CMP 8.03

SLOW MARKET

MARCH 2013 / ISSUE 8.3 / $6.95

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MORTGAGE RULES

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R E K BRO L L O P T N E M I T N E B20 S

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Exposing your concerns over mortgage rules, an attack by the banks and the government’s next move CALUM ROSS CATEGORIZE AND CASH IN

RON BUTLER A RATE SITE MAKEOVER

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ON IRD CALCULATIONS

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CONTENTS / ISSUE 8.3 FEATURES

6 | Letters to the Editor

22 | Not all clients are created equal No need to treat all clients alike, says top broker Calum Ross

8 | Reading between the Lines The devil is often in the details, as Michael Sjerven of Verico Vivid Mortgage found out, sharing his long quest to have a lender honour its renewal obligations 9 | Penalty Puzzle The Rubix Cube has nothing on how some lenders calculate prepayment penalties 16 | Broker to Broker Can rate comparison sites be turned from foe to a broker’s friend? Ron Butler says ‘yes’

issue

8.3

28 | Housing statistics The numbers are in – and they are in the red 40 | CMA Finalists The best of the mortgage industry will gather for the 2013 CMA Awards 42 | The Migration East?

Credit unions taking a deep breath before making the leap to go national

50 | Fraudsters head for commercial ground A tough residential real estate market means fraudsters are on the move to commercial, but should the buck stop with brokers?

54 | GIC Advice Home Trust has already handed brokers the gift of GIC referrals, writes Benjy Katchen. Now here are the instructions on how to build ‘em

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MARKET MATTERS

March 2013 / issue 8.3 / $6.95

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2013

COVER STORY

32 | CMP Broker Sentiment Poll Who has your back? Find out in our fifth cross-Canada broker sentiment poll

Exposing your concerns over mortgage rules, an attack by the banks and the government’s next move

THE MORE YOUR DEAL LOOKS LIKE ALONG SHOT THE MORE WE LOOK LIKE A SURE THING. Calum Ross Categorize and Cash in

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CONTENTS / ISSUE 8.3 REGULARS 30 | MortgageBrokerNews Mashup What do you think was the top story last month?

46

56 | More than a sporting chance The ruck-ready world of rugby has well prepared Michael James for brokering, writes CMP’s Don Horne 60 | Reporting for business Mortgage Architects is looking beyond volume, beyond numbers, says CEO Ron Swift

MARKETING 46 | Shhh, it’s a secret Superstar brokers are superstars for a reason, writes Doren Aldana, helping you tap their top-secret talents in this new series

NEWS

Twitter.com/ CMPmagazine

26

26 | Product News The (Kelly) Price is right at Encompass; iPad app puts CMP in yourD+H hands BC ad 7.25x4.71.pdf

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CONTENTS / EDITOR’S LETTER

SENTIMENTAL SALVO chalk and cheese, but they manage to find common ground in this year’s CMP Broker Sentiment poll (P. 32).

Those results – the centrepiece of this issue – are a candid snapshot of brokers ready to do battle over the latest round of mortgage rule changes. To put it more mildly, they’re not best pleased.

But the results of our online polling do, once again, capture what exactly industry players are grappling with in a year rife with change. More certain is the determination to persevere and even better the success of 2012.

This month’s issue is just as much focused on helping brokers achieve that latter goal, starting with Ron Butler’s very nuts-and-bolts look at how he reshaped his business to benefit from rates sites instead of battling them (P. 16). Calum Ross is no less committed to helping CMP readers up their game, with his take on why all clients aren’t created the same and so shouldn’t be treated that way. There’s a method to his anti-egalitarianism. Read on, starting P. 22.

The Canadian Mortgage Awards pick it up from there, offering a first glimpse of the industry professionals selected as finalists for this year’s most coveted nod to excellence (P. 40.). The list is the most inclusive one to date, say event organizers, looking ahead to the May 10 gala at the Toronto Congress Centre.

And while I’m at it, allow me one last plug for the upcoming CMP Mortgage Summit, May 9 - 10. It’s cannon fodder for brokers looking to beat 2013 into submission and emerge with the training tuneup needed to do it.

COPY & FEATURES

ART & PRODUCTION

CONNECT

Contact the editor: vernon.jones@kmimedia.ca

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.

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Exposing your concerns over mortgage rules, an attack by the banks and the government’s next move Calum Ross Categorize and Cash in

Covers and Spine FINAL.indd 1

4 | MORTGAGEBROKERNEWS.CA

Alicia Chin

GRAPHIC DESIGNER

March 2013 / issue 8.3 / $6.95

Vernon Clement Jones

Vernon Clement Jones Rachel Naud Donald Horne Benjy Katchen Calum Ross Doren Aldana Mike Sjerven Ron Butler

EDITOR SUB-EDITOR SENIOR WRITER CONTRIBUTORS

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CONVERSATIONS / LETTERS TO THE EDITOR February 2013

LETTERS

/ issue

Medio Marketicre ng Missteps to avoid

8.2 / $6.9 5

new len der Look an d Learn Quality ref Made no errals t Magic

Broker

kit Bag

TO THE EDITOR

2013 Covers

and Spine.

indd 1

Re: Broker Kit Bag 2013 (CMP 8.2) 21/02/2013

from any lender who wants to give it. I’ll take that money and invest it.

