CMP 7.8

#1 Broker #1 Controversy Profiled Interview of an industry innovator

August 2012 / issue 7.8 / $6.95

Top tier Top small market brokers

$4.8B in mortgages, from Vancouver to Toronto to ...

Steinbach, Manitoba? page 32

has launched its new broker portal!

The Radius broker portal gives you the ability to login online to receive important information on rates, products and news. Gaining access to your points account is now easier than ever, check out a few of our features and value add information including: • Rate Updates • Product Manuals • Documents & Forms • Manage Your Points Account • Important Industry & Company News

To find out more about gaining access to the Radius Broker Portal

Contact your local RVP today!

Raj Singh

Jim FitzGerald

Suzanna Stefanec

David Mercer

Jillian Almeida

RVP, Ontario East & Atlantic

RVP, Ontario West

VP, National Sales & Products

RVP, Alberta & Prairies

RVP, British Columbia

raj.singh@radiusfinancial.ca

jim.fitzgerald@radiusfinancial.ca

suzanna.stefanec@radiusfinancial.ca

dave.mercer@radiusfinancial.ca

jillian.almeida@radiusfinancial.ca

416.728.7180

416.705.9900

647.291.5121

403.837.7733

604.809.7456

© Copyright 2012 Radius Financial, all rights reserved.

www.radiusfinancial.ca

contents / issue 7.8 market matters

FEATURES

6| First Up FirstLine has its BasisPOINTS offer on the table and one broker is pencilling in his concerns

24 | Where in the world is Bob Ord The industry’s CIO – Chief Innovative Officer talks industry, banks and broker futures

8 | Mortgage rules Canada’s leading executives at broker networks across the country break down the effects of Flaherty’s latest move

41 | #1 Broker He’s a controversial broker who just happens to be #1 on this year’s list

38

17 | Master Class If more clients are moving to joint ventures, it only follows that brokers should as well

market matters 20 | Product Round-Up This month’s product announcements, even before they come out of the box

42 | Small Market Top 20 Small Market brokers are finally getting their time in the spotlight, as CMP honours the biggest and busiest among them

MARKETING 50 | Employee mortgage benefits program: In his latest series, Doren Aldana explains what exactly brokers need to offer, from product one to product 10

46 | Debtor Clients If brokers used to shy away from dealing with clients in the red, they’re now finding ways to help them in hopes of winning their future business

22 | This Time Last Year The golden story behind Toronto’s most controversial mortgage broker

issue

7.8

Cover Story

20

32 | 2012 CMP Top 75 CMP presents an expanded list of Canada’s top mortgage brokers this year, with ranking of top small market players thrown in for good measure.

Product Round-Up

ANYONE CAN DOTHE SLAM DUNKS.

Blake Cassidy

800 494 0389 | romspen.com

Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada. With $1 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $2M to $75M.

$35,000,000 $18,000,000

Condominium 290 Suite Retirement Home Portfolio Construction Facility BC & ALBERTA VICTORIA, BC $10,000,000 $11,000,000

Multi-tenanted Condominium Industrial Development Portfolio Site TORONTO, TORONTO, ON ON $6,750,000 $7,500,000

Car 19 Serviced Dealership TORONTO, Industrial Lots ON EDMONTON, AB License # 10172

contents / issue 7.8

56

profiles

regulars

56 | Industry It hasn’t traditionally been an academic exercise, but a university thesis is nonetheless taking on the challenges of the mortgage broker industry

54 | Stats This month’s roundup looks at the most recent data on residential new listings and resale activity

columnS

64 | CMP Service Directory

60 | Favourite Things

62 | Guest Broker Jim Black talks banks and the need to open up the lines of communication

Twitter.com/ CMPmagazine

Expert mobile half page ad_with border.pdf

NEW

Like Us on Facebook Canadian Mortgage 17/02/2012 5:47:37 PM Professional

60 NE W !

Expert Mobile

technology for your

C

M

Y

phone that is

CM

MY

CY

to use.

CMY

K

Contact your Regional Sales Manager to learn more about Expert Mobile

© D+H 2011. All rights reserved.

D+H and its logos are trademarks of D+H Limited Partnership.

2 | mortgagebrokernews.ca

https://m.expert.dhltd.com

TM TM TM TM

Take the the first first Take step towards towards aa step

giant leap in your career. in your career.

With innovative programs, sales incentives, and value added benefits, HLC helps empower With innovative programs, sales incentives, and value added benefits, HLC helps empower you to achieve more. If you’re ready to discuss your career options with HLC, call the you to achieve more. If you’re ready to discuss your career options with HLC, call the Regional Sales Director in your area.

Regional Sales Director in your area.

Grant Bennett Grant Bennett British Columbia

Dodi Kozak Dodi AlbertaKozak

Mark Buller Mark OntarioBuller South & West

Nicole Bernier Nicole Quebec Bernier

Angelo Froudakis Angelo Froudakis GTA & Ontario East

Geoffrey Woodford Geoffrey Woodford Atlantic Canada

British Columbia • Grant.Bennett@hlcmortgages.com • Grant.Bennett@hlcmortgages.com • 1-866-978-9919 • 1-866-978-9919

Quebec • Nicole.Bernier@hlcmortgages.com • Nicole.Bernier@hlcmortgages.com • 1-866-264-8571 • 1-866-264-8571

Alberta • Dodi.Kozak@hlcmortgages.com • Dodi.Kozak@hlcmortgages.com • 1-866-443-9427 • 1-866-443-9427

GTA & Ontario East • Angelo.Froudakis@hlcmortgages.com • Angelo.Froudakis@hlcmortgages.com • 1-866-702-4994 • 1-866-702-4994

Ontario South & West • Mark.Buller@hlcmortgages.com • Mark.Buller@hlcmortgages.com • 1-866-236-5765 • 1-866-236-5765

Atlantic Canada • Geoffrey.Woodford@hlcmortgages.com • Geoffrey.Woodford@hlcmortgages.com • 1-866-217-5159 • 1-866-217-5159

3877337 Canada Inc. is a subsidiary of CIBC Mortgages Inc. and carries on business as HLC Home Loans Canada (“HLC”) except in Quebec, where it carries 3877337 Canada Inc.Hypothèques is a subsidiary of CIBC Mortgages Inc. and as carries on business as HLC Loans Canada (“HLC”) except Quebec,brokerage where it carries on business as HLC Logis Concept and is licensed a mortgage agency.

HLC Home is licensed/registered in Ontario as a in mortgage under on business as HLC Hypothèques Concept andas is alicensed as broker, a mortgage agency. is licensed/registered in New Ontario as a mortgage brokerage Licence #10423, in British ColumbiaLogis and Nova Scotia mortgage in Alberta as aHLC mortgage brokerage and in Brunswick as a credit broker. under TM Licence #10423, British Columbia and Nova Scotia as a mortgage broker, in Alberta as a mortgage brokerage and in New Brunswick as a credit broker.

HLC Design is in a trademark of CIBC. TM HLC Design is a trademark of CIBC.

contents / Editor’s letter

Put down your weapons OK, hold your fire, brokers. Well, at least until you’ve read this issue from cover to cover and not just the list of Canada’s Top 75 mortgage brokers, which you may – if history is anything to go by – take issue with.

This list’s tally of funded volume would be impressive any year, but is especially so considering the uncertainty that marked the 2011 housing market and the challenge upon challenge it threw in brokers’ way.

The top broker overcame those hurdles at top speed, with the kind of funded volume our annual ranking has never before known. As you will see on page 41, his assent to the lofty spot is not without controversy – controversy he takes head on in a first-person address to fellow brokers.

Keep in mind, all numbers have been verified.

Just as compelling a read can be found in the personal stories of other highly effective professionals who made this year’s expanded list, starting on page 38. You’ll also make note of the addition of the CMP Top 20 Small Market Brokers – our nod to the success of brokers in markets with home prices that fall considerably short of Toronto and Vancouver’s sky-high values (page 42).

But this magazine issue doesn’t end with the rankings. Also hear from the country’s broker network heads, in their own words. Each will analyze what exactly the latest tweaks to the country’s mortgage rules mean for brokers. It may not be as bad as you think. See page 8.

And don’t forget to give the first instalment of a new feature we’ve added to the magazine, “Master Class.” Chad Robinson kicks off that broker tutorial with a primer on tapping the growing number of jointventure deals expected to come your way as property investors team up to fund acquisitions.

So read on, and then drop us a note after you’re done. Look for some of those comments in the October issue with the reintroduction of our “Letters to the Editor.” By the way, that’s me.

Vernon Clement Jones

connect

Contact the editor: vernon.jones@kmimedia.ca

4 | mortgagebrokernews.ca

COPY & FEATURES Editor Vernon Clement Jones SUB-EDITOR Rachel Naud staff writer Nestor Arellano

Caitlin Nobes contributors Doren Aldana

Jim Black

Chad Robinson

ART & PRODUCTION gRAPHIC dESIGNER

Alicia Chin

SALES & MARKETING

NATIONAL SALES MANAGER Trevor Biggs Marketing and Communications Julia Comitale PROJECT COORDINATOR Jessica Duce

CORPORATE PRESIDENT & CEO Tim Duce OFFICE/TRAFFIC MANAGER Marni Parker Events and Conference Manager Chris Davis

Editorial enquiries vernon.jones@kmimedia.ca Advertising enquiries trevor.biggs@kmimedia.ca Subscriptions tel: 416 644 8740 • fax: 416 203 8940 subscriptions@kmimedia.ca KMI Publishing 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 mortgagebrokernews.ca Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as CMP magazine can accept no responsibility for loss.

First Up / Read between the lines

Reading Between

the lines: Finally, after months of silence, CIBC came out last month with a settlement for brokers holding thousands of FirstLine BasisPOINTS. The proposal, explained in exhaustive detail, was also accompanied by this “Full and Final Release.”

Its menu of options are two: a) brokers take 5 cents for every BasisPoint or b) they take two Aeroplan

Miles for each of those points.

Less straightforward is what direction most brokers will move. Kevin Power, of Power Mortgages in Kitchener, Ont., isn’t saying whether he’ll accept or decline, but here’s his initial reaction.

Read between the lines.

FULL AND FINAL RELEASE

IN CONSIDERATION OF our payment to you, calculated in reference to outstanding FirstLine

BasisPoints® that you hold multiplied by $0.05 OR (at your alternative option as indicated below) calculated in reference to outstanding FirstLine BasisPoints that you hold converted to 2 Aeroplan® Miles for each FirstLine BasisPoint, and in consideration for the extension of the POINTS program until December 1, 2012 (collectively the “Points Programs”), as such terms are defined under the broker

Kevin Power

is 8 cents, The real value fered is what’s being of value 62.5% of the option Not a very good

agreements entitled Broker Certification: Welcome to FirstLine Mortgages or the FirstLine Mortgages: Mortgage Broker Agreement entered into between the undersigned and CIBC Mortgages Inc., through its division FirstLine Mortgages (the “Agreements”), THE UNDERSIGNED, and its directors, officers, agents, employees, successors and assigns (the “Releasor”) HEREBY RELEASES AND

OK. It’s go od some deadlin to have e.

FOREVER DISCHARGES Canadian Imperial Bank of Commerce, CIBC Mortgages Inc., FirstLine Mortgages, each of its and their subsidiaries, affiliates, shareholders, directors, officers, agents and employees and each of their respective successors, assigns, heirs, executors and administrators (the “Releasee”) from any and all claims, demands and causes of action which the Releasor has or may have, arising out of or in any way related, directly or indirectly, to the termination of the Agreements or the Points Programs, including but not limited to any claims relating to unredeemed points under the Points Programs,

THE RELEASOR hereby represents and warrants not having assigned any of the claims referred

to in this Release to any other person, corporation or other entity. The Releasor also agrees not to make a claim against any third party that may then bring a claim against the Releasee, with respect to the matters covered by this Release.

IT IS ALSO UNDERSTOOD AND AGREED that the consideration provided to the Releasor in

exchange for the execution of this Release does not constitute, and shall not at any time be treated as, an admission by the Releasee of liability. The Releasor agrees to keep confidential the terms of this offer and this Release.

OPTION CHOSEN (Indicate one option only by checkmark): Aeroplan® Miles ____ Aeroplan® Number _______________ OR Cash Payment ____ DATE OF SIGNING: _______________________ 2012. __________________________________ Name of Broker (Please Print Name Here and Sign Above):

While grateful for offer, the terms are not overly generous to brokers who’ve had a long-term relationship with them. After helping FirstLine become a success, brokers deserve more than this

6 | mortgagebrokernews.ca

The bank is just covering itself

Heavy-handed . Doesn’t leave room f or negotiations

Our common sense approach opens the doors to home ownership even wider.

As Canada’s leading alternative mortgage lender, Home Trust Company has been opening our doors to brokers for over 25 years. Our dedicated underwriting team always uses a common sense approach, allowing you to close more deals.

It’s as simple as that. Yet another way Home Trust helps you open more doors when opportunity knocks.

MORTGAGES

|

CREDIT

|

VISA

|

DEPOSITS

|

www.hometrust.ca

Market Matters / Broker Heads

Mortgage Rule

Changes

There are four burning questions on the lips of brokers. Here, according to leading broker network execs, are the key answers

Still, their collective message is undeniable: Brokers will survive; brokers will continue to succeed.

1.

An Amortization Abatement

Paul Therien Director of Business Development Centum Financial Group Inc.

Jim Flaherty hadn’t formally announced the latest mortgage rule changes before broker phones began to ring.

The calls came in just as fast and often just as furiously to network execs as mortgage professionals grappled with the impact for both themselves and their clients.

You may have been on the receiving end of some of that analysis, but not all. Well, that is until now.

CMP has corralled many of those broker heads, asking them to share their own insights on four mortgage rule changes meant to slow down the market and protect Canadian households from the perils of unmanageable debt.

These broker execs don’t pull any punches about the 25-year amortization cap on insured mortgages or the “refi reset” to a maximum LTV of 80 per cent.

They also meet square on concerns about the $1-million ceiling on home values and a maximum gross debt-service ratio of 39 per cent, with a total debt-service ratio limited to 44 per cent.

We all know the government recently changed lending guidelines, including limiting maximum amortization to 25 years. I have been following the reaction from a large portion of our industry, and I think the sky falling theory is overstated. I have come to this conclusion by really paying attention to some consumer polls that show over 45 per cent of mortgage holders thought that 25 years was already the maximum allowed; 25 per cent said that they knew about 30 years, the balance simply did not know or care.

We also need to step back and look at the hard numbers.

The impact of that extra five years to the consumer is not drastic. A $350K mortgage with a rate of 5.99 per cent only has a payment

BROKER ON

8 | mortgagebrokernews.ca

1.

OR

Broker focused? Absolutely.

Unlike the big banks, our focus is serving brokers. In fact, we treat them like partners, not competitors. That’s why we go out of our way to find solutions for brokers and their clients — no matter how challenging or unique the situation. To us, deals are more than just numbers on a page. They’re about turning a house into a home.

1-888-837-2326 • bwballstarportal.ca

Market Matters / Broker Heads difference of $157.55 per month. If that change means that you cannot afford your home then you should not be buying that home. What will happen in the event of a major repair, assessment, or other unexpected expense? We should also consider that the interest paid on that mortgage increases from $321,174.25 to $398,692.91 - a staggering $77,518.66.

