guide Inside NO. 14
Guide to insurance www.mortgagebrokernews.ca
title insurance More than just fraud protection MORTGAGE INSURANCE RULE CHANGES
BECOMING AN EXPERT SPEAKER
Q&A KELLY PRICE LORNE SHUMAN PETER VUKANOVICH PUBLICATIONS MAIL AGREEMENT #41261516
Jaunary 2011, 6.1 www.mortgagebrokernews.ca
FEATURE Repairing your client’s credit scores
SPECIAL FOCUS Training and education
Troy Alexander: Making a difference PUBLICATIONS MAIL AGREEMENT #41261516
44 the knowledge tree With changes occurring in the financial services industry, itâ€™s important for mortgage brokers to stay informed. Heather Li explores the value of training and continuing education and where itâ€™s available to brokers
6. 01 issue
24 The New Normal The mortgage broker industry may be out of the woods economically speaking, but there are still plenty of issues to be dealt with. Consumer awareness and confidence in brokers, broker-lender relationships and the threat from government of more mortgage rules are some of the issues John Tenpenny heard about when talking with prominent industry members
58 Networking to win: Social networking sites like LinkedIn are a cheap and easy way of liaising with peers and clients. Our sister publication MPA looked at their usefulness
Letters & comments from mortgagebrokernews.ca: Some of the best stats and comments from CMP’s website
NEWS 10 News: Mandatory continuing education in Ontario, CAAMP conference, ICICI puts support behind the CMAs, Bank of America settles with Fannie and Freddie, and more 17
News Analysis: Mortgage broker Morgan Vaughan explains how collateral-charge mortgages will require careful consideration by both the broker and the client
34 Repairing Credit Scores: Looking to graduate your clients from a B to A mortgage? Heather Li looks at some of the tools brokers can use to turn around their clients’ credit scores 38 What to look for in a lender: Dave Larock shares his suggestions for improved brokerlender relations 49 Marketing – Six referral mortgage marketing mistakes: Doren Aldana explores some of the reasons why new brokers fail in the first two year of their career (Part Three)
PROFILES 56 Profile: Heather Li finds out how Troy Alexander balances his career as a mortgage broker with being a humanitarian
INSIDE Guide to insurance In CMP’s continuing series of guides, we look at the business of insurance and the growing possibilities it presents to brokers. Whether it is understanding how mortgage insurers are dealing with recent rule changes or simply knowing what to tell clients about title insurance, this guide is not to be missed.
54 Provider: CMP spoke with CEO Don Lawby about how Centum is prepared to take advantage of opportunity in the year ahead 60 Insight: CMP finds out how industry advocate and pioneer Brian Matthey has grown his business over the past 20 years 62 Guest Column: When it comes to success, it all begins with a choice says Calgary-based mortgage broker Greg Williamson
regulars 20 International News 22 This time last year 61 Favourite Things 63 CMP Service Directory
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Getting the conversation started The latest research on the broker industry from Maritz Canada for CAAMP, revealed some interesting facts about brokers and their relationships with consumers and lenders. The study entitled “Canadian Mortgage Broker Channel: Consumer and Industry Perceptions” noted, among other things, that only 35 per cent of consumers have a full or good understanding of the services provided by mortgages brokers, 17 per cent are aware of the AMP designation and that while two-thirds of those looking for a mortgage consult with a mortgage broker on first mortgages, that falls to 27 and 21 per cent respectively on early-term renegotiation and scheduled renewals. In the broker/lender relationship there is still clearly work to be done. While the vast majority of mortgage lenders (97 per cent) see the value of being involved in the broker channel for such reasons as access to wide range of customers, less costly to operate and putting different lenders on a level playing field, nearly two-thirds of banks (32 per cent) don’t believe their institutions benefit from involvement in the broker channel. Lenders and banks cite four primary concerns when dealing with brokers: fraud, inconsistent or inexperienced brokers, lack of client ownership and the difficulty of cross-selling. Surprisingly, when asked what influences brokers when choosing a lender, lowest rate was just the fifth-most influential consideration. No. 1 was speediness of approval, followed by underwriter support and service provided. In terms of keeping clients, the study indicated the key is in the relationship between the broker and the client after the first mortgage has been completed. While low interest rates are one of the key drivers in attracting clients, what drives satisfaction and loyalty are things like being proactive, suggesting strategies to improve terms and being helpful. “While these results may be eye-opening, they should not be surprising,” stated the study. “The fact is that brokers have already passed the rate test among their customers; that is why customers chose their broker in the first place. What drives true loyalty is development of meaningful relationships with customers, ones that ensure that when it comes time to deal with their mortgage, customers immediately think of their original broker.” This news generated quite a bit of discussion on MortgageBrokerNews.ca from brokers and a lot of it had to do with industry standards and professionalism on the part of brokers. This topic and others are discussed in this month’s cover story “The Year Ahead” (page 24) by a group of industry players who don’t always agree, but provide insightful and thought-provoking commentary that I’m sure will lead to a more spirited and healthy discussion, which is key to the future success of the mortgage industry. As always, please feel free to contact me and let me know what’s happening in your corner of the mortgage broker industry. Cheers. John Tenpenny Editor firstname.lastname@example.org
6. 01 issue
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“There’s only so such much pie that is available. This industry has to come to the realization that lenders have to be profitable in order to survive and we need more lenders as opposed to less. We need to start looking at ways to make these lenders profitable and more efficient and we have to start looking at a true partnership in the sense that sustainability needs to be the goal.”
“CMHC recognizes the important role that mortgage professionals play in arranging mortgage financing for borrowers, that’s why our BDM team focuses on developing ongoing relationships with them to ensure they have the necessary information and training they need to assist consumers in making informed mortgage decisions.” - Pierre Serré, vice-president, Insurance Products and Business Development, CMHC discussing CMHC’s relationship with mortgage professionals. Guide Page 10
- Vince Gaetano, vice president and principal broker at MortgageMonster.ca, on the broker-lender relationship. Page 30
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A tool to change the mortgage brokerRealtor relationship
Conference hears from international panel of mortgage industry associations
Vendors would be better served taking a few thousand dollars and offering a selling bonus commission to the Realtor. In a soft market that will make the house sell faster as the buying Realtor will push it more. Then they know exactly what their “loss” is as opposed to waiting a year. What buyer buying their residence really cares about a five per cent drop in price? I imagine the conditions of sorting an actual claim on the other end are onerous. Sure it’s a tool to use with Realtors but then you’re hyping a negative real estate market which just puts you in bad terms with most Realtors anyways. Seems like much ado about nothing. I’m not drinking the Kool-Aid. – Skeptical in Vancouver
Canadian independent mortgage brokers could conceivably suffer if leading banks decide to advertise competitive rates like petrol stations do. That is to say, they do away with their current higher posted rates and advertise broker network rates instead. The only thing stopping the banks from doing this is that it still pays them to practice price segmentation, or to put it less nicely, price discrimination amongst customers. Those that pay posted rates without questions must still be a large enough percentage of customers and so very lucrative for the banks. It then leads one to think that the day our government (politicians, and regulatory-consumer advocate agencies), in the interest of consumer protection and “market efficiency,” decide to mandate all banks to operate on and advertise only discounted rates is the day when Canadian independent mortgage brokers will get the real hit. As it now stands, our existence in large enough numbers means we do enough business to the extent that we cannot be ignored; and most banks put up with having to offer/carry broker network services as a result. – Mortgage Needs
As a broker here in Calgary, this program just makes sense. Have you seen the amount of price drops that are happening? In this market you need to be different, be creative and think outside the box. If it doesn’t make sense, I have found it’s because you don’t know enough about the program. The BPP can be negotiated in or out of the deal. Why keep five per cent in escrow? Because, it’s the alternative to a five per cent price drop. In Calgary, nothing is selling for list or even 95 per cent of list today. Are we artificially inflating the values to account for the five per cent? No. The home must be properly priced in the first place. Furthermore, all lenders and insurers are going to do their due diligence. Is there a chance that someone could abuse the program, absolutely. But we are all ethical professionals here, right? What’s the definition of insanity? Doing the same thing over and over and expecting a different result. Continue to do what you’ve been doing and you’ll continue to get what you’ve been getting. How is that price drop after price drop been working for you Mr. Realtor? The way I see it, the BPP is one more tool for your toolbox. It isn’t really about bringing buyers to the table? If the seller gets most if not all of the five per cent back, is that a bad thing? I was a skeptic too, but I made the call to Greg and became more informed. – Jeremy from Calgary
Further tightening of mortgage rules not necessary say brokers I find it unreasonable that the finance minister would look at mortgage debt as a target to control Canadians’ finances when the real problem is credit card and other consumer debt. Why doesn’t the finance minister focus his attention on the real problem and leave access to home-buying open for Canadians? – Kata Sorry bankers, but the jig is up. You can’t distract the government forever, although you have done a good job so far. As many people have already commented, it’s time to review payday loans, credit cards and bank loans, not mortgage rates and the mortgage qualification process. Telling someone you’ll make it harder to put a roof over their head and force them into eternal renting, but letting them fall victim to pre-approved credit cards and loans with high interest rates is not acceptable. – James in Whitby CMP
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FSCO seeks comment on mandatory continuing education proposal for mortgage brokers The Financial Services Commission of Ontario (FSCO) has released a proposal that would see continuing education (CE) become mandatory for mortgage brokers. The proposal is out for public comment until Feb. 28. In spring 2011, FSCO plans to release its decision on its website. Since the Mortgage Brokerages, Lenders and Administrators Act (MBLAA) came into effect in 2006, FSCO monitored and audited licensees’ compliance with the new requirements. The results provide objective evidence that there is a need for mandatory CE, according to FSCO. The proposal stated: “Despite FSCO’s year-long information and outreach campaign, and significantly improved new education standards, FSCO’s audits revealed an unacceptably high level of non-compliance. Of particular concern, only 53 per cent of principal brokers had complied with the legal requirement to file information about their mortgage agents’ education qualifications (as of Oct. 29, 2009). In addition, only 70 per cent of mortgage brokerages met the legal requirement to maintain errors and omissions insurance.” FSCO says the goals of mandatory CE for mortgage brokers are to improve the sector’s compliance with current legal requirements by increasing awareness of the rules and the importance of complying with those rules, and to improve consumer protection—without imposing unnecessarily onerous requirements on licensees. “IMBA has long been a proponent of continuing education for Ontario mortgage professionals and we welcome the initiatives that FSCO has undertaken,” commented Martin Marshall, communications chair for IMBA. ”We believe that education is one of the cornerstones of professionalism and ongoing education
requirements to maintain licensing will allow our members the opportunity to constantly improve their skills. As we have done since our inception, IMBA will continue to provide consistent access to relevant industry topics through various seminars and symposiums across the province. “The real winner here is the consumer who will be able to count on dealing with a mortgage professional that is continually working to improve their knowledge.” FSCO has established five key principles, which it says are consistent with the continuing education principles for life insurance agents. 1. FSCO will not provide continuing education directly. 2. FSCO will seek to harmonize its requirements with those in other provinces. 3. CE must be readily accessible to licensees through the Internet, by correspondence and perhaps also in a classroom setting or some combination of these approaches. 4. CE programs must be administratively efficient – for CE providers, licensees and FSCO. 5. FSCO will not require licensees to duplicate CE training that they have completed through a professional association, educational institution, other provincial regulator or commercial education provider. You can e-mail comments to MBCE@fsco.gov. on.ca and include “CE Consultation for the Mortgage Broker Sector” in your e-mail’s subject line. To read the proposal, go to: http://www.fsco.gov. on.ca/english/regulate/mortgagebrokers/CEconsultDec2010.pdf. CMP
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Banks won’t impose own tighter mortgage rules: TD Canadian banks are not likely to impose stricter mortgage qualifying rules on their own to curb the nation’s rising household debt, TD chief executive officer Ed Clark told The Globe and Mail. The banks fear they will suffer a major loss of customers to rivals, so it would be up to the government to change mortgage policy if that’s the biggest concern for personal debt. “Personal banking is a highly competitive industry,” Clark told the national newspaper. “If we said, ‘Look, we’re going to be heroes and save Canada from itself, and we’ll impose a whole new mortgage regime on everyone else,’ the other four big banks would say ‘Let’s carve them up.’” On Dec.13, Finance Minister Jim Flaherty said if necessary Ottawa would tighten the mortgage rules further. TD’s analysis shows the most direct way to help the debt situation would be to shorten the maximum amortization schedule from 35 to 30 years. Other options include forcing homebuyers to pay a higher minimum down payment, or extending the qualifying rate to six or seven years from five. CMP
ICICI Bank named title sponsor for 2011 CMAs CMP is proud to announce ICICI Bank has been named the title sponsor for this year’s Canadian Mortgage Awards taking place April 29 in Toronto. “The Canadian mortgage lending business and servicing the mortgage broker market is at the core of ICICI Bank Canada’s growth strategy. To celebrate our successful first year and to further our commitment to mortgage brokers and the business, we are sponsoring the prestigious Canadian Mortgage Awards which recognize and honour the industry’s best,” said Rajesh Ramakrishnan, Vice President, Retail Banking & Operations. This year’s awards include 21 categories covering all facets of the mortgage industry and new for 2011 is the Mortgage Broker Network of the Year award, which will be presented to the outstanding national broker network for their commitment to the brokers, agents and support staff in their network and to the mortgage industry as a whole. For more information visit: www.canadianmortgageawards.com. CMP
68% of all household debt in Canada is made up of residential mortgage debt (Canadian Bankers Association)
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Brokers get global perspective of mortgage industry At the annual conference of the Canadian Association of Accredited Mortgage Professionals (CAAMP) in Montreal, Quebec, 1,500 delegates heard CEOs of the leading mortgage industry associations in Australia, Canada and the U.S discuss the current global predicament faced by the mortgage industry following the recent financial crisis. Titled “The State of the Mortgage Industry – A Global Perspective,” the panel featured, John Courson of the U.S. Mortgage Bankers Association, Phil Naylor from the Mortgage and Finance Association of Australia and Jim Murphy of CAAMP. During the hour-long discussion, topics covered included competition, compensation and regulations in each of the three mortgage markets. Courson described how the U.S. mortgage market is undergoing a “total remake” since the recession decimated the industry, taking market share from 70 to 17 per cent and shrinking the number of mortgage companies from 54,000 to approximately 8,000. He called the events a perfect storm. “The push to increase homeownership expanded credit products at the same time house prices were skyrocketing,” he said. Currently, Courson said, 13 per cent of all mortgages are either in default or foreclosure. Murphy cited Canada’s banking system, better lending practices, CMHC securitization and a climate of more “responsible home ownership” as reasons for the better mortgage market conditions in Canada. Speaking on Australia’s current conditions, Naylor explained that the financial crisis had all but wiped out non-bank lenders in his country and without some source of capital, the sector will surely die. He said his association has been studying Canada’s market and believes, “our market needs funding similar to that provided by your Canada Mortgage and Housing Corporation (CMHC) to revive non-bank lending for brokers.” In addressing compensation, Naylor spoke of how his country’s big four banks recently slashed fees for brokers and how the response of some brokers in Australia was to begin charging consumers for their services. He said those brokers have been successful at convincing clients that they offer more than just transactions and that the added value of advice is worth the cost. As Canadian mortgage professionals grapple with overlapping provincial regulations and licensing, according to Murphy, his Australian counterpart spoke of Australia’s recently introduced National Consumer Protection Act and how the MFAA was able to ensure its already established standards for members was included in the final draft of the NCPA. Massive regulatory changes are on the way in the U.S said Courson and finally he sees a stabilization of the market. “We are finally seeing the bottom.” CMP