Re: The fiery 4 (CMP 8.2) eld Robert Stanfi

Re: Reading between the lines (CMP 8.2)

I’ll take the 10 bps

Michael Markowicz

I understand the whole thing about wanting renewal fees and other more long-term concessions from Scotia and the other banks in the broker channel, but I think that I will gladly accept an extra few bps

Ajay Singh

You’ve got to think that lenders will eventually get it right and start to treat brokers as though we were true partners and equals. Lenders are paying us for our expertise and the underwriters know this and they should trust us until such time as we do something that compromises that trust. Second-guessing an approved deal because the income has been verified at $1,000 less is ridiculous and insulting to brokers, who are always working to protect their reputations… and their lender-partners.

MortgageBrokerNews.ca Reader Poll WHAT ARE YOU DOING MORE OF? Stated income with a prime lender Stated income with a non-prime lender

52 per cent 48 per cent

2:29:00

PM

Don’t get me wrong

Trust but verify

LIST 201 3

Forget yo Pack up ur troubles! th tools in yo ese 8 new ur old kit bag

Pete McSherry

If CMP is going to help brokers with a list of gadgets that will help us this year, it seems to me that they have to look at the app platforms and ask what can be done to make them better tools for brokers. We need to know that deals that are submitted won’t be held up by technical problems and that we can return answers to clients in a timely fashion and better compete with the banks.

Re: Goal Getters (CMP 8.2)

25 what?

Faye Shapiro

I agree it would be nice if all agents at any time would be able to increase funded volume by 25 per cent this year, but in this market, Mr. Karram, it’s probably unrealistic and places undue pressure on agents at a time when they don’t need it. I think it would be better to look at an agent separately to determine what is doable for them and then tailor your expectations. Don’t be too aggressive.

LETTERS TO THE EDITOR ARE WELCOME! Due to space considerations, priority is given to those 300 words or less. We reserve the right to edit, condense or reject submissions for accuracy, brevity, clarity, good taste and legal reasons. Writers must provide their full name, address and telephone number to verify authenticity. Please reference the article.

6 | MORTGAGEBROKERNEWS.CA

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FIRST UP / READ BETWEEN THE LINES

READING BETWEEN

THE LINES: ross the verberate ac re to es u n nti s rebel yell co professional as mortgage el ern n h rt an o ch N g broker uragin co en in le ro eir e offer, celebrate th a renewal fe r u o n o h to dit Union Savings Cre . ncelled, tired in 2010 nuity was ca an n officially re o si is m lan ll-com under that p While the fu y the lender b d ighlighted h le s d er an k h hing bro et mortgages m so , ed be renew continued to s.ca article. ne broker BrokerNew ge ga rt o M etails, says o a d e in th t in en il is oft s he though But the dev on renewal si is ts m jo m , o ge -c Mortga cess full erico Vivid V hoping to ac f o , at h en w rv g ailin ichael Sje e lender det he’d lost. M tter from th le a n is request. o h e r k u o ely, hon at down his ta im lt u , d rocess an it needs to p

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n Michael SMjeortgrve age

Verico Vivid From: Northern Sa vings Broker Centr e <M IG Priority@northsav Date: Mon, Feb 25 e.com> , 2013 at 12:31 PM Subject: Sjerven, Michael To: Michael Sjerve n <mike@vividmort gage.com>

Hello Michael, Re: Commissions on Renewal of Mo rtgages …

It is our Credit Un ion’s practice to ho nour any arrange past. To the exten ments that we ha t permitted by law ve agreed to in the , we intend to pay that were placed 2 trailer fees to you with us between for mortgages 2005 and 2010, nuity Program for if you decided1 to such mortgages. participate in the AnWe must, howeve and you, as a bro r, make sure that ker, comply with the Credit Union all reg ula tor y requirements relati Program. ng to the Annuity As a matter of ba ckground, in 2010 , it was brought to some regulatory our attention that problems with the there could be Broker Annuity Pr This was the prima og ram as it was the ry reason why we n structured. discontinued the 2010. Neverthele Annuity Program ss, we have review at the end of ed the regulatory are able to pay tra framework and de iler fees to you if ter mined that we you can provide us 3 • Confirmati with the following on of your registrat : ion as a mortgag e broker or sub-mo • Evidence that you disclosed to rtgage broker; the borrower tha fee on renewal of t you would receiv the mortgage (eithe e a brokerage r via a Form 10 Co Statement or oth nflict of Interest Di er evidence of su sclosure ch disclosure); an • Privacy consen d t from the borrowe r authorizing the tion from the Cred exchange of perso it Union to yours nal informaelf (provided that the cover the disclosu consent is broad re of information enough to to you for the purpo ses of payment of a trailer fee).

