24

Product Range

4.25

-

-

Satisfaction Index on Overall credit policy

3.5

3.42

+.08

Transparency of commission structure

4

4.13

-.13

Underwriter support

3.55

3.54

+.01

Overall Performance 3.28 3.45 Interest rates “ING Direct entered Canada 13 years ago. Having grown substantially over 13 years, one of the core values of the ING brand is to give savings to all Canadians, so providing exceptionally good rates is part of that brand. We do that in the business through lower mortgage interest rates. True to where we stand today, that will never change.”

-.17

Loyalty program - Orange Plus In 2010 ING retooled their loyalty program and introduced Orange Plus. “Orange Plus is for the top tier brokers who are not just giving us volume, but who are strategically aligning with us and becoming a partner with ING. People are starting to feel what we are all about and we are winning them back being dedicated to the broker and to high levels of service,” Hugh says. Other programs ING’s unique-in-industry, 120 day rate hold, made it easier to close deals for brokers - nobody else offers this. ING is looking forward to introducing some new initiatives in 2011. “Even from an underwriting perspective, it is such a wide-open space. ING made adjustments to underwriting to sustain different geographic areas across Canada. This meant a big win for ING in 2010. ING has been very vocal in the public and feels like a good business partner for brokers.”

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Brokers on lenders

“Our brokers are entrepreneurs, and all entrepreneurs have certain expectations of lenders. We are a great fit for them because the ING model supports what they want to do. ING will continue to be strong advocates for brokers in the channel.”

FirstLine Mortgages

As we constantly strive to improve our service, the CMP Brokers on Lenders survey, along with our regular FirstLine surveys and broker feedback workshops, gives brokers a voice to identify our areas of strength and opportunities for improvement. We are proud to see that FirstLine Mortgages scored so highly on BDM support, as FirstLine Regional Business Managers play a key role in providing support and training. FirstLine’s dedication to giving brokers the tools to succeed is further reflected in the score for Overall service level

FirstLine Mortgages Category

2010

2009

difference

Approval/ loan turnaround times

3.4

-

-

BDM support

4.44

3.59

+.85

Broker support (training, information seminars etc)

2.93

3.42

-.49

Interest Rates

3.2

3.51

-.31

IT and electronic/ technology

3.81

2.99

+.82

Overall service level to brokers

4

-

-

Product Range

4.11

4.06

+.05

Satisfaction Index on Overall credit policy

4.23

-

-

Transparency of commission structure

3.55

-

-

Underwriter support

4

-

-

Overall Performance

3.37

-

-

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mortgagebrokernews.ca   

to brokers, with FirstLine gaining the number four spot this year. As part of our commitment to enhancing Broker support through education and information sessions, the FirstLine Professional Development Tour, EDI seminar on operational effectiveness and financial success, and the Benjamin Tal Tour are all underway. These programs are designed to help provide brokers with the tools they need to build their business in an ever-changing mortgage market. As the next fiscal year approaches, we look forward to continuing to provide a competitive product range, clear credit policies and increased support, with a continued focus on the needs of brokers. - Tim Mezik, President, FirstLine Mortgages

Street Capital

“Our strong showing in the survey indicates that we are continually improving our service levels both in underwriting and BDM level,” said Street Capital’s president Paul Grewal. “One of our mandates in 2010 was to improve our service levels.” Street Capital placed in the technology category this year, which it missed in last year’s poll. Grewal indicates that they wish to continue to improve this record. “We’ll be introducing a broker portal to mortgage brokers in fall of 2010.” Street Capital’s gains can be attributed to a few things, but the overarching change at the firm this year was an increase in personnel. “We increased our underwriting and sales force significantly from last year. This has introduced us to lots of mortgage brokers who were new to Street Capital, and we have seen a great growth in sales overall as a result of this expansion.” Street Capital was praised by brokers for their BDMs in this year’s survey. “Our mandate has been to hire experienced residential underwriters. The expanded workforce that we have in place right now contributed to our success -- they are seasoned lenders who work quite well with mortgage brokers.” And finally, one of the best broker statements in the article was about Street Capital, with a broker writing that “Street Capital steps out above most, in my opinion” and went on to praise their services. “Once again, it proves that our business model is continuing to work well when brokers provide us with that kind of testimonial. Street

Paul Grewal


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Brokers on lenders

Street Capital

their average tenure, we probably rank as having the most long-term BDM’s in the market. This played a role in them being recognized as very supportive by the broker community. The BDM is the broker’s window into ResMor, and at the end of the day the broker will only ever meet that BDM. Results have shown that they can maintain relationships through thick and thin. The organization as a whole was most proud of this reward.” “It is key for ResMor as we move forward to capitalize on all the changes we have made and to focus now on some of the things that they ranked on. There are a number of initiatives that will come to fruition later this year or early next year that I am confident that will move ResMor up or help us score in some categories, including implementing innovative new technology being developed in conjunction with DVM Software Inc.” CMP

Category

2010

2009

difference

Approval/ loan turnaround times

4.27

3.49

+.78

BDM support

4.06

3.87

+.19

Broker support (training, information seminars etc)

3.2

3.15

+.05

Interest Rates

4.55

3.64

+.91

IT and electronic/ technology

2.91

2.75

+.16

Overall service level to brokers

3

3.47

-.47

Product Range

3.20

3.20

-

Satisfaction Index on Overall credit policy

3.85

3.31

+.54

Category

2010

2009

difference

Transparency of commission structure

4.36

3.73

+.63

Approval/ loan turnaround times

3.4

3.33

+.01

Underwriter support

4.1

3.55

+.55

BDM support

4.32

-

Overall Performance

3.41

3.42

-.01

Broker support (training, information seminars etc)

3.2

-

-

Interest Rates

3.77

-

-

IT and electronic/ technology

2.83

-

-

Overall service level to brokers

3.72

-

-

Product Range

4.25

-

-

Satisfaction Index on Overall credit policy

3.6

-

-

Transparency of commission structure

4.1

-

-

Underwriter support

3.3

-

-

Overall Performance

3.42

-

-

Capital has come out with certain pricing promotions over the year to enable brokers to be more competitive in the marketplace that, combined with our sales and service platform, has improved broker satisfaction and consequently our success.”

ResMor

“It was a delight to find ourselves in this position. ResMor has gone through a number of changes in the past 12 to15 months,” said Michel Cubric, Vice-President of Mortgage Operations. “We have strived to give brokers great levels of service while working on fundamental changes in the organization, including new senior leadership members and refocusing the business to offer not a thousand options but a few solid offers that we want to be known for.” ResMor received a bronze in the BDM support category. “When you look at our BDMs, based on

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ResMor

Michel Cubric


Feature West Coast

British Columbia is known as the long established province for mortgage brokers. Heather Li takes a look at what makes the region different and why it sets the trends for the rest of the country

West Coast ways I

n British Columbia, the mortgage broker industry is more firmly entrenched than in any other province in the country (with the possible exception of Quebec). The broker share for financing mortgages hovers around 25 per cent for most of the country, but in B.C., it reaches closer to between 35 and 40 per cent. Last month, CMP took a look at the mortgage market in the Atlantic provinces, where the use and understanding of brokers is behind the rest of Canada. Now CMP is going to the West Coast to see the different aspects of that region’s market. Higher house prices The biggest difference that kept coming up about B.C. was how unaffordable homes have become over the years, relative to income. “This is a very, very expensive market to purchase in,” says John Charbonneau, broker with The Mortgage Group in Vancouver for nearly 17 years. “Average purchase price of a home that’s been sold is close to $700,000, and it’s not like we have incomes that are 40 or 50 per cent higher to match.” This has resulted in a dependence on rental suite income when obtaining a mortgage.