Flaherty responds to banks’ comments While he still hasn’t ruled out tightening mortgage rules next year, Canadian Finance Minister Jim Flaherty thinks it is up to banks and not government to slow lending as household debt continues to rise, aided by low interest rates. “The primary responsibility for prudence in lending practices rests with the financial institutions,” Flaherty told Bloomberg News in Ottawa. “People also need to take responsibility for what they do and exercise common sense in terms of taking on debt.” This comment was in contrast to what some leading bank executives have said in recent weeks, including Toronto Dominion Bank CEO Edmund Clark, who told The Globe and Mail that cutting Canada’s excessive household debt is a matter for the government rather than lenders, and would be best tackled through tighter rules on mortgages. No bank wants to lead the way in imposing stricter borrowing conditions for fear of losing customers to rivals, Clark, 63, told the newspaper. “Banks are responsible for their own business practices and what I find odd from time to time is when a bank executive asks me to tighten lending rules,” Flaherty said. “It seems to me that’s the primary responsibility of the financial institutions and not the government.” Canada’s debt levels topped the U.S. for the first time in 12 years, prompted by record-low interest rates, which saw consumers take on bigger mortgages, car loans and credit card balances. Flaherty said he expects interest rates to “go up over time,” which will bring higher mortgage costs. The comments by Flaherty aren’t resonating with brokers, however. Colin Dreyer, president and CEO of Verico Financial, thinks Canadians aren’t being given enough credit when it comes to fiscal responsibility. “It seems to me that Canadian consumers are somewhat self-regulating in terms of being fiscally responsible,” Dreyer told MortgageBrokerNews.ca. “I think a further tightening of the mortgage rules at this time is not necessary as residential sales are already moderating based on the existing economic conditions.” CMP
mortgages in the press
AGF Trust expands mortgage broker network AGF Trust Company has announced that it has entered into a licence agreement with VERICO Financial Group Inc. to offer borrowers a cobranded mortgage program. “We are pleased that this alliance will provide us with an opportunity to deliver our mortgage program to one of Canada’s largest and premiere independent broker networks,” said Mario Causarano, president and COO of AGF Trust. “Having AGF Trust’s mortgage program on our platform will provide our brokers with some of the most competitively priced and innovative products in the mortgage arena, increasing our ability to help our clients with their mortgage needs,” said John Kelly, COO of VERICO. CMP
Financial benefit for retirement from home ownership: StatsCan Purchasing a home as an investment for retirement would seem to be a wise choice. This tenet of financial planning seems to have been confirmed by a Statistics Canada study which concluded that between 1969 and 2006, home ownership made a significant and rising contribution to household finances for retirement-age households. Using data from the Survey of Household Spending and its predecessor, the Survey of Family Expenditures, this study estimates the contribution to household finances generated by the home equity of working-age and retirement-age households. According to the report, “Study: Income from owner-occupied housing for working-age and retirement-age Canadians, 1969 to 2006”, the financial benefit of owning a home is equivalent to the rent that does not have to be paid. Over the 1969 to 2006 period, an era of considerable variation in interest rates, incomes and employment, the majority of households persistently chose to invest in their homes rather than rent. This provided a considerable benefit to homeowners later in life. In 1969, nearly seven out of 10 households headed by an individual aged 70 and over owned their home, with a similar proportion in 2006 owning their homes. “While there was year-to-year variability in the financial gains from home ownership, there was a general increase in its proportional contribution to household finances over the period,” said the study. “Retirement-age households gained more from home ownership during the 1990s and 2000s than they did, on average, during the 1970s and 1980s.” CMP
Housing crash unlikely in Canada: CIBC economist Mortgage industry professionals were told the worst isn’t over yet for the U.S. economy and that a housing crash is not likely for Canada. Benjamin Tal, senior economist for CIBC World Markets, told delegates at the CAAMP conference in Montreal that the U.S. housing collapse is unlikely to rebound soon, and that it will take until 2017 for house prices to rise to the point where the average person in the U.S. is able to get out of negative equity. He said what is leading the U.S. economy right now is “a renaissance of the U.S. manufacturing sector” something being driven by emerging markets. He said Canadian companies can take advantage of this as suppliers to U.S. firms. His advice to brokers when discussing the economy was “You can’t just discuss the Bank of Canada. You need to discuss the U.S., China and emerging economies.” Commenting on the global economy, Tal declared “the Chinese consumer will be the most important force in the global economy for the next 10 years.” He said this is good for North America, as the Chinese are “starting to demand quality” and would buy more goods. Tal said this recovery timeframe is critical as America’s housing market is what is driving its economy, and so this will impact other economies, as well as interest rates for mortgage holders. Tal said he was “almost positive the [U.S. Federal Reserve] will not change rates until mid-2012” and that the Bank of Canada would not “take chances” and raise rates significantly above the U.S. While “the next few quarters are safe” from Bank of Canada rate hikes, Tal said Canadian consumers are “exhausted” due, in part, to a 146 per cent debt-to-income ratio, and, as a result, it won’t take many rate hikes in future to slow the economy. Tal also indicated a housing crash wasn’t in the cards. For that to happen you need two things, higher interest rates and poor quality mortgages, both of which are absent in Canada. “The trend of the vulnerable sector is declining as a share of the mortgage market,” he said. However, Tal said that if rates rise, mortgage defaults will actually drop. He explained that is because rising rates imply rising employment, which influences defaults more than anything. CMP
20% How much British Columbia home sales rose in November 2010 compared to the previous month (British Columbia Real Estate Association)
Reality check R
ecently, it was announced that a major Canadian lender would be registering all new mortgages as “collateral mortgages.” So what exactly is a collateral mortgage? It’s a loan attached to a promissory note and backed up by the Morgan Vaughan collateral security of a mortgage on a property. Collateral-charge mortgages have historically been used to register secured lines of credit, which allow the balance of the loan to float up or down depending on the customer’s use. How does it work? The primary security on a collateral mortgage is a promissory note with a lien on the property for the total amount registered. You can register far more debt against the property than the property is worth. Under this new approach, the collateralcharge mortgages are registered at 125 per cent of property value, even though that amount may not have been given to the borrower initially What are the potential downfalls for borrowers? Most chartered banks will not accept “transfers” of collateral mortgages from other chartered banks and this can result in additional legal fees and costs to move to another lender. Collateral-charge mortgages are also being registered on title with rates as high as prime + 10 per cent, regardless of what the client initially receives. Effectively, collateral charges allow lenders to change the
interest rate to borrowers after closing. Several lenders recently increased the interest rates on existing client’s Secured Lines of Credit due to this technicality. This won’t happen with a traditional mortgage. Renewal time (with a collateral-charge mortgage) is when the bank can offer clients whatever rate they choose and a client’s options are to accept it or pay legal fees to move elsewhere. The most damaging aspect of collateralcharge mortgages is in the event of a client experiencing some sort of unexpected problems (even if temporary). The bank says that they can give you more money with no additional cost, but, they fail to mention that you still have to qualify to borrow that additional money. If your client has had a credit setback and needs to access $40,000 in hard-earned equity from their home, the bank may decline them, another lender may want to help you with a short-term second mortgage, except 125 per cent of their equity has been tied up in a collateral-charge mortgage. The only alternative would be for the client to break their mortgage, incur a penalty and move to a potentially higher rate mortgage due to the current setback in their credit or income. This could end up costing thousands of dollars in the end. As brokers we need to educate clients to the potential impact that going with a collateral-charge mortgage could have. There are many choices of lenders out there, it is very important to understand how lenders register their mortgages to ensure our clients are receiving the best possible mortgage product for them.
A recent switch to collateral-charge mortgages by one lender to, it says, make it easier for homeowners to tap into their equity can make it harder for clients to switch when it’s renewal time. Mortgage broker Morgan Vaughan explains these kinds of mortgages will require careful consideration by both the broker and the client
Morgan Vaughan is a mortgage broker with The Mortgage Group Ontario Inc. in Toronto. CMP
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TMG opens new Toronto office
appointments TMG The Mortgage Group Atlantic welcomes Carolann Young, mortgage broker, who has over 25 years experience in the financial services and mortgage industries. Young works in the Fredericton, New Brunswick market. At Equitable Trust, Jeff Perra joins as business development officer for CMBS, Quebec. Meanwhile, Helen Gadsby was appointed regional business manager, GTA North & East for Toronto and Ontario regions.
TMG The Mortgage Group officially opened its new Ontario regional head office in November 2010 at 310 Davenport Road in Toronto. “TMG continues to experience positive momentum and this is particularly noted in Eastern Canada,” states TMG President, Mark Kerzner. “It is wonderful to now have a space to house our expanded team, and serve as a meeting place to accommodate our growing presence in the Greater Toronto Area.” “The office space itself really reminds me of TMG,” says Romana Bozic, TMG agent. “It is modern, classy and professional.” The brokerage celebrated the opening with its Ontario agents, lender and supplier partners, referral partners and clients. TMG Ontario Vice-President Jason McKittrick also said about the new site that it is “a work environment unique in our industry. Its location is a blend of Yorkville, the Annex and downtown,” referring to three distinct Toronto urban areas. CMP
New firm joins Mortgage Architects Mortgage Architects is pleased to announce that Antoine Latte and his OACIQ firm Altim Inc. have signed an agreement to join Mortgage Architects. Latte brings 25 years of real estate and mortgage financing experience to Mortgage Architects, the last six of which were with a major financial institution in Quebec. CMP
“I PARTNER WITH TMG THE MORTGAGE GROUP BECAUSE... ...TMG is a great company that provides its brokers/agents all the necessary tools, support, and industry leading training. I am proud to be part of the TMG network." Matt Daniels, Ottawa Mortgage Advisors, Kanata, ON ...TMG allows me to maximize my income, including the ability to take full advantage of volume bonuses with the deal centre. The company is large enough to provide excellent support, training, lender relations and promotional/advertising tools.” Michael Fortin, Vancouver, BC
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In the community Right Dominion Lending Centres The Mortgage Source based in Ottawa and led by owner/broker Nelly Van Berlo (far right wearing orange sweater) was named the winner in the Professional Services Category for the city’s 2010 Better Business Bureau Torch Awards. For the 14th year, the BBB recognized local companies that go “Above and Beyond” in promoting trust and serving their customers, employees, suppliers and the community at large.
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U.S. home prices decline signals still weak economy U.S. housing prices declined 1.3 per cent in October from the previous month, according to the S&P/ Case-Shiller index. This was a bigger decrease than economists anticipated. The home prices are still above the lows reached in the spring of 2009 but these new figures suggest the housing sector will drag down the rest of the U.S. economic recovery. “The double-dip is almost here,” David Blitzer, chairman of Standard & Poor’s index committee, told The Globe and Mail. “There is no good news in October’s report. Home prices across the country continue to fall. The trends we have seen over the past few months have not changed.” While some economists believe the worst is here and that the market will gradually improve in the new year, BNP Paribas in New York predicts prices will also slide in 2011 and 2011, to fall by five per cent from the current level. CMP
Bank of America settles with Fannie and Freddie Fannie Mae and Freddie Mac, the U.S. government mortgage lenders, accepted US$2.8 billion from Bank of America to settle claims of the bank providing faulty loans. The cost to Bank of America was less significant than what some investors expected, according to the Washington Post, and the bank’s stock increased by 6.4 per cent on Monday, Jan. 3 after the news was released. The settlement helps Bank of America avoid “a doomsday scenario,” analyst Paul Miller of FBR Capital Markets told the Post, but Fannie Mae can still pursue additional claims against the bank whereas Freddie Mac has now closed any more potential claims. Fannie spokesperson Janis Smith called the deal a “fair and responsible resolution,” though others cite it as a “gift” to the bank because the losses will now be incurred on the government mortgage lenders. CMP
Average amount of equity among homeowners who have mortgages (CAAMP)
australia Australian government bans pre-payment penalties Australian Treasurer Wayne Swan announced changes to finance laws, banning unpopular mortgage fees and cracking down on price collusion between major banks in a bid to boost competition in the sector. Targeting Australia’s “big four” banks, the reforms ban exit fees (pre-payment penalties as they are known in Canada) on new home loans and allow the competition regulator to prosecute lenders for colluding on rates, after large hikes sparked an angry consumer backlash. An additional (AUS) $4 billion dollars would also be injected into the mortgage-backed securities market under the reforms, Swan said. “Building up competition in our banking system will ensure that interest rates are lower over time,” Swan told Australian newspapers. “It’s very important that we don’t let the big banks off the hook.” Government opposition said the policy to abolish exit fees was more likely to hurt smaller lenders and do little to foster banking competition, since smaller lenders tend to have bigger exit fees compared to the big four banks. Phil Naylor, CEO of the Mortgage and Finance Association of Australia told MortgageBrokerNews. ca’s sister website BrokerNews.com.au that Australia had missed a “golden opportunity” to develop an Australian version of the Canadian Mortgage Bonds systems, which Naylor said enables thriving and competitive non-bank lender sector to operate there. He labelled the government’s promise to boost securitization funds “a mere drop in the ocean,” which does not deal with the long run competitive funding needs of the non-bank sector. “The federal government’s investments pale to those made by the Canada Mortgage and Housing Corporation, which during the past three years has invested $300 billion in the National Housing Act Mortgage-backed Securities and Canadian Mortgage Bonds programs.” CMP
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Affordability toughens in Canada Canadian home ownership costs have become more expensive for the first time in 18 months, according to a report by the Royal Bank of Canada. Rising property values and a recent pickup in mortgage rates are at cause behind the numbers. The decline in affordability was true in all major markets and in all types of housing, and follows steep declines since the spring of 2008. Yet despite the latest decline in affordability, it’s still better than it was a year ago. “The current levels in the RBC measures are in line with those in early 2006 when housing market activity was shifting into high gear in Canada,” the report said. The average rate on a five-year conventional mortgage went from 5.45 per cent to 5.73 per cent in the third quarter, according to RBC, the first quarterly increase since last year. The overall property market has also picked up. One year later It’s becoming more affordable to own a home, according to the Royal Bank of Canada, but the high cost of ownership will continue to keep the market steady and contain price increases. RBC said home ownership cost decreased over the summer for the first time in more than a year. This is attributed to low mortgage rates. But homes were still more expensive than long-term averages in many markets, suggesting “greater than usual tensions exist for Canadian homebuyers.” “These tensions are unlikely to derail demand for housing in the near term but will act as a restraint on growth in market activity going forward,” said RBC senior economist Robert Hogue. This is the first time affordability has improved since mid-2009. CMP