Yes, you have a moderately smaller payment, but is that small savings really worth it in the long term when considering how much more you pay in interest over the full term of the mortgage?

In some areas, this impacts the ability of consumers to purchase a home in their preferred location. There are always options such as buying a smaller home or buying in a different area. This is not a new dilemma; it has always existed and is why we have suburbs. We can’t always get what we want, and sometimes we should consider needs before wants. Does a first-time home really need a $50,000 kitchen? I want to live on a waterfront, but do I need to? This may also result in some price compression and create pressure for greater affordability in housing. True this is not always a good thing, but the industry ebbs and flows, always has.

Homeownership is a good long-term investment, but it needs to be smart homeownership, that is made with educated decisions and creates financial sustainability for the consumer. It should not create hardship. We live in a world today where we want instant gratification, and that is no different when purchasing a home. Living on debt, however, is also living on borrowed time, because, eventually, it will catch up to us.

Brokers have the ability to turn these changes into an opportunity should they make that choice.

We can become true advisers to our clients and

instead of just focusing on the transaction today, stop and consider the long-term homeownership goals of our clients. They might not be able to own the biggest house in the best neighbourhood today, but with sound advice, and a properly structured mortgage plan, that customer will come back to you when they are ready to move closer to their dream home.

2.

Reduced LTV on Refis and its Impact

2.

Michael Beckette, President & CEO for Mortgage Alliance We’ve all heard the expression “using a home as an ATM.” It’s referencing the concern that Canadians are utilizing the equity in their homes to potentially live beyond their means and to rely on debt as a way to sustain their lifestyles. I don’t think anyone was ultimately surprised by the government’s announcement to reduce LTV (on refis) given the recent trend in economic and consumer indices.

The writing was on the wall and it was only a question of “when”!

Change in our industry is the one constant you can bet on. The pendulum never stops swinging – which direction and how far over one way or the other is hard to say. You can’t run a business today based on the assumption that things will be the same tomorrow. You either choose to succumb to the problem or you carve a strategy to pursue the opportunities. Each change will bring with it those respective scenarios.

OK, so here’s the bad: If you owe, for example, $20,000 in debt outside of your mortgage and are

OverOver 600 Million 600 Million LentLent sincesince 19971997

80% 80%

5.75% 5.75%

6.75% 6.75%

OFFICES IN VANCOUVER, IN VANCOUVER, CALGARY, CALGARY, EDMONTON, EDMONTON, TORONTO TORONTO & ATLANTIC & ATLANTIC PROVINCES PROVINCES Member ofMember CAAMP,ofAMBA, CAAMP, MBABC, AMBA,BBB. MBABC, BBB. OFFICES

Hugh Doggett Hugh Doggett 10 | mortgagebrokernews.ca

905.299.6951 905.299.6951 905 824.7095 905 824.7095

hdoggett@capitaldirect.ca hdoggett@capitaldirect.ca

Market Matters / Broker Heads paying 21 per cent in interest, the 80 per cent maximum limit could mean that you are paying an extra $3,600+/- annually in interest (since you can’t roll it into your mortgage based on current interest rates). In addition, this may have an effect on home renovations – since quite a few homeowners depend on refinancing their mortgage or taking a home equity line of credit to pay for major home renovations.

The Good: The reduction to 80 per cent (previously 85 per cent) means that as a homeowner, you will now retain an additional $20,000 in equity in your $400,000 home. The plus is that a loan-to-value less than or equal to 80 per cent means you save approximately $5,900 in high-ratio mortgage insurance premiums (based on a $400,000 property value).

The Outcome: We may see the return of more private lenders to fill in the gaps. We will manage those partnerships to the benefit of the Mortgage Alliance network and their customers.

Our network is founded on providing the ultimate choice, convenience and counsel.

Mortgage Alliance Professionals are in a unique position to provide that “counsel” and deliver their clients with alternate solutions for their customer’s challenges. It comes from our position of having the resources of a bank, but the

ER

12 | mortgagebrokernews.ca

3. & 4.

attitude of an elite mortgage brokerage.

With this in mind, we will have to become better at helping our clients at managing their debt and counsel them toward planning for major spending by first saving or paying down their mortgages faster before they borrow again. Therefore, the better we know our clients, the more we connect with them and the more they’ll trust us to help them navigate their financial future. That hasn’t changed and never will.

ORIGINATE ON

3. & 4.

Don’t forget: Changes Three and Four

Eddy Cocciollo President of Mortgage Centre Canada Fixing maximum TDS/ GDS: 44%/39% Consumers who are in debt with credit vehicles that have higher interest rates and higher minimum payments and could use a consolidation mortgage to better their monthly cash flow will be affected by the new TDS ratio change.

Those wanting to purchase a little more house and are stretching will also be affected. Brokers will win themselves an advantage if they are in tune with being more creative on behalf of these clients and use

AG

VERICO BROKERS EXCEL IN THE TOP 75!

HIGHEST LOAN VOLUME IN THE TOP 75 AND TOP 20!

The BEST of the BEST belong with VERICO.

Congratulations to all TOP 75 and TOP 20 winners!

BY LOAN VOLUME *2012 CMP TOP 75 BROKERS

CANADA’S #1 BROKERS NETWORK

TALK TO VERICO You will be impressed.

See what the professionals in industry already know!

THE ONLY NETWORK SUPPORTING

The most comprehensive tools and service package available in market!

®

YOUR BRAND. YOUR BUSINESS. YOUR WAY. JOIN US TODAY. www.verico.ca/welcome

Market Matters / Broker Heads private funds or non-traditional lenders. The broker who is a transactional cookie-cutter broker will have to better his knowledge in creative financing .. and do it fast!

Maximum insured mortgage amount: $1M In a nutshell, a borrower with less than 20 per cent down payment cannot have a mortgage amount of more than $1 million.

I think the Smith Manoeuvre scenario may be affected more in this rule change than simply the consumer looking to purchase with less down on mortgages over a million. I think once a purchaser qualifies for this kind of mortgage then he or she should be able to come up with a 20 per cent DP more times than not. Maybe those professionals that are cash flow heavy but are still paying student loans or would rather use home capital for their business may see it more difficult to get into a high-end home or condo now. Brokers that have this kind of clientele will probably see their average mortgage come down slightly.

This market is small and tends to be only in the big cities, so overall the change won’t have much of an effect on the average mortgage broker really.

ATE

Take Four: A four- pronged approach

Colin Dreyer President and CEO Verico Financial Group Inc.

AGGREGATE

At VERICO, we ensure that we arm our professionals with balanced and insightful perspectives on any issues that affect our business.

On the day that these changes were announced by the government, we immediately hosted a webinar featuring two VERICO members who, not only have great insights, but are also regularly interviewed by major media: Calum Ross in Toronto and Jared Dreyer in Vancouver.

We started the discussion with the 25-year amortization change, which will mostly impact first-time homebuyers and those on the fringe. We advised our mortgage brokers who have focused on this particular sector as

14 | mortgagebrokernews.ca

an opportunity to expand their demographic circle and offer their valuable services to a broader range of consumers.

The removal of CMHC insurance for $1 million-plus homes will affect mainly brokers in Vancouver and Toronto where many homes are in and over that price range. The consensus was that there is no reason why CMHC and the Canadian taxpayer should be backing luxury home purchases with less than 20 per cent down. Calum pointed out that this is a change for the greater good in terms of helping citizens use credit responsibly and that CMHC insurance should not have been available for $1 million-plus home in the first place.

On the change to GDS and TDS; it is hard to determine how this will affect the market overall.

Combined with the maximum amortization cutback, there will be reduced buying power, but will likely stimulate more subprime lending and, again, present new opportunities to VERICO members.

And finally, we addressed the change to LTV on refinances from 85 per cent to 80 per cent. In our opinion, there are few cases where a refinance at 85 per cent was justifiable given that clients would need to pay insurance premiums if they wanted the extra five per cent, so this change is beneficial to consumers.

I’m pleased to have been able to provide our VERICO members with this opportunity for discussion and to gain valued insight from two very involved members in our network. Credit changes or shifts are part of our new landscape and we need to learn to adapt and find opportunities in any market condition. Bottom line is if our employment rate stays consistent then these regulatory changes or market shifts will be less cumbersome than some predict.

VERICO mortgage brokers are in the best position to adapt to the changes and to continue to provide sound financial advice and to help

ON

Lisa Nikiforuk Bell

Account Executive BC – Lower Mainland & Vancouver Island

AT YOUR SERVICE WITH SOLUTIONS TO SUPPORT YOUR SUCCESS. As a valuable resource, with a wealth of industry experience, market knowledge and insight, Lisa Nikiforuk Bell is committed to helping you succeed.

At Canada Guaranty, each member of our National Sales Team is dedicated to ensuring you receive the personalized service and support you need to find the right solutions for your clients.

Contact your regional Account Executive to learn more about: ■

Mobile Tools

■

Continuing Education & Training

■

The Homeownership Solutions Program

■

Our Comprehensive Product Suite

For more information about these and other solutions available, please visit canadaguaranty.ca.

Canada Guaranty Mortgage Insurance Company 877.244.8422 I www.canadaguaranty.ca

Market Matters / Broker Heads secure the best mortgage products for Canadian home buyers.

A Broker’s Critique

Albert Collu President & CEO of Argentum Mortgage and Finance Corporation There is much discussion and speculation around the past and pending mortgage rule changes that have been implemented by our respective regulators and government. A number of mortgage brokers and agents are trying to crystalize the impacts of these changes as it relates to lending institutions and borrowers and that has raised many questions and concerns.

There are varying opinions as to whether or not these changes are necessary, but my opinion rests in the following notions. While I agree that the Canadian government must safeguard against potential credit issues experienced in other countries,

CMP top 75

$4.8 billion

- by the groupTotal Funded Volume

MORTGAGE SOLUTIONS THAT ARE AS SMART FOR YOUR CLIENT AS THEY ARE FOR YOU

I believe the manner in which they are doing so is disagreeable from my point of view. It is true that Canadians have been using their homes as ATMs to cash in equity for many purposes, including the consolidation of debt and therein lies the symptom of what I deem to be the greater issue. Canadians and their homes have been made the targets while other more vulnerable areas should be scrutinized, namely credit card debt.

It seems that day in and day out we are inundated with mail solicitation to apply for credit card debt and it is clear that Canadians are starting to take advantage of those campaigns towards the option of overextending themselves and are looking to normalize their monthly payments by extracting equity from their homes. The Canadian residential mortgage market has been stable for quite some time now with policies that allowed for higher loan-to-value ratios and more relaxed lending criteria than what is being imposed by our regulators. With that said it is my opinion that our credit preservation and liquidity concerns would be better aimed at revolving credit facilities such as credit cards rather than targeting a segment that has been fairly stable and consistent.

What’s in it for you? > A unique product portfolio including our award winning All-In-One Banking™. > Niche product lending allowing you to meet a variety of your client needs; including mortgage solutions for first time homebuyers, rental properties, new immigrants, non-residents and more 1. > An incentive program built on your feedback, including reward options such as: $2,0002 towards marketing, $15,0003 travel voucher towards a trip of lifetime, rate discounts up to 15 BPS, free appraisals, great cashback offers, and more!

Contact your local BDM or email mortgagebroker@nbc.ca

TM National Bank All-In-One is a trademark of National Bank of Canada. 1 Financing shall be subject to the credit approval by National Bank. 2 $2,000 marketing fee is a one-time reward for the first 65 deals or $20M funded in the fiscal year. 3 $15,000 trip paid for every 125 deals or $40M funded in the fiscal year. The fiscal year is from November 1, 2011 to October 31, 2012.

16 | mortgagebrokernews.ca

Market Matters / Master class

Broker

-to-

Broker

advice

Joint ventures come in many ‘flavours,’ writes broker Chad Robinson. Here’s what you need to know to help a client choose

W

ith tighter mortgage rules and fewer options, investors are beginning to take a serious look at joint ventures again. Brokers have to be just as serious about arranging them.

There are as many types of JVs as there are flavours of gelato; however, most fall into a few broad categories. The key as a mortgage broker is understanding your role in the JV process and how to advise clients. That can be tricky, depending on who the client is – a lender, an investor or the deal-maker, and sometimes all three. Still, in general anything that would affect a lender’s security on a property should be disclosed to that lender.

In most cases, the person on title and guaranteeing the mortgage is the person who has significant assets and solid income; this tends to be the investor. The catch is to ensure that if the investor is held liable for a mortgage that he has first rights to the property. I have heard of stories where an investor signs a mortgage for a rent-to-own deal, the deal-maker sets up the purchase and takes a large deposit, before collecting a few months’ rent and disappearing. The tenant-buyer is out his or her deposit and the investor is dealing with a property in power of sale.

Signing onto a joint venture is in essence becoming partners for a period of time. This can be as short as a few months on a flip to a decade or more. Most people have trouble committing to a car for more than a few years at a time let alone co-owning a property for the long term. That is not to say your client should avoid these opportunities, as these can be wonderful and mutually beneficial to all parties involved. However, they must systemically and methodically plan who they partner with, what structure best fits their personal

mortgagebrokernews.ca | 17

Market Matters / Master Class legal and tax profiles, as well as what is the exit strategy. Yes, I know it sounds boring. It should.

Each of the different ownership structures requires different disclosure to the lender. It is imperative brokers talk to clients and their broker/ manager about regional and provincial guidelines covering joint ventures. There are central questions for the broker to consider: What do we need to tell lending partners? If you feel that a JV deal is bad for the investor, but the client has brought you lots of business, how will you handle that? Does your E&O insurance offer you protection? Do you sign any special waivers or disclosure forms with an investor? These are just points to ponder.

But first, all brokers looking at arranging mortgages based on these deals must familiarize themselves with the five main types of joint-venture ownership structures.

General Partnership

When two or more parties agree to work together to hopefully earn a profit. It is not often used as each party is fully liable for the decisions of the other.

Since it is a not a legal entity, all profits and loss flow directly to the individuals.

Limited Partnership

Investors often view it as a more attractive version of the general partnership, allowing them to avoid the costs of a JV corporation. It allows for some protection to the investors, while at the same time passes profits and losses directly to the investors.

The “general” partner is responsible for day-to-day operations and the limited partners are essentially passive investors. With respect to lending, this type

of ownership structure would be too complex for most single residential transactions. However, the general partner would be the one applying for and so responsible for the mortgage should the lender write it. This is very common on commercial transactions.

Joint Venture Corporation

The JV corporation has many of the advantages of the limited partnership, however it is a completely separate tax entity. Depending on the situation, this could be a positive, but in most cases it becomes more costly. In today’s lending climate, lending to corporations is much more difficult at the residential level. A few years back I worked on a commercial building at 75 per cent loan-to-value that was set up as a JV corporation. One of the stipulations in the contract was that a partial recourse mortgage was required. This would eliminate any liability for the limited partners to the mortgage. It took some doing but I was able to put it together. Non-recourse loans were more common in the late 1990s and early 2000s, however, they are extremely difficult to come by today.