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mortgagebrokernews.ca   

A common attribute found among B.C. homes are these additional basement suites that are rented out to supplement income. Charbonneau says when he moved to B.C. from Toronto in 1986, the suites were common but the income derived from it acted more as a bonus. As house prices started to drastically increase, people have now become dependent on that extra income when applying for mortgages. The only problem is most of the suites are illegal. “There’s a broad spectrum of lenders who differ on how they will treat that illegal income,” says Charbonneau. “Some lenders say, ‘We will not count on that illegal income in any shape or form.’ Others say they’ll take 50 per cent of the rental income and add it to the borrower’s income; while some will take 80 per cent, deduct it from the mortgage payments and see how you qualify to borrow after that.” Though rental suite income is so common in B.C., particularly in the lower mainland where Vancouver, Victoria and Kelowna are situated and where house prices tend to be the most expensive on average, lenders fear the illegal aspect. This is because if someone has an obnoxious tenant who parks his car to interfere with a neighbour, or constantly has loud parties, and the neighbour


Feature

West Coast

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51


Feature West Coast

“ the Vancouver government is allowing people to build selfcontained units varying from 500 to 800 square feet to be used as legal accommodation and thus a legal rental suite ” complains to the city about it, the city can come in and shut down the suite. The city will then continue to monitor the home and ensure another illegal suite doesn’t spring up. This means the common rental income is no longer there and may hinder the borrower’s ability to make her mortgage payments. To counteract this problem, the city of Vancouver has recently authorized the building of laneway homes. Just like in many other cities, there are homes in certain areas with a laneway at the back of the property so as not to but up against a neighbour’s backyard. Typically, most people would have a garage. But now, the Vancouver government is allowing people to build selfcontained units varying from 500 to 800 square feet to be used as legal accommodation and thus a legal rental suite. In Victoria and on Vancouver Island, where Carolyn Maycock and Margaret Mots have been based as brokers for over 10 years, in the past year they have found two couples coming together to buy one property. “That way you’re using four incomes instead of two,” says Maycock. “There will be two levels in the home so one couple lives in a suite in the lower level and the other lives on the top floor. They’re all on one title and all on one mortgage together.” Though it isn’t a prevalent practice, it is one creative way a few borrowers are employing to get around some of the high house prices.

There are other competing programs that a potential new broker can enrol in but essentially he or she has to meet the course standard at Sauder. Once this educational requirement has been completed, a broker must register with the provincial Financial Institutions Commission (FICOM), which is the government body that regulates mortgage brokers. FICOM is also about to implement a re-licensing education requirement every two years to ensure brokers continue to maintain a high level of professionalism. “What FICOM wants to do is ensure brokers are on top of what’s happening in the industry as far as regulatory, compliance and disclosure requirements go,” says Joanne Vickery, president of the Mortgage Brokers Association of British Columbia (MBABC). “This way we can report to the consumer that we’ve been through this course, we’re licensed, we’re regulated and we have an ethics committee in our association. We have that established and it’s been running like that for quite some time and that’s why it puts us ahead of the other provinces.” In the past few years, Alberta and Ontario have followed B.C.’s lead with its licensing and regulation, and the other provinces are following suit, but because B.C.’s programs have been running the longest, consumer confidence is greatest there. “Probably 17 years ago when I first started as a mortgage broker, the vast majority had the perception they only needed a mortgage broker if they had bad credit,” says Charbonneau, which is still a common outlook among Atlantic Canadians. “Now when you say to someone you’ve never met before that you’re a mortgage broker, they’ll say, ‘Oh yeah. My brother used a mortgage broker and he got a really good interest rate on his mortgage. Better than the bank.’”

“ now when you say to someone you’ve never met before that you’re a mortgage broker, they’ll say, ‘Oh yeah. My brother used a mortgage broker and he got a really good interest rate on his mortgage. Better than the bank ”

Regulation and licensing When CMP looked at the mortgage broker industry in the Atlantic provinces last month, it came as a surprise that there are no education requirements to obtain a licence in Newfoundland and New Brunswick. Meanwhile in Nova Scotia and Prince Edward Island, you don’t even need a licence to say you’re a practicing broker. This is the complete opposite of B.C. where regulation and strict licensing has been in place for many years. Longevity of the industry goes a long way as it The initial licence is a one-year correspondence means advertising and campaigning to grow course taken through the Sauder School of Business consumer awareness has been in place for many at the University of British Columbia in Vancouver. more years.

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mortgagebrokernews.ca   

Top: Brent Irving Middle: Carolyn Maycock Bottom: Joanne Vickery


“In addition to recognizing the hard work our entire team does to service our customers better every day, winning this award has enhanced our position as market leaders and added to our credibility in the eyes of our clients, partners and new recruits. It also contributes to our ongoing efforts to gain market share from the banks and prove to consumers that using a mortgage brokerage is the smarter alternative than just using one bank.�

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Feature West Coast

Constantly changing Since the B.C. broker industry has been longer established than many other provinces, there are many more lenders, products and policies in place now than there were 20 years ago. “The amount of information I need to know about lenders now has grown exponentially,” says Charbonneau. “We have 27 major lenders now compared to 10 or 15 years ago. And the information changes rapidly. You could print out every e-mail from every lender over the past month about a new policy or product offering and it is outdated within two or three Building consumer confidence months. They either cancel the program or bring in The establishment of the MBABC has also been something new; change the policy, the rule, the great support for mortgage brokers in the western guideline. To stay on top of the game is so much province. One program it launched last fall was more complex.” Mortgage Month, dubbed Mortgage Education Considering how much more information is Month for this year. “This is a thought leadership available now in B.C.’s mortgage market, it seems initiative to increase the awareness in all B.C. the re-licensing education components are more communities of what a mortgage broker is and why important now than ever. B.C. is also poised for you should use one,” says Madelaine Hatch, continuous growth, which will likely help continue communications specialist for MBABC. “There are to grow the mortgage broker industry. “B.C. is still so many people who simply do not know what well-positioned for the long term with more a mortgage broker is and what they do.” economic trade from countries such as China and Mortgage Month is being held in October this other Asian nations,” says Joe Santos, regional year and consists of MBABC members hosting a vice-president of Western Canada at MCAP. one-hour seminar in their community to educate “Vancouver and the lower mainland in particular and engage with consumers on mortgage topics. will be able to take advantage of more commerce Last year, about 25 seminars were held across the and more trade going on with countries across the province, and MBABC is hoping for a higher ocean. B.C. did fairly well surviving the serious participation level this year, as well as greater economic situation and that shows there’s a lot of attendance. Sister associations in Alberta and sustainability in the market here. I feel in the long Ontario are looking to duplicate the initiative and term, it’s a good place to invest and do business.” MBABC hopes it becomes a national campaign. Though the mortgage broker industry appears “We want as many consumers as possible to be to get younger as you move east from B.C., it aware that we are a trustworthy, educated certainly helps to have an established province industry,” says Vickery. paving the way for the rest of the country. CMP

“ Mortgage Month is being held in October this year and consists of MBABC members hosting a onehour seminar in their community to educate and engage with consumers on mortgage topics ”

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mortgagebrokernews.ca   

Top: Joe Santos Bottom: John Charbonneau


GOLDEN GIRL. You know it. We have serious star power at Mortgage Architects. We take pride in seeking out and signing the best-of-the-best. That’s why we’re thrilled to roll out the red carpet for our latest mega-watt addition to our Leadership Team. We’d like to announce the remarkable Joanne Vickery in the starring role of Regional Vice President of Western Canada. (Applause, please!) Joanne previously held various management roles for a major Canadian bank, owned her own successful boutique brokerage firm, and developed all of the training and education for a western-based national brokerage firm. Want more? She wholeheartedly gives back to the brokerage community as the current President of MBABC. Joanne Vickery is a star, plain and simple. And to us, she is our golden girl – because everything she’s ever worked on in the mortgage brokerage industry has been a resounding success. Now she’ll be using her golden touch to help our Western Canada brokers build their businesses and achieve their goals. Please join us in congratulating Joanne on her new starring role! And if you’d like your own business to be a star in this industry, give her a call. Joanne’s experience and passion for this business is unparalleled. Trust us. It’s a golden opportunity.