FEATURE WHY CANADA’S HOUSING MARKET DIDN’T GO BUST
Mortgage Alliance’s RightMortgage reaches the $2 billion mark Mortgage Alliance’s RightMortgage product reached $2 billion in sales under administration in December after two years on the market. The private-label product – which Mortgage Alliance chose not to brand with its own company name – allows consumers to select the terms, features and rates of their mortgages. It is sold by the close to 1,700 brokers and agents across Canada in the Mortgage Alliance network. One year later Mortgage Alliance’s RightMortgage product has topped $3 billion in mortgage origination. Mortgage Alliance was the first “super broker” to launch its own mortgage product with a unique and proprietary consumer benefit. The Right Mortgage gives mortgage consumers the freedom to choose things such as term, prepayment options, payment frequency and length of rate guarantee that allow them to personalize the mortgage and impact the interest rate they receive. Added Tony Bartolomeo, product manager for Mortgage Alliance, “this product gets an agent and the customer engaged in a process that helps build trust.” While giving consumers choice, RightMortgage also gives brokers flexibility when it comes to fees, according to Bartolomeo. Their choice of compensation models ranges from “upfront” to “trailer fees” or a combination of both. “It’s been our network of mortgage professionals that has really helped to make this a success,” explained Beckette. “We create new mortgage products by listening to consumers and our brokers and it was [brokers’] early adoption and support that’s created this remarkable industry achievement.” CMP
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The Year Ahead
The Year Ahead
The Year Ahead
The mortgage broker industry may be out of the woods economically speaking, but there are still plenty of issues to be dealt with. Consumer awareness and confidence in brokers, broker-lender relationships and the threat from government of more mortgage rules are some of the issues John Tenpenny heard about when talking with prominent industry members
he economic outlook for the year ahead is better than it was this time last year, but it’s not overly optimistic either. Taken together, the predictions from bank economists, real estate boards and brokers themselves paint a picture of slow, but steady growth, with little upward movement in interest rates and flattening home sales and a corresponding stability in home prices. It’s not exciting by any means, but after the roller-coaster ride Canadians have experienced since 2008, it’s certainly a relief. Welcome to the new normal. “What we’re going to see in 2011 is a complete change to the marketplace from what we’ve seen the past five years,” says Mortgage Alliance president Michael Beckette. “ Brokers capitalized in an environment of decreasing interest rates and a high transactional real estate market with lots of renewals and refinancing. It’s not going to be quite as easy for the individual broker as it has been in the past. Although to look at the situation you wouldn’t think there would be room for mortgage professionals to grow their business, according to Verico Financial Group president and CEO Colin Dreyer, you’d be wrong in that assumption. “To me, the new normal means there are still going to be approximately 450,000 home sales next year and upwards of 60 per cent of Canadians own homes and if you look at that it becomes clear that there is opportunity for brokers and the question becomes how do I involve myself in a percentage of those financial transactions? “What it comes down to is the fact that this isn’t the kind of environment where just by being a
“ while there may be some opportunities available for brokers in 2011, there may also be some roadblocks put up by the government ”
licensed mortgage broker I can make a living. This is the kind of environment where if I’m a really good mortgage broker and I do the right things then I have a chance to compete effectively. There is an opportunity for those good mortgage brokers to show their value.” Mark Kerzner, president of TMG The Mortgage Group agrees there is some market share to be had for brokers, despite some reports to the contrary. Why? “I look at it as simple math,” he says. “If a lot of brokers are working with first-time homebuyers (40 per cent) and they’re doing a good job, which is supported by recent surveys, then it would hold that they are going to get a bigger share of the refinance and renewal business when it becomes available.” If rates do increase at some point in the future, according to Vince Gaetano, vice-president and principal broker at MonsterMortgage.ca, there may be opportunities for brokers as “some mortgage holders may break their mortgages in cases where penalties have been lowered because of the rate differential.” Household debt While there may be some opportunities available for brokers in 2011, there may also be some roadblocks put up by the government. After holding interest rates in its December announcement, Bank of Canada Mark Carney then spent the next few weeks warning Canadians about their personal debts, which now sit at 148 per cent of disposable incomes, eclipsing the U.S. for the first time in 12 years. Following that, Finance Minister Jim Flaherty said if necessary Ottawa would tighten the mortgage rules further. In the spring, the federal government fine-tuned the rules on mortgages, requiring borrowers to make higher down payments in some cases and forcing banks to ensure that borrowers could handle higher interest rates before approving a loan application. But there is rising pressure to do more, including forcing homebuyers to pay a higher minimum
Top: Michael Cameron Bottom: Colin Dreyer
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The Year Ahead
down payment, or extending the qualifying rate to six or seven years from five. Dreyer believes Canadians aren’t being given enough credit when it comes to fiscal responsibility. “It seems to me that Canadian consumers are somewhat self-regulating in terms of being fiscally responsible,” he says. “I think a further tightening of the mortgage rules at this time is not necessary as residential sales are already moderating based on the existing economic conditions.” Beckette compares the situation to trying to close the gate after the horse is already out. “Consumers are starting to become more aware of paying down debt and because of that I think their behaviour tends to follow. Kerzner is concerned that additional changes may affect the housing market, which would affect everyone from first-time homebuyers to those looking to refinance. He believes the issue is more than mortgages, it’s also about credit card and other revolving debt. “If it’s consumer debt that’s driving this household debt ratio, limiting the ability for a mortgage consumer to refinance because the threshold was lowered could actually encourage them to take higher interest debt than they would have to,” he says. “I think a mortgage can be a very effective tool for debt management, because consumers can lower the effective interest rate they pay on all of their debt. I would be concerned if there were too many restrictions that paralyzed the customer’s ability to do that.” “Borrowers have become used to low rates and Banner ad january 2011 edited_SYD.pdf 1 1/13/2011 11:29:28 AM are borrowing more money, thinking that these low rates are sustainable,” says Margo Wynhofen, Verico One Mortgage Corp. broker and president of
“ I think educating consumers about debt level and warning them of the pitfalls of debt levels is a good thing ” the Independent Mortgage Brokers’ Association (IMBA) of Ontario. “When mortgage rates go back up to 7.5, eight per cent, those payments will not be sustainable.” Wynhofen asks her clients if they’ll be able to afford the mortgage when the rate does eventually return to normal levels. But she sees other types of consumer debt as the bigger issue. When Flaherty’s comments were reported on CMP’s website, MortgageBrokerNews.ca, the reaction was swift. “Credit card debt is the issue,” said one comment. “The policies are way too loose in the first place. Every credit application should have to qualify on its own merits. There should also be support documents required and verified. The Canadian banks rake in huge profits off credit cards, lines of credit and loans. Of course the banks are not going to want tighter restrictions on the higher interest-generating business. Why ask them? Killing the mortgage industry is not the answer.” Michael Cameron, a partner with Axiom Mortgage Partners concurs. As the co-founder of an affordable housing project back in 2001 Cameron believes home ownership should be available to all responsible, hard-working Canadians and he’s opposed to making that more difficult.
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The Year Ahead
“If I look at any clients that I have run across in the past 10 years that have run into difficulty it is not typically because they have had more mortgage than they can handle,” he says. Gaetano has a slightly different take on the issue. “I think educating consumers about debt level and warning them of the pitfalls of debt levels is a good thing. And I don’t think it will cease the lending machine. “Instead of fighting the change, we have to embrace it. This isn’t a situation where we’re being picked on; it’s nothing more than the facts. We need to start working with the government and being proactive rather than digging in our heels and trying to protect our position. We know credit cards and auto lending can be predatory in nature, but I think we should be proud that our lending practices are very conservative; this is not the Wild West as it was south of the border.” Who owns the client? The broker-lender relationship is always a hot topic of discussion amongst brokers and some say the adversarial posture taken by certain parties needs to go the way of the dinosaurs. “There’s only so such much pie that is available. This industry has to come to the realization that lenders have to be profitable in order to survive and we need more lenders as opposed to less,” says Gaetano. “We need to start looking at ways to make these lenders profitable and more efficient and we have to start looking at a true partnership in the sense that sustainability needs to be the goal.” Kerzner agrees and emphasizes that the trend of partnerships between brokerages and lenders needs to continue. “We need the banks as part of the value proposition, but having strong monoline lenders who understand the broker channel is vital. We need a balance.” “Trust is an issue that needs to be addressed as well says Gaetano. “Our industry hasn’t moved forward over the past decade because we’re still arguing about who owns the client,” he says. At the recent CAAMP conference in Montreal, Gaetano had a conversation with the owner of one of the largest independent broker firms in Australia. While broker market share in that country has climbed to 40 per cent since 2003, here in Canada it has remained virtually unchanged and Gaetano attributes this stagnation to the unwillingness of brokers and lenders to come together. “If that doesn’t stop, lenders aren’t going to care and they’re going to do what they need to do to survive and that may mean cutting commissions, adjusting their compensation model and putting us in a position where we’re going to be in a reactive situation as opposed to a proactive one where we
can try to come to some sort of understanding of how we’re going to deal with this relationship moving forward.” One of the things that could bridge that gap, according to Gaetano is looking at ways to reassure
Flaherty pulls the trigger on mortgage changes As this issue of CMP went to press, Finance Minister Jim Flaherty announced a second tightening of mortgage rules in the past 12 months. The three main changes are maximum amortization periods will be reduced to 30 years from 35; the refinance limit of a home’s value will be lowered to 85 per cent from 90 per cent; and the government is also withdrawing insurance on home equity lines of credit. The new rules will be go into effect March 18. “Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped protect us from the worst of the recent global recession,” Flaherty said in a press conference on January 17. “The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future. The MortgageBrokerNews.ca community was vocally upset in past news tips that Ottawa may restrict mortgage lending further, and a majority expressed Harper and Flaherty were tackling the wrong debt issues. Many brokers feel looser rules around credit cards and auto financing need to be re-examined. While CAAMP supports some of the mortgage rule changes announced, it disagrees with the reduction of the amortization period to 30 years. ”Rather than reducing the amortization period to 30 years from 35, as the Minister has announced, we would have preferred that the government had required those people seeking 35 year amortizations to meet the same qualifying standards as those with a shorter amortization. We hope the government will revisit this one feature as the economy strengthens,” said President and CEO Jim Murphy in a statement released by CAAMP. Peter Kinch, owner of a mortgage brokerage in British Columbia, said he expects the measures to put a rush on the real estate market as buyers seek to get in before the deadline. It’s similar to last year’s changes by Flaherty to the borrowing rules, he said. Whether or not they have an effect, on borrowing, many Canadians are likely to push real estate activities up to avoid the changes, Kinch said. ”It’s not really what these changes will do, but what the perception will be,” he said. Kinch said he was surprised that Flaherty acted so quickly this winter, but suspects there’s a hidden message in the mortgage rule changes – rate hikes are coming. According to Kinch, this is a way for Flaherty to prepare Canadians to be more responsible with their borrowing ahead of the rise in borrowing rates. “He’s clearly trying to cut back on Canadians using their houses as ATM machines.” Look for complete coverage of the mortgage industry’s reaction to these changes in the February issue of CMP.
The Year Ahead
lenders that brokers are not going to pull away mortgage holders when the term is up. New GAAP accounting measures now require lenders to take on the full cost of a mortgage upfront. “They’re in the ditch profitability-wise for the first three to four years,” Gaetano says. “They’re under pressure to protect that client from leaving. There’s a belief that they have to fight for that business “We have to work together and we have to look at going to a different model that accommodates both parties. That could be trailer fess, taking a lower commission upfront; it’s providing representations and warranties, possibly clawbacks if deals are pulled inadvertently before a certain date. These are things that have to come to the table as discussion points to ensure sustainability long term.” Each party understanding the challenges faced by the other are crucial says Beckette. “Then the responsibility becomes trying helping each other meet their own objectives. And I don’t think we’re there yet. We need to get to the point where we’re strategically cooperating because then as brokers we will understand what’s important to lenders and they in turn will understand what’s important to us as brokers.” What you don’t want to see happen is competition based solely on rates. “Rates are a slippery slope,” says Dreyer. “If everyone just competes on rates, then at the end of the day we become just a priced commodity.” Broker cooperation Brokers shouldn’t just be improving relationships with lenders, they should also being be fostering a better understanding amongst themselves.
For Cameron the vicious game some brokers are playing by undercutting each other to acquire deals is extremely worrisome. “If we continue to whittle down our value proposition to that of order-takers offering the lowest rate, we run the very real risk of becoming irrelevant. It is becoming a game of who can work for the least amount of commission in order to buy down a rate by the most. “Why are we beating each other up?” he asks. Cameron feels brokers need to speak with a louder voice to lenders instead of looking out for their own best interests. “Why are [brokers] not working more closely together to grow our business? If we stay fragmented our growth is largely limited by what the big banks are comfortable with.” Cameron also thinks brokerage houses having to compete on increasingly thin margins has meant that there is very little to put back into the industry. “It is difficult to grow market share when we have our sales force taking out a substantial amount of overall revenue. Historically, those at the brokerage level have acquiesced to those demands, again leaving little left over to re-invest in compliance, training and technology.” For Gaetano, awareness is good no matter where it comes from. He points to the recent television advertising campaign from DLC, which features Canadian icon Don Cherry and says it should be applauded by the industry as a mutually beneficial initiative that brings awareness to the mortgage brokerage space in Canada. MonsterMortgage.ca invested similarly
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The Year Ahead
with a Doug Gilmour advertising campaign six years ago and Gaetano believes it increased awareness. “It’s unfortunate that more firms don’t spend this type of money promoting their business and the industry. We have to work together to bring this industry to a different level. You have to realize that you cannot grow your brand or your business by giving all the commissions to your agents.” He is also adamant that it’s not the responsibility of industry associations to advertise on behalf of brokers. “It’s the broker/owner’s responsibility to do so,” says Gaetano. For Kerzner, throwing money into national advertising is not the only answer. “Advertising builds a brand, but word of mouth leads to sales,” he says, quoting sales guru Jeffrey Gitomer. “Brokers need to continue to do a great job with consumers. The more people they work with, the more advocates they build. They have to toot their own horn, which doesn’t necessarily mean spend a lot of money on advertising.” Beckette feels brokers have lost focus of what’s truly important. “As an industry we’ve done an absolutely appalling job of telling consumers of what we do on a wholesale basis. We’ve been totally focused on deals; we have not been focused on the consumer and we haven’t been very sophisticated in our strategies of informing consumers in a simple way of what exactly it is they can ask a mortgage professional to help them with.”
