News Industry
HomEquity Street Capital introduces trailer fee reports record reverse model for brokers Street Capital Financial Corporation announced the launch of its new Street Loyalty Program to encourage renewal business with brokers by offering two compensation models, including trailer fees. “We believe that the strategic alignment with mortgage brokers on their renewing business demonstrates our commitment to our broker clients,” said Paul Grewal, Street Capital president. “It’s a great way for brokers to create enterprise value by partnering with Street Capital.” The first option is an upfront fee model: up to 110 bps for upfront compensation with 105 bps for a finder’s fee and 5 bps in Street Rewards. Then a 15-bps renewal fee starting at the renewal date and paid on every anniversary date afterward. Together this equals 185 bps over two terms. The second option is the trailer fee model: up to 75 bps in upfront compensation with 70 bps for a finder’s fee and 5 bps in Street Rewards. Then 12.5 bps is paid on each anniversary date of the initial term, and a 15-bps renewal fee starts on the renewal date and paid on every anniversary date afterward. All together, this equals 200 bps over two terms. Toronto mortgage agent Dianne Chafe of Oriana Financial Group of Canada Ltd. prefers the trailer fee model when all other lender attributes are equal for the client. “I like that trailer fees build you a book of business,” Chafe told MortgageBrokersNews.ca. “So at the end of the day, 10 years from now if I want to retire, I have a book of business that’s worth some money.” Street Capital started accepting applications for the new program on Mon. Jan. 31. CMP
22
mortgagebrokernews.ca
mortgage originations
HomEquity Bank reported that it originated a record volume of reverse mortgages of $206 million. On an annual basis this is an increase of 87 per cent over 2009 and an increase of 58 per cent over the previous record of $130 million set in 2008. Mortgage originations in the fourth quarter were $47 million. As at Dec. 31, 2010, HomEquity Bank’s portfolio of reverse mortgages surpassed $1 billion and was 17 per cent higher than at Dec. 31, 2009. The news came as HomEquity Bank completed its first full year operating as a Schedule I Bank. “Our reverse mortgage offering is now widely recognized as a mainstream financial solution,” said Steven Ranson, president and CEO. “We are seeing broad market demand for reverse mortgages as the demographic wave and other macro economic factors affect retirement trends in Canada.” CMP