Joanne Vickery Regional Vice-President Western Canada

joanne.vickery@mtgarc.ca 604.250.5070 www.mortgagearchitects.ca © Copyright 2010, Mortgage Architects, all rights reserved.

The power of value.


NICHE SERIES Alt-B Lending

know your B products CMP magazine continues its series exploring a variety of niche markets and how mortgage professionals can work within these areas to increase their business. This month we focus on alt-B clients. Nick Lypaczewski spoke to a few brokers to find out what is the most effective way to reach and work with this market Kam Brar

Verico Select Mortgage Corp. Victoria, B.C. How does a broker’s approach with an alt-B client differ from a broker dealing with prime clients? The fundamentals are all the same, provide exceptional service and fulfill the needs and wants of the client with the right products. Where things differ is ensuring that with alt-B clients you get their whole story. In other words, you need to fully understand what has led them to their current circumstances, and most importantly you need to ensure that the short-term plan you are providing them with will ultimately benefit them in the long run.  Furthermore, they also need to understand that in order for things to be successful they will have to adhere to the plan.

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NICHE SERIES

Your mortgage clients are everywhere. Fortunately, we are too. www.MortgageBrokers.com The mortgage industry is changing. Your person-to-person contact increasingly relies on technology. And homebuying clients across

Canada are knocking on your virtual door. Here at MortgageBrokers.com, we’ve built a business model that’s leading the industry into the future. We’ve invested in the kinds of technology and high-tech tools that will generate business, increase efficiencies and, most importantly, position you for the future. Your best client prospects are web-connected, and they’re looking for mortgage solutions at MortgageBrokers.com:

Web Traffic Rank in Canada According to Alexa.com*: MortgageBrokers.com, way out ahead!

Alt-B Lending

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a great service for my growing team. All of the people at

MortgageBrokers.com are very receptive, they have an open culture, and invest back into the company. I have all the

confidence in my future success. – Barry Gibbs,

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Your mortgage clients are everywhere. We’ll bring them to you. Daniel Putnam President

416.884.6767 dputnam@mortgagebrokers.com www.mortgagebrokers.com

*As at July 27, 2010 © Copyright 2010, MortgageBrokers.com, all rights reserved. Corporate Office: 6505 Mississauga Rd., Mississauga, ON L5N 1A6 mortgagebrokernews.ca  

57


NICHE SERIES Alt-B Lending

What are some of the problems brokers face when dealing with B clients? Not getting all of the information both about the client and the deal overall upfront. With B deals there is always a greater likelihood of surprises -surprises which can often derail the deal quite easily.  For example, there are sometimes judgments on title that the client may not be fully aware of or sometimes reluctant to tell you about, but by doing a simple and quick title search these can be found out quite quickly.   Another common problem is the rates that B deals come with, a lot of brokers simply have a hard time selling their clients on these rates.  What tips can you offer brokers to get clients looking for B lending through the process? Be creative, think outside the box, in fact, get rid of the box altogether. Be candid and don’t sugarcoat things. Trying to make them feel good isn’t going to help, being honest and direct with them, however, will. Also, make sure there is an exit door at the end. Very few clients can continually stay in B and private mortgages due to the costs, these products are short-term solutions -- make sure that’s the case with all of your clients. Lastly, don’t be ashamed of the rates. Rates are based on risk and, at the current time, those are the ones your clients qualify for. What are some of the problems consumers experience with B products? Less flexibility.  A lot of the B products don’t have the same early repayment or lump sum repayment of options as their A cousins.  Sometimes there is a lock-in period during which they cannot be paid out at all unless the property is sold.  Other products don’t even allow you to refinance and switch to another lender during a prescribed time period.  B products can also come with a set of fees that clients may not often experience with A products.  These can vary from lender to lender so it’s best to know your B lenders’ products inside out thereby avoiding any grief for you and your clients.  What are some of the problems brokers experience when accessing B products? They don’t realize that polices and products differ greatly from B lender to B lender. 

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Unlike the A side, which is fairly uniform, the same cannot be said of the B side. These lenders all have their own particular nuances on the B side as far as LTVs, types of properties, beacons, credit history, etc.  What one may accept is not guaranteed to be accepted by another.  Lender fees can also present a problem.  Sometimes brokers who are inexperienced on the B side, are quite shocked by what some lenders charge. Once again, this can vary from B lender to B lender. There is no set policy out there. What are some of the issues for B clients? Rates. It’s more a sticker shock thing. Most consumers have prime rates in their heads and who can blame them? This is what everyone talks about.  So the sooner a broker can “recalibrate” the rate expectations the better. Fees are another one. Most consumers are not aware that there are fees associated with B lending.  Again, a successful broker is one who deals with this upfront.  Springing these on clients at the last minute is not the way to go -- it’s a recipe for disaster. I’m a B client, should I be upset or worried that I don’t qualify for a better product or are B products satisfactory enough?  I don’t believe you should. Conversely, I’m not saying you should be jumping for joy either.  You should look at your present situation as a temporary one. If the B product is the best you can get at this time and it bridges an immediate issue or challenge or solves one presently in your life than it’s OK.  Ultimately your goal should be to cross back over to the A side. 

Chad Mooney

Mortgage Brokers.com How does a broker’s approach with an alt-B client differ from a broker dealing with prime clients? I don’t know that the approach is any different to the client themselves. Typically, you have to treat all the clients the same. The approach to the lenders is different and obviously who you can go to. The subprime and the B market is starting to open up a little bit, it wasn’t like it was a couple of years ago. I don’t think the approach to the client is any different whether

Kam Brar


NICHE SERIES

Alt-B Lending

they’re A, B or C. You basically look at the client, you paint the picture, and you find the best possible mortgage solution for them. What are some of the problems brokers face when dealing with B clients? Every situation is unique. We deal with some pretty tough-to-do situations with people. We’ve been doing this long enough where we know exactly which lenders accept what. I’m finding that nowadays even B clients who have been with the B lenders, have loan to value so high because of the mortgages they got into five years ago. Although they’ve always made their payments, it’s tough to find them a lender at this point, there’s just nobody doing it. Their credit’s not good enough to get into a CMHC-insured mortgage. There’s this hole now and a lot of people are having trouble renewing. What tips can you offer brokers to get clients looking for B lending through the process? With B clients, I think the biggest thing now is to get the full story. Get all the information upfront before you present it to the lender. Because everybody has a story as to why they got there, some stories are believable some stories aren’t. If you can paint the picture for the lender and tell them the full story as to what the situation is, sometimes they’ll make an exception based on the story you can tell them. Because the client is in B doesn’t necessarily mean they’re bad people, there’s a story to go with it.

What are some of the problems consumers experience with B products? If they qualify then there are no problems in essence. If they’re a qualified B client, then they’re qualified. So is there any challenge? Not necessarily. The only downside is going to be interest rates are going to be a little higher than what we can get for our A clients. Outside of that, if they qualify, there’s no challenges that I foresee anyway. What are some of the issues for B clients? Not necessarily, like anything, you pay your mortgage every month and you’ll never have an issue. If you abide by your contract and make your monthly payments you shouldn’t encounter any problems.