If you are unable to fulfil any of the se requirements, if there are ways we would like to that we can addre talk4with you to se ss e the regulatory co trailer fees that ma nc ern s so tha t we can pay any y be owing to you.

W e ho pe tha both yourself and t you recognize the the Credit Union, importance, for of complying with and conflict of int the regulations rel erest disclosures. ating to privacy

1 As a former BDM of a trailer-fee lender, this comes as news to me. I've never heard before that renewal fees is not permitted or unlawful. The other lenders currently paying trailers/renewals do not ask for any special compliance or disclosure requirements so it would be nice to get clarification on this.

2 A big reason I "decided" to send Northern Savings deals at the time was because of the advertised offer for full compensation on renewal. There was never an option to choose another compensation model, as it was 90 bps on a five-year fixed w/payment on renewal.

3 A brokerage fee on renewal option is not indicated on the Form 10, and I do not believe there is a legal requirement to include this information. If the credit union requires this then it should be a mortgage condition at the time of origination.

4 I really hope they follow through on this promise and don't make it too difficult for brokers to collect this Please do not he sitate to contact us compensation, otherwise it could tarnish their reputation if you wish to dis forward to receiv cuss this matter fur ing the information ther. We look further. listed above so tha payment of any tra t we can make arr ile r fee angements for s tha t ma y be owing to you.

5 On a side note, I really enjoyed working with the 5 underwriters at Northern Savings, and it would be nice to Yours truly, do business together again. I believe the future of the Northern Savings Credit Union broker channel is with lenders who act as true partners, Northern Savings Cr edit Union and paying on renewal is the best way to accomplish this.

Mortgage & Inves tm en t Group If I could make a suggestion to NSCU moving forward, 200 775 Topaz Ave it would be to reduce their renewal payments by 50% (to Victoria, BC V8T 4Z7 make it more affordable), put it in a formal agreement and offer it to all brokers approved to submit files.

8 | MORTGAGEBROKERNEWS.CA

MARKET MATTERS / IRD CALCULATIONS

PENALTY

PUZZLE The Rubix Cube has nothing on how some lenders calculate prepayment penalties, reports broker Rick Robertson

B

orrowers are often perplexed by the prepayment penalties they attract with an early exit from a mortgage. Their brokers are less so. But are mortgage professionals doing enough to lessen that sticker shock by illustrating the charges clients could face, depending, of course, on the lender? Or is that discussion taking a backseat to rate?

President of MMI Mortgage Mentor Rick Robertson sharpens his pencil, turns on the calculator, and jumps in with both feet to calculate the pre-payment penalties that a hypothetical client faces in breaking a five-year mortgage just before the three-year mark. The varying results – again, depending on the lender – may surprise, but also inspire a similar exercise for the benefit of your clients.

The Scenario • 29 - 31 months in on a conventional 5-year fixed mortgage • Rate: 4.24 per cent, with no insurance premium • Amortization: 25 years • Original mortgage amount: $300,000 • Monthly payment: $1,617.34 • Balance owing as of March 2013: $280,216 NOTE: In the summer of 2010, where we have this mortgage beginning, the discounts from posted were running anywhere from 0.94 per cent to 1.15 per cent. The discount I chose for these examples was the lowest, 0.94 per cent. Borrowers who have received higher discounts from the posted rate will experience a higher penalty than those shown in the chart below.

If all lenders used a similar basis for their calculations, a higher original discount would result in a proportionately higher penalty for every lender.

The relationship, however, does not translate equally across all lenders because some do not apply the original discount in determining the present penalty.

MORTGAGEBROKERNEWS.CA | 9

MARKET MATTERS / IRD CALCULATIONS Methods Differ

D. Now we come to determining the actual rate

A. The two logical core methods for calculating

number used for the calculation:

a pre-payment penalty are: • Rate Difference method • Income Loss Method

The first would simply take the borrower’s present rate, minus the new rate the lender could lend the money out at for the remainder of the term, then multiply that rate difference times how much is owing, times how much time is remaining in the term.

The second would involve calculating: • the actual amount of interest the lender would receive on the present mortgage for the remaining term; • the amount of interest the lender would receive if the money was re-lent at the current lower rate for the remaining term; • subtracting the newer from the older to come up with the loss.

B. Those can each be further complicated by: • Face value loss • Time value of the loss

The face value is basically the figure determined by the above mentioned formulas.

Time value takes into consideration that the lender is getting that entire interest differential today, rather than over time, and there is a benefit to the lender being able to re-lend those funds as well.

This would result in a lower penalty. Royal Bank was the only lender I noticed who referred to this on its website calculator.

C. If that wasn’t enough, lenders also can vary in which comparable term they use: • some will use the rate for the next lower year term. As an example, if there is three years and 11 months remaining in the original term, then this style of penalty would use the three-year rate for calculation; • other lenders will use a mid-year split. In explanation, if there were three years and seven months remaining in the term, these lenders would use the higher four-year rate for penalty.

If there were three years and five months left, they would use the lower three-year rate.