“The consumer is knowledge-savvy and the only way that you’re going to be able to interact with them is to be more knowledgeable than them,” he says. Making designations more challenging to obtain is twofold for Cameron: it raises the professionalism of brokers and acts as a barrier to those who may not have what it takes to be a full-time broker. “It is easy to become a mortgage broker while still maintaining another job. Given the complexity of the products and services we offer it is not realistic to expect that one can keep a high standard of professionalism without putting forth a full-time effort. There are far too many individual agents who do not have sufficient training, expertise, ethics or discipline to convey a professional image to the consumer.” This is hurting the industry a lot more than people think says Gaetano, who as a participant on CP24’s Hot Property call-in television show for the past 10 years, has heard first-hand the horror stories of people dealing with inexperienced or poorly trained mortgage agents. “When you have a lot of part-time brokers the chance for a client to have a good first impression is not good. Some clients using us for the first time may have had a poor experience and went back to a bank. Now we’re behind the eight ball with those clients, trying to get them back and trust what a broker does for them. Consumer awareness and satisfaction “People who think we’re growing as an Recent research by Maritz Canada reported that industry are wrong. We’re not. We’re actually the AMP designation resonated with 17 per cent of regressing because we’re not investing in proper respondents, a number that is too low for Kerzner, training and we’re not demanding that people considering “the value proposition a broker take this as a full-time job. We need to clean up represents, but it is moving in the right direction. the image of the mortgage professional. You “They represent choice, they take the pain out either take it seriously or get out.” of the process, they are experts,” he says. “Given all Dreyer’s message for part-time or illthat, it’s a pet peeve of mine that the broker equipped brokers is slightly less caustic than awareness level with consumers is still not where Gaetano’s, but no less clear. it needs to be.” “Good people in the industry have always For Dreyer, it still comes to down to personal done well and will continue to do well,” says relationships. “What if every broker went back and Dreyer. “Those who make a dedicated and actually engaged with every consumer they’ve disciplined approach to being a broker as a dealt with over the past decade?” he asks. “What profession will do well. For those who don’t have would be the impact of consumer awareness?” the dedication, this is not a good time for them. Doing a good job is still the best form of “It’s not about everybody should be a advertising as far as Dreyer is concerned. “At the mortgage broker, the right people should be a end of the day, it’s the value of the business you do mortgage broker.” with the consumer which will continue to grow Designations in general don’t cut it for independent broker share.” Gaetano, who says the industry needs to look at He thinks ongoing education and training, ways to certify documentation. “We need to drill including professional designations are important. down and look at the paper because the quality
Top: Mark Kerzner Bottom: Michael Beckette
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of paper is what’s being sold in the mortgage-backed security market. We have to be accountable for whatever we deliver to that lender.” According to Gaetano, his company was the first firm to ask Genworth in 2008 for an audit. “I have a mirror image of the file that the lender has because I provide them all the content and documentation,” he explains. “Insurers on a regular basis audit their lenders’ files to make sure they are complying with the requirements under the insurance act and I’d like to know how my paper performs in an audit. I think this is the basis for certification of brokerages in Canada.” To Kerzner’s thinking, full-service brokerages are one way to ensure a more complete mortgage broker is engaging the public. “We treat regulatory compliance issues very seriously, making sure we have systems, manuals and processes in place to protect our brokers and the consumer. That’s a value-add that a full-service brokerage offers,” he says. “If you’re an independent trying to figure out how to row your business and where your business is going to come from, to also have the expertise in the area of regulatory compliance is difficult. I think there is an opportunity for the full-service brokerages to continue to demonstrate their value in that area.” Value is what brokers, whether independent or affiliated, have to offer consumers, says Dreyer. When the number of consumers who use the Internet to acquire mortgage information is substantially higher than those who apply for a mortgage online, the void should be filled by brokers he says. “What [consumers are] looking for is validation of what they’re doing. And they need advice for that. What they’re saying is ‘This is a tricky place to be and yes, I’d like the best rate, but I also need to know the decision I’m making on my mortgage is accommodating my financial needs.’ Our niche is the fact that we are reliant on that relationship on an ongoing basis; we don’t pass the baton off to someone else and hope they will take care of it.” For Beckette it’s a matter of getting back to basics. “We’ve have been so focused on other brokers, other networks and lenders that we’ve forgot about the person who actually pays the bills, which is the consumer. I think in 2011 we’ve got to return to fundamentals and understand that our business is about serving consumers. We have to have processes in place for brokers that make it easier to stay in touch and stay top of mind with consumers.” There is no doubt that there are issues the mortgage broker industry in Canada needs to deal with in the face of continuing, although improving economic conditions, but things are looking better and that’s sometimes easy to forget. “As we talk about all of the economic concerns it’s too easy to lose sight of the fact that we live in a great country, something I think as Canadians we take for granted,” says Kerzner. “It’s too easy to lose sight of everything that is great.” CMP
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Improving Credit Scores
repair job Looking to graduate your clients from a B to A mortgage? Heather Li looks at some of the tools brokers can use to turn around their clients’ credit scores
redit is sometimes a mysterious concept to people. A lack of basic financial knowledge, such as why it’s important to pay bills on time, could be the difference between an A mortgage with a great rate and a B mortgage with higher payments. But as a broker, you know placing clients with an alternative lender can be the perfect segue to building up their credit scores. “Brokering today is so much more than finding your client a mortgage,” says Brian Leland, Equitable Trust’s director of residential mortgage underwriting. “They are taking an approach to keep that client for a lifetime so they’ll try to coach clients to improve their credit over time.” Identifying why Before you can advise your clients on a course of action to improve credit, you have to know why they have a less-than-stellar Beacon score. “Improving credit is easy yet difficult,” says Pino Decina, Home Trust’s vice-president of mortgage lending. “The main factor for the broker is to understand the reason behind the credit score. Once that is determined, it’s much easier to assist a client in the graduation process.” The Beacon score, determined by the Equifax credit bureau, is an at-a-glance indicator lenders use to estimate a client’s probability of successful loan repayment. Beacon scores range from 300 to 900, with 900 as the highest possible score and good credit averaging in the 600s. A person with a Beacon score below 520 will often be turned away from the bank. The credit score is comprised of the following percentages: • 35 for late payments, bankruptcies, collections and judgments,
• 30 for current debts, • 15 for how long accounts have been opened and established, • 10 for type of credit, such as credit cards and bank loans, and • 10 for applications for new credit card enquiries. One common example of a homeowner with a poor credit rating is chronic late payments. “This is an easier situation—a simple consolidation of all balances into one low monthly payment and reminding the client not to max out their credit cards will help them focus on repaying debt,” says Decina. Maxing out credit cards is a second frequent mistake people make. Mark Fidgett, a Vancouver mortgage broker who owns Verico Not a Penny Down Mortgages, advises that his clients do not exceed 50 per cent of their credit limits. “If you have a $1,000 credit limit and a balance of $950, and you pay your credit card off every month, it still negatively affects your Beacon score,” says Fidgett. “This is because we don’t know what day of the month that particular credit card reports to the bureau. So even if you pay it off every 26th of the month, let’s say TD Visa reports every 15th of the month, your report still says you had a $950 balance on a $1,000 credit card.” Fidgett suggests his clients split spending on a few cards so they’re not overusing their credit.
“ before you can advise your clients on a course of action to improve credit, you have to know why they have a lessthan-stellar Beacon score ”
Improving Credit Scores
Improving Credit Scores
Fidgett’s most imperative advice is for clients to pull their own credit reports from Equifax at least twice a year. All consumers are responsible for correcting any errors and it takes awhile for amendments to be made. “The credit bureau is not there to help you and they’re hard to get a hold of so individuals have to be really diligent,” says Fidgett. Fidgett gives a personal example: “My daughter goes to the University of Victoria and I gave her a car to use. She got a parking ticket. I got it in the mail and told her to pay it. She did but she paid it late and it went through to collections for $50, which I saw when I pulled my credit report—because I do every two or three months. I wouldn’t have known it was there if I wasn’t diligent about my personal finances, including my credit.” Sometimes there can be misleading information on a client’s credit report as well. For example, American Express doesn’t set a credit limit because it’s based on the individual’s ability to pay. So a client may use $5,000 one month and on her report, the AmEx credit limit is set at that amount. The next month, she may spend $8,500, which is acceptable for AmEx, but now her credit score is negatively affected. Alternative lenders offer some specific products to help repair a bruised credit report. Products to repair credit Mortgage payments do not go on credit reports. So even if your client is paying the lender on time, he still needs to increase his credit score. Home Trust offers a one-charge mortgage product where there is a regular fixed payment to own a home and the added feature of an Equityline Visa card. This Visa provides the flexibility of using the equity in a client’s home to secure credit up to $250,000. In the meantime, regular activity on the Visa card and paying bills on time improves the Beacon score. Home Trust also launched a Credit Assist product in Ontario in October 2010 as a one-year solution where debts are consolidated into one to help consumers repair bruised credit. After one year, clients should be able to renew their mortgage to a prime rate with more favourable terms. Conditions for qualifying include verifiable income, a 44 per cent maximum total debt service ratio and a minimum Beacon score of 520, with lower scores evaluated on a case-by-case basis. Homeowners can borrow up to 85
per cent loan-to-value without requiring default insurance. At Equitable Trust, though there are no specific products available to assist clients move from a B to A mortgage, the company itself is designed to take on a broad spectrum of borrowers with various credit situations. “There’s obviously no maximum credit score— the higher, the better,” says Leland. “We’ll offer a particular loan-to-value and interest rate to somebody with a high Beacon score and somebody on the other end who is working to improve credit.” Tips for credit improvement Just as Decina recommended, the biggest tactic for improving credit scores is consolidating debt. Fidgett often takes out a short-term second mortgage for clients so they can pay off all their debt. “Now their credit report basically gets wiped down to zero so it’s positive,” he says. “We usually allow two to three months for it to go through and report to the bureau a few times. Now the reporting says, ‘This guy is great. He’s got low balances.’ The Beacon score will gradually go back up and it’ll move them back to the A side of an acceptable Beacon score for competitive rates.” One of two key pitfalls for clients to avoid is over-applying to creditors and lenders. As shown in the earlier breakdown of a credit report, how often you inquire for a new credit card makes up 10 per cent of your Beacon score. “Even if they’re walking through the mall and there’s somebody at a booth giving away a free pen, saying, ‘Just fill out a credit
Top: Brian Leland Bottom: Mark Fidgett
Improving Credit Scores
card application,’ people don’t realize that’s authorization for someone to pull their credit report,” says Fidgett. Or a client may be deciding what kind of credit card to get. They may apply to a number of lenders to find the best deal. They’re approved everywhere but now there were five hits to the credit report. “The best approach is to talk to a mortgage professional, decide which product is best and apply for that one,” says Decina. The other problem many people walk into is ignoring small payments, but no matter what the balance is, it should always be paid on time. “Even if it’s $30 on your credit line bill or Visa bill, never say, ‘I’ll pay $60 next month,’” advises Decina. “A credit bureau doesn’t take into account that the money owed was very small. It does take into account the payment was missed. That becomes part of the score and is something that cannot be erased.” To
avoid the hassle of paying a credit card bill every month, your client can set up automatic payments through the bank. Fidgett has recorded videos on credit tips and uploaded them to YouTube for clients to access easily. He also has an e-book designed that he sends to clients for free whenever they’re looking for advice on managing and improving credit. He suggests other mortgage brokers do the same. “This is also a great lead generator because when people are surfing the Internet for this advice, they find my videos and can get my e-mail address off the website,” he adds. Generally, moving a client with bruised credit from a B to A mortgage simply takes time and sound advice. When you inform them of the effects their financial habits have on the whole picture and the easy steps they can perform to do better, a mortgage renewal with a great rate is within reach. CMP
What to look for in a lender
Drawing the line After years spent on the lending side of things, Dave Larock reflects on lessons learned after his first year as a mortgage planner and shares his suggestions for improved broker-lender relations
hen it comes to lenders, as an independent mortgage planner, I am spoiled for choice. Each morning I receive mortgage rates from 25 lenders across the country and throughout each day, territory sales reps send me e-mails offering tips, advice and product updates. As my rookie year as a mortgage planner draws to a close I am now reflecting back on which lenders I sent my business to and why; partly to evaluate whether I want to continue these relationships in the future, but also to appreciate the very different perspective that this last year has given me. You see, before I became a mortgage planner I spent the previous 10 years working in senior sales and marketing roles for three different lenders. Throughout that period I sought feedback and input from brokers to better learn how to work in partnership with them, but in the end, I was always learning from someone else’s point of view. This past year has given me first-hand experience and, not surprisingly, it has changed my perspective. Here then, is my somewhat unique opinion of what I look for in a lender. What I look for in a lender The first thing I realized when I started mortgage planning is how hard it is to get customers. A big lender always has a pipeline of business that ebbs and flows, but as an independent planner you start with nothing. It takes a Herculean effort to get those first few deals in the door, and as such, every file is critical to your success. When I send a deal to a lender I want them to appreciate how hard I have worked to bring them that customer and I need a level of service that matches my own. For me, world-class lender service requires employees to do two things above all else: • Care. In both obvious and subtle ways, it’s easy to tell whether employees are taking pride in their work or punching the clock. Attitude permeates everything. (Lender suggestion: Merely sending surveys to the broker of record won’t give you an accurate picture of your team’s performance because the top dog always gets great service. Send surveys to the agents as well to find out what your service is really like.) • Communicate. I need underwriters and sales reps to tell me what’s happening so I can manage expectations. Everyone runs a little late now and then, but when I don’t know what’s happening, my stress level
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What to look for in a lender
increases exponentially. (Lender suggestion: Take the sales reps off the road, unless they are delivering training. Office visits are a waste of time and reps who work from a desk return calls much, much faster.) While top-notch service levels are the single most important element I look for, I, of course, need my lender partners to offer competitive pricing and a wide range of flexible lending solutions. If I can offer customers increased flexibility in the areas that are most important to them, they will gladly pay a small rate premium for the privilege. Conversely, if a lender only offers plain vanilla products, then it’s going to come down to rate every time, and that’s a long-term losing proposition for all of us. (Lender suggestion: Why not offer a base mortgage that comes with optional features that can be added for an incremental premium? The first lender to offer borrowers a truly customized mortgage will revolutionize the industry. As an example, look at how the insurance companies are constantly adding new, optional riders to their base coverages.) I am also happy to have lenders who will accept my business (seriously!). With the recent push toward minimum volume levels, newer agents are often forced to submit their deals through a higher-volume producer. There is no way that I will hand off my file to anyone, so if I can’t deal with a lender directly then they are off my list. I must say that I find this trend a little perplexing. Setting volume minimums is
“ I think our industry will change more in the next five years that it has in the past 10 ”
basically an attempt to improve funding ratios, but wouldn’t eliminating quick close promotions and/or having funding ratio minimums be a far more direct way of addressing the problem? What’s wrong with an agent who sends you five deals a year that all fund? Interestingly, in my time as a lender I found that there was actually very little correlation between funded volumes and funding ratio. But I digress. Lenders also create an overall “corporate impression” that matters to me in the long run.
Since we are all stewards of the industry, let’s do away with offering higher rates to earn more commission and while we’re at it, would somebody please create a mortgage life insurance product worth selling? I appreciate lenders who issue clean, readable commitments and I’m really looking forward to the day when prepayment penalty clauses specifically describe how calculations are made and with
“ if a lender only offers plain vanilla products, then it’s going to come down to rate every time, and that’s a long-term losing proposition for all of us ” what rates. I want to partner with lenders who support, and don’t directly compete, with the broker channel and I’d rather not have to fight to get my customers back at renewal. As such, lenders who incorporate some form of renewal compensation in their broker programs are better aligning their interests with my own. On the lighter side, please note that unpublished rate specials are not unpublished if they are blasted out to the entire broker community, and that the effectiveness of exclamation points is inversely related to the frequency with which they are used. I think our industry will change more in the next five years that it has in the past 10, and that the next generation of mortgage planners will evolve into overall borrowing advisers who establish long-term client relationships and who offer financing solutions that go well beyond mortgages. Not every lender will embrace this evolution, and as we leverage our client relationships to expand our share of customer wallets, I believe that the lines between lenders as partners and lenders as competitors will become more pronounced. It will become increasingly obvious which lenders see independent mortgage planners as key strategic partners and I think it will be this sub-group who, if they focus on the areas mentioned above, will flourish as a result. David Larock is a Toronto-based independent mortgage planner with TMG The Mortgage Group (Thompson/LaRue). CMP
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With changes occurring in the financial services industry, it’s important for mortgage brokers to stay informed. Heather Li explores the value of training and continuing education and where it’s available to brokers
hen most of us were young, we were taught if you don’t know, ask. Education, training and asking questions are the cornerstone to advancing in any profession and building a successful mortgage brokering business for the long term is no exception. Though this industry is now more than 20 years old in most provinces, it is still a young profession. Licensing and regulation is a recurring issue; there are more consumers who prefer a broker now but many are still wary or uninformed; and the industry as a whole is still developing best practices for the transfer of knowledge and skills. British Columbia is ahead of everyone else as it has instituted mandatory relicensing requirements every two years. In Alberta, you cannot start your own business until you have worked for two years under another broker after licensing to obtain enough hands-on experience. The province is also developing its own relicensing rules. Meanwhile Mal Eccles, the education chair for the Independent Mortgage Brokers Association of Ontario (IMBA) is envious of his western neighbours. Without legislation, he sees education as a purely independent act no matter how much support is provided by the associations, lenders and broker houses. “You’ve heard the old story about taking a horse to water, you can’t make him drink,” says Eccles. “There’s one thing I have found after being education chair for IMBA: you can’t even convince the horse to walk to the water, never mind whether you can convince him to drink or not.”