Chad Mooney

I’m a B client, should I be upset or worried that I don’t qualify for a better product or are B products satisfactory enough? Obviously products aren’t as good as they are for your A clients, however, generally, we try to let our clients know two things: if I see a pattern in their credit bureaus we want to kind of coach them as to why they’re there. Usually we put them into a shorter term, whether it be a one-year, two-year or three-year, we kind of stay way from the five-year terms. And give them the kind of approach that this B-mortgage is basically a stepping stone to get you into the A. Looking at your history and looking down the road here’s what you need to do, over the term, to get you out of this B lending and back into the A lending side. CMP

Tell us your news Have you held a recent event, made a new appointment, introduced a new product or have a pressing issue you want to share? If so, CMP would love to hear from you, because your news is our news! Send us your news inquiries to: Email: gina.monaco@kmimedia.ca, or call us at 416-644-8740 ext: 250

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profile PROVIDER

Paradigm Quest’s amazing growth continues After a successful launch in 2005, Paradigm Quest has a reputation for service excellence and has been recognized as one of Canada’s top employers

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aradigm Quest Inc. was launched in September of 2005 as a financial services business process outsourcing (BPO) company. The company’s vision, business plan and launch were developed by the founding president and CEO, Kathy Gregory. Following an extensive career as an executive in financial services , primarily large schedule A banks , Gregory saw a unique opportunity in the Canadian mortgage market to launch a third-party mortgage servicing company dedicated to servicing lenders and extremely focused on improving the mortgage experience for borrowers in an extremely costeffective manner for lenders. At the time of its inception Paradigm Quest was the first pure BPO company in Canada that was wholly dedicated to underwriting, funding and servicing in the mortgage industry. As a strategic partner for Canadian financial institutions, Paradigm Quest allows its partners to focus on their core competencies, which is mortgage funding, capital markets, origination and sales, while having confidence that their operations, and most importantly their customers, are being managed by passionate professionals who constantly are innovating and exceeding client expectations. Gregory, along with her founding leadership team, developed key corporate principals that the entire organization lives and breathes every day, setting the highest level of standard of excellence, complete transparency, integrity and ensuring they created an outstanding workplace for all of the over 140 employees across the country. In its brief five-year history Paradigm Quest has accomplished a number of feats that give credence to the company’s focus on service excellence. Launching in late 2005, with its first brand partner, Merix Financial, Paradigm surpassed $1.4 billion of assets under its administration in its first year of business, growing to over $4 billion by end of 2007. January 2008 saw Paradigm Quest expand its presence in the marketplace opening a credit operations centre in Vancouver, and expanded its brand customers to four. Additionally, Paradigm was also recognized as one of Canada’s Top 250 Employers. Once again, in 2009, Paradigm Quest was recognized as Canada’s Top 250 Employers. Additionally, the company achieved an above average ranking by Standard and Poor’s as a residential loan servicer in Canada. The year 2009 was capped off with Paradigm’s founding President and CEO, Kathy Gregory being recognized by Profit

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Magazine’s top W100 as the number one CEO to watch for the company’s impressive early success. Now just concluding five years in operation, Paradigm Quest services over $10 billion of assets under administration with over seven brands in the market, becoming the fastest growing mortgage servicing company in Kathy Gregory Canada’s history. This unprecedented success was and continues to be driven by the strength of the outstanding culture that has been built at Paradigm. Once again, Gregory was recognized by Ernst and Young as one of the top Entrepreneur’s in 2010, and WXN 100 Most Powerful Women in Canada. Looking forward to the company’s growth strategy, Gregory indicates she is most excited about the next leg of their journey. “In keeping with our reputation to continuously innovate and provide solutions and strategic value to our investor and lenders as well as the borrower and brand customers, we are extremely excited about the launch of our new technology platform in the Canadian marketplace. Our new RUBI ™ systems (Revolutionary Universal Business Innovator), includes a state-of-the-art point of sale /mortgage application system, an underwriting/work flow management system, loan servicing, collections and securitization reporting systems. RUBI ™ will provide the vehicle to revolutionize service levels across our various partner brands, not only the origination community, but equally important to the mortgage borrower.” In addition to this state-of-the-art technology functionality, providing significant gains and efficiencies, the key differentiating factor is that the RUBI processes have been developed by the users – these are the people who have the experience and vision for what the business needs. “With the launch of RUBI, coupled with the highest level of committed, experienced, passionate individuals at our Paradigm family, that I am honoured to work with everyday, there is no question this is a powerful combination to support our market expansion and aggressive growth strategy for the next several years towards becoming the preeminent service provider (BPO) in financial services . CMP


Real support from real people For many broker companies it’s all about the broker… that is, until they hire the broker. Then it becomes all about the next broker. It’s difficult to say that you offer full service support when your HR, Marketing and IT departments are the same person. At Invis and Mortgage Intelligence we are all about the broker... all of the time. Whether you have been with us 10 months or 10 years you’ll receive the info, tools and programs that enable you to stand out and succeed. We’re all about real support from real people, including reliable payroll, an innovative new CRM program, customized marketing, prompt IT help, a proven national brand, and resourceful regional managers. We also have a unique broker-centred culture that celebrates excellence and gives back to our communities – our brokers have raised over $1.5 million for the Angels in the Night homeless shelter project, $1 million for the Chair in Thoracic Surgery at McMaster University, and funds for other local charities. Call us today and discover what makes our brokers so successful. It’s your career, your business, and we’re here to support you.

Let’s talk

Learn more about joining our broker teams at www.invis.ca & www.bettersupportcanbeyours.com Head Office: 5770 Hurontario Street, Mississauga, ON L5R 3G5. Invis FSCO 10801 | MI FSCO 10428.


Business Marketing

Why your income will rarely exceed your level of

personal development Doren Aldana explores the information age and how to increase your income by continually improving yourself through the books you read, the CDs you listen to and the seminars you attend

A

s students begin filing back into classrooms all over the world I can’t help but be reminded of how important it is to be a lifelong learner and continue to grow – not just in general knowledge, but more importantly, in character, wisdom and skill. Information overload We live in the “Information Age” where information is more ubiquitous than ever. We’re perpetually inundated with information through our TV sets, computers, radios, newspapers, iPads, iPods, iPhones, Crackberries, you name it. One would think that since “information is power” – like they teach us in school – this rising tide of information must be lifting the human race into higher and higher levels of health, wealth and happiness. While I’d love to believe that, I still find myself confronted with the startling statistics showing a steady global increase (per capita) in cancer, AIDS, obesity, diabetes, ADHD, bankruptcy, suicide, divorce, Prozac prescriptions, etc. How do you account for all that? Is more information really the answer? As Anthony Robbins once said, “We’re

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drowning in information but we’re starving for wisdom.” I couldn’t agree more. Seems to me, all indications are pointing to the fact that if we want to rise above the mire of mediocrity we’re going to need more than just information, we need transformation – an inner metamorphosis of our deep-seated values, beliefs and habits. Anything less is like putting lipstick on a pig – you can smear it on all you want but at the end of the day it’s still a pig. Here’s a case in point: Studies show that approximately 80 per cent of all lottery winners file bankruptcy within five years. You can give someone a million dollars but if they don’t have a million-dollar mindset, they’re bound to blow it. You may be thinking, “That would never happen to me.

“ with rare exception, your income will grow in direct proportion to how much you grow as a person ” You would have to be really dumb to lose all that money.” Yet the very reason that these individuals let their money run through their fingers is the very reason that most mortgage professionals are still struggling to