Trust (Family Trust)

There are some very specific rules regarding trusts in Canada. They are a separate entity, as a corporation, however in some cases they allow for the flow-through of profits and losses to the beneficiaries. The problem is that it does not provide the same liability protection as some of the other options. I have seen many clients who have a real estate holding company that is wholly owned by the trust as income can flow “up” to the trust and be distributed to the beneficiaries.

CMP top 75

$48.5 million

- by the groupMedian Funded Volume

THE ALTERNATIVE LENDER You NEED To kNow Hali Strandlund

Fisgard is one of the largest private alternative lenders in Western Canada and is dedicated to supporting mortgage brokers and their clients. We provide competitive products, flexible lending guidelines and dedicated customer service.

Having a good relationship with you, our broker clients, is critical to the success of our business. Fisgard’s creative, knowledgeable and experienced underwriting team wants to see all of your deals that don’t fit the typical “bank box”.

Chances are that Fisgard can fund these deals, and fund them quickly. We are here for you and we’re here for your clients.

Call your underwriter today.

Call 866.382.9255 or visit www.fisgardmortgage.com

18 | mortgagebrokernews.ca Fisgard Capital Corporation | 3378 Douglas Street, Victoria BC V8Z 3L3 | www.fisgardmortgage.com

News market Matters / Master class aPPoIntments

We care about you, to give you the very best!

• 100% finder fees & 100% volume bonus paid to you

Co-Ownership

Is the only one of the structures that allows for direct ownership. This is commonly referred to as Tenancy-In-Common. The ownership is shared as a percentage of the real property and the income and expenses flow through to the partners on their respective pro-rata basis. This form of ownership is the easiest to finance, but usually requires all parties to be part of the mortgage, especially on residential appointments transactions.

There are some mechanisms that can afford you the best of the co-ownership and the Limited Liability Partnership, however, it needs to Mortgage Intelligence announced that be structured correctly at the start.

Steve Heimbecker, The above are some of the broad categories ofMarg Green, Donna Ramsay and Concierge how you might legally formalize a joint venture.

Mortgage Group are joining Ensure your clients obtain the independent company. legal and accounting advice prior to signingGreen any JV in Mississauga, Ramsay in documents. It always amazes me that people have no in Orangeville and Heimbecker owners problem writing a cheque for Waterloo, $100,000,are butequal refuse to in Concierge Mortgage Group. spend $1,000 on legal advice to ensure their money Concierge is a new boutique is protected. brokerage firm that will focus on I came across a system not long ago where an elite and experienced brokers, individual was sourcing JV money forexceptional real estateneeds-based offering projects he didn’t even own! Itcustomer looked really great service.

Theon goal is for paper and they had a very good presentation, but Concierge Mortgage Group to have offices throughout once you peeled back the onion it was a house ofOntario.

Concierge operate as a cards. Always encourage due diligence and will patience. network partner Your clients and lenders will thank you for it. with Mortgage Intelligence, developing its own I encourage anyone interested in joint ventures to brand while taking advantage of obtain as much education on the subjectIntelligence’s as possible.key Mortgage We are very fortunate in Canada to have some great payroll, resources like compliance, authors and speakers on this subject. exclusive mortgage products,

• Virtual office on RmaNet.ca • Centralized Placement Unit gives you access to status & lenders • Dividend-paying share ownership in Real Mortgage Associates Inc. • Annuity paying share ownership in RMA Properties Ltd Own shares in RMA that pay annual dividends and own shares in a commercial real estate portfolio with a target value of $10 million.

and marketing.

“Mortgage Intelligence offers us competitive compensation and the support that Concierge needs to be successful,” said Heimbecker.

l a e Ownership that makes R sense.

>

TMG The Mortgage Group is moving three of its regional leaders up the corporate ladder, billing the move as in keeping with its philosophy of promoting from within. Effective Jan.1, 2012, Bud Jorgenson assumed the position of VP for the Prairie Region; Gord Appel, VP, Alberta Region; and Gerald Krahn, Ontario Region. “These three have already made positive changes in their respective regions,” said Mark Kerzner, president of TMG. “Their Ottawa mortgage broker Chaddedication Robinson to is head of TMG agents and Verico Top: BestSteve Interest Mortgagesbrokers and a specialist in Heimbecker is very important for the Middle: Marg Green property investment.

Middle: Donna Ramsay company’s long-term success. They Middle: Gord Appel are a great asset to the TMG Bottom: Gerald Krahn family.” CMP

Call Ron De Silva at 877-677-7778 ext: 5 for more information

www.rmabroker.ca

News

News / Product Round-UP InternatIonaL

& PRODUCT u.s.

90.6% 52.1%

inspectors have found problems; appraisals showed a home was worth less than the bid; a buyer lost a job before the closing.

U.S. housing market worse than thought More than two years after the recession The number of Americans who bought previously officially ended, many people can’t qualify for occupied homes rose in October. But the National loans or meet higher down payment Association of Realtors says it overstated more than requirements. Even those with excellent credit three million sales during and after the Great Recession, and stable jobs are holding off because they fear showing the housing market was weaker than Percentage of that home prices will keep falling. Sales are also previously thought. homeownership being hurt by a decline in first-time buyers, who The private trade group says sales rose four per costs, including are critical to reviving the housing market. cent in October to a seasonally adjusted annual rate of mortgage payments, Sales have fallen in four of the five years 4.42 million. That’s below the roughly six million homes utilities and property since the housing boom went bust in 2006. a year that economists say are consistent with a healthy taxes that take up a Declining prices and record-low mortgage rates housing market. But it’s ahead of 2008’s revised sales, typical household’s haven’t been enough to boost sales. now considered the worst in 13 years. monthly pre-tax At the same time, home construction has The trade group revised its sales from 2007 to 2010 income in Vancouver begun a gradual comeback and should add to the down 14 per cent, from more than 20.6 million to nearly and Toronto, economy’s growth in 2011 for the first year since 17.7 million. Among the reasons for the lower figures, respectively (RBC the Great Recession began in 2007. Last month, the Realtors group says: changes in the way the Census Economics Housing builders broke ground on an annual rate of Bureau collects data, population shifts and some sales Trends and 685,000 homes, the government said recently. being counted twice. histories. Report) • a 9.3 Down payment customer’s That was per cent jump from from October andown The Realtors consulted with government and stellar creditAffordability Here’s a rundown of some importantthe fastest pace resources only2010. for purchase since April private housing experts, including the Federal Reserve, Most economists say home prices will keep the Department of Housing and Urban Development, details about the product: transactions falling, by least five schedules per cent, through 2012. the Mortgage Bankers Association, the National • at Payment include: monthly, Many forecasts don’t foresee a rebound in prices Association of Home Builders, mortgage giants Fannie bi-weekly, weekly, accelerated • For purchase or refinance until at least 2013.

Mae and Freddie Mac and CoreLogic, a California-based bi-weekly and accelerated weekly • Available for five-year mortgage terms The high rate of foreclosures has made data firm that first raised doubts about the annual only resold homes cheaper than new ones. The numbers earlier this year.

• All borrowers listed in the app should say: “Super PRIME is a fully medianWhat price ofthey a new home is roughly 30 per CoreLogic has estimated that the Realtors group have a minimum Beacon Score of 740 featured, five-year mortgage solution for cent above the price of one that’s been occupied overstated sales in 2010 by at least 15 per cent. before –people twice the markup.

Investors The changing numbers could affect how economists • 90-day rate hold applies whonormal have taken care of theirare credit taking advantage of the view the trade group’s data. It could also affect companies • 20/20 prepayment privileges rating,” said Glebdiscounts.

Ioussoufovitch, director The facts: housing market is struggling even “This that use the figures for hiring and expansion plans. • Maximum loan-to-value of 90 per centTheof sales and marketing for Xceed.

Super PRIME is a five-year mortgage as the broader economy has improved in Sales are measured when buyers close on homes. purchase; 80 per cent refi. product offers customers who show a product for borrowers with an excellent recent months.

But many deals are collapsing before that point.

• CMHC premium will be charged on of grew responsible creditpace management credit history.

It is priced at Xceed’s posted Thehistory economy at an annual of two One-third of Realtors said they had at least one contract refi deals an excellent opportunity to save further rate minus 25 bps. per cent in the July-September quarter. Many scuttled in October, up from 18 per cent in September.

• Only available for fully-salaried or with low interest rates.”

The product is aimed at clients who are economists expect slightly better growth in the Contracts are being cancelled for several reasons: October-December quarter. CMP Bankssalaried have declined mortgage applications; fully or BFS-qualified and have home BFS-qualified customers

NEWS

A bite-sized guide to the industry’s newest products as they come down the channel Who: Xceed Mortgage Corp.

What: Super PRIME Mortgage

THE BEST APPRAISERS IN CANADA ARE CERTIFIED AND REGULATED BY

LOOK FOR THE PROFESSIONAL DESIGNATIONS

DAR & DAC

THE CANADIAN NATIONAL ASSOCIATION of REAL ESTATE APPRAISERS LAUNCHING A NEW PRODUCT?

Launching a new product?

Wantor it to be considered for CALL 888-399-3366 inclusion on this page?

Send the details to the editor: .CNAREA.CA FIND AN APPRAISER at WWW vernon.jones@kmimedia.ca

28 mortgagebrokernews.ca 20 | mortgagebrokernews.ca

news / product Round-UP

Who: Canada Guaranty What: Progress Draw Advantage – Full-Service Option The facts: Designed to help borrowers who are building a new home or undertaking a major renovation to their existing property.

The program is available for both contractbuild and self-build projects.

Previously, Canada Guaranty offered only a Basic Service version of Progress Draw Advantage. Recently, a full-service option was added to the offering. Existing qualifying criteria still applies.

of construction reached and the reasonableness of an advance amount without consultation or pre-approval required from Canada Guaranty.

Full Service – This option is insurer managed. The lender determines the stage of construction reached and the reasonableness of advance amount. Canada Guaranty covers the cost of the initial appraisal and all required inspection costs up to four progress advances. Should further advances be required, the lender will be responsible for the cost of any additional inspection.

LAUNCHING A NEW PRODUCT?

Want it to be considered for inclusion on this page, send the details to the editor: vernon.jones@kmimedia.ca

Highlights: Basic Service – This option is lender managed. The lender determines the stage

Canadiana Financial offers a renewal-based compensation plan option, which just became more valuable to your lender portfolio.

Are you preparing for the road ahead?

Contact a Director of Business Development in your area today for information about our valuable Freshly Brewed Renewal Compensation plan option.

We focus on you.

FSCO Licence #12012

www.canadianafinancial.com/renewal-comp mortgagebrokernews.ca | 21

News / this time last year

Not quite good as gold A year on, his mortgage business is going “smoothly,” says Harold Gerstel; how about his gold-buying one?

ONE YEAR LATER One year on and Harold Gerstel is still advertising mortgages with his gold business – and says the mortgage business is going well.

“Everything is going smoothly,” Gerstel tells CMP from the floor of his midtown Toronto gold-buying shop/ Harold Gerstel mortgage brokering office. The hope is, he said, mortgage rule changes introduced last month will shine a light on his business.

It wouldn’t be a surprise if Gerstel decided to focus more on mortgages and less on gold – the gold-for-cash business has brought him into the mainstream news a number of times in the last few years, and not for positive reasons.

This year Gerstel was pistol-whipped by a man who came into the store to sell some jewellery. He required 10 stitches and was left with a black eye after the man, who Gerstel had dealt with before and trusted, pulled out a gun during negotiations.

“He started banging me on the head,” Gerstel said at the time. “He grabbed a few

22 | mortgagebrokernews.ca

rings that he had brought in and ran out without saying anything.”

Robberies are much more common in the gold business than the mortgage business – and it’s not the first time Gerstel’s made the news in the last few years. There was the cash-for-gold turf wars which saw one of his employees arrested for hiring a hitman – the 71-year-old woman was cleared last year but says she still suffers anxiety and depression from the incident. Gerstel says the story was concocted by a competitor to cause problems for his business.

Later the same year his store was destroyed in a suspected arson attack, another incident garnering the licensed mortgage agent the wrong kind of attention, say critics.

There are, in fact, quite a few of those in the brokering community – mortgage professionals who charge he has damaged the hard-earned credibility others in the industry.

Still, as many brokers grapple with those same mortgage rule changes,

threatening to cut originations by as much as 16 per cent this year, there may be more of them reaching for unusual business models.

“I’d applaud diversifying revenue within the context of the financial sector, says Albert Collu, president of the Independent Mortgage Brokers Association of Ontario. “Where I struggle with is when it’s not a good fit. It’s like having your tires changed at a mechanics shop and having the mechanic say if you need legal work I can do that for you.”

Others have voiced similar concerns, worried Gerstel’s gold-buying business may not be in the best interest of the industry, especially given the concerted effort of broker in the last 10 to 20 years to build credibility and raise consumer awareness about the regulated profession.

“I don’t know who’s to blame,” says Collu. “Is it the individual at hand? I think not. We’ve allowed this individual to be licensed. Or is it the brokerage that allowed this individual to enter the industry?”

Mortgage Maven broker Joel Kelman – Gerstel’s principal -- did not respond to CMP’s requests for an interview.

News

Industry News / this time last year

Your trusted news source S SOURCE STED NEW YOUR TRU

industry, said IMBA President Albert thousands of TV-watchers in the Collu. “I applaud Harold for trying to Toronto area, told diversify his business and revenue,” MortgageBrokerNews.ca. “I had the he told MortgageBrokerNews.ca, “but jewelery business, and for a few mortgages that start under a there is an inherent have expanded their unsecured lending products. in my opinion, monthsfirst-time now havebuyers, offeredorfirst and specific price (remember restrictions in 1992 when What our government fails to realize is that danger in the perception this creates mortgages refinances first-timeand buyer program was implemented? unsecured lending has a larger impact on cashsecondthe brokers in the eyes here, too.”

Should we look at something similar?) about When mortgage “Red flow than mortgage lending. Particularly when of the consumer.

We have worked “Harold does some of the business, Ed” Clark at TD was screaming for more home ownership has already been proven to be hard what as an industry to elevate our controlswith on mortgage lending, most of the working more affordable than renting in most areas but I dogovernment really saying was that lenders can’t police (Vancouver is currently a rare exception). Whatclients he profile and professionalism and a andwas arranging the mortgages,” themselves.

If bank Aofwill can’t shop offering mortgages they (government) do see is the most powerfulsaid Joel jewelery Kelman, president Thedo the deal why bank B? IfInc. Johnny off the bridge,only would youus as an industry.” lobby group in the country saying “it’s mortgage hurts Mortgage Maven and ajumps licensed Gold-buying broker raises jump off a bridge? What kind of people do we have lending that is the issue.” broker running for moreour than 10 years.

“It’s in The real culprit in concerns banking system?

– Paul Therien one store, and we use the same ad, regulated andKelman Some brokers fear it may tarnish the this whole mess is the least that is disagreed. “There are a few bad eggs out there in any but we find that they are different industry’s reputation.