• some lenders used a Posted Less Discount method rate (for the term determined in the above section) less a discount equal to what the borrower received off posted originally (more on this later in the Rate Unfairness section); • some lenders used their Correct Best Rate method for the Term determined above; • one lender used an Average of the Best Rate for the Two Closest Terms method.

E. Finally there is the possibility of the lender automatically applying a benefit for the PrePayment Privilege that the client may not have had the cash to pay.

Very few lenders do this. I believe the penalty figures in the table below can give us an indication of who does. This step gets an additional twist because some lenders base the ability to make an annual pre-payment on the calendar year, and others on the anniversary of the original funding.

Note: a creative broker can take advantage of this if a refinance is coming up close to the pre-payment privilege cut-off. They can arrange for the client to make a pre-payment a few weeks before the cut-off, then another immediately after, then trigger the refinance. By arranging a short-term loan of 30-45 days to facilitate this, a broker can save the client 30 per cent to 40 per cent of the penalty.

All combined, there are probably more permutations of the above options than there are major Canadian mortgage lenders. I’ve actually encountered a credit union that uses a formula that’s so complicated they can’t explain it. When I have pressed lenders on how they actually do their specific math, some don’t want to say, and a couple have said “we don’t really know, it’s part of the software we bought.”

The Research process and data Because of the possibility of the mid-year split mentioned above, the two remaining time frames used were: two years and five months, two years and seven months. We did that to observe if the lender would drive their IRD rate to the Closest Remaining Term. In other words, the closest remaining term for • the two-year five-months would be two years • the two-year seven-months would be three years

STATS

2,000 - PEI Housing starts January 2013 Source: CMHC

12 | MORTGAGEBROKERNEWS.CA

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MARKET MATTERS / IRD CALCULATIONS Rate used for Interest Rate Differential penalty calculation Several were hidden and automatic; One used average of rates, which I was directed to look up and enter; Some had the user choose themselves from an online rate table, which was very lengthy and included investment and savings rates as well.

Discount inequity First off, here are some samples of present discounts-off-posted rates used by several of the major banks:

described earlier.

Of note is the situation of a broker arranging a short-term loan to take advantage of that mid-year term-shift.

That advantage would only work for the lenders who shift down to the next lower term at the mid-year shift. In other words, those with the lower penalty in the two-year-five-month column in the table.

BROAD MENU BANKS

PENALTY FOR 2 YEARS 5 MONTHS PENALTY FOR 2 YEARS 7 MONTHS

1yr -0.25 pp 2yr -0.35 pp 3yr -0.86 pp 4yr -1.65 pp 5yr -2.05 pp 10 yr -3.10 pp

As an example of apparent unfairness, if the borrower gets 2.05 per cent off a five-year rate today, is it fair for the lender to be taking 2.05 per cent off the two-year rate three years from now if the borrower wants to, or needs to, pay off their mortgage? The lender will only give the new borrower of that money 0.35 per cent off posted but are penalizing their existing customer of three years at a whopping 2.05 per cent. That’s literally profiting both coming and going.

16

14

12 THOUSANDS ($)

• • • • • •

10

8

6

4

2

Calculation Type (present value) • Only Royal Bank made it obvious that they used a Time Value of Money factor in their calculation.

It was uncertain if any other did; • Based on the data it appears that some automatically apply the Annual Prepayment Privilege before making the penalty calculation.

Not all of the lenders displayed the actual rate they used and therefore it would be unfair to make comment on which lenders had the most air methods of calculation. That said, I think the numbers speak for themselves.

Of the calculators used, MERIX’s’ seemed to be the easiest to use, easiest to understand, and most transparent.

The data in the table may at first glance appear to be mixed up with some lenders having their lower penalty in the two-year-five-month column, and others with the lower in the two-year-seven-month column. The variation comes from the multitude of ways a lender can develop their formula as

14 | MORTGAGEBROKERNEWS.CA

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MARKET MATTERS / MASTER CLASS

BROKER

TO

BROKER ADVICE

BROKER, MEET YOUR

FRENEMY, RATE SITE

Sure, brokers may have lots of dark feelings about these comparison sites, writes industry vet Ron Butler, but here is exactly how they can turn that foe into friend

16 | MORTGAGEBROKERNEWS.CA

MARKET MATTERS / MASTER CLASS Let’s get some of the details out of the way: A mortgage rate comparison site is typically a website built and owned by an independent company that makes its living charging for leads and website clicks that are fed to mortgage brokers and other lenders.

The aim of the rate site is twofold:

1. Find great rate offerings to spark public interest in its information or in clicking onto the websites of mortgage brokers and lenders offering those rates;

2. Do all the search optimization work on Google to make sure every time someone searches “Best Mortgage Rates” the rate site’s name appears at the top of that Google list.

Historically, my brokerage has used RateSupermarket.ca and if you Google “Best Mortgage Rates” that site will come up No. 1 or 2 on Google’s list every time.