Business

Marketing

eke out a meager existence – their mindset is programmed for failure not success. Personal growth equals increased income With rare exception, your income will grow in direct proportion to how much you grow as a person. In other words, as your value to the marketplace increases, so does your income. Here’s how my mentor, the late Jim Rohn put it, “You don’t get paid for the hour. You get paid for the value you bring to the hour…if you work hard on the job, you’ll make a living. If you work hard on yourself, you can make a fortune!” It never ceases to amaze me how two mortgage professionals with the same level of experience and access to the exact same tools, systems and training can have such dramatic differences in results. One will earn a meager $40,000 per year and the other $140,000. What’s causing the disparity? If I had to boil it down to one single thing it would be ATTITUDE, or their respective levels of personal development. You see, in life there will always be challenges. The winds of adversity blow on us all, no one’s exempt. Jim Rohn said, “It is the set of the sails [your attitude], not the direction of the wind that determines which way we will go… if you learn to set a good sail, the wind that blows will always take you to the dreams you want, the income you want, and the treasures of mind, purse, and soul you want.” Therefore, it’s not the external obstacles that determine our level of success or failure but rather, the obstacles within – our own fears, doubts, worries, etc. Neglecting this important truth is like the logger who had to work harder and harder each year to hit the same level of production because he never took the time to sharpen his axe. Perhaps this is what James Allen was thinking when he wrote: “Men are anxious to improve their circumstances, but are unwilling to improve themselves; they therefore remain bound.” So, what’s the best, easiest way to keep our axe sharp? Simple. Implement a daily self-improvement program. Charles Tremendous Jones said, “You will be the same

person in five years as you are today except for the people you meet and the books you read.” I would also add the seminars you go to, the CDs you listen to and the DVDs you watch. Here’s the BIG idea: input equals output If you fill your mind with a daily dose of good, inspiring information, you can’t help but increase your value to the marketplace, and thereby increase your income. Likewise, if you taint your mind with all the doom and gloom from the six o’clock news, chances are you’ll be “informed” but not necessarily “empowered.” It’s not just the quantity but the quality of the information that really counts. Starting today, make a daily commitment to fill your mind with something positive that improves your value to the marketplace. Then take daily action towards your goals. Over time, those simple daily disciplines will compound and ultimately culminate into the extraordinary life, income and the YOU you’ve always dreamed of! About the Author: Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach. Since 2005, he has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions. Aldana is also the author of a new 3-disc DVD/CD set titled, “7 Secrets to Attract More Referrals on Autopilot.” To pick up your free copy, visit: www.freereferralsecrets.com. CMP

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Profile Insight

From paramedic to mortgage planning to robbing banks, Scott Peckford from Mortgage Architects talks about balancing brokering with his other aspirations

Chasing shiny objects When did you become a mortgage broker? And why? I became a mortgage broker five years ago. When I was 21, I wanted to be a financial adviser but I looked like I was 15 so I took the Canadian Securities Course, realized nobody in their right mind is going to give me their money and decided to become a paramedic instead. I reasoned if someone dialed 911, and I showed up, they didn’t have a choice about what I looked like. I did that for eight years then I came back to mortgage brokering because it was close to what’s always been my interest, which is the financial aspect of people’s lives. What about the financial aspect of people’s lives do you enjoy so much? I’ve always liked math and numbers and people. Money and people intersecting with it makes for some really interesting dialogue and conversations. Also, people pay way more attention when the numbers you’re talking about have a dollar sign attached to them. You joined your wife’s mortgage business. How did that come about? She was the financial adviser in the family even though she never really liked it. I was the one reading all of her books. For two years, she started a mortgage business then I joined. We were lucky that at that time in B.C., the real estate market was starting to climb every year so our timing was pretty good. Now we’ve built a decent client base and we’ve been able to maintain that. Though it seems you’ve always enjoyed financial planning, the switch from paramedic to mortgage broker must have still had its challenges.

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One of the benefits of being in the ambulance was you had to learn how to build trust with people quickly because you just show up and you’re seeing them at their worst possible moment. So I’ve used that trust-building skill in my mortgage business and it has been helpful building rapport with people. I also find that people get as stressed or more stressed about their money than they do about their health. That was one of the surprises to me. That was a transition. What was your biggest challenge when you entered the mortgage business? The biggest thing I had to overcome was I always thought salespeople were slimy, car salesman-type people. I couldn’t stand salespeople. But I’ve read lots of sales books and they’ve all redefined sales to mean communication. So if you have the other person’s interest in mind, sales is about communicating to the client in a way where they want to do business with us. You have a book coming out this fall called How to Rob Your Bank. What’s it about? The book is about educating consumers on how the bank system works so they don’t get taken advantage of. It’s essentially my perspective on the financial industry after being it in for five years and some of the problems I see with it. One of the biggest things is the lack of transparency and how banks will routinely offer a low rate to a new customer but charge a high rate to an existing customer. That’s not good business, to me that seems totally unfair, but it still happens, so my book is basically a response to that.


Profile

Insight

Where will the book be available for purchase? On Amazon, and at the website, RobYourBank.com. On your mortgage site, scottpeckford.ca, you’ve seem to have gone the route of video blogging. How come? The reason I did that is because I like video. A year-and-a-half ago, my business partner and I created a pilot for Global called Clean Slate and it was a financial literacy program. It was actually a huge distraction for my mortgage business so I don’t recommend anyone doing it. But it got me a bug for video and what you can do with it. People consume content in different ways. Some people like to read, watch, others like to

listen and I think it makes sense to try to deliver content in multiple formats. What’s the response to the videos? My business is primarily built around referral and past clients. But when people meet me for the first time, they come in and they feel like they already know me because they’ve watched some of my videos. It’s kind of weird for me at first because they’ll quote me. And I’ll swear I said that but I forgot. It’s really a rapportbuilding thing for me. What’s your biggest challenge moving forward? For me, it’s distraction. I chase shiny objects. I tried to create a reality TV show. It’s actually a great business if I could stay focused on it. My wife made me sign a contract that I wouldn’t start any new businesses because I was all over the place. She was saying, “What are you doing? You have this great mortgage business and you’re always messing around with these other ideas.” What’s it like working with your wife? We have three kids so her involvement is much less than what it was. She has said she wouldn’t want to come work with me full-time because she’d probably kill me. But because we both have taken on different roles in the business, it works well. We’ve identified, “You’re good at this, I’m good at this,” and I don’t tell her what she knows how to do. She still tells me what I need to be doing but she’s allowed to. She’s my wife. What roles have you each taken on? I’m kind of the face, I meet with the clients. She’s behind the scenes. She makes sure we pay the cheques, takes care of the marketing and client events, the business cards. She loves design. She’s a really strong salesperson in her own right but she doesn’t do the direct part of the business. And she’s my best business partner because whenever I go to her with an idea, if it’s a dumb idea, she sees it pretty quick. I don’t always listen but she can always say, “I told you so,” and she usually does. Though you seem to have lots of goals, what other kind of career do you see yourself in? I probably should have been a teacher. If there was a profession I really would have loved, it would be teaching. But that’s a pretty tough profession. CMP

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Feature Business

Brokers are under siege: market demand is slowing, commissions are being threatened and the cost of doing business is rising. When your back is up against the wall sometimes all you’ve got left is your good name. In 2008, our sister publication in Australia, Mortgage Professional Australia (MPA), examined the concept of white labelling and how to use it to your advantage. Although the article was written two years ago, it may be the sign of the times for Canada’s brokers

g n i l l e b a l e t i wh make your m ark

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he battle to stay alive has begun. Westpac fired the first shot at brokers when it announced it was cutting commissions by 0.2 per cent from its 0.7 per cent upfront commission and 0.1 per cent from its 0.25 per cent trailing commission. St. George followed with a softer blow, but a hit nonetheless – at least to brokers who are unable to meet or exceed an agreed percentage of home loan applications that convert to settlements or agreed home loan book run-off rates. Commonwealth Bank Group stepped up to the plate next. The bank dropped commissions to a maximum of 65 bps, (brokers earn 15 bps for lodging electronically, submitting quality reports and for settlements that exceed 80 per cent value of loan applications). They also cut trail commissions for the first year and reduced trail commissions in the second year onwards to 20 bps. BankWest then delivered its own bomb. The lender limited its lending to the top 17 aggregator groups and cut ties to the rest. Commission cuts and the culling of brokers are just two fronts of the broker blitzkrieg. According to comments in MPA’s Broker on Banks survey, brokers have to contend with some banks stealing their clients. “Once the broker has done the deal for the bank, the lender should refer the client back to the broker, without stealing the broker’s bread and butter – as with one lender whose staff kept asking clients if they want to refinance when they go to the branch, and they don’t care if the client was referred by a broker, which is wrong!” one broker commented. So what’s a broker to do? Some suggest white labelling could be the ultimate safeguard to falling commissions. MPA examines how brokers can get involved in white labelling and if it is wise to take it to the next level – mortgage management. ABCs of white labelling In its simplest definition, white labelling allows one to brand his or her own products. You can control the pricing offered to clients and by controlling the price, you can control the level of commission or margin earned. A wholesale funder offers a product range at a set delivery rate and margin is then determined.