But a business They just don’t get it, do they? Economics 101, says credit card debt. Put some sense back in the put the to theorcredit cardprofession,” lenders, he told People who are boots purchasing advertising – at itthe cool off a hotbroker marketservices by making more difficultclients: to system, understanding that it will impact the economy borrow, up “cash a cooling economy selling jewelery aren’t necessarily same itheat hawks for gold” – is by loosening MortgageBrokerNews.ca. “But especially retail goods. Gradually up lending. Wefocused are cooling off in many markets,lookingsignificantly, for mortgage.

There is some nonetheless on customer reputation has more to do with your tighten theenough mortgage underwriting “standards” that weresaid never hot as Toronto and Vancouver. crossover, but not to explain service, theasjeweller/mortgage business practice than where you that have been perverted over the last 10 years.

Canadian institutional (read bank) mortgage the success.” professional behind it. practise an your business. Where lending has been on a 10-year roll, like drunks on a Will there be pain? No doubt about it. But Any connection between cash-for“I am a licensed mortgage agent,” business is conducted is not the bender, abetted by their “drinking buddy” CMHC. I uncomfortable pain now, beats an agonizing pain gold services and the mortgage Harold Gerstel, otherwise known as determining factor, but how the client later. agree that a 30-year amortization is too long a may, ultimately, damage the “Harold the Jewelery Buyer” to time in general, but maybe it should be allowedbusiness for is treated.”

– GTA Broker , 6.7

JULY 2011

BY

PRESENTED

ver.indd

6.7_Co

S FOCUBRO KERS SPECIAL GY: CK TECHNOLO FAST TRA ON THE

2011

D SS OKERS PROFILE THE CLA GAGE BR MORTWA : TOP OF 1516 T #4126 OTTA AGREEMEN NS MAIL PUBLICATIO

AM 3 12:39

11-07-1

1

Peoples Offers Choice:

CMHC & Conventional Mortgages for:

Single Family Alternate Equity Lending:

Multi-Family Rental Properties Senior’s Housing Projects Commercial Properties Construction Projects

Competitive Rates Equity Take Outs Purchases No Minimum Beacon Homeowner or Rental Flexible Income Verication Renewal Fees Available

Vancouver

®

Calgary

Suite 1115-Bentall Two 555 Burrard Street, Box 231 Vancouver, BC V6C 3K4 Fax: 604-683-2787 Email: vancouver@peoplestrust.com

Suite 955 808-4th Avenue SW Calgary, AB T2P 3E8 Fax: 403-266-5002 Email: calgary@peoplestrust.com

CMHC/Conventional Financing Brian Kennedy 604-331-2211 Jonathan Wong 604-331-2218

CMHC/Conventional Financing Dennis Aitken 403-205-8203 Daniel Stewart 403-205-8202

Toronto Suite 1801 130 Adelaide St. West Toronto ON M5H 3P5 Fax: 416-368-3328 Email: toronto@peoplestrust.com CMHC/Conventional Financing Michael Lombard 416-304-2078 Ady Steen 416-304-2089

Single Family Financing Tom Wollner 604-331-2210

19

mortgagebrokernews.ca mortgagebrokernews.ca | 23

Feature / Bob Ord

Where in the world is Bob Ord: A 37 chronology

1975

Progressive Funding Group

24 | mortgagebrokernews.ca

1976

KCR Investments Western

1977

KCR investments (Alberta)

Feature / Bob Ord

Bob Ord doesn’t mince words and he doesn’t often give interviews. Here’s an exception to the second and, thankfully, not the first

1978

Title Mortgage Corporation

1984

First Western Trust Company

1987

First Western Trust purchased by Counsel Corporation mortgagebrokernews.ca | 25

Feature / Bob Ord

I

n 1975, after only months on the job, Ord did 111 deals. That’s 111 deals in one month when not even his mother was quite sure what a mortgage broker did. He wasn’t about to slow down for the heady days of the 1980s, often creating new products on the back of cocktail napkins 30,000 feet in the air.

There have been many innovations in the intervening decades, among them creation of POINTS and basisPOINTS systems during his tenure at FirstLine, helping propel the broker channel to record levels of market share.

After 37 years in the industry, Ord is now an industry veteran and, having played an integral role in FirstLine, LSS, Mortgage Centre Canada, Mortgage Intelligence, Mortgage Architects, Radius (formerly myNext) and Filogix, he’s widely known as the industry’s innovator. Ord sat down with CMP to talk about the future of the industry he has no immediate plans to leave. In fact, he’s once again sketching out its future as chief executive officer for Invis-Mortgage Intelligence.

CMP: Why did you accept this new challenge with Invis/MI?

CMP: Some have suggested all of the big banks now in

Ord: MI has been the apple of my eye and I’m delighted

the broker channel intend to get out within the next five years. Do you agree?

to be back at the helm. It’s an awesome opportunity to work with a group of really great people at both Invis and MI.

CMP: Looking at the banks and the new tighter lending guidelines, where is the broker channel headed, back to alternative lending?

Ord: The A space is getting smaller and there will be a new form of financing coming into the market in the next 12 months. We will see large growth in that space and some brokers will have to re-learn the business; they’re not just in this business to do Triple A. You hear a lot of angst and concern with how much these new lending guidelines are going to stop the market, but I’m not on that page. I believe what Flaherty and Carney have done is prudent. I look at it as an opportunity, not as a problem.

Ord: This is a bigger issue than just the big banks leaving the channel. It’s about the historical creation of volume bonus, which was meant to reward efficiency and make the lenders more productive, but now the waters have been muddied. Volume aggregators jumped on the band wagon and recruited brokers at big splits while not providing core services such as compliance and with minimal control over their brokers. These aggregators are not managing broker efficiency, which has caused higher costs for the lenders. You have inexperienced brokers qualifying for volume bonuses only because they have joined an aggregator, not for their own quality business and pull-through ratios. The banks are the first to react to this because their primary distribution is their branches; they’re finding that their secondary channel has become too expensive so they are exiting. And there could be more backlash with the monolines as they too examine the whole volume bonus concept.

Where in the world is Bob Ord: A 37 chronology

1987

First Western name changed to FirstLine Trust 26 | mortgagebrokernews.ca

1989

FirstLine starts Mortgage Centre FirstLine

1991

Mortgage Centre FirstLine buys Equity Centre and becomes The Mortgage Centre Can.

Think reverse mortgages are expensive?

Think again!

With CHIP Home Income Plan’s new low rates, homeowners 55+ can now access up to 50% of their home equity at rates comparable to other home equity lending products.

But unlike these other products, with the CHIP solution: • no payments are required, until homeowners choose to move or sell • no income, credit or medical qualifications are needed • funds can be received as a lump sum or over time, giving your clients the flexibility they need

Why not tap into the potential of the growing seniors market and recommend CHIP? You’ll receive a referral fee, and we’ll look after all the paperwork for you.

To find out more, or to partner with CHIP, contact us:

1-866-536-2447 www.chipadvisor.ca

In addition, clients maintain ownership and control of their home.

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

Feature / Bob Ord Where in the world is Bob Ord: A 37 chronology

1992

FirstLine sold to Manulife CMP: Broker network consolidation is on the minds of many, is this really the direction the industry is headed in. Why? Ord: I don’t believe consolidation is necessarily the way it’s going to go. I believe there will be more brands rather than less and more brokers will be branding themselves down the road. Remember, this is a relationship business; it’s not an advertising business.

It’s referral based and it will continue to grow because of that.

CMP: What are your thoughts on commission splits?

Are they sustainable?

Ord: You get what you pay for. The really high commission split companies don’t provide services.

When volume aggregation is finally eliminated, which I think you’ll see coming down the road, we’ll begin to move back into a good space.

CMP: Recently some high-level brokers packed up and

1993

Ord gathers the founders of CIMBL

1995

FirstLine sold to CIBC

CMP: You were pivotal in the development of Filogix.

How is technology changing the broker business? For example, do you see it allowing the client to bypass the broker and go straight to the lender?

Ord: I don’t know how long Filogix will have the field to themselves. I think the movements in tech in the industry are going to be huge and I think there will be other solutions coming. But Filogix have certainly added value.

It has always been the rage to try and take out the intermediary, there will always be that element that wants to do business solely over the net and never meet anybody. But we’re at a point where we have that degree of complexity in the market that people want advice and they want choices.

CMP: This industry tends to skew to a fairly young demographic in terms of the age of agents and brokers.

Does it still afford professionals the kind of lifetime opportunities you seem to have won or is brokering

moved to different broker networks. Will we see more migration and why?

Ord: I think it’s really shortsighted. One of my friends got one of these offers and she said “I got this offer and I had to turn around to the other party and say ‘let me get this straight, I’m in a 50 per cent tax bracket which means I get to take home $100,000 of the $200,000 offered. I have 14 people who helped me get here so I would want to share it with them. The $100,000 works out to be about $14,000 a year on a seven year deal.

That’s about three-and-a-half deals in the Toronto market. You want me to lock myself in on a seven-year deal for three deals a year? Not to mention you charge my people an advertising fee every month: $213,000 over the next seven years and we can’t move!”

You’re getting this mobility today because it’s a tighter market and some people want the cash. There’s two great motivators in life, one is fear the other is greed.

It might be good for the broker in the short term but it’s not good for their people; I hope we don’t see much more of it.

28 | mortgagebrokernews.ca

You’re getting this mobility today because it’s a tighter market and some people want the cash. There’s two great motivators in life, one is fear the other is greed

Wouldn’t Wouldn’t it be be nice? nice?

PARTNER ZERO monthly MORTGAGE! marketing fees Wouldn’t it be nice to have a say in your own product; to always be paid at renewal; to not fight with a retention team for ownership of your client; to have platinum rates from your first deal; to have had an answer for 2.99?

(Partner had the rate AND the frills!)

Wouldn’t it be nice to have Partner Mortgage?

www.BoldResources.ca

Feature / Bob Ord increasingly a stepping-stone?

Ord: We’ve gone from backroom, to storefront and now we’re moving to the second floor. The industry is moving more toward white collar every day. There will always be the ambulance chasers and the guys that say ‘can’t get a loan? Come see me.’ But I think there is more value to this so down the road this industry will attract more B Comms and MBAs because it’s an interesting and rewarding profession and it will get more interesting as we go forward.

sources, not through advertising. Our immediate focus through our marketing and CRM will be to extricate our clients that we faithfully placed with FirstLine, which at one point was the ultimate broker advocate. Strong CRM with relevant and persuasive messaging will keep our brokers’ businesses growing regardless of market conditions.

CMP: You’ve kept your hand in the business. Is retirement something you’ve considered?

Ord: I have no desire to retire at this point in time, I’ve got too much energy, too much to give, and I just love this business.

CMP: Where do you see Invis MI going in the future?

Ord: We’re innovators and customer focused; MI was first brokerage firm in the industry with a CRM program. We’re going to put emphasis on having sophisticated CRM so we can reach out to our customers with both traditional and unique ways and with timely and sharp messages so we can bring more value and choice to our borrowers. In the last few years the banks have expanded their sales forces and we need to counter that through CRM. Our business is built on CRM and our brokers’ databases and referral

2000

Ord becomes EVP Filogix and starts Mortgage Intelligence

I have no desire to retire at this point in time, I’ve got too much energy, too much to give, and I just love this business

30 | mortgagebrokernews.ca

2002

Mortgage Intelligence sold to GMAC

2012

CEO Invis/ Mortgage Intelligence

2006

Ord appointed CEO of myNext Mortgage and Mortgage Architects

COVER / CMP top 75

An Overview

54

Total Funded Volume:

$4.8B

Total No. of Deals:

16,305

21

In its fifth year, CMP’s top brokers list received a record number of submissions and once more an increase in funded volumes. CMP reports on the results

C

ongratulation, Top 75! You’ve made Revenue Canada exceedingly happy.

Despite its challenges, 2011 proved more than profitable for so many mortgage professionals. We are celebrating our first-ever Top 75 Brokers list this year, but for an apples-to-apples comparison, consider the total funded volume of the top 50 on that list. Their combined volume exceeded last year’s Top 50 by more than $145 million. Now consider the bigger picture: The total funded volume for the entire CMP Top 75. It was a whopping $4.89 billion.

When all the submissions were gathered and doublechecked, 27 brokers from last year had reclaimed spots on British Columbia: 29 the CMP Top 75 for their individual funded volumes in

32 | mortgagebrokernews.ca

Total No. of Years in the business:

513

Average No. of Years in business:

6.8

Total Funded Volume of the Top 50:

$4B

Brokers By Province Ontario: 29

Quebec: 2

Nova Scotia: 2

Manitoba: 1

Alberta: 9

Saskatchewan: 1

New Brunswick: 1

COVER / cmp top 75 Rank

Rank 2010

Name:

Company:

Funded Volume

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

1

2

Dan Eisner

True North Mortgage

$412,827,787

1365

0

16

9

2

1

Gord Pipkey

Verico Realmortgage Services Inc

$239,186,097

712

1

2

15

3

3

Jim Tourloukis

Advent Mortgage Services

$232,063,928

622

1

2

6

4

7

Dave Butler

Verico Butler Mortgage

$153,359,778

603

3

4

7

5

5

Collin Bruce

Dominion Lending Centres Mortgage Mentors

$150,026,338

494

2

3

7

6

--

Jora Purewal

Invis

$129,575,061

400

3

0

10

7

--

Rob Regan-Pollock

Invis - Team Rob ReganPollock

$124,775,942

356

4

4

19

8

33

Jason Singh

Verico COD Financial Services

$114,340,198

314

1

2

6

9

8

Scott Travelbea

Dominion Lending Centres Travelbea & Associates

$108,825,260

298

1

2

8

10

--

Susie Inglis

Dominion Lending Centres Mortgage Evolution West

$101,266,167

225

2

0

18

11

--

Rick Sekhon

Verico The Mortgage Leaders Inc.

$100,000,000

210

2

0

7

12

--

Christine Xu

Argentum Mortgage and Finance Corp

$98,252,804

292

3

0

12

13

13

Greg Martel

Dominion Lending Centres Harbour View Mortgages

$82,000,000

200

1

2

5

14

17

Angela Calla

Dominion Lending CentresAngela Calla

$81,225,219

236

1

1

8

15

11

Christopher Bisson

The Mortgage Centre Complenetary Real Estate Services Inc.

$80,643,864

348

4

2

13

16

23

Mark Goode

Mortgage Man - Dominion Lending Centres

$77,802,473

435

2

1

11

17

16

Dustan Woodhouse

Dominion Lending Centres Canadian Mortgage Experts

$74,111,967

162

1

1

4

18

--

Skye McLean

Argentum Atlantic (HS) Financial

$72,354,741

185

0

1

5

19

--

Viktor Schaefer

Verico Onelinks Mortgage & Financial VS Mortgage Inc.

$68,013,858

330

5

0

10

20

--

Charlene Elliott

Dominion Lending Centres The Mortgage Hub

$67,466,635

125

0

1

7

21

26

Nick L’Ecuyer

Verico The Mortgage Wellness Group Limited

$64,293,126

287

4

1

5

22

--

Chad Robinson

Verico Best Interest Mortgages Inc

$64,000,000

219

2

0

10

23

24

24

--

25

20

Sharnjit Singh Gill

Verico Superior Mortgage Inc

$62,069,188

167

2

1

11

Clinton Wilkins

Centum Home Lenders Ltd.