“ most, if not all, brokers and agents agree if you want to be a top performer, you have to make it happen for yourself ”
This comes across as a pessimistic outlook, but Eccles is just expressing his desire to better the mortgage broker industry and a knowing opinion that much improvement can be made. Most, if not all, brokers and agents agree if you want to be a top performer, you have to make it happen for yourself. “The people who really want to take advantage of enhancing their career or moving their career along into the next level know professional development courses are there,” says Rick Wilson, regional sales manager for Mortgage Alliance for the Prairies. “They take advantage of it and they’re all over it. Then there’s another group who’s more concerned about the day-to-day business that may not quite see the value in it. I don’t think that’s an industry thing but a personal thing.” For anyone who sees the value in continuing education, you know what you’re looking for and needing to develop at the moment. But know there are many resources available. All you have to do sometimes is ask—or Google. Where to learn The industry associations are committed to professional development. Nationally, the Canadian Association of Accredited Mortgage Professionals (CAAMP) provides the original broker licensing course in Ontario and Saskatchewan, which is available online for Ontario and as an intensive five-day inclassroom course. CAAMP also offers the AMP designation, which needs to be renewed annually upon the completion of 12 continuing education credits. Currently, the CAAMP website has a total of 15 different continuing education products in a mix of French and English, and is continuing to add lessons in 2011. In the fall of 2010, CAAMP also introduced a new online learning management system that demonstrates various mortgage education features. “We invested a considerable amount of
money on that platform and we’re very pleased with it,” says Mark Webb, CAAMP’s vicepresident of education and professional affairs. If you are not a CAAMP member, you can view a sample of the system through its consumer site www.mortgageconsumer.org. At the provincial level, the three associations (Ontario, Alberta and British Columbia) are each doing something slightly different from the others to cater to their members. In Ontario, some of the courses IMBA has developed in the past few years include how to analyze an appraisal, a power of sales course to learn what to do when a client is losing their home, an underwriting course and best hiring practices for mortgage broker owners. In terms of attendance, Eccles is the only one to admit attendance is low when considered as a percentage. Typically, an on-site course may have around 100 attendees but Eccles notes the area contains 5,000 registered and licensed agents. “I want to see this industry move forward and bring itself to a level where we are populated by knowledgeable, skilled, practising participants. And the only way we can achieve that goal is
Ontario proposes mandatory continuing education for brokers The Financial Services Commission of Ontario (FSCO) has released a proposal that would see continuing education (CE) become mandatory for mortgage brokers. The proposal is out for public comment until February 28. FSCO says the goals of mandatory CE for mortgage brokers are to improve the sector’s compliance with current legal requirements by increasing awareness of the rules and the importance of complying with those rules, and to improve consumer protection – without imposing unnecessarily onerous requirements on licensees. FSCO has established five key principles, which it says are consistent with the continuing education principles for life insurance agents. 1. FSCO will not provide continuing education directly. 2. FSCO will seek to harmonize its requirements with those in other provinces.
“ I want to see this industry move forward and bring itself to a level where we are populated by knowledgeable, skilled, practising participants ” through knowledge and education. That’s my personal desire and motivation.” To support mandating relicensing courses, IMBA has built a new classroom in its expanded head office space with the desire to teach more and as much as necessary. If Eccles had it his way, the main areas a broker would have to continuously cover are ethics, fiduciary duties, rules and regulations, fraud, professional liability, mortgage law and privacy issues, something that may finally be addressed by the Financial Services Commission of Ontario (FSCO), which has proposed the introduction of mandatory continuing education for mortgage brokers in the province (see sidebar on this page).
3. CE must be readily accessible to licensees through the Internet, by correspondence and perhaps also in a classroom setting or some combination of these approaches. 4. CE programs must be administratively efficient – for CE providers, licensees and FSCO. 5. FSCO will not require licensees to duplicate CE training that they have completed through a professional association, educational institution, other provincial regulator or commercial education provider. Top: Mal Eccles Middle: Rick Wilson Bottom: Mark Webb
You can e-mail comments to MBCE@fsco.gov.on.ca and include “CE Consultation for the Mortgage Broker Sector” in your e-mail’s subject line.
Out West, Mortgage Alliance’s Wilson enjoys the annual conferences delivered by the Alberta Mortgage Brokers Association (AMBA). “The quality of the speakers we’ve been able to continually bring along here is outstanding and the value that it brings back to me and my associates is great,” he says. He cites some of his
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favourites: Benjamin Tal, CIBC World Markets senior economist; David Chilton, author of The Wealthy Barber; and Arlene Dickinson, Venture Communications chief executive officer. Wilson finds in Alberta one of the two prevalent learning subjects right now is social media. “I don’t think you go to one course to learn about it because there’s a constant evolution,” he says. “Everything has shown you can do a lot of business that way if you know how to do it properly—not just go on Facebook. That’s not enough.” The other popular topic is fraud. And Wilson finds the training counterparts at the Canada Mortgage and Housing Corp. (CMHC), Genworth and various lenders tackle the subject with their own program versions. “Also, one thing I get a lot out of is any time I can sit or join in somehow whether it’s an expert broker or lender panel where I can get candid responses,” adds Wilson. “From my perspective, a lot of what I need to understand or want to know is what’s going on in the industry? What do people see happening? What’s going on in the economy? Those are the true things that pique my interest.” While Wilson is enthusiastic about the speakers his provincial association courts, Greg Martel of Victoria, B.C. Harbour View Mortgages finds the presenters inconsistent in British Columbia. Some are big names that pull in large crowds, others have little appeal. But he too sees benefit when the right person is on offer. “I try to inundate myself with that type of education, speakers and seminars,” he says. “I also isolate the thought-producers in
insurers’ programs The three national mortgage insurers also provide mortgage brokers with additional online training and professional development courses. The links are as follows: The Canada Mortgage and Housing Corporation www.cmhc.ca/theclassroom Genworth Financial Canada www.genworth.ca/content/genworth/ca/en/home.html Canada Guaranty http://www.canadaguaranty.ca/brokers/training-centre
the industry to find out what they’ve done and how they’ve got to where they have.” The Mortgage Brokers Association of British Columbia (MBABC) does have consistency in its professional development course offerings. The series takes place every yearly quarter and reviews the topical points of interest including best practices, a highlight of presales and the pitfalls to presale contract assignments, and how the harmonized sales tax is changing the real estate landscape.
“ there always seems to be an ongoing thirst for us to be better at what we do, from the associations to regulators to lenders ”
Top: Greg Martel Bottom: Rob Regan-Pollock
Whereas MBABC has always shown itself as a leader among the nation’s brokering education, MBABC’s co-chair of professional development Rob Regan-Pollock has also seen more awareness from the mortgage companies over the past few years. “Many are looking at ways of providing additional training to their brokers so there’s a corporate awareness and a thirst for information on how to underwrite files, deal with customers, make them more aware of the value that we bring to them,” he says. “There always seems to be an ongoing thirst for us to be better at what we do, from the associations to regulators to lenders. Especially with technology, we are able to quickly and efficiently get information out there to people.” Inevitably, just as your parents taught you to ask in grade school, curiosity should never end as you develop your career as a mortgage professional. “Going forward, the worst thing you can say is, ‘I’ve basically reached my point of success so I don’t need any further education,’” says Martel. “When you’ve decided that you’ve got to that point at life, that’s where you stop growing. I always try to keep growing my business, making changes to improve, fine-tune and make sure I’m going in the right direction. My business has grown exponentially year in, year out.” When you ask the right questions, meet the right people and attend the right courses, you will eventually find the answers you were looking for. CMP
Guide to insurance www.mortgagebrokernews.ca
title insurance More than just fraud protection Mortgage Insurance Rule Changes
Becoming an expert speaker
Q&A Kelly Price Lorne Shuman Peter Vukanovich PUBLICATIONS MAIL AGREEMENT #41261516
rest easy portability ...knowing your clients have fully portable protection that goes with them from home to home, and lender to lender.
...knowing that all of your clients are eligible for some form of mortgage protection.
indemnification ...knowing that we’ll stand up for you if you’re ever involved in an insurance-related legal dispute.
† Your client must be a resident of Canada
between the ages of 18 and 65, and the mortgage must be less than $1 million.
contents cmp guide no.14
Guide to insurance
Mortgage makeover With nearly a year having passed since the federal government instituted changes to the mortgage insurance rules, CMP spoke with CMHC about how those changes have played out in the mortgage insurance marketplace
Helping First-time Homebuyers Genworth President and COO, Peter Vukanovich, talks to CMP about where the national home insurer is headed for 2011
Title Insurance: More than Just Fraud Protection When you know everything there is about homes, you stand out as the best broker. Heather Li spoke to the experts and presents a list of benefits title insurance provides your clients
The Best Form of Mortgage Protection The best protection is neither the cheapest nor the most generous—it’s what your client buys. CMP spoke to Kelly Price of Mortgage Protection Plan about the benefits of mortgage protection versus life insurance
Claims stories make the case The most powerful way to articulate just how title insurance can protect a client’s home is to discuss actual claims. CMP spoke to Lorne Shuman, director of legal services at First Canadian Title about real-life claims paid out on behalf of its homeowners
Feature Title Insurance
title insurance More than just fraud protection
When you know everything there is about homes, you stand out as the best broker. Heather Li spoke to the experts and presents a list of benefits title insurance provides your clients
usan Lawrence’s home was mortgaged for almost $300,000 by fraudsters who forged her signature and walked away with the money. “I had heard of real estate fraud but never thought I could be a victim,” the Torontoarea resident told First Canadian Title (FCT). “Most people are aware that criminals use identity theft to commit credit card fraud. I never realized someone could use the same tactics to take my house.” In response to the rise of mortgage fraud, FCT launched www. protectyourtitle.com to provide information on how title insurance can prevent this nightmare from happening to other homeowners. But title insurance covers more potential problems than just fraud. Though as a mortgage broker, you don’t necessarily sell this insurance, it’s still important to be knowledgeable about it. “In a referral-based business, having the competitive edge is critical to differentiate your services,” says Lynda Hester, FCT marketing strategist. “Knowing about title insurance can give you that advantage.” Being able to explain what it is and how it can benefit your client can make the difference between ensuring the homebuyer obtains a competitive rate and providing them with an outstanding experience. Though there are a multitude of reasons why your client would want to purchase title insurance, here is a list of nine reasons from the expert providers. 1. Makes closings faster and more efficient.When buying a home, sometimes certain searches need to be performed before the sale is finalized. For example, your client may need to obtain a tax certificate from the city or a building zoning search is required. With title insurance, since the insurer is taking on the risk of uncovered problems, a search is no longer mandatory. “With searches a time lag exists from when a lawyer sends it off to the
“ most people are aware that criminals use identity theft to commit credit card fraud. I never realized someone could use the same tactics to take my house ” municipality and when you get a response,” says Karen Decker, vice-president of underwriting and legal at Stewart Title Guaranty. “With title insurance, you eliminate that time lag.” Your client has her home sooner and is happier she got this helpful tip from her broker. 2. Low one-time premium. Unlike car or life insurance, title insurance is paid once and lasts for as long as you own that property. For an average property, the cost ranges from $200 to $300. Though the title insurance can’t be transferred if you sell the home and move to a new one, it can be passed on to an heir of your property, such as a spouse or children. 3. Saves more money. Since title insurance eliminates the need for a search and because it only costs a few hundred dollars, the client is saving the money that would have been spent on a survey. “A survey costs anywhere from $500 to $800 to $1,000,” says Ray Leclair, vice-president of TitlePLUS. “I’ve practised 25 years as a real estate lawyer in Ontario, and we saved more in not doing searches and paying for title insurance.” However, Leclair cautions that the homebuyer needs to evaluate why they may want a search even with the purchase of title insurance. “It might be very
important for the client to have a garage,” says Leclair. “I want to make sure it’s on the property within the limits and I can keep it because if you find it’s built on a neighbour’s property, you might have to remove it. Title insurance will give you a couple of thousand for removal but you can’t build a garage for a couple of thousand.” So a property survey before closing may still be an important step for the client. 4. Covers unknown title problems. Aside from mortgage fraud, title insurance policy provides comprehensive coverage on a variety of scenarios. For instance, if a neighbour performs a survey on his property and finds your garage is a foot over the property line, title insurance will cover the reconstruction. “If the prior owner didn’t pay their property taxes or the last tax cheque bounces, the new owner becomes responsible for those tax arrears. That would be covered under our policy,” says Decker. This also applies to any public utility bills that weren’t paid, such as water. Another issue that title insurance covers is hidden defects. “There might be a situation where a prior owner had a spouse and the spouse should have consented to property transfer but didn’t because the first person lied about being married,” says Decker. “Then the spouse comes forward and claims interest in what is now your client’s property.” Title insurance also covers any zoning problems—if the property you bought is being used legally—and building compliance issues. “Building compliances is when you’re supposed to get a permit to do an addition on the home,” says Leclair. “The previous owner didn’t get the building permit, or maybe he did but never got the final inspection. After purchase it’s
“ if an issue arises in the title that requires lawyer services, the insurance policy will handle those fees until the case is resolved ”
5 benefits for a broker to know about title insurance 1. Reinforces your position as an expert in all aspects of real estate transactions including protection available for homeowners. 2. Differentiates you from your competition. 3. Provides more complete information to your client. 4. Encourages more referrals. 5. Saves your clients money and stress if they ever encounter a problem.
discovered there was a permit problem and the addition is not up to standard or code. This would be covered by a title insurance policy.” 5. Title fraud coverage before or after the property purchase. Most times, a homebuyer has a lawyer look at a title to see if any fraud has been committed but lawyers aren’t trained in all facets of fraud. So if there’s a forged signature, it may go undetected. Title insurance will cover that incident before the closing. “But after closing, lawyers can’t protect your client because they’re not verifying anything the closing,” says Leclair. “So if five years down the road, somebody fraudulently transfers your property by forging your name then the title insurance policy would protect you.” 6. Duty to defend. If an issue arises in the title that requires lawyer services, the insurance policy will handle those fees until the case is resolved. “So rather than having the homeowner spend their own money, it’s covered by the insurance company,” adds Decker. 7. Covers lawyer negligence. The reverse is also true in the scenario of lawyer negligence when purchasing the home. “Your client is not affected by the
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“ title insurance is relatively hassle-free if your client ever has to claim ” lawyer’s conduct or status,” says Leclair. “If the lawyer is negligent for some reason and you sue the lawyer, the lawyer’s insurance would indemnify you if you had a rightful claim. But that lawyer’s insurance has a cap on it. So if the lawyer had another client sue him, there may be no more insurance left because it’s all used up from previous clients. With this policy, it’s a direct guarantee and link to the homebuyer.” 8. An efficient no-fault claims process. Title insurance is relatively hassle-free if your client ever has to claim. “It’s a no-fault situation, which means the title insurer looks at the facts of the case, determines if the issue is covered by your policy and then
9 reasons why your client wants title insurance 1. Makes closings faster and more efficient. 2. Low one-time premium. 3. Saves more money. 4. Covers unknown title problems. 5. Title fraud coverage before or after the property purchase. 6. Duty to defend. 7. Covers lawyer negligence. 8. An efficient no-fault claims process. 9. Peace of mind.
compensates the homeowner for the loss,” says Decker. “If you didn’t have title insurance and an issue arose, your client’s only option would be to sue the lawyer and prove negligence. In any case, if you have to go the route of suing somebody, that’s obviously a much more time-consuming and costly process.” 9. Peace of mind The biggest reason for your client to purchase title insurance is peace of mind. Since the policy covers such a wide range of potential issues, homebuyers can be assured if they landed in an unlucky situation—whether it was fraud or an unknown title defect—it won’t cost them anything extra. “Most people would rather not have the problem than have the right to claim under an insurance policy,” says Leclair. “Most people have fire insurance not because they want a fire—they never want to make a claim. They’d rather never have a fire. It’s the same thing for a title insurance policy.” In Ontario, more than 95 per cent of residential transactions are title insured. Outside of Ontario, depending where you are, it’s more or less but the percentages are growing very fast. In the 1990s, title insurance barely existed in Canada. Decker identifies three main reasons why it grew in popularity. The first is in 1997, the law society introduced a rule that required lawyers to discuss all protection options with clients, including title insurance. Prior to that, homebuyers simply had to rely on the lawyer’s opinion of whether there were any defects or suspicious activity on a property title. So the new rule propelled the idea of title insurance to the forefront. The second factor was at the same time, it became clear obtaining title insurance could save clients money, which always acts as an incentive. Finally, Decker recalls there was a prevalence of title fraud incidents, also spurring consumers on to learning how to protect their home interests. So as a mortgage broker, knowing as much about all aspects of your clients’ homes shows you care about them as people rather than a dollar sign. This builds a stronger relationship and increases the likelihood of referrals. Since title insurance is commonplace now in most provinces, your clients will be thrilled to learn all the benefits they’re receiving for such a low cost. CMP
Top: Karen Decker Bottom: Ray Leclair
Security and service in the right combination
Incidents of real estate title fraud are increasing in Canada causing significant financial losses for innocent lenders and homeowners. Stewart Title not only provides coverage to safeguard against the losses incurred from mortgage fraud, but also helps to identify and prevent fraudulent transactions via its fraud verification due diligence practices and procedures. As one of the largest, most reliable title insurance companies in the world, Stewart Title provides unsurpassed title policy coverage for both residential and commercial transactions. Add to that our history of paying claims in a fair, ethical and timely manner, and youâ€™ve got the Stewart Title difference. At Stewart Title, we know itâ€™s our relationship with our clients that determines our success. Thatâ€™s why service is the foundation of our business and integrity, the keystone in all our dealings.