But there are varying degrees of involvement, from being a full-service mortgage manager, to working slightly down the food chain to the mortgage origination level. A mortgage manager is responsible for the full processing of a loan including presettlement tasks as well as all post-settlement work. The manager may have a delegated lending authority from the funder and approve the loan itself, or they may send it to the funder for approval. The mortgage manager also handles collections, customer enquiries and arrears. Sometimes a mortgage manager is able to offer sub-origination agreement to white-label products for brokers. Usually the mortgage manager takes full responsibility for processing and managing these loans. There are other offers from wholesale funders that allow mortgage brokers to originate mortgages under their own label, but tasks are typically limited to pre-settlement activities including obtaining valuation and preparing conditional approval. These brokers are commonly referred to as mortgage originators. Generally, an originator is seen as the person that goes and markets to the community to bring the business in the door. The originator then sends the loan to the funder for approval. The mortgage delivery rate usually reflects the amount of work the mortgage manager or originator is prepared to do. The less work involved, the higher the delivery rate and vice versa. Name your price Industry players say interest in white labelling has spiked over the past few months as a result of the current market. Former head of mortgage management, Brett Mansfield, confirmed ING Direct has experienced an increase of enquiries from brokers wishing to become mortgage managers. One compelling driver of this is pricing flexibility. White labelling allows brokers to set their own commission structures and introduce new profitable revenue streams, with no claw backs. Brokers could decide to either take a greater upfront, or no upfront and a trail, suggests Steve Weston, Challenger’s general manager of residential and commercial lending.

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“Somebody who’s relatively new in the business and requires more cash flow could decide to take a higher upfront commission and a lower trail. And when their business then becomes established, they’d typically prefer to have a greater trail because that’s how your business is valuated.” Taking a lower upfront and a higher trail is a good thing in times like these, says Weston, because there is less business for you and less upfront income, but “you’ve got the trail there to sustain you through the quieter periods.” While white labelling does allow for different types of delivery structures, Mansfield suggests that giving customers a price-sensitive offering should not always be the end goal. “It’s important for brokers to keep in mind the overall proposition the client is receiving. It’s not all about price. If you look at any survey that’s done, price isn’t the No. 1 factor in a lot of cases. It’s a major driver for where a loan is eventually placed for a customer, but it’s not the only driver. There are other factors that should be taken into consideration when the broker is looking to place the customer.” The one caveat to white labelling is that you have to be competitive,” says Paul Ryan, executive director of Toniq Financial Services. “One of the key challenges, and it’s very relevant in today’s market, is if you have your own white label and the funder increases its rates outside of the Reserve Bank rate, that sits on your book, so therefore does the responsibility of accepting the borrower’s reaction. “It’s a lot easier to distance yourself when St. George or Westpac lifts its rates. When it’s your own brand you’ve got to wear it.” Cradle to grave Another major reason to consider white labelling is customer retention. “Why do brokers work so hard to win customers only to hand them over to a bank?” says Ryan. “They’re the ones sitting in Mom and Dad’s living room at seven o’clock at night. They’re working very, very hard. Sometimes it takes a day, sometimes a week, sometimes a month to win a client.” But at the end of the day, he says when a broker cuts a bank loan; they are giving up that client.

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“ if yo u surv look at e pric y that’s any e isn d ’t th one, facto e r in ” a lot No. 1 of ca ses

“Then the client doesn’t belong to you and you’re at the discretion of the lender to pay the upfronts or the trailer.” Not only that, but brokers potentially risk losing their clients to bank churn. “As a former broker myself, in most cases, a broker won’t know that they’ve lost a customer until they don’t appear on their commission sheet at the end of the month anymore,” says Geoff Wilson, a managing director of Gold Coast-based mortgage manager Wilson National. White labelling, on the other hand, allows a broker to own the client. As Resi’s head of consumer advocacy Lisa Montgomery says it allows you “to manage that client right through from cradle to grave. So it gives you an opportunity to service them and to nurture them.” In return, brokers have an opportunity to nurture their own brand and build a greater asset after they retire. “So if you think about it – being a broker – if you’re putting business through the broker channel, when you come to exit the industry will you be rewarded for your effort? Because who’s going to pay a premium when all your loans sit on someone else’s book?” Ryan asks. And at the end of the day, Wilson says, a white-label business is a good lure. “The other advantage of white labelling is when it comes to establishing an exit strategy for your business, says Mark Flack, Firstfolio’s manager for product development, mergers and acquisitions. “Quite simply, a white label loan book is more attractive for takeovers because they’re considered a safer option, but the primary motive should be servicing the client “From my view, the key thing about white labelling is why you’re doing it, and you really should be doing it because you want to earn and service the client, that’s really the major opportunity. If you’re just doing it because you think you’ve got this fantastic idea for a brand then you’ve really got to have deep pockets. It’s really about commitments to client service.


Feature Business

Unless you’ve got enough volume, the fixed costs of being a mortgage manager can make it economically unviable. “It’s not enough to say, ‘I’ll do it in my spare time.’ Being a mortgage manager is a serious business. You sign an agreement that says you’ll undertake the customer servicing and the arrears management up to a certain point. And your funder, like Challenger (Financial Services Group in Australia), will enforce that. They’ll ensure that you take it seriously and if you don’t, then they’ll take the servicing off you and do it for you at cost,” Weston of Challenger says. If you stuff up the service, you risk stuffing up your good name. And s s e branding is one of n busi s u the biggest o i r se components of white labelling.

Challenges There are several challenges associated with white labelling, whether you are a mortgage originator or a mortgage manager. For mortgage originators, one problem is the perception of independence. Borrowers come to brokers for independent advice – that is one of the big selling points. Would customers detect bias in offering your own white-label product alongside other lenders’ products? Ryan says no. “I defy any broker to say they actually provide that choice to the consumer because they generally only deal with the lender with whom they have the best relationship with,” he says. “Generally, the choice that’s placed in front of the

“ being ”

a ger is a n a m tgage a mor

Branding Aussie did it. So did Wizard. Two of Australia’s best-loved mortgage businesses successfully built up their brands through white labelling. But it is not the kind of thing that happens overnight and can take deep pockets to really pay off. customer is the choice of lenders the broker wants “The best name you’ve got to work with is your to use. And that’s no one’s fault. It’s just that there own,” says Weston. “It’s your personal property. If are so many different rates and products and you’ve got another brand name you’re never going features out there that no one can be expected to to be able to build a publicly recognizable brand know everything.” For brokers looking to move beyond origination, without a chequebook that’s worth millions and the challenges increase in direct correlation to their millions of dollars. You can do two things in your level of responsibility. You need to be a technician, local community -- you can have different offices in different areas, but you’re simply not going to have who can do the underwriting, do all the independent employment and income checks, order the capital that’s required to build a brand.” Ryan agrees. It’s a confusing market and people the valuations, underwrite a loan, and approve don’t know who to trust, he says. When someone repayment capacity. But the key difference, says asks a friend for advice, the friend is more likely to Weston, is once the loan is settled you need to suggest the name of a broker they worked with, service the customer. rather than the business name. “When you’re on a holiday and you’ve “At the end of the day, the consumer is looking sent a deal to a bank or to another mortgage to find somebody they can trust with their personal manager, if the customer has any enquiries, information and their long-term plans in terms of they phone up the bank or the mortgage borrowing money. We get it all the time. They manager. With your white-label product, want somebody who is going to act in their best it’s you they call,” Ryan explains. “You’ve got to interest,” Ryan says. have someone there, checking everyday, if a The current flight to brand quality cannot be customer missed a payment and you need to chase ignored. When non-banks and mortgage managers them up.”