$61,857,990

305

1

2

7

Debbie Belair

Dominion Lending Centres Smart Debt

$60,085,802

219

2

0

25

26

--

Rishel Tomlinson

Verico Custom Mortgages

$60,000,000

175

1

4

7

27

--

Larry Barkley

Home Loans Canada

$58,851,964

192

1

0

23

28

35

Deb White

Dominion Lending Centres White House Mortgages,

$57,209,951

218

1

0

13

29

--

Steven Brouwer

Dominion Lending Centres Drake Entrust Mortgage

$57,092,887

202

1

1

7

mortgagebrokernews.ca | 33

COVER / CMP top 75 Rank

Rank 2010

30

--

31

40

Name:

Company:

Funded Volume

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

Chris Landry

Verico Paragon Mortgage Group

$55,706,492

138

0

1

1

Sabeena Bubber

Verico Integre Mortgage Partners

$55,362,650

130

1

0

10

32

--

Victor Schnitzler

Axcess Finance Hypotheca

$55,312,928

121

2

0

6

33

48

Tonia Jacobsen

Dominion Lending Centres Canadian Mortgage Experts

$51,504,000

139

0

0

11

34

--

Tom Gasparec

The Mortgage Centre R.D.M. Financial Ltd.

$50,184,872

123

0

0

9

35

30

Luisa Hough

Verico Exclusive Mortgage Professionals

$50,000,000

115

1

1

8

36

39

Jeff Attwooll

Verico K-W Mortgages Inc.

$49,420,868

205

1

0

12

37

--

Nick Kaaki

Dominion Lending Centres The Mortgage Source

$47,623,575

197

2

0

10

38

--

Denny Segal

Dominion Lending Centres - Origin Home Financial Partners Inc.

$47,000,000

93

3

0

20

39

25

Jordi Browne

Verico Preferred Financing Inc

$46,182,206

176

1

1

10

40

--

Daryn Young

Mortgage Intelligence The Mortgage Firm

$45,372,875

166

1

1

13

41

19

Morris Briglio

Verico The Mortgage Advantage

$45,267,844

109

1

0

20

42

--

David Griffin

Dominion Lending Centres Griffin Financial Group

$44,796,066

234

1

0

8

43

42

Lisa Yun

The Mortgage Centre Innovative Mortgage Solutions

$44,500,000

110

0

1

12

44

30

Hal Tagg

Mortgageflex Ltd.

$44,362,300

172

1

2

7

45

--

Enza Venuto

Centum - Streetwise Mortgages

$42,000,000

320

1

0

7

46

36

Lance Cook

Invis Canada’s Best Mortgage

$40,698,476

114

2

0

15

47

--

Kuljit Singh

Mortgage Alliance AKAL Mortgages Inc.

$40,041,755

127

1

0

10

48

--

Rudy Dedic

Dominion Lending Centres Casa Mortgage Inc.

$39,605,098

85

2

0

7

49

--

Tracy Luciani Price

Dominion Lending Centres The Price Team Forest City Funding

$39,131,031

197

2

2

12

Yves Cormier

Verico Cormier & Cormier Consulting Inc.

$38,601,051

323

1

1

10

50 51

--

Carolyn Callero

Verico Premiere Mortgage Centre

$38,310,446

128

1

0

12

52

--

Jody Henry

Dominion Lending Centres Arrowsmith

$38,275,826

122

1

5

20

53

37

Bruce Gilkinson

The Mortgage Centre Gilkinson Financial

$38,141,068

218

2

3

11

54

--

Sherri Hislop

Verico Alliance Mortgage Group

$37,000,000

190

1

0

10

55

--

Dustin Lamoureux

Dominion Lending CentersHarbour View Mortgages

$36,420,000

89

1

0

5

56

--

David So

The Mortgage Centre Canadian National Mortgage Corporation The Mortgage Centre

$35,095,081

106

2

0

23

57

--

Terry Kilakos

Verico North East Mortgages

$36,852,000

140

1

0

4

34 | mortgagebrokernews.ca

COVER / cmp top 75 2011. In many cases, those numbers exceeded last year’s performance.

CMP is very proud of the diversity of this year’s list.

Brokers from eight out of 10 of provinces are represented, and for the first time in a long time, that includes Quebec.

Some of those same names appear on another first for CMP: The Small Market Top 20, which recognized the successes of top performers in markets where the average home price is $290,000 or less.

Together, both lists point to an unmistakable trend – one that brokers from Bonavista to Vancouver Island – have also noticed. While total funded volumes have grown, the gap is growing between the very top performers in this industry and other mortgage professionals.

The top five this year contributed nearly 25 per cent of the total funded volume for the entire list. Those in the middle of the pack ( Nos. 40 – 50) saw their individual volumes slip by as much as 40 per cent compared to the 2010 listing.

CMP congratulates all the mortgage professionals who took part in this year’s list. Each, as always, had to be employed as a mortgage professional, able to write

loans and their deals must have been personally originated. They also provided a breakdown of their deals by lender with contact information, which was verified by the CMP team. All deals were residential, and while back-office support in processing the loans is acceptable, no other parties received commissions on these deals.

you’ve arranged their mortgage for them, now let’s keep them coming back.

E Q U I T Y G R O U P LT D .

syndicate mortgage investments allows you to give your clients options for investing •

Fixed terms - standard 3 years (2-5 years on a project basis)

•

8% fixed rate interest annually

•

All funds fully invested

•

Cash, RSP, RESP, TFSA, RIF, LIRA and LIF eligible

We are the industry experts on SMI’s with a proven history of stable and rewarding investment products.

Titan Equity Group Ltd. Successfully growing portfolios seamlessly and securely.

Contact us at 905-760-2277 or www.titansinv.com

Disclosure: This announcement is not, and under no circumstances is it to be construed as, a prospectus or an advertisement or an offer to buy or sell securities. The SMI contemplated herein is offered only (i) in those jurisdictions and to those persons where and to whom they may be lawfully offered for sale and (ii) by persons permitted to sell this investment. No legally binding obligation is hereby created, or is to be implied or inferred, until all appropriate documents in final form are executed regarding the subject matter of this announcement. Licensed mortgage agents/brokers close all transactions. Approved persons and organizations, where permitted, may enter into a referral relationship with Titan Equity Group Ltd. (“TEG”) and The Mortgage Centre - Unity Financial Mortgage Services Inc. (“Unity”) (FSCO License 10457), the lead mortgage brokerage for TEG product, unless specifically noted otherwise and will be compensated for having referred, directed and introduced prospective investors/lenders to TEG and Unity. In some instances, the relationship is instead between a selling party/registrant and an issuer.

Please ask for more information. For subject properties outside of Ontario, there are unique provincial brokerage license numbers that will be included in all documents and materials.

TITAN Equity Group Ltd. 8600 Keele Street, Unit 3 Concord, Ontario L4K 4H8 office 905 760 2277

www.titansinv.com

mortgagebrokernews.ca | 35

COVER / CMP top 75 Rank

Rank 2010

Name:

Company:

Funded Volume

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

58

--

Adil Mawji

Invis

$35,000,000

70

0

0

4

59

--

Leonard Lane

Verico Brokers For Life

$34,703,433

74

1

0

5

60

--

Daniel Sauve

Verico: Mortgage Corp. Financial Services Inc.

$33,525,065

216

2

0

20

61

--

Lena Ohanjanians

Argentum Ultimate Mortgage and Finance Solutions Inc.

$32,892,983

88

1

0

6

62

--

Michael James

Dominion Lending Centres Mortgage Evolution West

$32,659,910

83

0

0

4

63

--

Brent Parnell

The Mortgage Centre Vertuity Mortgage

$32,400,000

160

1

0

4

64

--

Janet MacDonald

Verico The Mortgage Professionals

$32,103,592

151

1

0

9

65

--

Scott H. Bentley

Verico Premiere Mortgage Centre

$31,407,770

134

1

0

10

66

--

Todd Lovallo

Vertuity Mortgage The Mortgage Centre

$31,000,000

140

1

0

3

67

--

Anthony Spadafora

Verico Premiere Mortgage Centre

$30,605,092

102

1

0

7

68

--

Ken Lankin

Mortgage Intelligence Niagara

$27,480,000

170

0

1

14

69

49

Reed Harris

Verico Manifest Mortgage Corp.

$27,454,980

92

0

1

8

70

--

Chad Oyhenart

Dominion Lending Centres Aegis Mortgage Services Ltd.

$27,159,010

86

0

0

8

71

--

Judy Ivers

Dominion Lending centres White House Mortgages

$27,004,868

100

0

0

8

72

--

Stephen D’Souza

Dominion Lending Centres Client First Mortgage Solutions

$27,000,000

82

0

0

5

73

--

Catherine Evel

Dominion Lending Centres Homestead Financial

$26,938,250

105

2

0

13

74

--

Dave McNabb

Dominion Lending Centres Regional Mortgage Group

$26,700,000

107

1

0

15

75

--

Matthew Chan

Dominion Lending Centres Downtown Financial

$26,349,742

62

1

0

8

CMP Top 75 By the Numbers: By the Group

By the Province:

Total Funded Volume: $4,891,332,228 Median Funded Volume: $48,522,130 Total No. of Deals: 16,305 Average Mortgage Amount: $299,989 Total No. of Years in the business: 513 Average No. of Years in business: 6.8

Total Number of Provinces represented: 8 – Double last year’s Ontario: 29 British Columbia: 29 Alberta: 9 Nova Scotia: 2 Quebec: 2 New Brunswick: 1 Manitoba: 1 Saskatchewan: 1

Total Funded Volume of the Top 50: $4,086,253,118 (Up $145,524,443 from last year’s Top 50)

The number of brokers from last year’s list on the CMP Top 75: 27

36 | mortgagebrokernews.ca

CMHC’s 2012 MORTGAGE CONSUMER SURVEY

Released annually for over 10 years, the Mortgage Consumer Survey is a reliable source of insight into consumer behaviours, attitudes and expectations when acquiring, renewing or refinancing a mortgage. CMHC provides you with support, expertise, and the tools you need to effectively meet the needs of an evolving industry, helping you focus your time on serving your clients and managing your business.

Visit cmhc.ca/2012survey today to get the details of the 2012 survey results.

Everything you need to open new doors

COVER / CMP top 75

Canada’s

top five

brokers look back at 2011 If many agents found themselves sinking in the rough waters of 2011, several others saw their boats rise on the tide of competition. The CMP Top 75 includes 75 of those brokers who met the challenges of a cooling market and rate war head on. Five, in particular, steered their way to the top of that list, although it wasn’t an easy sail.

Here’s what the country’s leading five brokers have to say about the churning storm called 2011 and what exactly they did to navigate it.

#5 Collin Bruce Owner/Broker Dominion Lending Centre – Collin Bruce Mortgage Team Edmonton, Alta.

Cool markets, tighter credit, competition from the banks failed to dampen 2011 for Collin Bruce.

“It was a very good year for us overall,” recalls the Edmonton-based owner/broker of Dominion Lending Centre – Collin Bruce Mortgage Team.

Bruce maintained his No. 5 position from 2010’s CMP Top 75 Brokers list. His one major challenge was a major business restructuring his office went through last year when they brought in additional staff to business volume. “The restructuring had a positive effect on our business,” he says.

Focusing on strategic advertising helped his company succeed in 2011, according to Bruce.

“We redoubled efforts in advertising to attract more business. We were spending more than $54,000/month on ads,” he says.

Working closely with his advertising partners enabled Bruce to serve the desired message during certain market cycles. “For example in January when most people are interested in refinancing, we send out ads that focus on highlighting our refinancing services.

Around March when people are thinking about purchasing our ads switch to the purchase message,” Bruce says.

38 | mortgagebrokernews.ca

#4 Dave Butler Broker Verico Butler Mortgage Mississauga, Ont. Another broker who enjoyed 2011 was Dave Butler.

“2011 was a great year statistically. We increased our business about 20per cent across the board in units and volume from our previous year. We were especially happy to break the 600 deals in a year goal I had set for my staff,” says the Mississauga-based broker.

One of his biggest challenges was the transition to becoming independent.

“At the middle of the year, I made the decision to leave the Super broker that I had been with for 7 ½ years, join the Verico network and start our own brand, Butler Mortgage Inc.,” Butler say.

Verico was very instrumental in helping Butler weather 2011. “Change is not always easy to deal with.

Verico and everyone involved helped me make it a seamless transition,” say Butler.

#3 Jim Tourloukis Owner/Broker Verico Advent Mortgage Services Unionville, Ont. “Although we had another great year which saw our volumes grow (albeit by only

COVER / cmp top 75 10 per cent year-over-year), we found the year to be much more competitive than previous years,” Jim Tourloukis told CMP magazine in describing what 2011 meant for his company Verico Advent Mortgage Service in Unionville, Ont. He says brokers were feeling the squeeze from almost every side. “The banks started to compete more with an increased emphasis on their internal channels and road reps. Even worse, our two major lenders have also made it more difficult to deal with them as they continue to move towards less broker-friendly changes in the past 18 months.” says Tourloukis.

“At the same time we faced a lot more competition from other brokers. This was by far the most competitive year we’ve had in the last three to four years,” he added. “There was a bit more brokers fighting for the same slice of shrunken pie.”

He says the golden lining for him is that he has now diversified and added Scotia as a key lender and is looking for another lender to take up the other 40-50% of his business.

Tourloukis says, his company relied on corporate contracts to weather the year. “We didn’t go around chasing real estate agents like other brokers did. We refuse to do such work because with real estate agents, you’re only as good as the last deal.”

#2 Gord Pipkey Owner/Broker Verico Real Mortgage Services Richmond, B.C. Despite the tough business environment, Gord Pipkey, owner broker of Verico real Mortgage Services managed to post a commendable performance for 2011 although he is first to admit it was no cake walk.

“The market was softer and three times as intense,” says Pipkey, who was the country’s top broker in 2010 dropped to number two last year.

“We dropped value from $263 million in 2010 to $239 million in 2011. But just to achieve those numbers we had to work three times as much as we did in 2010,” Pipkey says.

Tougher mortgage requirements were also another major challenge, according to the Richmond, BC-based broker explains. “Because of credit tightening and the tougher qualification requirements set by lenders each transaction required more work and took longer to get an approval,” says Pipkey.

For example, he says, in 2010 it took an average of half an hour to prepare documents especially for

clients who have 35 per cent down on a property and have a notice of assessment. “But last year A lenders pulled equity lending off the shelf. We had to produce lots of supporting documents such as pay stubs, job letters and T4s. This translated to spending an extra hour or more per transaction,” Pipkey explains.

How did Pipkey’s company meet the challenge?

“We just did what we do best and worked harder,” he says.

#1 Dan Eisner CEO/Broker True North Mortgage Calgary, Alta.

Tighter credit had a ravaging impact on many mortgage businesses last year.

But for Dan Eisner the main challenges of 2011 had to do with brand image and staffing.

Eisner moved from No. 2 to No. 1 in the 2011 Top 75 Brokers list.

“2011 was a challenging year for us as we tried to integrate our new stores and our new employees,” says Eisner, CEO and founder of True North Mortgage in Calgary.

“We had to invest heavily into making our stores look and feel the way we wanted.

Finding good staff in a timely fashion was another major challenge. We started a few people and realized quickly that we made some bad decisions,” he explains.