The rate sites are smart: if you want to be the featured mortgage broker on the website, you need to buy-down rates by reducing commission levels to the point where the rate is extremely low, it’s almost

Ron Butle r

Butler Mor a reverse auction system. tgage Inc. So picture this: you have paid the website for the leads and only about 42 per cent of the leads work out to the point the applicant gets a commitment; so you pay for about 2.5 leads to get a shot at one. You have discounted the rates so you are only working on about 65 bps total compensation not 115 bps.

The applicants are extremely ratesensitive and have zero loyalty to you, if a bank rep offered them 5 bps less they would jump to the bank rep in a heartbeat. The applicants are unlikely to ever stop being ratesensitive so when they come up for renewal it will be the same fight for their business all over again. These types of clients may very well refer others to you, but those referrals also want super low rates. These clients will likely never think of you as a trusted adviser; they will only think of you as a source of low rates. So the leads are very expensive, the commissions are highly discounted and the clients will always check to make sure they are getting the best possible rates.

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TM 2 TM 2 60 deals in the fiscal year.

National Bank All-In-One is a trademark National BankofofNational Canada. 1Financing be subject1to the credit approval

by National Bank. $2,000 marketing fee is aby one-time rewardBank. for the first National Bank All-In-One is aoftrademark Bank ofshall Canada.

Financing shall be subject to the credit approval National $2,000 marketing fee 3 3 trip paidreward for everyfor 125the deals in the65 fiscal year or up to a maximum of 2 in tripthe vouchers.

Minimum to fund ratiopaid of 60% fiscal 2013 required be eligible for either incentives payments be $15,000 trip forforevery 125 isdeals orto$40M funded in financial the fiscal year.and The fiscalwill year is$15,000 a one-time first deals $20M funded fiscal year. approve made in February 2014. The fiscal year is from November 1, 2012 to October 31, 2013. is from November 1, 2011 to October 31, 2012.

MORTGAGEBROKERNEWS.CA | 17

MARKET MATTERS / MASTER CLASS

We had 10 years to adapt to processing incoming leads from a website.

That being said, we made SO WHY DO IT? To be honest, we ask ourselves that question almost every day, this is some of the least fun you can have in the mortgage business; it’s an endless frustrating grind.

But we do it. We do it because it will likely generate $300 million in mortgage volume this year just in Ontario; if we expand to other provinces that number could be $450 million. We have other divisions in our company that will do about $225 million of traditional mortgage broker volume but the fastest growth is from the rate sites. We do it because rate discounting may be the future of this business, and we want to be successful in this business for years to come, so we want to master the discounting trade now, not later. We do it because 80 per cent of the applicants are absolutely perfect candidates: 800 Beacon scores, government jobs, smart, well-educated; they have all of their documents at their fingertips. We do it because it is a seductive business challenge: can we tweak a ton of different variables to improve profits, reduce overheads, increase pull-through and wring greater net income from a tough to execute business model? It keeps you awake at night but it’s an intriguing battle.

Many will tell me that we are only doing harm to a great industry by advertising discounted rates.

Many think we debase the whole business by commoditizing it. Many say rate discounters cannot take the time to give real counsel and get to know our client’s needs properly because we need to work very quickly and efficiently on every file.

I don’t have all the answers, but I think I have a couple. Banks are advertising discounted rates so why should mortgage brokers be afraid to do the same? Should we just roll over and give up? Maybe this business will be commoditizing itself anyway, so why not try to get ahead of the curve? Almost all of the extremely qualified clients who use the rate sites do not want advice or council; they want service and they want us to execute the instructions they give us. Perhaps we as brokers may have better rate and

18 | MORTGAGEBROKERNEWS.CA

massive changes to our systems to accommodate the rate site leads.

product ideas, but if the client is mature, welleducated, and successful and tells us they have done their product research and they have determined the mortgage is suitable to their needs, why would we contradict them?

Conversely, if the applicant does ask for advice and guidance our brokers have a combined 50 years of experience from billions of dollars in funded mortgages to give the clients the counsel they ask for.

John Webster once said the greatest thing mortgage brokers can offer is choice and advice and he’s right. I firmly believe a full-service, highly proficient, full-commission mortgage broker will always be here, and nothing a rate site can do will replace deep knowledge, long experience combined with great lender relationships. Particularly, I think niche brokers have a bright future, whether it is sub-prime or investment property specialists. But I firmly believe the public gets to decide what mortgage source they want and if technology makes mortgage rate information highly available to the public, someone will discount rates to attract leads just as sure as night follows day. So either we will provide those discounted rates on rate sites or someone else will do it, it’s going to happen anyway.

Remember: travel agents did not get to decide if Expedia or Priceline was a good idea, the public made the decision.

NOT FOR INDIVIDUALS As Greg Williamson correctly says: rate discounting is not a viable strategy for individual agents and brokers. Our organization has grown over the last 18 years to the point where we had the number of lender relationships at high-volume levels to allow us to tap best rate offers from a number of sources.

We had 18 years of experience handling cold calls from other forms of advertising. We had 10 years to adapt to processing incoming leads from a website.