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Feature Business

started raising rates in reaction to the increasing cost of funds, public opinion was swayed to believe that these products were unstable. Months later, banks also raised their rates, but the consumer flight to brand quality is still in effect. ING’s Mansfield suggests that to be successful as a brand, consumers must see the value in the product offering and service proposition. “Especially with the way the market is today, mortgage managers tend to not have the brand presence, so it’s putting the customers at ease that yes, they’re getting a quality product that meets their needs, and the service proposition that backs that product is a superior one,” Mansfield says. He adds: ‘Customers are attracted to brand, but if you understand who’s behind your mortgage manager it may be a brand as strong as ING Direct, which would provide some customers comfort.” ING lets mortgage managers choose whether they want to play up their connection to a funder. “I expect a mortgage manager, who has their own brand presence, wouldn’t choose to mention their source of funding. But if it’s a newer brand or a lesser brand they might choose to reveal it,” Mansfield says. Credit crunch On the one hand, a desire to protect their profit margins has resulted in banks cutting broker commission, which, in turn, has led brokers to look towards white labelling. Ryan says he is seeing more brokers becoming interested in becoming mortgage originators and having their own white-label program. “What I’ve noticed is a lot of brokers making enquiries about how they can utilize a sub-origination process. That is, they can still have their own white-label program, but they can outsource their operation aspects and utilize the services of an existing mortgage manager,” explains Ryan. But what about making the leap from mortgage originator to mortgage manager? Is now a good time? “I think that mortgage brokers have become aware that a mortgage manager is more than just putting your name on a loan statement…Our reply to the little

guys is, look we’re not going to accredit you – as a little guy you just don’t have the resources or the capability to become a mortgage manager, but we’re happy to introduce you to our mortgage manager and if you like the colour of each other’s eyes, there’s a viable alternative for you, Weston says. Resi’s Montgomery admits it’s tough times and says funding is hard to obtain. “There’s been rumours about brokers moving into mortgage management but no evidence of that. Knee-jerk reactions to try and obtain greater business volumes are of interest to everyone, but I just don’t think brokers moving to mortgage management are really going to do it right now,” she says. She says established mortgage managers are relying on their existing customer base, retaining that customer base and readying themselves to increase volumes “ when the market returns. despite it being a Mansfield says that while difficult time, white there has been a drop off in volumes in the channel as a labelling proponents whole, the impact of the credit suggest mortgage crunch has been different managers have an across different funders. ‘There’s been an impact,” important role to he says. “The key is how a play still mortgage manager partners ” themselves with a funder – how the funder they choose sources the funds that they lend, whether it’s through a securitized program or whether it’s through someone like ING that has a balance sheet presence.” In the end… Despite it being a difficult time, white labelling proponents suggest mortgage managers have an important role to play still. “If we look at the world prior to mortgage managers, banks enjoyed larger margins and little competition, so I think the competitive set would be severely disadvantaged if mortgage managers weren’t available anymore. I think more than ever now, when there’s a lot of volatility, you need to have that competitive set to keep the majors honest,” Mansfield says. CMP

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Profile Brokers

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Profile Brokers

Debbie Thomas, partner of The Mortgage Group, is a quiet role model in the industry. Heather Li looks at how this professional educator navigated her brokers to success for over 20 years

training a family I

f you watch Global TV News at noon on a regular basis in British Columbia, you may have seen and heard mortgage expert Debbie Thomas. She has a dark blonde bob to her chin, a soft face and a confident voice. Every other Wednesday for nearly four minutes, she speaks with the Global anchor about the current mortgage news and gives tips to the audience on topics such as why it’s important to maintain good credit and taking advantage of government incentives. During one audience Q&A segment, she smoothly answers a caller’s question on the uncertainty of buying a home that could be later re-zoned into RA or R1 development. “R means residential. Initially when you go to buy, it must be residentially zoned. That’s when you can get a mortgage,” she says. “If it’s commercially zoned or industrially zoned, that’s when it’s tough to get that mortgage to begin with. But as long as it remains an R, you’re fine.” Thomas qualifies as an expert because she has been the co-owner of The Mortgage Group (TMG) brokerage for over 20 years. She didn’t have any past experience in broadcasting when the segment started two years ago. “I don’t think I knew what nerves were until I sat down at that desk and there’s five cameras staring at you,” she says. “My palms were sweaty, I felt like my heart was in my throat but after about three months, I got used to it.” Thomas adds that interacting with an audience and an anchor is a lot like teaching: “You get up in a room full of people you don’t even know, and you learn about your mannerisms, what to do with your hands, what to say and what not to say.” This is fitting considering before Thomas and her husband, Grant, purchased the brokerage firm in 1990 in Vancouver, she started her career as a high school business education teacher in Calgary. When they first bought TMG, it was originally called The Equity Centre. It was later purchased by CIBC. But in 1997, Thomas and her husband decided it was better to split TMG off because their original goal was to give advice to the client that is independent from a lender. From the beginning, and as a natural branch off from her teaching, Thomas assumed the role of broker of record, compliance and training. She’s been widely recognized by her peers as a natural at the job,

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including John Charbonneau, a mortgage broker with TMG for over 15 years. “Debbie is an excellent trainer. She’s responsible for all the training for our new mortgage brokers who join the company,” says Charbonneau. “One thing that totally impresses me is that she’s got this great teaching skill where she lets people know there’s no such thing as a stupid question. She explains things in a way that people grasp quite easily.” Training sessions take place every Wednesday. For the past year the sessions have been on live webcasts for TMG brokers across the country. They are also archived on the backend of TMG’s online portal for future reference. “We really pride ourselves in communicating across the nation so that everybody knows what’s going on,” says Thomas. For TMG, staying closely connected to over 800 brokers through various communications media is important because unlike most other major national brokerages, they have a centralized system rather than being broken off into franchises. So administrative, payroll, accounting, training support and everything else pertaining to running a mortgage business is done through the Vancouver head office. “It’s a model that works for us,” Thomas says. “There are other models that work but this is how we do ours.” Thomas says one big way the TMG’s centralized approach benefits the brokers is that they can easily come to her or Grant for help and for the relationships the couple has built within the industry for over 20 years. “If I have a new broker who’s thinking of starting his own franchise with a different firm, he’s on his own,” says Thomas. “Here, we have Grant, myself or Mark Kerzner, our president. We have two experienced gentlemen who run our Deal Centre. We have a number of different avenues to help get you where you want to go. We believe really strongly in that we’re all equal. We’re all in this together.” That was one of the big draws for Kerzner when he was hired on by Thomas and Grant a year ago. “Debbie gets personally invested in the success of TMG brokers. She really looks at TMG as a family,” says Kerzner. “She’s a role model for perseverance, passion and commitment. And, in many ways, Debbie has been the rock within the ownership of TMG throughout the years, being the constant, steadfast, consistent partner.” Thomas is in the unique position of being the only woman owner of a national brokerage firm, and on top of that, running it with her husband. “Our offices are on complete opposite ends,” she laughs. “So if we don’t want to see one another, we stay at our ends of the building. It is challenging when you live together, work together. So we take

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many small vacations. We find we have to zip out of town for two or three days to recharge.” But even if they go without seeing each other, they can’t go without talking to each other. Charbonneau’s office is next to Thomas’s, and with the open-door office style the company has, Charbonneau comments on how much he hears them calling each other over speaker phone and the intercom. “They bounce ideas back and forth,” he says. “They have a great flow of communication back and forth so you know, she’s not going to get blindsided by anything he does, and he’s not going to get blindsided by anything she does.” While they were building a business from 25 brokers to currently over 800, they were also building a family. Thomas and Grant have a 29-year-old daughter who is a licensed broker and works as a compliance officer at TMG. They also have a 25-year-old son, a professional golfer living in Florida; and a 23-year-old daughter in Sydney, Australia, working for a public relations firm. “I tried being a homemaker and it just didn’t work for me,” says Thomas. “I always enjoyed working.” As true as that may be, Thomas, with her husband, undoubtedly brought a family feel to TMG as Kerzner mentioned, and Charbonneau concurs. “You feel like you’re part of their family,” says Charbonneau. “There are always opportunities to work for other companies that may say, ‘We’ll offer you this higher split.’ For me, it’s not always about the money. It’s about the relationship. They are great to be in a relationship with because as owners of the company, they know their success is based on the brokers that work for the company.” And with Thomas taking the lead of training TMG brokers, it’s easy to see why success is inevitable. CMP