“Fortunately, we now have a good, smart stable of employees that can help clients and grow the company,” he adds.

How did True North Mortgage chart a successful course through a stormy year?

“With luck and persistence.

Just like getting a tough mortgage deal done, you have to work the problem until a solution presents itself,” says Eisner.

mortgagebrokernews.ca | 39

COVER / CMP top 75

CMP Top 75

Christine Xu # 12

Broker profile Jora Purewal #6 Owner/Broker Invis Mississauga, Brampton, Oakville, Ont. Jora Purewal loves his profession but the Mississaugabased broker, No. 6 on this year’s list, won’t let that stand in the way of welcoming his new baby into the world this October.

“I expect it to be business as usual,” the Invis mortgage professional tells CMP. “But work will have to take a backseat when the baby calls for it.”

Purewal, who is normally up at 7 a.m. and does not leave his office until well after 7 p.m., has always reserved the weekend for family time, taking the occasional client call on his mobile only when it’s necessary.

Indeed, he’s had to allow for the intrusion, doing a whopping 400 deals in 2011, making for a total funded volume of $129.5 million.

A new baby may make a dent in this year’s volume, although not much.

“I should be OK,” says the 31-year-old. “I have a very good support staff. They won’t be taking care of the baby for me, but they’ll be looking after the office when I am home.”

Managing a mortgage business in Mississauga is no cakewalk. The city, along with Brampton, Oakville and Milton (areas Purewal also serves) are among the GTA’s fastest growing real estate markets.

In recent years, numerous home buyers of South Asian, Latin, and Polish descent have poured into the region marked by an average home price of between $400,000 and $450,000.

As a result, the area has quickly become saturated with brokers.

“Rate wars are a fact of life here,” admits Purewal. “This is where the product provided to us

by Invis is a great advantage.”

Invis, Purewal explains, currently offers a very competitive five-year mortgage at 2.94 per cent. “In a market where the typical offering is 3.09 per cent, it hasn’t gone unnoticed by clients.

It’s also blocked the number of buy-downs.

“There are times when I can’t avoid it,” he concedes, “Competition is very tough here. But these (buy-downs) make up only 15 per cent of my business.”

40 | mortgagebrokernews.ca

Christine Xu

Branch Manager Argentum Mortgage and Finance Corp Unionville, Ont.

When Christine Xu and her husband sought to buy a home more than 11 years ago, she discovered that there was a dearth of mortgage brokers with Chinese backgrounds in the Unionville/Markham, Ont., area.

That was ironic considering the influx of Asian homeowners, but it was also an opportunity Xu felt was too good to pass up.

“My husband and I had problems securing a loan because we were both self-employed,” says Xu, who immigrated to Canada from Shanghai in 1989. “I was thinking many Asian families would have the same difficulties as us and they would need a broker that can understand their needs and their culture.

“I basically had to find a way to translate the ‘mortgage agent’ into Chinese because there was no equivalent for it in the language.”

Xu, who previously worked as a financial adviser for Scotiabank, lost no time in getting her broker’s licence.

She mined the area’s lucrative ethic Chinese market and today the branch manager of the Argentum Mortgage and Finance Corp., is among the top tier brokers in the CMP Top 75 Brokers list for 2011.

“Early on, I decided I needed to focus on the Chinese community,” says Xu, who was an English and Literature major in China and holds a bachelor’s degree in Economics and Asian Studies from the University of Toronto. “That was where I had the advantage. I knew the language, understood the culture and was familiar with nuances of how we communicate.”

As much as 80 per cent of Xu’s clients are Chinese, she said. Currently, the average price of the Unionville homes she arranges mortgage on is between $700,000 and $800,000.

Markham’s growing Chinese population is also made up of strongly motivated buyers. After the handover to China of Hong Kong by the British in 1997 many wealthy Chinese immigrated to Canada. Many of them found their way to Vancouver and Toronto. In recent years investment in real estate in the area continues to be fed by people from Mainland China who are benefiting from that country’s economic boom.

COVER / cmp top 75

A controversial No. 1 Yes, he’s this year’s CMP top broker, and Dan Eisner is going to tell you why he alone deserves the title True North Mortgage CEO Dan Eisner moved up to CMP’s top broker spot this year, a testament, as he sees it, to a business model many brokers applaud and other criticize.

The arguments against it centre on who exactly gets the credit for mortgages originated in True North’s growing number of stores and the model’s reliance on interest rates and Internet lead generation.

Those upscale storefronts are now seven in number and scattered across the country in Vancouver, Calgary, Toronto, Montreal and Halifax. They employ 21 licensed agents and originated a whopping $412 million in funded volume for 2011.

CMP asked Eisner to speak directly to readers on the sustainability of True North’s business model, its overhead costs, financial rewards and, most importantly, why exactly he deserves to be the top broker on this year’s list.

On criticism from the industry:

“My reaction to the criticism is we wear it as a badge of honour because we know that if we weren’t succeeding nobody would care about what we were doing. I think the heart of the problem is that the way our model works it exploits the rules of this Top 75 game, it’s not like we designed it that way, it just happens to work out that way.”

On deserving his place on the list:

“I think there are two perspectives. From a lender’s perspective, they want to know if they can look at your business as one entity or a bunch of smaller entities.

With this perceptive, clearly lenders can look at us as one entity. They only need to talk to me to negotiate commitment volumes and interests rates. They need not speak to my sub agents to get buy in.

“For example, when First National came to True North Mortgage with a proposal, they spoke to me and only me. Once we agreed on a plan, on the first day we submitted 18 new mortgage applications. That’s without them speaking to any of my staff. I effectively control where the origination goes.”

“From a client’s perspective, it is how they discover us and where their loyalty lies. Clearly, nobody calls here for Dan Eisner, but they don’t call for anyone else either. They are loyal to the brand. We have never lost a client due to a departing employee. Clients love the highly visible store locations, the low pressure/ non-commissioned staff and of course our great rates.”

On who originates True North’s applications:

“In our case that is the wrong question. It is not “who originates the applications” but “what originates the applications. The “What” is our advertising and our great locations, it is also our forward-thinking pricing strategy.” Since I pay the bills I guess I am the “Who” On his business model:

We take the Walmart approach. Everyday low pricing.

We would rather make a little less on each client in order to attract more clients.

My time is spent finding ways to offer lower mortgage rates profitably. I don’t spend any time negotiating splits.

On whether his high-overhead model is less profitable than individual brokers’ models:

“I couldn’t say for certain. I have not seen any other brokers’ financial statements in order to compare.

However, given our cost structure, I would imagine our profit per deal is lower than average. Stores are expensive to build and rent and salaries are very significant costs. But we are proud to say we did make the Profit 50 list in 2009, 2010 and Profit 200 list in 2011.”

Rate buy-downs

We are comfortable with our policy towards rate buy-downs.

mortgagebrokernews.ca | 41

feature / small markets

The Small Market

Top 20

Size doesn’t matter, say brokers on this year’s list, but hard work and community spirit certainly do

Yves Cormier

Mark Goode

Small-market brokers step into the spotlight this year as CMP introduces its first-ever Small Market Top 20 list in conjunction with the Top 75.

“There are many brokers in smaller communities seeing great success and high volume,” Yves Cormier, a mortgage broker with Verico Cormier & Cormier Consultants in Edmundston, N.B., and No. 11 on this year’s list, with a total funded volume of $38,601,051 for 2011. “With average home prices lower than those of major cities, however, sometimes these accomplishments are more difficult to recognize unless these factors are taken into consideration.”

That was, in fact, CMP’s

thinking.

The Small Market Top 20 was open to all brokers and agents who did a minimum 80 per cent of their deals in markets where the average home price is at or below $290,000. They must be MLS-identified regions, cities or towns.

That cut-off is considerably lower than the national average, which sat at $372,460 in June 2011.

For the inaugural Small Market Top 20, brokers from Alberta, Ontario, B.C. and the Atlantic provinces shared that spotlight, many of them amassing total funded volumes that outstrip their counterparts in much pricier markets. That does mean they worked harder for their money, often doing 10, 20 or, even, 40 per cent more deals to pull it off.

“The price difference skews things a bit,” says

42 | mortgagebrokernews.ca

Cormier, “since the average home sells lower in our market, we have to close more deals to match their volumes.”

Mark Goode, broker-owner of Mortgage Man Dominion Lending Centres and No. 1 on this year’s Small Market Top 20 agrees. His total volume of $77,802,473 also clinched him the No. X spot on the Top 75.

“It’s a great initiative to start recognizing the difficulties faced by brokers in places like (my home market) Orillia, Ont., who have to compete with their counterparts in large markets like Toronto and Vancouver,” he tells CMP. The tail-end of 2011 was all the more challenging.

“With the economic downturn, some brokers saw a decrease in volumes by as much as 30 per cent,” he says.

Goode thinks the introduction of tougher mortgage rules this year will make 2012 even tougher but small market brokers just need to keep on doing what they do best.

His advice to brokers entering smaller markets is to make a sincere effort to become part of the community they service. For example, Goode and his team are active sponsors and participants in local soccer, hockey and lacrosse teams in Orillia. Goode is also a member of the chamber of commerce and sits on the hospital board.

“Get to know your clients, get involved in the community,” he says. “People want to know that you actually live and work in the community and not just driving in to get their business.”

That’s what Sarah Davison’s business is all about getting to know the community she serves. Still the industry’s acknowledgement helps.

“I think it’s wonderful that brokers in smaller markets are being recognized in this way,” says Davison, an agent with Mortgage Intelligence in Grand Prairie, Alta.

CMP small markets

$877 million

- by the groupTotal Funded Volume

feature / small markets

Big fish

in a growing pond Daniel Sauve # 15 Owner/Broker Verico Mortgage Corp. Financial Services Inc. North Bay, Ont. For Daniel Sauve, broker-owner of Verico Mortgage Corp. Financial Services, it’s a matter of pride that he was the “first mortgage broker” actually based in North Bay – then a shy little city in northeastern Ontario.

“We’re the oldest and biggest in the area,” says Sauve, now surrounded by the big and bold community sprung up around him. “We were the only brokers here from 1992 to 2004. Before that time, residents had to go somewhere else to find a broker.

You might say he’s now the big fish in the growing pond of North Bay, just off the coast of Lake Nipissing.

“There have been 12 years of uncontested growth in which I was able to build a solid client base,” he said.

North Bay has long been considered a railroad town. Apart from First Nations tribes, voyageurs and surveyors, there was little activity along Lake Nipissing until the Canadian Pacific Railway arrived in 1882. The city has a more diverse economy now, its largest employers being CFB North Bay, which maintains the NORAD control centre, along with Nipissing University, Canadore College and a new medical health centre.

Miners and hunters have long since been replaced by a new breed of tech-savvy professionals, although the population remains at around 54,000.

That hasn’t kept Sauve back. As a Small Market Top Broker, he was able to ring out just over $33.5 million in funded volume for 2011. That number represents 216 mortgages, which he says, is probably small compared to what brokers farther south are used to handling.

Not necessarily so, with Sauve having amassed a book large enough to rival many successful Toronto brokers.

Property prices are nonetheless lower than areas closer to Toronto.

Although there are properties worth around $780,000 to over $1 million in North Bay, Sauve said the average prices of homes are around $150,000 to the low $300,000s.

That growing upward mobility has brought in competition. There are now more than 20 other firms fighting for a share of the market in the city.

“For a small city, it has become a very competitive market,” he says.

His big advantage, according to Sauve, is that he has been around for much longer than most of the competition. “We have amassed a large client base even before they got here.”

Sauve has four other agents playing on his team, but he relies on family to keep his own accounts straight. “My children are great,” he says, with a smile.

“They have been doing my underwriting for so long now and have helped me achieve my funded volume.”

mortgagebrokernews.ca | 43

feature / small markets Rank

Name:

Company:

Funded Volume

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/Agent

1

Mark Goode

Mortgage Man - Dominion Lending Centres

$77,802,473

435

2

1

11

2

Viktor Schaefer

Verico Onelink Mortgage & Financial - VS Mortgage Inc.

$68,013,858

330

5

0

10

3

Nick L’Ecuyer

Verico The Mortgage Wellness Group Limited

$64,293,126

287

4

1

5

4

Clinton Wilkins

CENTUM Home Lenders Ltd.

$61,857,990

305

1

2

7

5

Steven Brouwer

Dominion Lending Centres Drake Entrust Mortgage

$57,092,887

202

1

1

7

6

Nick Kaaki

Dominion Lending Centres The Mortgage Source

$47,623,575

197

2

0

10

7

Daryn Young

Mortgage Intelligence The Mortgage Firm

$45,372,875

166

1

1

13

8

David Griffin

Dominion Lending Centres Griffin Financial Group

$44,796,066

234

1

0

8

9

Kuljit Singh

Mortgage Intelligence AKAL Mortgages Inc.

$40,041,755

127

1

0

10

10

Tracy Luciani Price

Dominion Lending Centres Forest City Funding - The Price Group

$39,131,031

197

2

2

12

11

Yves Cormier

Verico Cormier & Cormier Consulting Inc.

$38,601,051

323

1

1

10

12

Bruce Gilkinson

The Mortgage Centre Gilkinson Financial

$38,141,068

218

2

3

11

13

Sherri Hislop

Verico Alliance Mortgage Group

$37,000,000

190

1

0

10

14

Brent Parnell

The Mortgage Centre Vertuity Mortgage

$35,000,000

160

1

0

4

15

Daniel Sauve

Verico Mortgage Corp. Financial Services Inc.

$33,525,065

216

2

0

20

16

Janet MacDonald

Verico The Mortgage Professionals

$32,103,592

151

1

0

9

17

Scott H. Bentley

Verico Premiere Mortgage Centre

$31,407,770

134

1

0

10

18

Todd Lovallo

The Mortgage Centre Vertuity Mortgage

$31,000,000

140

1

0

4

19

Ken Lankin

Mortgage Intelligence - Niagara

$27,480,000

170

0

1

14

20

Judy Ivers

Dominion Lending Centres White House Mortgages

$27,004,868

100

0

0

8

The Small Market Top 20 by the Numbers: By the Province:

By the Group:

Total Number of Provinces represented: 8 – Double last year’s 10

Total Funded Volume:

3

On.

B.C.

4 2

1

N.S. N.B. Man.