That being said, we made massive changes to our systems to accommodate the rate site leads.

THE HOW-TO We downsized our commissioned agent group and hired salaried individuals who were licensed through FSCO. Those persons handled initial application input and Expert processing. We bought software to monitor internal deal progress and customized PDF docs to maximize electronic client interaction. We are constantly looking at ways to enhance the performance of the process. We don’t see how an individual working alone can live with the expenses, take on all the tasks and shoulder the workload the rate sites create.

CREATING THE DRAGONSâ&#x20AC;&#x2122; OF TOMORROW

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MARKET MATTERS / MASTER CLASS

NOT ALL CLIENTS ARE CREATED EQUAL…

So why are brokers treating all of them that way? Asks top broker Calum Ross, detailing his strategy for segmenting clients to form a more perfect and profitable union

Calum Ro ss

Calum Ros s Mortgag e

I have now been in the mortgage industry for over 12 years and I have learned a lot of great techniques and practices from some of North America’s top mortgage professionals. Over those 12 years, I have invested heavily in education – over $250,000 in personal and professional development alone (courses, seminars, business school tuition, etc.).

While that may sound like a staggering figure, consider this one: $1.5 billion. That’s what I have personally funded in mortgages over those 12 years.

That is not volume pooling, but represents the over 5,000 mortgages I have arranged for clients who would all consider themselves my personal clients when asked who their mortgage person was and is.

I certainly wouldn’t have been able to do it alone – but with the help of as few as three full-time and up to five full-time salaried team members, in the last 10 years I have never had a year where I funded less than $100 million dollars in volume and never had my average basis points per deal drop below 89 bps in any calendar year. Statistically, I only have to buy-down rates on less than one in 20 deals I fund.

TOOL OF CHOICE Over and over again, people ask me what is the single-most important skill that I’ve learned, and without question one very simple technique consistently remains at the top of the list. In fact, if you master only one skill set in mortgage banking, I’d say that it should be this: nothing will pay off better for you than effective database management.

It requires no formal schooling, very little technology, and very little organizational skills, still this one technique should singlehandedly double your income in less than a year.

Let’s stop for a moment and imagine you in this hypothetical situation:

22 | MORTGAGEBROKERNEWS.CA

MARKET MATTERS / MASTER CLASS

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MORTGAGEBROKERNEWS.CA | 23

News MATTERS / MASTER CLASS MARKET InternatIonaL

u.s.

You are a frequent flyer and you have made it your mission to always support Airline A. You have been U.S. to housing market worse than – thought loyal them with all your bookings flying both your The number of Americans who bought previously shortand long-hauls with them, amassing not only a occupied homes rose in October. But the National lot of flights,of but also thousands of miles. You stop to Association Realtors says it overstated more than do themillion math, and you’ve thousands three salesfind during andspent afterliterally the Great Recession, showing housing market wassimultaneously weaker than of dollarsthe with that airline while previously thought. getting to know exactly how their system operates. private trade says sales fourthat per NowThe imagine after all group this support you rose find out cent in October to a seasonally adjusted annual rate of that Airline A has one complimentary upgrade to a 4.42 million. That’s below the roughly six million homes better seat on your next flight yet they decide to give it a year that economists say are consistent with a healthy to some random customer who happens to check housing market. new But it’s ahead of 2008’s revised sales, in first and you are withinno now considered theleft worst 13 legroom years. and feeling The tradeYou group 2007 2010 disrespected. see,revised AirlineitsAsales truly from means well,tobut down 14 per cent, from more than 20.6 million to nearly they simply have no system for measuring the 17.7 million.orAmong the reasons the lower fiAs gures, frequency profitability of yourfor relationship. the Realtors group says: changes in the way the Census frustrating and crazy as this situation sounds, this is Bureau collects data, population shifts and some sales exactly what many mortgage professionals do every being counted twice. day when they serve all their customers the same The Realtors consulted with government and or, even worse, when they treat their high-maintenance private housing experts, including the Federal Reserve, the Department of Housing and Urban Development, clients even better! theWhile Mortgage Bankers the National airlines mayAssociation, not get the service right all Association of Home Builders, mortgage giantsthan Fannie the time, what they often understand better Mae and Freddie Mac and CoreLogic, a California-based most industries is loyalty and the profitability of data firm that first raised doubts about the annual their clients. As mortgage professionals, we are numbers earlier this year. often our ownhas worst enemy.that Likethe many sales group people CoreLogic estimated Realtors we have thesales bestinof2010 intentions, we 15 getper so cent. busy doing overstated by at least The changing economists deals and busy innumbers reactivecould modeaffect that how we don’t stop view the trade group’s data.

It could also affect companies to proactively consider who our biggest supporters thatand use try theto figures for hiring and expansion are pay special attention to theplans. clients and Sales are measured when buyers close on homes. referral partners who are a big part of our long-term But many deals are collapsing before that point. success.