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Mortgage Rule Changes
Mortgage Rule Changes
With nearly a year having passed since the federal government instituted changes to the mortgage insurance rules, CMP spoke with CMHC about how those changes have played out in the mortgage insurance marketplace
here’s no clear evidence of a housing bubble, but we’re taking proactive, prudent and cautious steps today to help prevent one.” With those words federal Finance Minister Jim Flaherty announced some changes to mortgage insurance rules which went into effect in April 2010. First, mortgage loans are income-tested against the five-year posted rate, rather than the old practice of using the three-year posted rate. Second, mortgage refinancing is now restricted to 90 per cent of the value of the home, down from 95 per cent. Third, buyers of non-owner occupied dwellings are required to provide a 20 per cent down payment. At the time, experts lauded the changes as prudent. “They will not dramatically impact housing; but, they will help to cool the market, temper speculation and reduce the risk to personal finances from the inevitable future rise in interest rates,” said Craig Alexander, deputy chief economist, with TD Bank Financial Group. Government mortgage insurance In order to promote home ownership, the Government of Canada provides financial guarantees for the provision of default insurance on qualifying high-leverage mortgages (that is, mortgage loans at 80 per cent or greater of the value of the property). The insurance is provided by the Canada Mortgage and Housing Corporation (CMHC), a crown corporation that has 100 per cent guarantee from the federal government on the insured mortgages, or private insurers that have a 90 per cent guarantee from the federal government. As one might expect, the federal guarantee comes with certain
conditions, which can be changed over time – such as in the amendments made last year. Pierre Serré, vice-president, insurance products and business development, CMHC, spoke to CMP about the changes and how they have affected the mortgage insurance landscape. He made the following comments: “CMHC supports the Government of Canada’s on-going efforts to maintain a strong Canadian housing market. CMHC aligned its product offerings with the revised government guarantee parameters and stopped offering insurance for mortgages falling outside the scope of the new parameters on April 19, 2010, the effective date of the revised government parameters. These steps were timely, targeted and measured, and helped to reinforce the importance of Canadians borrowing responsibly. The changes were positive steps towards ensuring homebuyers have the best possible conditions for homeownership success, which as an industry, we all have an interest in. In terms of the impact of those changes, we need to look at the broader picture and also recall that there were two other significant influences – moving to Harmonized Sales Tax (HST) in Ontario and BC July 1 and the widely anticipated increase in borrowing rates in June or July of this year (as a consequence of the Bank of Canada raising its rate). Now back to the mortgage insurance changes. Despite efforts from all players in the mortgage industry to ensure that the changes were explained to borrowers in the simplest and clearest terms, there was considerable confusion. So the confusion around the impact of the mortgage insurance changes, expected interest rate increases and the coming of HST in two provinces collectively brought forward demand for mortgage loan insurance applications into the first four months of 2010. We saw our volumes decrease by just over 20 per cent in the weeks post April 19. Since then the housing markets have cooled and largely reflect our expectations. The current environment has created a greater awareness of the need for the mortgage industry to continue to work together to support Canadians further in the areas of financial literacy.
Mortgage Rule Changes
three key regulatory changes There were three key components to the regulatory changes that went into effect in April, 2010.
Mortgage applications to be income-tested against five-year posted rate First, mortgages are now income-tested against the five-year posted rate. Previously, mortgage applications were typically income-tested, with a qualifying interest rate of the three-year posted rate. This ensures that even if interest rates rise, the individual can meet their financial obligations. This effectively lifted the qualifying interest rate by one percentage point. The new policy only constrains the size of the mortgage for which an individual can be approved. It has no impact on the payments made on the mortgage. For example: If the current five-year closed variable mortgage rate being offered is 2.25 per cent, while the three-year posted rate is 4.30 per cent, using the three-year posted rate, a borrower in a variable mortgage is evaluated on their ability to meet their payments if short-term interest rates rise two percentage points. However, the Bank of Canada currently has the overnight rate at one per cent, when a neutral stance to monetary policy is likely in the range of three per cent to four per cent. Eventually, interest rates will have to rise back to neutral. Under the new rule, mortgages are income-tested against the five-year posted rate, which is roughly one percentage point higher than the three-year rate. In other words, individuals are tested to ensure that they can meet their financial commitments if interest rates were to rise three percentage points. But, the tighter rules do not mean the impacted individuals didn’t buy. They simply had to limit the size of home they purchase. Based on a national average home price of $337,000, a buyer with only five per cent down requires roughly $9,200 more in annual income to qualify under the new rules. To buy a $200,000 home, potential buyers with only five per cent down would need $5,500 more in additional annual income.
Refinancing limited to 90 per cent Homeowners are not allowed to draw equity from their homes back to the five per cent down payment they put on the property. Instead, as they make principal payments over time and build equity, they are not allowed to reduce their equity position until it exceeds 10 per cent of the value of the home and then they cannot draw down below the 10 per cent mark. The impact of this change was said to be limited as less than one-third of refinancing is done by individuals with mortgage loans in the range of 90 per cent to 95 per cent of the value of the property.
Real estate investors will need to put 20 per cent down For purchases of non-owner-occupied dwellings, buyers are required to provide a 20 per cent down payment, up from five per cent. This measure was likely aimed at tempering speculative buying of real estate by reducing the leverage available to buyers. It also impacted individuals buying real estate for investment purposes more generally, including those looking for rental properties. It was roughly estimated that the change impacted about five per cent to 15 per cent of new mortgage originations.
“ tools such as CMHC’s Mortgage Payment Calculator and Household Budget Calculator can assist mortgage professionals in helping borrowers evaluate their ability to prudently and responsibly manage and repay their mortgage and household debt ” CMHC recognizes the important role that mortgage professionals play in arranging mortgage financing for borrowers, that’s why our national business development team focuses on developing ongoing relationships with mortgage professionals across the country to ensure they have the necessary information and training they need to assist consumers in making informed mortgage decisions. CMHC is recognized as a trusted source on housing related matters. Through www. everythingyouneed.ca, mortgage professionals can access a wealth of information to keep up-to-date on industry trends and help their borrowers navigate through the home-buying process and understand their mortgage options. Tools such as CMHC’s Mortgage Payment Calculator and Household Budget Calculator can assist mortgage professionals in helping borrowers evaluate their ability to prudently and responsibly manage and repay their mortgage and household debt. In 2009, we launched The CLASSROOM for Mortgage Professionals, CMHC’s in-person and on-line training platform, offering educational resources and training modules for mortgage professionals on a variety of topics including CMHC mortgage loan insurance products and features, as well as housing market trends.” CMP
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Helping first-time homebuyers Genworth President and COO, Peter Vukanovich, talks to CMP about where the national home insurer is headed for 2011
CMP: It’s another new year. What can the broker community expect to see in 2011? Peter Vukanovich: We’re going to continue delivering great service. We’re recommitting to our commonsense approach to underwriting and proactive service in terms of answering the phones. In general, we are able to discuss a file with your underwriters at the lender level and that lender discusses it directly with one of our underwriters. This gives the mortgage agents good insight that their deals are going to be looked after fairly and quickly. Our mission statement is to be the first choice for mortgage brokers and lenders.
CMP: What opportunities does Genworth see in the mortgage industry this year? PV: There’s much more of a focus on the first-time homebuyer and educating people to understand their choices and options. First-time homebuyer confidence has gone up. For the first time in a while, we’re starting to see some more opportunity—rates are low, prices came off a little bit in some markets, more people moving to Canada and more people who would rather own than rent.
CMP: What separates Genworth from its competitors? PV: One thing we’re really proud of is our Homeowner Assistance Program. With this program we will work with the homeowner and the lender in the event that a homeowner is faced with financial difficulties that put their mortgage at risk. An unexpected life event such as job loss, a serious illness or even a marital dispute can happen when least expected. The program enables us to work out a solution that helps them to keep their home. In 2010 alone, we helped over 3,700 families stay in their homes.
CMP: Tell us about the Homebuyer PrivilegesTM Program. PV: With the Homebuyer Privileges Program homebuyers gain access to valuable online rebates, discounts and special offers on expenses they are most likely to encounter with a new home. For example offerings such as appliances, windows,
computers and even moving companies are offered to help with them with the move into their new home. We introduced the program many years ago as an added benefit to consumers and to differentiate Genworth from the competition.
CMP: When homebuyers have less than a 20 per cent down payment, that’s when Genworth steps in with mortgage default insurance. What should brokers advise their clients about this insurance? PV: Mortgage default insurance makes it possible for these homebuyers to qualify for a mortgage at much lower interest rates than would otherwise be possible. If a broker helps the client compare the cost of default insurance to the costs of the significantly higher interest rates they would otherwise pay, it can represent considerable savings over the life of the mortgage.
CMP: How much does mortgage default insurance cost? PV: It depends on a number of factors: the amount of the down payment, value of the home, amortization period and product type. The two most popular options in Canada are mortgages that are 95 per cent of the home’s value, with five per cent down, and mortgages that are 90 per cent of the home’s value with 10 per cent down. For a mortgage with a 25-year amortization, five per cent down, the mortgage default insurance is 2.75 per cent, and with 10 per cent down, it is two per cent. Mortgage insurance premiums are paid once but can also be added to the principal of the mortgage.
CMP: Do you have final thoughts on housing sales for the beginning of 2011? PV: We believe that home-buying intentions are still strong. People see low rates and prices have come back in some communities, and I think we’re going to have a good spring market.CMP
Quick stat + 40% of homebuyers who qualified for a mortgage last year did so with the benefit of mortgage default insurance CMP
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Mortgage Protection Plan
The best protection is neither the cheapest nor the most generous—it’s what your client buys. CMP spoke to Kelly Price of Mortgage Protection Plan about the benefits of mortgage protection versus life insurance
The best form of mortgage protection K
elly Price has been in the business of marketing creditor insurance for almost 20 years. She can tell you all the reasons why it is a good idea to offer it to your clients and she’s also heard every possible argument against it. “The most common reasons for not promoting mortgage protection seem to boil down to an uneasy feeling that it is not the best deal for the client,” says Price. “It’s not hard to understand why they feel this way. Today, a primary source of information about all sorts of products and services is the Internet. And it’s filled with insurance agents’ websites proclaiming that an individual term life insurance policy is the best way to protect a mortgage.” These folks are professional insurance advisers, all consistently giving the same advice. It’s convincing evidence. Even Price almost believes it.
Is there a “best way” to protect a mortgage? Price sees term insurance and mortgage creditor insurance as able to do the job equally well. This is particularly true of independent programs, such as Mortgage Protection Plan, that are fully portable. This leaves clients free to take their mortgage to any lender they want and they won’t lose their protection. “Comparing the cost of different life insurance products often is not about comparing dollars but rather it is about evaluating the trade-offs between different product features,” says Price. For example, if a client in their mid-40s wanted policy right now, a 10-year to buy a $250,000 term would cost about $30 per month and a 20-year term would cost $45. But the 10-year term policy is not actually cheaper in the long term
because when the renewal comes up in year 11, the $30 increases to over $100 per month. The choice of which is “better” is subjective. Some clients would prefer to pay the $45 and know that the cost is fixed for the rest of their working life. Or your client could buy Mortgage Protection Plan and be assured that the coverage is locked in at a fixed cost for the entire 35-year mortgage amortization period. Other people might look at their cash flow now versus where they expect to be in 10 years, and prefer the 10-year product—even in light of the significant cost increase that’s ahead. In other words, everybody doesn’t define the “best price” in the same way. But here’s the game-changer. Which client is in better shape? The one who bought mortgage protection from a broker because the offer was made at the right time and place? Or the one who has been considering a term insurance policy that’s a few bucks cheaper, or provides a benefit over-and-above the mortgage balance, that they just never seem to get around to buying? “Some brokers underestimate the powerful position they are in because they provide the right time and place to offer mortgage protection,” says Price. “Chances are that a client will never be more focused on their mortgage and all it entails than when they are sitting with the broker or on the other end of the phone.” That’s also the point where the client is going to be most open to taking the time to think about the need for mortgage protection. Once that contact is broken, life’s other chores and challenges inevitably creep in.
Mortgage Protection Plan
Applying for life insurance is not exactly fun, and it can be time-consuming. That’s why the convenience offered by mortgage protection insurance is so important. “How many clients are actually going to take the initiative to go out to shop for insurance once their mortgage is no longer front-of-mind?” Price asks. “Sure, some will, but probably a lot more won’t.” Mortgage protection at the right opportunity If the client is not presented with the opportunity to purchase mortgage protection when they arrange their mortgage, there is a very real possibility that they will be under-insured. According to the Canadian Life & Health Insurance Association (CLHIA), there was $1.8 billion worth of individual life insurance in force in 2008. But for each of the 21.2 million Canadians between the ages of 20 and 64, that’s only about $85,000 worth of protection. CLHIA recommends five- to seven-times salary as an adequate amount of life insurance. The average of $85,000 is only adequate if the client’s annual income is less than $20,000. It’s true that many Canadians have group life insurance through their employer but most often that’s only one- or two-times salary. That’s less than half of what they need and it is vulnerable (no job, no insurance). “Someone once said to me, ‘Well, mortgage creditor insurance is better than nothing, I suppose.’ The person’s intent was something other than complimentary, but yet it is just a simple statement of fact,” says Price. “While we experts can endlessly debate the merits of various types of insurance, there’s no debating the fact that bought-and-paid-for insurance protection is far better than the ‘best buy’ that was never bought.” Another important thing for brokers to keep in mind is that applying for creditor insurance doesn’t mean their client is giving up the opportunity to go out and see if there is another insurance product that fits their personal definition of a best buy. A free look period is standard and Mortgage Protection Plan buyers have 60 days to shop around. If they find something they like better during that time, they simply call in to cancel and their money is refunded. Meanwhile, they’ve been protected while they shop around at no cost. The client really can’t lose. CMP
Claims stories make the case The most powerful way to articulate just how title insurance can protect an investment in a client’s home and provide peace of mind is to discuss actual claims. CMP spoke to Lorne Shuman, director of legal services at First Canadian Title about real-life claims paid out on behalf of its homeowners
CMP: Who should buy title insurance? Lorne Shuman (LS): Anyone who owns their home is a good candidate for title insurance; whether they are just buying a home, refinancing or looking for a policy on a home they have been living in for years. Problems related to title can be incredibly time-consuming and stressful to remedy. Many people also assume that even if there is a problem with the title, it won’t cost that much to fix. The fact is that the related problems can be very expensive; they can add up to hundreds of thousands of dollars. Imagine having to find a way to pay that kind of money out of pocket?