44 | mortgagebrokernews.ca

By the Broker Network:

$877,289,050

Verico

Median Funded Volume: $39,586,393 Total No. of Deals: 4,282 Average Mortgage Amount: $204,878 Total No. of Years in the business: 193 Average No. of Years in business: 9.7

Mortgage Alliance

Dominion Lending Centres

The Mortgage Centre Centum

The ONLY national publication for Canadian Real Estate Investors

LOOkINg tO bump up CLIENt REtENtION? HE Lp YOuR CL IE Nts suCCEE d aN d gROw YOuR busI NEss at tH E sa mE tI mE! Whether your clients are homeowners or property investors, this money-making real estate source provides monthly information to help grow value through real estate.

puRCHasE 5 OR mORE gIft subsCRIptIONs

& RECEIvE 25% vOLumE dIsCOuNt OR puRCHasE a sINgLE subsCRIptION

wItH tHE Cmp REadER RatE 12 issues for $60 (promo code: SCMP1) 24 issues for $105 + fREE bOOk (promo code: SCMP2CI)

save up

to 25 on

%

bu subs lk/gift cript ions

spECIaL IssuEs & fEatuREs: ≠ ≠ ≠

Annual Property Forecast issue; learn how and where to make big profit Features on the value proposition mortgage brokers bring to investors Readers’ Choice issue; the most reputable real estate service providers are recognized

≠ ≠ ≠ ≠

Investment strategy guides (i.e. cash flow, capital growth & renovations) Real life success stories & expert advice Latest legal, tax & financial guides for secure investing More opportunities for international investment

For single subscriptions please visit our website: (Use promo codes above)

Online: canadianrealestatemagazine.ca For bulk/gift subscriptions please contact us at:

Email: subscriptions@kmimedia.ca

Telephone: 416-644-8740 Ext. 243

Feature / debt

Debtor’s

Potential

In the first of a three-part series on debt- and credit-challenged consumers, Nestor Arellano finds brokers now unlocking the business potential in those clients 46 | mortgagebrokernews.ca

Feature / debt For many mortgage brokers, there’s the temptation to show the door to people with bad credit.

But working with clients to rebuild rather than relegating them to don’t-call lists makes good business sense, according to Marcus Keller, owner Imperial Mortgage Group, in Calgary.

“Brokers who shoo away potential clients just don’t see the potential in people who come through their doors,” he says.

Keller rounded up a lot A-level business during Alberta’s oil-fuelled boom of the early 2000s. But as the economy slipped and companies began laying off, the pool of eligible AAA borrowers began to dry up.

“Suddenly people who were eligible for loans before could not qualify for a mortgage,” he says.

“We saw a lot of clients with I-4 credit ratings coming through the door.”

But through all the red ink, Keller saw opportunity and not the “hopeless causes” some brokers did. For example, many debt-heavy and credit-challenged consumers looking at buying have jobs or are self-employed. Most have hit a rough patch – a costly divorce, a death in the family,

CMP top 75

$16,305 - by the groupTotal No. of Deals

chronic illness – and that’s damaged their credit rating, he says.

In a number of instances, clients may simply have overextended their credit exposure.

“In Calgary, especially during the boom time, credit card Marcus Keller providers were very aggressive in marketing their products. Many people were not careful and had borrowed more than they could afford,” he says.

Canadians are carrying an average of $13,058 in personal debt, excluding mortgages, and less than one-third think they’re managing it well, according to a consumer confidence report released by RBC last year.

Tighter mortgage lending rules for insured mortgages and coming into effect last month are also expected to impact a significant number of borrowers, who would previously have qualified for

mortgagebrokernews.ca | 47

Feature / debt

The worse credit rating I saw, we were still able to remedy by referring the client to a credit counselling service a mortgage under the old rules.

Their number is expected to grow as well as the number of A deals expected to head south. It’s one reason why brokers are increasingly focused on sticking with clients who simply can’t qualify for A or alternative deals. Short-term private deals are usually off the table given interest rates.

Often the best move is to steer them toward rehab and wait to greet them on their way out. That isn’t as long a wait as many brokers think.

“I can easily get most clients eligible for a mortgage in as little as three to six months,” said Keller. “The worse credit rating I saw, we were still able to remedy by referring the client to a credit counselling service.”

The strategy can also serve as a differentiating factor for brokers who are constantly in competition with banks, according to Josh Balner, president at Compliance First Financial Corp. a debt rescue and financial consulting firm in Aurora, Ont. “Referring their financially troubled clients to financial consultants is what sets brokers apart from the banks. Institutional lenders do not offer this sort of service,” says Balner whose firm often gets receives clients sent to them by brokers.

The prospective borrowers that Compliance First Financial sees are generally shut out from loans because of badly damaged credit histories. “We negotiate on their behalf with the lenders or lender representatives such as credit collectors and lawyers. We do it in such a way that the arrangements reach does not leave a blemish on the client’s credit record,” Balner explains.

48 | mortgagebrokernews.ca

Susan Heim, executive director of the Community Credit Counselling Services, says her not-for-profit, operating in Toronto’s York region, now gets clients referred to them by brokers.

“With these clients we’re typically encountering people who have stable jobs, but are in need of some budgeting and debt management program to get their credit rating back in shape,” she says.

In many cases, their credit ratings have taken a hit because of missed credit card payments or spotty loan repayment histories.

The afflicted generally go through a 12-to-60 month budget and credit management program to help them obtain manageable payment agreements for their debts and help them stick with the payment schedules. After the debts are paid in full, the service also helps them update their reports with Equifax and TransUnion.

Elena Jara, director of education for Credit Canada, says in many cases it takes about two years for clients to successfully complete a debt management program.

Elena Jara

Feature / debt “At the end of the program, we refer our clients to a bank to help them get signed up for a secured credit card,” she says. “This helps them rebuild their credit record and prevents them from falling into the same hole again.”

Credit Canada also occasionally encounters clients who were referred to them by a mortgage broker.

“We would hope that brokers would refer more people to us because we offer an important preventative solution that will be helpful for their clients,” Jara says.

For example, proper debt management and budgeting can help people with bad ratings obtain a new mortgage and maybe even prevent their problems from “snowballing” to the point where they ultimately lose their homes.

“Credit counselling shouldn’t be seen as a last resort,” argues Jara. “The earlier we get to work on a situation, the faster it can be remedied.”

Increasingly, brokers are singing the same post-housing-market-boom tune.

Greg Nowik, a lead mortgage planner with Mortgage Architects in Nanaimo, shares the same philosophy as Keller.

“We never turn away anyone, because anyone can be a customer someday,” he says.

A mortgage broker for over 22 years, Nowik said he builds his client list with the help of parents who refer their children now ready to purchase their first home or people who refer extended family members.

“When it comes to coaching clients to rebuild their credit, parents can be a great help because they’re always there to provide support and guidance as well,” he tells CMP. “Remember bad things sometimes happen to good people.”

When clients with bad credit come to his office, the first thing that Nowik does is to sit down with them and determine where their financial situation is. “In most cases what needs to be done is for the client to stick to a budget in order to pay down a debt,” he says.

In the case of a young couple, for instance, Nowik

We never turn away anyone, because anyone can be a customer someday

found that the man had a good credit rating but the woman’s rating was in, ahem, a bad shape.

“I sent her to a local bank where they set her up with a secured Visa card and an RRSP loan to help rebuild her credit,” recalls Nowik. “Within three months they were ready to buy a new home which they intend to do this fall.”

The message for brokers is even more straightforward.

Turning away clients with bad credit is “kissing away opportunity,” says Nowik. “If you help someone when they’re stuck, they’ll be loyal to you for life.”

CMP top 75

$299,989 - by the groupAverage Mortgage Amount

mortgagebrokernews.ca | 49

Business / marketing

WHAT

NOW? Well, 10 benefits for your employee mortgage program, of course, writes Doren Aldana

50 | mortgagebrokernews.ca

Business / Marketing In my previous article, I shared eight exciting advantages of Corporate Benefits Marketing and why you should strongly consider adding this powerful strategy to your marketing arsenal. I also gave you several reasons why I believe this one marketing method has the potential to outperform and out-produce all your other marketing methods combined! In fact, I know a lady who closed over three hundred deals per year, just with this one strategy. Do you think there might be some potential here? You bet there is!

At this point you may be thinking, “OK Doren, this sounds kind of interesting but what exactly am I going to offer these employers that will get them excited about promoting me to their employees? What specific benefits will I be offering in my program? Good question.

Here are 10 terrific benefits you would include in your program:

1

Free credit consultation. To make this

worth your while, I recommend restricting it to clients who are planning to buy or refinance in the next six months. The first step is to pull their credit report and review their history to identify where they need help.

Then you would walk your client through the report, educating them on how their credit score is calculated, how to improve it, how to protect it and if applicable, how to get themselves mortgage-ready faster.

2

Free appraisal or one-year home warranty. Typically, the mortgage

professional would get the client to pay for this upfront and then they would be credited back upon closing. I’d recommend limiting this with a minimum mortgage amount of say $250,000 so it is still profitable for you.

Crunch the numbers for yourself and make sure it makes sense.

do choose to pay out of pocket, as I said earlier, the client typically pays the fee and then they are credited back -- all or a portion of it --upon closing. Since rules vary depending on location, be sure to review your local rules and regulations before implementing this.

5

Special rates for homeowners insurance. In this case, you partner

up with a top-notch insurance agent and ask them what special rates they could offer exclusively for clients who participate in your benefits program. Chances are they may be able to swing something special, and then you can tout it on your list of key benefits.

3

Financing options. Promote the fact

that you can help your clients buy with as little as 5 per cent down, less than perfect credit or no income verification.

Providing these creative financing options can help your clients get into a home of their own sooner. That’s a great benefit you want to emphasize.

4

Discounted closing costs. This could

include the home appraisal, legal fees, home inspection, etc. The amount you discount is entirely up to you. Typically, it would be somewhere between $250 and $500 worth of closing costs. In many cases, if you are recommending a particular service provider as one of your “Preferred Vendors,” you can get the service provider to concede a significant discount, which doesn’t cost you a penny! If you mortgagebrokernews.ca | 51

Business / marketing

6

Discounts on Realtor services when buying and/or selling.

This would involve partnering with one, two, perhaps even three top-notch Realtors in your area to become your “Preferred Realtor Partners.” Depending on how large your town or city is, you may want to break it up into different markets and have one real estate agent per market area.

Alternatively, you could position them as exclusive providers based on specialty. For example, one could be a Sellers’ Agent and another could be a Buyers’ Agent. So there are a variety of ways you can do this. The key is to build your “Dream Team” of top-notch service providers and then you plug them into your program.

As you find ways to send more business to your Dream Team, the more they’ll be motivated to send business to you! The Law of Reciprocity states that the more you give, the more you gain. In other words, givers gain. You can’t help but receive more as you give more. By launching and building your own Employee Mortgage Benefits Program, you’ll have a powerful vehicle for giving more referrals to your Dream Team and as you do that, you’ll be amazed how referral partners start flocking to you like moths to a porch light. This is because you’re not just a parasite mortgage chump asking for business, you’re actually providing them REAL VALUE by giving them business they wouldn’t have had otherwise.

OK, let’s cover a few more benefits...

The key is to build your “Dream Team” of topnotch service providers and then you plug them into your program

7

Mortgage professionals dedicated to your employees. When you speak

to the HR manager or the owner of the company, you can talk about how their employees will have an in-house mortgage expert dedicated to their employees -- to help them avoid costly mistakes. That’s a valuable benefit.

8

Free mortgage advice. Information is power. The more valuable

information you can provide the employees, the better. A great way to do this is to deliver educational seminars or “Lunch and Learns” in the workplace. This can be very effective because it gives you an opportunity to build rapport, connection and trust with the employees, by positioning yourself as a their advocate. If you really want to tip the scales of fortune in your favour, bring some pizza, pop, doughnuts, etc. They’ll love you for it! And chances are, you’ll attract more closed deals.

9

Free retirement planning sessions. To make this work, you’ll

want to partner with an excellent financial planner who you’d feel good about recommending to your clients. Any smart financial planner will see how offering complimentary sessions will help them attract more business. You’re adding value to the financial planner by sending them a steady stream of prospective clients and they’re adding value to you by offering something of benefit to the employees. It’s a perfect win-win!

52 | mortgagebrokernews.ca

Business / Marketing

10

Free cost of borrowing analysis. This is particularly

relevant for homeowners who already have a mortgage. By providing a free analysis, your clients would have an opportunity to assess their current mortgage and ensure they’re getting the absolute best mortgage, with the best rates and terms available. If they decide not to refinance, remember to ask for their renewal date so you can capture their future business.

So there you go. I’ve just given you 10 compelling benefits you can offer within your Employee Mortgage Benefits Program. And that’s just scratching the surface of what’s possible! In my next article, I’ll reveal the best types of companies to target, so you get the best return on your investment of time, energy and money. I’ll also teach you how to compile a “Hit List” of companies to start marketing to. Stay tuned…

About the writer: Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach and recently won the “Best Industry Service Provider” award at the 2012 Canadian Mortgage Awards. Since 2005, he has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions. For a free online workshop on “How to Launch Your Own Employee Mortgage Benefits Program,” visit: www.Done4UMortgageBenefits.com

mortgagebrokernews.ca | 53

STATISTICs / RESIDENTIAL RESALE ACTIVITY

National picture

at-a-glance

Sales activity declined by 1.3 per cent in June compared to May 2012, posting the second monthly decline since January. Activity ran only slightly above the five- and 10-year averages for June.

Price gained accelerated in Calgary and remained strong in Toronto but continued their slowing in Greater Vancouver.

“Canada’s housing market lost a little altitude in June, but it is still flying pretty high,” says Wayne Moen, president of CREA. “That said, sales activity and average prices bucked the national easing trend in a number of markets, which underscores that all real estate is local,” he adds.

Activity receded in about 60 per cent of all local markets in June as compared to May, led by the Greater Toronto Area, where sales, nonetheless, remained above levels recorded over most of last year.

Monthly sales declines elsewhere overshadowed improving activity in the Ottawa-Gatineau region as well as in Newfoundland and Labrador.

Actual (not seasonally adjusted) activity remained 4.4 per cent above levels in June 2011, and also stood above the reading for June sales in the previous three years by a similar margin, reflecting volatile spring markets in each of the past four years.

The decline in sales activity combined with an uptick in new listings resulted in a more balanced national housing market in June. The national sales-tonew listings ratio, a measure of market balance, stood at 51.7 per cent in June 2012, compared to 53.1 per cent in May. Based on a sales-to-new listings ratio of between 40 to 60 per cent, nearly two-thirds of all local markets were in balanced market territory in June as the number of sellers markets declined.

New home listings rose 1.4 per cent in June compared to May with Toronto leading the infusion of new housing. About 42 local markets, out of the 100 markets nationwide, registered a monthly increase in new listings by at least one per cent.

The actual (not seasonally adjusted) national average price for homes sold in June 2012 was $369,339, down 0.8 per cent from the same month last year. Average sales prices in June were up year-on-year in about seven out of every 10 local markets.

Year-over-year gains eased in all benchmark housing categories except one-storey single-family homes. Fueled by increases in Greater Toronto and Calgary, prices in this category rose at the fastest pace in nearly two years in June

This month’s roundup looks at the most recent data on residential new listings and resale activity

New Listings

(year-over-year percentage change) Source: CREA

British Columbia

-3.1%

Nova Scotia

-5.9 %

Alberta

-3.2 %

-10.1%

Saskatchewan

-7.4%

Prince Edward Island

Manitoba

2.9%

-3.8%

Ontario

-0.1%

Newfoundland & Labrador

Quebec

2.0 %

Northwest Territories

-10.5%

New Brunswick

-1.0 %

Yukon

25.4

54 | mortgagebrokernews.ca

STATISTICs / RESIDENTIAL RESALE ACTIVITY

Sales Activity

(year-over-year percentage change) Source: CREA

British Columbia -13.8%

Saskatchewan 5.7%

Nova Scotia

Swift Current Saskatoon

South Shore Yarmouth

37.2% 11.4%

9.5% 20.8% 10.3%

Northern Light 6.1% BC Northern 5.9% Quebec -0.2% Quebec (CMA) Montreal

5.8% 0.5%

Manitoba -2.7% Thompson Brandon Alberta 8.1% North Eastern 49.5% Calgary 16.7% Medicine Hat 31.1%

25% 18.4%

Ontario -7.5% Quinte & District 24.3% Cambridge 20.1%

New Brunswick -0.3% Northern Saint John

19.2% 4.4%

mortgagebrokernews.ca | 55

Profile / industry

It isn’t often brokers look to academia to solve their problems, writes Jamie Farshchi, but one academic thesis is looking at them

56 | mortgagebrokernews.ca

profile / industry n academic thesis is providing a snapshot of the mortgage broker industry in 2010 at the same time foreshadowing today’s market, where rates aren’t always enough to win the day and client perceptions aren’t always the most favourable.