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Guest Column

According to Calvin Coolidge nothing takes the place of persistence when going for your personal gold. Calum Ross explores this concept and offers a few tips on how to get there

positioning your time and mindset I

have recently been accused of using too many clichés in my communications. I have to admit I make no apologies for that. In a world where so many people focus on bad news and whose minds are full of pessimism I feel no regret for sharing inspirational words. Is it really so bad to wish people would achieve their personal best? It has been said that you are the average of the five people you hang out with most regularly. There is no scientific fact supporting that statement but I challenge you to think about the company you keep and refute it. If you don’t think that stretching yourself and stepping outside your comfort zone results in personal and professional growth then I challenge you to honestly answer the following three questions: Do you feel compelled to take better care of your health when you hang out with your fittest friend? Do you strive to have greater financial success when you hang out with your wealthiest friend? And finally, is there even one example of a situation that you have experienced personal failure that didn’t result in significant personal growth on the other side of that failure?

“ opportunity is missed by most people because it is dressed in overalls and looks like work ” -Thomas Edison For good or for bad there is amazingly powerful influence in peer pressure. How many of us grew up hearing, “you are the company that you keep.” My mother, one of the wisest people I know, said this to me often. Sometimes I wish I would have stopped to heed the advice of people who were wiser and more experienced than me – it certainly would have made my life a lot easier. It’s just as easy to join the complacency bandwagon and justify why you aren’t

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“ don’t wish it were easier, wish you were better ” -Jim Rohn achieving your dreams instead of going out and chasing them. If there is one common trait of successful people it’s that they don’t wait for things to happen – they make them happen. As we roll into some more challenging economic times ahead, we need to proactively create business opportunities to ensure we maintain and grow our overall business opportunities. New York Time’s bestselling author and sales guru Todd Duncan insists that most salespeople spend less than 25 per cent of their time actively selling and developing their business. The challenge with improving this statistic is that most people couldn’t actually break down what they do with their day. For this reason, one leading mortgage coaching company insists that each of its one-to-one coaching clients complete a time-tracking work sheet for no less than one full week of each and every quarter. The idea is simple – write down what you do with each 15-minute interval for a full week and make a list of all the things you are doing. Once the week is completed mark down all the high payoff activities with an H, the medium pay off activities with an M, and the no pay off activities with an N. In a perfect world you try to hand off and outsource all but the highest payoff activities, which will increase your total pay – this will allow you to work less and make the same amount of money. Whether you actually use and apply the principles learned from that one exercise, I guarantee you will be surprised at the amount of time you spend on non-dollar productive activities. With some application and practice it may even improve your income and quality of life. Wishing you continued success. CMP

Calum Ross


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Profile

Favourite Things

Lisa Theriault + Regional Partner/Mortgage Agent + Mortgage Brokers Ottawa + Ottawa, Ont.

Favourite Things Hobby Recently developed a LOVE of Jet Skiing, so that and cottaging with my family and friends

Food The ‘bad’ one is fries! The ‘good’ one is spartan apples! Sport Dance (yes, dancers ARE athletes)

Drink A bold red wine or Sleeman Clear (depends on the time of year)

Movie The Sound of Music and Grease --I love all things musical

Music/band I love alternative, like Depeche Mode, The Shins, The Smiths. But I listen to just about anything, depending on my mood

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Celebrity Tim Ferriss - does he count as a celebrity? Don’t really follow the hype of ‘Hollywood’ celebs

vacation spot The cottage with my family (see a theme developing here)

Place to be The cottage

Book Anything by John Grisham. My favourite biz-related book is The 4-Hour Workweek by Timothy Ferriss


service directory

Banks

Bridgewater Bank www.bridgewaterbank.ca Ph: 1 888 837 2326 Page 17

Home Trust www.hometrust.ca Ph: 1 877 903 2133 Page 43

The Money Source www.mymoneysource.ca Ph: 416 699 2274 Page 19 Insurance

HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 21

MCAP www.MCAPBROKER.com Ph: 1 866 289 7389 Page 37

Canada Guaranty Mortgage Insurance Company www.canadaguaranty.ca Ph: 1 866 414 9109 Page 9

National Bank www.nbc.ca Ph: 1 888 483 5628 Page 49

Macquarie Financial www.macquariefinancial.com Ph: 1 877 462 3788 Page 41

Genworth Financial Canada www.genworth.ca Ph: 1 800 511 8888 Outside Back Cover

Non-Bank Lenders

Capital Direct www.capitaldirect.ca Ph: 780 868-0550 Page 44

Merix Financial www.merixfinancial.com Ph: 1 877 637 4911 Page 39

Mortgage Protection Plan www.mppbroker.com Ph: 1 866 677 4677 Page 45

Broker Networks

Equitable Trust Company www.equitabletrust.com Ph: 1 866 407 0004 Page 25

Meridian Financial www.meridianfinancial.ca Page 69

Firm Capital www.FirmCapital.com Ph: 416 635 0221 Page 7

Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 51

FirstLine Mortgages www.firstline.com Ph: 1 800 387 2020 ext. 6044 Inside Back Cover

Home Loans Canada www.hlcmortgages.ca Ph: 1 866 452 1821 Inside Front Cover

Resmor Trust Company www.resmor.com Ph: 866 809 5800 Page 47

Street Capital www.streetcapital.ca Ph: 877 416 7873 Page 5

Centum Financial Group Inc. www.centum.ca Ph: 1 604 257 3940 Page 11

Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 27

INVIS www.invis.ca Ph: 1 866 854 6847 Page 23

Mortgage Architects www.mortgagearchitects.ca • Ph: 1 877 802 9100 Page 55

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service directory

Commercial Lenders

Real Estate

ROMSPEN investment corporation www.romspen.com Ph: 1 800 494 0389 Page 1

MortgageBrokers.com www.mortgagebrokers.com Ph: 647 680 9384 Page 57 Technology/Software

Mortgage Intelligence www.mortgageintelligence.ca Ph: 1 877 667 5483 Page 61

The Mortgage Group www.mortgagegrp.com Ph: 877 899 1024 Page 42

Verico The Mortgage Practice Inc careers@vtmp.ca Ph: 905 458 4222 Page 12

VERICO www.verico.ca Ph: 1 866 983 7426 Page 13

CreditCRM

Canadian National Association of Real Estate Appraisers www.cnarea.ca Ph: 1 888 399 3366 Page 33 Services

Credit CRM www.creditcrm.ca/cmp Ph: 1 877 256 8162 Page 15

Best Points Travel www.bestpointstravel.com Ph: 1 800 551 8786 Page 18

Filogix Limited Partnership www.filogix.com Ph: 1 866 345 6449 Page 2

Applied Business Software www.themortgageoffice.com Ph: 1 800 833 3343 Page 31

GoMax Solutions www.gomaxsolutions.com Ph: 1 877 492 5164 Page 8

Vanguard Law Group www.vanguardlg.com Ph: 1 866 420 4714 Page 14

Would you like to see your company name here? Please contact Trevor Biggs: trevor.biggs@kmimedia.ca

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news n ews is our news!

Do you hav have a e news to share? r Hav Have ave you o held e d a recent event ve t or o made ade a new w appointment? appo t e t? If so, CMP W WANTS ANTS to hear ffr from om you. Send us your newsworthy submissions and photos, and you may find your story printed in a future issue of CMP. Send your news to: gina.monaco@kmimedia.ca

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