CMP: What are the most common types of claims people make? LS: Most frequently we see claims related to municipal and permit issues. The other most common types of claims are about: • Title/Legal description defects (such a violations of the Planning Act or an error in the description of the property in a previous transfer) • Survey issues (such as an encroachment of a garage onto the neighbour’s property) • Liens and encumbrances (a debt of a prior owner secured against the property)
CMP: Is fraud the only reason to buy title insurance? LS: Since cases of fraud and forgery tend to have a high degree of coverage in the media, fraud is the first type of claim that comes to mind when discussing title insurance. However, fraud is only one type of coverage we offer. In fact, in 2009 fewer than 25 per cent of our claims were related to fraud.
CMP: Can you provide an example of what a municipal issue could be? LS: Municipal issues can include tax or utility arrears that come up at some point after the purchase. The purchaser is now responsible for the outstanding amount. If they have a title insurance policy on the property, the tax arrears would be paid out for them. Other municipal issues include work orders that were on file with the municipality at the time of the purchase, and existing zoning violations.
CMP: Can you provide an example of an actual fraud claim? LS: We had a claim where a couple was asked by a family member to co-sign a mortgage for them and to register it against the couple’s property as security. The family member promised to pay the loan. The couple decided that they were not comfortable with the risk so they turned down their family member’s request. Later they found out that the family member had gone ahead anyway, forged their signatures and registered a mortgage against their home. As the title insurer for the couple, FCT retained counsel and had the mortgage discharged from their property. CMP: What other types of issues are covered? LS: Other types of coverage included are encroachments onto neighbouring properties, issues related to previous work done without a permit and tax arrears from the previous owner. Title insurance also protects against unmarketability (someone refuses to purchase, lease or mortgage) related to a defect that would have been revealed by an up-to-date survey when the home was purchased.
CMP: What is an example of a permit problem? LS: The new homeowners received a notice from the city that their basement apartment had been built without obtaining the required development or building permits. A permit was required to remove or to legalize the apartment. FCT paid the costs (over $100,000) to rectify the problem. CMP: I’ve heard the term “duty to defend” used. What does that mean? LS: When people think of settling a claim, they assume the only issue involved is financial compensation. Of course, that’s a big part of the peace of mind a title insurance policy offers. But our coverage includes another key service, and that is our “duty to defend.” That can be a significant benefit if there are legal costs involved in the claim. The legal costs required to fix a title problem are covered under the policy, and FCT will retain a lawyer to do the necessary work. In the case of a claim against the insured’s title, FCT may pay the claim or take on the responsibility to defend the insured against the claimant’s case, in which case all the legal costs are paid under the policy. CMP
Their broker recommended a title insurance policy from FCT…
And they can’t thank him enough! A couple of years after they had moved in, they discovered their garage was partly on their neighbour’s property and had to be removed and rebuilt. They were thrilled to find out their FCT policy had them covered. Recommend a title insurance policy from FCT. For any homeowner – available on new purchases and existing homes.
One time premium. Protection as long as you own the house. To discover how FCT can protect your clients, call 1.866.804.3122 or visit www.FirstCanadianTitle.com Insurance by FCT Insurance Company Ltd., with the exception of commercial policies by First American Title Insurance Company. This material is intended to provide general information only. For specific coverage and exclusions, refer to the policy. Copies are available upon request. Some products/services may vary by province. Prices and products offered are subject to change without notice. ® Registered trademark of First American Financial Corporation.
Training without all the structure. As leaders in industry training and education, Genworth Financial Canada is dedicated to helping raise the bar for more mortgage professionals. Through our online Webinar Series, you’ll hear from housing market experts and product specialists on a variety of topics that will help you increase your edge in the marketplace. What’s more, you and your colleagues don’t even have to leave the office. No classrooms. No travel. What could be better? To see our calendar of courses, visit www.genworth.ca/webinars
© 2011 Genworth Financial, Inc.
six referral mortgage marketing mistakes that make you work harder, not smarter : 3 # e k Mis t a We a k ds r a w e R
It has been reported that over 80 per cent of mortgage professionals fail within their first two years. That’s a staggering statistic. Doren Aldana explores some of the reasons why this happens and how new brokers can help themselves succeed in the third of a six-part series
e’d all like to think that as long as we do a “good job,” our clients and referral partners will naturally refer us to their friends, family and associates. While there is some truth to that, the reality is most people lead hectic, busy lives and life tends to get in the way. Good intentions are often thwarted by good distractions. That’s why it’s so important to do all you can to magnify the emotional intensity that drives people to refer business to you, regardless of how inconvenient it may be to do so. Motive matters; the more motivated people are to refer you, the more referrals you’ll receive. Motivation always precedes action. Let me give you a simple example. According to recent studies, seven out of 10 American adults don’t exercise regularly despite the proven health benefits. That means at least 70 per cent of the population lacks the emotional intensity necessary to get off their duff and get in the gym. It’s not that they don’t want the benefits of exercise (being more fit, energized, attractive, etc.) it’s just that they lack sufficient motivation to take consistent action. In the face of all this, a fitness trainer by the name of Bill Phillips started promoting
“ motive matters; the more motivated people are to refer you, the more referrals you’ll receive. Motivation always precedes action ” the Body For Life ™ healthy living contest, involving a disciplined diet in conjunction with intense cardio and weight training sessions, 45 minutes per day, six days per week, for 12 consecutive weeks. To say it was rigorous would be an understatement. What was the
“ you see, people will often do more to get recognition than any monetary reward ” result? The program was a massive success – both for Bill and the contestants who followed through. But how? Simple. He leveraged a powerful motivation secret that got people to take consistent action, in spite of their mood, inconvenience or discomfort. What was that secret? In two words: Contests and Recognition. You see, people will often do more to get recognition than any monetary reward. It has been said that children cry for it, and men die for it. People have a deep-seated need to be praised, recognized and appreciated. Bill Phillips’ brilliance, more than anything else, lies in his ability to use contests as a means by which to celebrate, recognize and reward people who take the desired action and achieve the desired result – in his case, by featuring chubby-to-buff, dud-to-stud, before-and-after transformations. As silly as it sounds, people busted their rumps to be recognized. So how about you? How can you use the power of praise and recognition to reinforce that desired behaviour and attract more referrals? Here are a few proven strategies to get you moving in the right direction: Send a thank you card for every unclosed referral. You need a system for promptly expressing your gratitude every time you receive a referral, regardless of whether it closes or not. In doing so, you’ll anchor into the minds of your referrers that you truly appreciate them and their referrals. For best
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results, send a thank you card and then follow up with a phone call. You’ll be amazed how that extra touch by phone stimulates even more referrals. Send a thank you gift for every closed referral (if compliance allows you). Some provinces like Alberta don’t allow you to give any rewards for referrals. However, that doesn’t stop you from hosting “appreciation” events and inviting them to be a part of it. For example, why not host a monthly appreciation dinner at a nice restaurant and invite your best referral partners to join you? You could even mix it up with a movie night, wine-tasting night, comedy night, etc. Be sure to get them to RSVP in advance so you know how many people to expect. At the appreciation event, don’t promote yourself – just hang out, have fun and connect with your people. Yes, of course this will require an additional monthly investment (which you can write off) but as you foster and fortify those key referral alliances, you’ll find this to be one of the most profitable marketing investments you can ever make.
“ you’ll be amazed how many of your clients and referral partners thank you for recognizing them in your newsletter ” Recognize your referrers in your monthly newsletter. As said previously, people love to be recognized – even if all you do is put their first initial and last name in your print and ink monthly newsletter (you do have a monthly newsletter don’t you?) as one of your valued referrers. I know it may not seem like a big deal to you but you’ll be amazed how many of your clients and referral partners thank you for recognizing them in your newsletter. Recognize your top referrer of the year at your annual appreciation party. This event is a bigger deal than your ongoing monthly appreciation events in two distinctive ways: 1) You’re inviting all of your clients and referral partners, not just your top referrers 2) This should be more of a full-
fledged party with entertainment – like a guest speaker, live music, etc. To save money while expanding your reach, you can have it be a “shared” appreciation event where one or two of your best referral partners would also invite their client base and you would all share the costs equally. To reward your star referrers, provide them with exclusive limousine service to and from the event. Be sure to invite your star referrers to stand up so they can receive a big round of applause from the audience at the event. Then step back and watch as your star referrers become super-nova evangelists. As you can see, none of these four strategies are overly complicated or expensive. Most mortgage professionals know that it’s important to do these things but very few actually do them – consistently. Perhaps this is because they lack an effective system. If you’d like to see a proven example that you can use for your own mortgage business, go to www.wowfactorformula.com.
“ most mortgage professionals know that it’s important to do these things but very few actually do them – consistently ” 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.freerefferalscretscd.com. CMP
At Centum Financial Group the boat is stocked with everything needed to survive and thrive in economic uncertainty. CMP spoke with CEO Don Lawby about how Centum is prepared to take advantage of opportunity in the year ahead
ncreasing market share is the goal of every mortgage broker and mortgage brokerage. For Don Lawby, the recipe for success contains equal measures of knowledge, technology and hard work. Lawby, the president and CEO of Charlwood Pacific Real Estate Group, which includes Centum Financial Group and Century 21 Canada, says that when a mortgage consumer sits down with a broker these days a lot more is expected. “When [the consumer] is sitting across from an agent, they’re expecting someone who has extensive knowledge about the financing side of the economy,” says Lawby. “They don’t want to deal with someone who is just filling in forms. They’re looking for opinion, information and guidance and we need to help our system by providing that [knowledge] to the members of the Centum family.” Training and technology A key component of that commitment is training. Starting last fall, Centum began a series of half-day sessions for its franchisees at 18 locations across the country to “provide them with the skills and knowledge to do a better job in the marketplace and where we think the concentration has to be to deliver good service and to build a good business,” says Lawby. In 2011 full-day seminars for the franchisees will roll out along with events planned for agents at a further 20 locations. Being part of the Charlwood group of companies allows Centum access to resources not available to other mortgage brokerages, including technologies such as the web platform provided by the Minnesota-based company Where To Live and the proprietary software Online Office, which will be available to Centum offices in early 2011. Online Office is described by Lawby as an all-in-one resource centre, communication centre, CRM, database management system, calendar and marketing centre. “It is a desktop where everybody in Centum Group in the next 90 days will become very accustomed to using the single tool that will provide everything for them.” According to Lawby, Centum franchisees and their administrative staff have been introduced to Online Office first, so that they get an opportunity to
understand it so that when the software is rolled out for agents, the people in their office have some knowledge and have been coached how to use it step-by-step. He says it’s similar to what was done at Century21 Canada, which has approximately 8,000 websites. Changing marketplace Learning about mortgage consumers has also been important to Centum says Lawby, who sees a focus on a generational demographic as a trend that can help the company ensure its brand sustainability. “In the marketplace we see many generations that are being served and each generation operates and expects different treatment and different things from mortgage agents,” says Lawby. “Older people just want transactions to be done. Generation X and Y, they want to be involved step-by-step, they want to understand the process. “For us to build a brand, we need to pay attention both to what the consumer wants and what our customer wants.” And it is not simply about rates either say Lawby, who compares mortgages to cars by way of the fact that everyone doesn’t drive the same model. “Every client is different and their needs are different and their futures are different and what they qualify for is different,” he says. The relationship between lenders and brokers and their customers has also evolved. For Lawby, it’s no longer a matter of an agent completing the mortgage and then the agent and customer going their separate ways because the agent assumes that that customer now belongs to the lender. “It is the responsibility of the mortgage broker to stay in touch with the consumer and to provide ongoing financial advice as rates and products change. This is important for the long-term business.” With Centum’s focus on technology and training, the goal of customer retention is achievable. “We are spending time with our franchisees talking about coaching sales people or agents to be more productive,” says Lawby. Being professional is also an important aspect of the business for Lawby. “This is an industry where there is opportunity, but we need and we must teach people that this is a job and that it requires work. Business will not walk in the door and they have to go out and get it and they’ve got to do it in a professional fashion.” The coming year is going to be one of opportunities says Lawby. “The issue will be to grow while learning how to acquire customers and acquiring agents in this industry that are eager to actually work. There is great opportunity in the mortgage brokerage side of the business to build both market share and brand share.” CMP
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Troy Alexander is the “poster child” for an ideal mortgage broker. Heather Li finds out how this career lets him help people attain their homeowning dreams—and help underprivileged kids in the Philippines have a chance at an improved life
Beyond being a
hen Troy Alexander landed in Cebu City in the Philippines, it was the first time he ever travelled to that part of the world. “It was definitely a life-changing experience,” says Alexander, a mortgage broker with Verico Select Mortgage Corp. in Victoria, B.C. “Compared to our style of life, it’s very simple. They don’t have a lot but whatever they do have, they’re very thankful for.” Alexander visited the country to participate in a medical mission with Rotaplast International, a non-profit humanitarian aid organization where a surgical team performed free surgeries on more than 75 children and young adults to fix cleft lips and palates. The Victoria broker volunteered in the non-medical role of quartermaster, where he was in charge of ensuring all necessary medical equipment and supplies were available at all times, and shuttling patients back and forth between the operating room and recovery ward. In Canada, most children born with a cleft lip or cleft palate receive treatment within six to 12 months of being born. “These surgeries are two to four hours long, and while amazing to watch, they’re fairly standard. But in the Philippines, it is a fee-for-service operation that parents can’t afford
and then the children become outcasts,” says Alexander. “A number of them get ridiculed, teased, bullied and they wind up having to leave school. So they don’t have a good education and it just continues the cycle of ultimate poverty.” With Rotaplast delivering these medical missions, Alexander saw an immediate change in children’s lives because they were no longer viewed as a “monster,” a term he heard bantered about while he was there. At 36 years old, Alexander has been an active member of Rotary in Victoria since he joined in 2002. At that time, he was working in banking, and had worked every job possible from personal banking officer to lending specialist to branch manager. Eventually in 2005, he became a full-time independent mortgage broker. “I’ve always liked math and numbers and helping people,” says Alexander. “I looked at being an investment planner and life insurance but there are far too many people in those industries, fighting for the same piece of everybody’s wallet. In mortgage brokering, there wasn’t as much competition.” Alexander initially joined a company called U-Select Financial, which was owned by Coast Capital Credit Union. Coast Capital later sold U-Select to its president, Don Barr, in partnership with Geoff Parkin. It became Select Mortgage Corp., and is now affiliated with Verico. Barr recalls immediately seeing the broker potential in Alexander when they first met through a mutual friend. “He is probably your poster child for what you want in one of the modern type of brokers,” says Barr. “With all the myriad of product that we have nowadays and different lenders, it is very difficult for everybody to keep up with the ever-changing conditions. Troy is someone who just seems to remember these things very clearly, and he is always extremely quick to share information with fellow brokers since he has such great retention.” The business also often demands that a broker should specialize to succeed but Alexander believes his strength lies in his large general experience. “Because of my background in banking, I know both residential and commercial so I can do either,” says Alexander. “I know a lot of brokers out there only do residential or commercial but I’m well rounded and I will look at both. I also do B lending, private lending and have investors with money that we lend on. I don’t focus on any one particular thing.” Alexander sees himself in the industry for a long time and becoming a broker gave him greater ability to pursue his humanitarian interests. He served as club president of the
Royal Oak Centennial club in the 2007-2008 year, and is now a presenter and trainer for Rotary District 5020, having presented at the District Leadership Training Assembly and other Rotary events. Alexander also uses his business acumen to help other Rotary clubs develop their vision through strategic planning sessions to set targets for their long-term goals. A close friend who met him through Rotary says that Alexander is an ideal member. “When you sit there and wonder if people join service organizations for the right reason, Troy is definitely one of those people,” says Tony Joe, Victoria Re/Max real estate agent. “He joined it because he wants to be part of an international charitable organization and not just because he wants to pass out business cards.” Joe also says he admires Alexander for dedicating himself so wholly to various causes at a young age. Currently, Alexander is a member of the Harbourside-Victoria Rotary Club and an assistant governor for Rotary District 5020. “I enjoy the flexibility of mortgage brokering and being able to set my own hours,” he says. “It allows me the opportunity to get involved with things I really like, such as this trip I went on. And I will be committing more money in the future to go and do these types of missions.” His travel to the Philippines and experiencing first-hand the tremendous wealth gap between a developed and developing nation has significantly changed his perspective on life. During the hour’s drive to the hotel from the airport, he saw shanty shack homes thrown together with plywood and corrugated metal. He was flabbergasted. He also recalls seeing the same woman outside his hotel for four consecutive days. “Same woman, same simple sack dress, no shoes, dirty, carrying a baby in the same clothes every day,” he says. “There was also one night I was walking back from the hospital on this covered pedestrian walkway, and there were four kids all under the age of 12, sleeping on this ceramic tile in dirty clothes with no shoes.” Since his return home, Alexander has come to see the western lifestyle in comparison as luxurious and is revisiting his spending habits. His boss wasn’t surprised that he took on such an arduous mission. “That’s such a big stretch for someone to give up that time and income,” says Barr. “You’re away from your family and it’s not necessarily the most enjoyable thing, although he tells me he did enjoy it. It’s remarkable. Kudos to him.” Though Alexander doesn’t see the direct link between his humanitarian desires and brokering career, in both places he is in the position to do what he undoubtedly loves most—helping others. CMP
Social networking sites like LinkedIn are a cheap and easy way of liaising with peers and clients. Our sister publication MPA looked at their usefulness
Networking to win B
usiness success is all about the network — it’s about who you know, but more importantly, who knows you. We are all well aware of the fact that we need to constantly be out there actively looking for new clients, and getting more deals over the line. Many of us frequently go to networking events with the local Chamber of Commerce and other opportunities; we mingle at parties, on the rugby field on the weekend and enjoy getting to know as many people as possible to grow our network — don’t we? Now, when we know so many people and so many people know us, what do we do? Nothing!