All too often we confuse activity with One-third of Realtors said they had at least one contract productivity and accidentally consider highest scuttled in October, up from 18 per cent inour September. maintenance as our best. Soreasons: let’s Contracts referral are beingsources cancelled for several Banks haverandom declinedabout mortgage home stop being howapplications; we treat others and

&

While airlines

90.6% 52.1% the service right may not get all the time, Percentage of

whathomeownership they often

costs, including mortgage payments, understand utilities and property taxes that take up a better than most typical household’s monthly pre-tax industries is income in Vancouver and Toronto, loyalty and the respectively (RBC Economics Housing Trends and profitability of Affordability Report)

their clients

inspectors problems; appraisals put a plan in have placefound to make this year different. By showed a home was worth less than bid; a and understanding the importance of thethe frequency buyer lost a job before the closing. monetary value of your clients and referral partners, More than two years after the recession you can build a very profitable business where you officially ended, many people can’t qualify for give your your best. loans orbest meettohigher down payment requirements. Even those with excellent credit

RANK AND REWARD and stable jobs are holding off because they fear that home prices keep falling.

Salesare arethree also For simplicity, let’swill consider that there being hurt by a decline in fi rst-time buyers, who possible categories a client can fall into, although are critical to reviving the housing market. you’ll see that there are really four:

Sales have fallen in four of the five years since the housing boom went bust in 2006.

A VIPprices Client and is defined as an mortgage individual who Declining record-low rateshas referred or more clients; referred a client haven’t beentwo enough to boost sales.

At the same time, homehas construction during the transaction; transactedhas with you begun a gradual comeback and should in add to theof three or more times; has a mortgage(s) excess economy’s growth in 2011 for the fi rst year since $750K (or has generated more than $7,000 in the Great Recession began in 2007. Last month, revenue); has two or more mortgaged properties. If builders broke ground on an annual rate of they have any one of these attributes, they are VIP. 685,000 homes, the government said recently.

Thesewas clients getjump a highly That a 9.3need per to cent frompersonalized October andcall or touch point from you quarterly, the fastest pace since April 2010. plus a bi-monthly say home pricespersonal, will keepthe mailMost pieceeconomists (yes, not email!).

The more falling, by at least fi ve per cent, through better – 12 of my top clients one year had2012. a Many forecasts don’t a rebound in prices personal gourmet chefforesee come to their homes to until at least 2013. prepare the dinner of their choice for them and two The high rate of foreclosures has made friends. For this category think total wow! It should resold homes cheaper than new ones. The represent no less per is cent of your median price of athan new 10 home roughly 30database per and no morethe than 20 of perone cent. cent above price that’s been occupied before – twice the normal markup. Investors are taking advantage ofClient the discounts.

A Preferred is one who has used you Themore housing market is struggling evento one than once; has referred you as the broader economy has improved in client; has a mortgage over $500K (or has recent months. generated more than $4,500 in revenue); or has The economy grew at an annual pace of two identified additional mortgagequarter. need inMany the per cent inan the July-September course of theexpect transaction. onegrowth of those economists slightlyAny better in the October-December quarter. conditions makes them “preferred.”

These clients CMP

1

2

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24 | MORTGAGEBROKERNEWS.CA 28 mortgagebrokernews.ca

MARKET MATTERS / MASTER CLASS

NOW WHAT?

need to get a highly personalized call or touch point from you semi-annually, plus a bi-monthly mail piece (again, not email). Once again think personal – if they really matter to you, then know more than their financial details. This group should represent no less than 20 per cent of your database and no more than 45 per cent of your client database.

Once you have your clients broken down in those categories then put in a mortgage value that makes sense for your market. Since my average mortgage is around $400K, I have made the preferred clients a mortgage of 1.25 times that amount. The VIP clients have a mortgage of nearly twice the average. You will also notice that the more they use me or refer me the more I elevate them through the ranks. The purpose of this ranking is not only to give extra credit to large mortgage clients as you can very easily reach the VIP status and never have a big mortgage or be a high income earner. Always remember - the point of this exercise is to be able to give your best to your best and to use your time wisely.

If you follow these simple steps you will notice two significant changes in your life. First, you will all of a sudden enjoy your job more because you will have a deeper relationship with your clients and they will appreciate you more. The clients will know you care and go out of their way to support you more. The second thing you will notice is that your hourly income will go up dramatically. By forming meaningful relationships with your top clients, who happen to also be the ones who’ve bought into you, your rate shopping will go down, the amount of work you do to have them get their documents in will go down, and you will actually enjoy talking to your clients again. I have said this before and I will say it again many times, in fact: “people don’t care how much you know until they how much you care.”

Use the next year to insulate yourself from increasing rate wars and the high blood pressure of dealing with annoying people and show love to the clients who support you and make your job easier.

Give your best to your best and I guarantee you that your happiness and income levels will soar! Until then, I wish you all continued success.

3

A Client is an individual who has used your service and whom you have no problem with and hope to look after their other mortgage needs and/or future referral business.