“The inherent individualism of the broker industry, combined with the lack of national standards of education until 2004, has resulted in an inconsistently trained and experienced workforce,” concludes Andrew Williams, in a 2010 study of Canadian brokering, developed as part of an economics honours program at Acadia University in Nova Scotia. “Despite the advantages of being able to obtain lower rates, brokers are still limited in their appeal to Canadians.”

While the thesis looks at consumer perceptions of mortgage brokers as they existed two years ago, it manages to outline the main challenges facing the industry today.

Williams applies an academic’s hand to those difficulties to articulate the main stumbling blocks ahead. According to his paper, broker inexperience, industry fraud, the Big Five’s advertising dominance and those same consumer attitudes are frustrating the industry’s success story.

Most challenging perhaps, according to the economics research, is that in spite of a significant increase in industry standards and regulation over the last eight years, young, poorly trained brokers are hindering the profession’s ability to compete with the banks.

Paul Therien, director business development at Centum Financial Group, says the thesis paints an accurate picture of how the broker industry is perceived by consumers.

“There’s a pervading attitude among consumers that brokers are a last resort,” he tells CMP. “A broker used to be where you went to get a loan

Paul Therien

A broker used to be where you went to get a loan when you couldn’t get one anywhere else, I think that perception hasn’t really gone away when you couldn’t get one anywhere else, I think that perception hasn’t really gone away.”

The paper cites high levels of fraud and the relatively short lifespan of the industry – just over 50 years compared to Canada’s 195-year-old banking industry – as the cause of the industry’s limited appeal.

While fraudulent activity exists, writes Williams, it is understandable that consumers are not as satisfied with brokers as they are with banks.

“The vast majority of brokers are legitimate and trust worthy,” the findings continue, but “a fringe minority is causing significant damage to public

MortgageBrokerNews.ca Reader Poll Is CIBC’s offer of 5 cent for every FirstLine BasisPOINT fair?

Yes

55%

No

44% mortgagebrokernews.ca | 57

Profile / industry

perception of the broker industry.”

The Big Five makes a number of appearances throughout the thesis as a substantial threat to the brokerage industry, Williams asserting it’s the banks’ size, pervasiveness, and advertising budget that pose the greatest risk – a fact brought home this year as brokers struggled to grow market share in a sustained and highly-publicized rate war.

“Combined, the Big Five banks have over 5,000 bank branches and employ close to 300,000 personnel nationwide” writes Williams. “This significant presence within Canadian communities allows for an unrivalled access to consumers as well as control over the distribution of market information.”

Canadian banks are widely regarded as some of the best in the world and their stability during the financial crisis only worked to increase consumer confidence.

The financial crisis tainted the Canadian consumer’s view of the broker industry, says Therien, who has reviewed Williams’ conclusions.

“When this thesis was written in 2010, the fall out from 2008 hadn’t quite settled yet and everywhere you looked in the media it was about mortgage brokers,” says the Centum exec. “Our ties to the United States give us a lot of benefit, but it’s

58 | mortgagebrokernews.ca

not always positive.

“Unfortunately we have a lot of issues that we’re painted with the same brush when we shouldn’t be.

Are their quality concerns? Sure. Are there the same concerns in the banking industry? Probably, but they’re bank employees so the banks aren’t going to run around saying there are quality issues in the business. What employer would?”

The thesis says the massive advertising budgets of the banks has played a large role in helping win them the lion’s share of mortgage customers.

Therien agrees.

“The banks have advertising war chests that are bigger than what the broker industry has combined,” he says. “Canadian banks have had a big headstart in building a reputation and there’s unification between the banks’ corporate image and what customers experience when they walk into a branch.

“The banks can largely dictate the experience of the customer, (and while) they’re not always successful – we’ve all had bad experiences with banks – for the most part, they’re pretty consistent.”

Indeed.

“There’s unification of brand and unification of the customer’s experience,” says Therien, who introduced the thesis at the CMP Mortgage Summit

CMP top 75

513

- total No. of Years in the business

profile / industry this spring. “In the broker industry we don’t have that and that’s predominantly because we are franchise organizations. Is the corporate image you see in advertising reflected when you walk into all of their branches? It’s not. That’s a reality. So there are challenges.”

But it’s not all bad news. The thesis acknowledges the steady gains the broker industry has made over the last 10 years, gradually increasing market share. It also notes that recognition of industry limitations has led to the creation of stronger industry associations such as the CAAMP and, while brokering is largely a referral business, visibility via non-traditional advertising channels, such as the Internet, is allowing brokers to inexpensively target an tech-savvy generation of first-time homebuyers.

There is value for broker’s in the points raised by the thesis, says Therien.

“Nobody likes having their faults pointed out,” he says.”While this thesis isn’t exactly criticism, it doesn’t paint the rosiest picture in the world. I think it’s important to understand this (Williams) is somebody who doesn’t work for a bank, he’s not a

broker he’s neutral. So people may look at it and think he makes some valid points and those points they find value in they’re going to say, ‘OK, what can I do in my business? how can I change this?’”

The hope is the broker industry will consider the points laid out in the thesis and use that information to improve the industry as a whole, he says.

“As a franchise organization, we can do everything we can corporately to try and influence the customers’ experience, but ultimately the most powerful brand building tool and service experience tool we have are the agents and the franchise owners who are the frontline to the consumer,” concludes Therien, “and I would hope that some of them would look at this thesis and say ‘Ok how do I change this?’”

achieve more with a CRU designation

A finance designation from REIC increases your visibility. The CRU designation (Certified Residential Underwriter) signifies you have added depth of knowledge, experience and a commitment to high business standards and ethics. Be the candidate employers and clients select and increase your career and earning potential.

Visit www.reic.ca or call 1-800-542-7342 for more information.

learn more achieve more mortgagebrokernews.ca | 59

Profile / favourite things

Favourite things‌

Allan Kates

Broker and VP of Sales, Verico Northwood Mortgage Toronto, Ont.

Book: 7 Habits of Highly Effective People Drink: Vodka and club soda with a lime wedge

NEW Mortgage Product:

All-inNEW Mortgage Term:

year fixed mortgage

Music: Rock

y, ego Ba n: Mont

Vacatio 60 | mortgagebrokernews.ca

a Jamaic

Se Submis pte sion mb s Clos er e 14

Rank, Reward, Roust (?) ...your lenders ThiS iS yOur OPPOrtunity tO send the MOst infLuentiAL MessAge tO yOur Lenders Change today’s lending environment now!

• Acknowledge your best lender • Provide positive feedback • Ask lenders to step up to the plate CMP magazine is calling for submissions for the annual Brokers on Lenders special report featured in the October issue.

Submit before September 14 to have your say!

www.mortgagebrokernews.ca

GUEST / column

calling all banks Brokers aren’t going anywhere, nor are the banks, says mortgage associate Jim Black, so it’s time they focused on backing each other up

62 | mortgagebrokernews.ca

It’s no mystery that most chartered banks across Canada would love to rid themselves of the broker channel if they could. In reality, however, the broker channel is so large now that it would be very difficult for any event or change to completely eliminate brokers altogether.

I believe the single biggest improvement this industry requires is for a major chartered lender to truly embrace the broker channel. Brokers do have some white-label offerings via their brokerage houses but, since they’re offered through monolines, they don’t offer the product mix, basket of extra services or branding that chartered banks have available and currently only offer in-house.

If we had a lender step forward and embrace the broker channel and allow us to “own” the client via their brand, it would benefit the lender and the broker. If I had instant access to a client’s real-time information (balance, amortization, renewal, etc), wouldn’t that be wonderful?

If my client called the bank for anything, and they simply referred the call back to me, wouldn’t that be ideal? What if I could offer sensible unsecured credit and banking solutions? If they worked out a fair compensation model so that at renewal

we BOTH wanted to renew the client with the same lender, that would be quite the partnership.

Now, I’m not saying banks could or should offer this to all brokers and agents across Canada. But they could easily set up a partnership with a group of select high-producing brokerages. This would be a mutually beneficial relationship – it would provide an advantage for some brokerages and, in return, the brokerage would have to place minimum volumes with that bank; ie, $50 million.

Until we have a true partnership established you’ll see lenders with cutthroat rates, lenders offering better rates to a client at renewal than a mortgage broker can get via that lender, lenders offering early renewal with no payout penalty that’s not available to the broker and brokers will continue to move clients from perfectly good lenders at renewal time simply because they have to feed their families – and often for no added benefit to the client.

MonCana Bank of Canada may be a perfect example of how to treat brokers well. The bank says it will offer great underwriting service (No. 1 for most established brokers), a range of products

guest / column

AND pay 50 bps on renewal, ensuring the broker won’t switch out the clients for no apparent reason. And they will not have mobile specialists or in-branch staff attempting to step in and cut the broker out of future business. This represents a desire to forge true long-term relationships with brokers.

MonCana is a 100 per cent Canadianowned bank that’s completely focused on servicing clients through its broker relationships – through a network of select brokers.

It’s now easier than ever to seek out elite brokers/agents. When I entered the business in 2005 there weren’t many high-producing brokers. Now, many brokers are becoming better business people and, therefore, better producers.

They all have CRMs, work their databases and have teams to process the loans. So, whereas a broker’s capacity may have been 50 loans per year five years ago, that same person can now handle 150-plus loans.

Where brokers used to ignore renewals, they now contact them regularly throughout the mortgage term and at renewal time. More business is being done by fewer brokers, so being able to partner with banks for exclusive product access

just makes sense.

Going forward, I believe you’ll have to be a rainmaker and crush it, or find something else to do! As the mortgage landscape continues to evolve and change, large brokerages and high-producing brokers will earn client and lender trust, and write the majority of mortgage loans going forward.

The good news is the industry is still full of opportunity for established, effective and creative mortgage professionals looking to help their clients.

Regardless of whether it’s harder to place mortgages or qualify clients, the amount of outstanding mortgage debt keeps increasing and isn’t just going to disappear.

So even if a broker can understand how to tackle the renewal market, they could earn a fulfilling living by building a great business.

About the writer:

Jim Black, AMP, is a mortgage associate and owner of Dominion Lending Centres Mortgage Excellence based in Lethbridge, Alta. (www.jimblack.ca).

mortgagebrokernews.ca | 63

service / directory Banks

Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 31

Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 23

B2B Bank b2bbank.com/mortgages Ph: 1.800.263.8349 Inside Back Cover

Bridgewater Bank www.bridgewaterbank.ca Ph: 1 888 837 2326 Page 9

Radius Financial www.radiusfinancial.ca Ph: 1 877 369 6398 Inside Front Cover

HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 27

TM

Home Loans Canada www.hlcmortgages.com Ph: 1 866 452 1821 Page 3

RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 19

Tribecca Finance Corporation www.tribecca.ca Ph: 416 225 6900 Page 53 Commercial Lenders

ROMSPEN Investment Corporation www.romspen.com Ph: 1 800 494 0389 Page 1

National Bank www.nbc.ca Ph: 1 888 483 5628 Page 16

Technology & Software

Non-Bank Lenders

Canadiana Financial Corp

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

Canadiana Financial Corp. www.canadianafinancial.com Ph: 1 877 672 7219 Page 21

Titan Equity Group www.titansinv.com Ph: 905 760 2277 Page 35 Insurance

D+H Limited Partnership www.dhltd.com Ph: 1 866 345 6449 Page 2 Real Estate

Capital Direct www.capitaldirect.ca Ph: 780 868-0550 Page 10

Canada Guaranty Mortgage Insurance Company www.canadaguaranty.ca Ph: 1 866 414 9109 Page 15

Equitable Trust Company www.equitabletrust.com Ph: 1 866 407 0004 Page 5

Canadian Mortgage and Housing Corporation www.cmhc.ca Ph: 1 888 463 6454 Page 37

Canadian National Association of Real Estate Appraisers www.cnarea.ca Ph: 1 888 399 3366 Page 20

Real Estate Institute of Canada www.reic.ca Ph: 1 800 542 7342 Page 59 Services

Fisgard Captial Corporation www.fisgardmortgage.com Ph: 1 866 382 9255 Page 18

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

Compliance First Financial www.compliancefirstfinancial.com Ph: 1 800 380 7074 Page 47

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

The Lions Share Group www.lionssharegroup.com Ph: 1 866 726 5159 Page 12

Broker Networks

Home Trust www.hometrust.ca Ph: 1 877 903 2133 Page 7

ING Direct www.ingdirectbrokerteam.ca Ph: 1 800 574 5629 Page 43

64 | mortgagebrokernews.ca

INVIS Mortgage Intelligence www.invis.ca • Ph: 1 866 854 6847 Pages 29

NEW NAME. SAME 100% BROKER FOCUS. [And 0% focus on competing for your business.]

A new mortgage lender is finally here. Well, we’re not really new, but our name is. You’ve worked with B2B Trust as the administrator of Laurentian Bank broker mortgages for over 10 years. Now we’re B2B Bank, offering our own suite of mortgage and credit products. One thing hasn’t changed though, and that’s our 100% focus on brokers.

And, we still offer: • The same great rates, service, business development team, products and parent company (Laurentian Bank of Canada).

• One-on-one service that helps you get your deals funded.

• Adjudication decisions within 1 business day.

b2bbank.com/mortgages

1.800.263.8349

BANKING THAT WORKS

LOANS

MORTGAGES

BANKING SERVICES

DEPOSITS

FOR BROKERS ™

SELF-DIRECTED

Service to mortgage brokers in all provinces, except Quebec. Mortgage applications received by the B2B Bank Broker Mortgage Centre after July 7, 2012 will be funded by, and registered in the name of, B2B Bank. Mortgages and lines of credit are subject to credit approval by B2B Bank. Some conditions apply. B2B Bank is a wholly-owned subsidiary of Laurentian Bank of Canada. ®B2B BANK is a registered trademark of B2B Bank. ™BANKING THAT WORKS FOR BROKERS is a trademark of B2B Bank.

Why wouldn’t you take advantage?

Introducing a new online resource designed to help you connect with the tools and helpful information needed to stay ahead of the competition.

The Genworth Edge Resource Centre offers a full suite of resources designed to enhance your professional skills, increase your brand awareness and build long lasting relationships with your clients.

Visit GenworthEdge.ca and take advantage!

The Homeownership Company Š 2012 Genworth Financial, Inc.