We keep a Rolodex of business cards or shove them in the top drawer, and tell ourselves that we will get around to them later. Most of these people we’ve just met will remain a name on a business card for us — and so will we. How disappointing would it be to have a 15—20-minute casual chat with someone, give him or her a business card and hear nothing from them? What a waste of time. But not every person we meet is a potential client. Some of the people we meet will never buy from us. However, keeping in touch with them as a member of our network will allow us to have access to the people they know who may somehow, someday, buy from us. Now, we all know that keeping in
touch is expensive and/or time-consuming. But it is important, nonetheless. So what can we do? Linkedln is a cheap (or mostly free) way to keep in touch and top-of-mind, and maintain relationships with a network of people with very little time invested. I see Linkedln as a business and professional network: some call it Facebook for business. However, Linkedln is an online toolbox that goes way beyond keeping in touch with your business contacts. Although Linkedln is online, it is very similar to an offline network and it is just a lot easier to manage and maintain. Linkedln is a place where you can store your contacts (like your address book), and keep yourself up-to-date with your activities. It is a place to share information, make new business connections, introduce your contacts to one another, be informed about industry trends and news, develop new opportunities, look for service providers, employees, affiliates and much more. You’ll find people who will use this toolbox properly and professionally and there will also be people who will exploit it. You may find that people will try to connect to you for no apparent reason. You’ll find that some people advertise their wares, directly and indirectly. If you haven’t signed up yet, I strongly recommend that you do. Like any other network, offline or online — learn the dos and don’ts (see right column), what is acceptable and recommended, and what isn’t. As a rule of thumb: give more than you ask for and remember be yourself — everyone else is already taken!
✓✓ Have a complete and attractive profile. If you’re sending out invitations, I want to be proud to have you in my network (so I can refer you to others in my network) ✓✓ Have a professional head shot. I want to see who I’m dealing with ✓✓ Participate in discussions. It will add a lot of credibility, and will attract people to your profile, to learn more about you ✓✓ Give people a reason to contact you. If you participate in discussions, ask and answer questions, people will be drawn to hear more from you ✓✓ Advertise your blog. When you share useful information (not bluntly advertising your services), people will buy from you. Trust me, it does work ✓✓ Use it personally. This is your online brand: manage it yourself ✓✓ Make it part of your daily activity. Maintaining business relationships is time-consuming, but the return on investment is invaluable. Spend 10-15 minutes per day checking out your contacts’ activities, follow companies’ activities, answer a question or two in your field of expertise, participate in a group’s discussion and update your status
Use the standard LinkedIn invitation to connect unless you’ve discussed this with the invitee prior to sending, and they know you well. Personalize your invitation, tell the person why you’d like to connect, and also indicate your existing relationship (choose from the menu of options) ✗✗ Tell me you’re my ‘friend,’ unless of course you aren’t. If we had no prior interaction, you’d need to explain to me why I should accept you into my network ✗✗ Spam. Even if I’m in your network, I haven’t opted in to get your newsletter. If you think there is something which will interest me personally, by all means share it. Don’t use Linkedln to send out your marketing materials. If you want to advertise, use the proper tools (Linkedln Ads) ✗✗ Advertise on group discussions. There is a time and a place for everything. Group discussions are a great way to share information, show your expertise and get feedback. Nothing else ✗✗ Be a LION (Linkedln Open Networker). The strength of your network is in the quality of your relationship with your network, it isn’t a numbers game. Don’t accept all invitations CMP
what’s in a name? For Brian Matthey – Verico-The Mortgage Professionals – the name says it all. CMP finds out how this industry advocate and pioneer has grown his business over the past 20 years
sing your garage as an office isn’t the ideal situation when opening your own mortgage business, but for Brian Matthey there wasn’t much of a choice. Besides, it only lasted two months and since that fall in 1989, what is now The Mortgage Professionals-Verico has grown from three people in Matthey’s garage to three partners who operate five offices with a staff of 28 in the greater Kingston area. “We opened the garage doors everyday for business and went into the house to plug in the telephones,” laughs Matthey as he recalls how the company was created out of the ashes of Coulter Financial Group. “When [Coulter] went into receivership, the receiver didn’t even know about the Kingston office,” he says. “I called him up and ending up buying the office furniture and moving it into my garage.” After merging with the Equity Centre in 1995 and forming a cost-sharing partnership with a couple of other partners, The Mortgage Professionals was born. The firm, which joined Verico in 2007, now does $300,000,000 in mortgages each year. Those early days also saw beginnings of a national organization for mortgage brokers. “There were 25 of us who sat down and formulated what is today called CAAMP,” says Matthey, who spent 17 years at CIBC before entering the mortgage business. “I looked at the mortgage broker industry then and thought there had to be a better future to it, on a more professional basis if our industry was ever to be recognized the way we wanted to be recognized. [CAAMP] has come a long way and has done a lot of good work in raising the profile of the industry. There is still more to be done.”
have hired a lot more people, but we’ve been very careful about who we hire and how we hire,” he says. Most of the new hires complete a two-year training stint as an underwriter, according to Matthey, “before we let them on the street.”
The evolution of mortgage brokers Brian Matthey As the company grew and expanded over the year, Matthey was approached by just about all the major brokerages, looking for him to join their team, but nothing came of these inquires until Verico entered the picture. “What I liked about Verico was they told us ‘You don’t automatically get in.’ They wanted to talk to lenders and others in the industry and find out what we were all about before accepting us. And the minute they said that, I said ‘I’m in if you will accept us.’ “Verico lets you maintain your own brand, but helps you develop your company with a realm of professionals,” say Matthey, who served as chair last year of Verico’s National Advisory Council. Just like at The Mortgage Professionals, everything at Verico begins at the top, according to Matthey. “When Colin [Dreyer, president of Verico] says trust, truth and transparency he means it. And that meant a lot to me in terms of the way I look at the industry and how I look at how the industry should be growing.” For Matthey, growing the industry means going beyond just doing mortgages. Adding to what The Mortgage Professionals do is a partnership with Canadian First Financial Centres, a financial services company. To Matthey this is just another evolution for the mortgage broker industry,” he says. ���Many people don’t have a high level of financial expertise and a mortgage is a lot more than a rate. You’re not just doing a mortgage for them today, but Professional standards you’re looking at the mortgage and how it’s going to For Matthey, raising the profile of brokers is directly impact them today, down the road and for a lifetime. linked to the manner in which brokers practice their It’s about making their mortgage fit into a financial chosen profession. plan and that’s different than the traditional “If I’m an advocate of anything, it’s for mortgage broker, who’s already looking for the next professionalism,” he says. “[That] will raise us to deal to close instead of spending more time with their where we need to be. Our market share will grow in clients and addressing all their financial goals.” direct proportion to the effort we put into raising the Matthey’s motto is “Never stop thinking.” bar of professionalism in the public’s eye. When in 2002 he started updating his clients on “While we’ve grown as an industry in numbers, a economic conditions online to help them make lot of people don’t necessarily make a good industry. informed decisions, he was “blogging” before it was A lot of professionals make a good industry.” called blogging. And Matthey doesn’t just say the words, he puts “As a result I have a lot of very loyal clients. You his thoughts into action through the hiring process at have to continually be looking at evolving and looking The Mortgage Professionals. “As a company, we could at new ways to do things and improving.” CMP
Julia Smirnova + Principal Broker, MA, MSc, AMP + Mortgage Alliance The Mortgage Chef + Toronto, Ont.
Favourite Things Hobby Cooking and watching movies
Book Warrior of the Light by Paulo Coelho
vacation spot Venice
Celebrity Meryl Streep. She is incredible.
Drink Vodka, in all kind of drinks
Sport Hot Yoga
Place to be Home
Food Italian Music/ band U2 and Robbie Williams
Movie The Godfather
When it comes to success, it all begins with a choice says Calgary-based mortgage broker Greg Williamson. Only you can decide if 2011 is going to be a big year
thinking big I
often ask myself “Am I thinking big, or am I talking big?” especially at this time of year. As we all prepare our plans for 2011, I encourage you to ask yourself the same question. I encourage you to embrace the idea that every decision, every action, every encounter, essentially everything we do, begins with a choice. The “easy way” is when I am shutting people down, or out. I tell myself that this is the right thing because “they don’t see it my way,” the truth likely is that not seeing their way means I don’t have to take action, it means I don’t have to stretch, or best of all it means I don’t have to change. Let’s face it, not raising the bar means I am less likely to fail. I know that if I want to experience a life on my own terms then I need to spend my time around the people who are actually doing it. They expand what is possible for me. They inspire me to big thinking and better yet big action. I think the biggest reason people limit themselves from pursuing a life they deserve is because they think their circumstances are unique in a way that will not let them experience the best of life. “I can’t because…” sadly is a phrase I hear often in my travels as a coach and trainer. I think when I allow something outside of myself to dictate my actions, it is an excuse for inaction. I think there is a better way. One of my best serving values is “find the opportunity.” It comes from one of my most
favourite quotes, “Some people see things and ask why? I see things and ask why not?” When I find myself thinking small, I often switch myself out by thinking completely opposite “Do a 180” as I say to myself. “I can’t” becomes “I can,” “they won’t” becomes “they will” and best of all “why me” becomes “why not me.”
“ I encourage you to embrace the idea that every decision, every action, every encounter, essentially everything we do, begins with a choice ” My second most helpful tip is to embrace and accept support. I know that when I accept support in my life then I tend to improve faster. The trick is to not only accept it, but most critical of all is to pursue it and embrace it. Support often does not just show up, or put another way, it shows up in the most unlikely places. A famous quote helps me stay focused to this important tactic, “When the student is ready, the teacher will show up.” This puts the onus on me to be ready to accept support before support really shows up. For me 2011 is going to be a big year. How do I know this? Because I decided it will be. CMP
HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 5
ICICI Bank Canada www.icicibank.com Ph: 1 800 ICICI CA or (1 888 424 2422) Page 7
Canada Guaranty Mortgage Insurance Company www.canadaguaranty.ca Ph: 1 866 414 9109 Page 55
Home Trust www.hometrust.ca Ph: 1 877 903 2133 Page 29
Genworth Financial Canada www.genworth.ca Ph: 1 800 511 8888 Outside Back Cover & Guide Outside Back Cover
Macquarie Financial www.macquariefinancial.com Ph: 1 877 462 3788 Page 23
ING Direct www.ingdirectbrokerteam.ca Ph: 1-800-574-5629 Page 21
Merix Financial www.merixfinancial.com Ph: 1 877 637 4911 Page 39
First Canadian Title www.firstcanadiantitle.com Ph: 1 866 804 3122 Guide Inside Back Cover
MCAP www.MCAPBROKER.com Ph: 1 866 289 7389 Page 43
Stewart Title Guaranty Company www.stewart.ca Ph: 1 888 667 5151 Guide Page 7
Capital Direct www.capitaldirect.ca Ph: 780 868-0550 Page 28
Equitable Trust Company www.equitabletrust.com Ph: 1 866 407 0004 Page 47
FirstLine Mortgages www.firstline.com Ph: 1 800 387 2020 ext. 6044 Inside Back Cover
Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 19
Mortgage Protection Plan www.mppbroker.com Ph: 1 866 677 4677 Guide Inside Front Cover
Title Plus www.titleplus.ca Ph: 1 800 410 1013 Guide Page 5
Resmor Trust Company www.resmor.com Ph: 866 809 5800 Page 51
Firm Capital www.FirmCapital.com Ph: 416 635 0221 Page 10
Fisgard Capital Corporation www.fisgardmortgage.com Ph: 1 866 382 9255 Page 31
Street Capital www.streetcapital.ca Ph: 877 416 7873 Pages 40 & 41
The Money Source www.mymoneysource.ca Ph: 416 699 2274 Page 53
Canadian Mortgages Inc. www.canadianmortgagesinc.ca Ph: 1 877 385 7005 Page 17
Centum Financial Group Inc. www.centum.ca Ph: 1 604 257 3940 Page 9
Verico The Mortgage Practice Inc email@example.com Ph: 905 458 4222 Page 12
Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 15
Canadian National Association of Real Estate Appraisers www.cnarea.ca Ph: 1 888 399 3366 Page 22 Services
The Mortgage Centre Canada www.mortgagewellness.ca Ph: 1 888 930 1050 Page 20
VERICO www.verico.ca Ph: 1 866 983 7426 Page 13
The Mortgage Centre Canada www.mortgagecentre.com Ph: 1 800 423 0107 Page 3
Home Loans Canada www.hlcmortgages.ca Ph: 1 866 452 1821 Inside Front Cover
Best Points Travel www.bestpointstravel.com Ph: 1 800 551 8786 Page 37
Vanguard Law Group www.vanguardlg.com Ph: 1 866 420 4714 Page 11
ROMSPEN investment corporation www.romspen.com Ph: 1 800 494 0389 Page 1
RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 33
The Mortgage Group www.mortgagegrp.com Ph: 877 899 1024 Page 18
Filogix Limited Partnership www.filogix.com Ph: 1 866 345 6449 Page 2
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