These clients need to get a bi-monthly mail piece (again, not email) and some form of one-to-one contact. These are clients who enjoyed your service, but you didn’t necessarily connect with them and, no offence, they likely weren’t wowed by you either – it was just a mortgage deal for both of you. As a group, they should represent no less than 45 per cent of your database and no more than 70 per cent of your client database.

4

Finally, there is the somewhat taboo category that people sometimes give me grief for – clients and referral sources you need to let go. These are the clients who one week before closing engaged you in rate war, they were rude to your co-workers or they just were not very nice people. That’s right: fire them! Life is too short to work with people you don’t like. Give yourself a raise in your emotional well-being and send them to that mortgage broker who seems to enjoy abuse.

Not only will you be happier when you do this, but you’ll be more productive. This should not be more than five per cent of your clients or it may be the target marketing or your message that is attracting these overly demanding clients to your desk. While this will be awkward at first, trust me on this – there are enough people who do business your way to have to worry about those who don’t … I am living testament to this!

STATS

3,500 - Newfoundland Housing starts January 2013 Source: CMHC

Over 600 Million Lent since 1997

80% Member of CAAMP, AMBA, MBABC, BBB.

5.25%

7.25%

OFFICES IN VANCOUVER, CALGARY, EDMONTON, TORONTO & ATLANTIC PROVINCES

Donna Adams

780.686.2911

877.926.2122

dadams@capitalddirect.ca

Hugh Doggett

905.299.6951

905 824.7095

hdoggett@capitaldirect.ca gkakuno@capitaldirect.ca

Greg Kakuno

877.670.4070

MORTGAGEBROKERNEWS.CA | 25

MARKET MATTERS / PRODUCT ROUNDUP

PRODUCT

ROUNDUP AND INDUSTRY ANNOUNCEMENTS A bite-sized guide to the industry's newest products as they come down the channel ANNOUNCEMENT

Price-d to move

Kelly Price, the new president of Encompass Home Service Corp Encompass has been working with the mortgage industry for over 10 years and provides warranty programs that serve to enhance a lender’s core product offerings, in addition to providing an attractive incremental revenue stream.

PRODUCT NEWS Who: Canadian Mortgage Professional magazine What: iPad app

Here’s how it works: It is a free app for subscribers of the magazine and easily downloadable. Unlike many online offerings from other publications, there is no time-lag for readers – as the magazine will be online and available to subscribers as soon as the print edition goes out in the mail. All you have to do is go to MortgageBrokerNews.ca and point and click to download the app.

What they say: “The app is very user-friendly and easy to scroll through, simply swiping up. It easily allows you to ‘pinch and zoom’ to enlarge font size/pictures,” says Deepak Bansal, with Dominion Lending Centres Mortgage Village. “The print quality is high and has virtually no lag-time to load each page to full clarity as you scroll through. Being able to access previous issues of the CMP magazine from one source is also very handy.”

The facts: In February Canadian Mortgage Professional launched the iPad app for the magazine, as a complement to the online version currently available on MortgageBrokerNews.ca.

26 | MORTGAGEBROKERNEWS.CA

LAUNCHING A NEW PRODUCT? Want to be considered for inclusion on this page, send the details to the editor: vernon.jones@kmimedia.ca

Sally and Jim were so moved by the CHIP Home Income Plan they fell out of their rocking chairs.

STATISTICS / RESIDENTIAL RESALE ACTIVITY

NATIONAL PICTURE

AT-A-GLANCE

This monthâ&#x20AC;&#x2122;s roundup looks at the most recent data on residential new listings and resale activity

Chiliwack, B.C. 1.5

Battleford, Sask.

0

Fort McMurray, Alta.

8.9

Saguenay, Que. -1.8

Thompson, Man. 75

TOP CITIES Sales Activity

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

28 | MORTGAGEBROKERNEWS.CA

WoodstockIngersoll, Ont. 18.1 Fredericton area, N.B. 13.8

Yarmouth, N.S. 0

Sales Activity by Province

Source: CREA

British Columbia: -13.8 per cent

New Brunswick: -4.3 per cent

Alberta: -7.6 per cent

Nova Scotia: -7.3 per cent

Saskatchewan: -8.7 per cent

Prince Edward Island: -12.7 per cent

Manitoba: -8.8 per cent

Newfoundland and Labrador: -4.7 per cent

Ontario: -11.7 per cent

Northwest Territories: 0.0 per cent

Quebec: -7.4 per cent

Yukon: 0.0 per cent

C

M

Y

The February slump was felt nationwide, as CREA’s home price index edged down 2.1 per cent compared to January, with actual activity plummeting 15.8 per cent compared to February 2012.

“February 2012 saw an extra selling day due to the leap year.

However, the year-over-year decline between this February and last year is largely a reflection of demand that is well off from 2012,” said Gregory Klump, CREA’s chief economist. “The cooling off of the housing market resulted from tighter mortgage rules and guidelines coming into force in mid-July last year, with most of the decline in the sales occurring in August.”

The number of newly listed homes fell 1.2 per cent from January to February, and the national average price was down 1 per cent in February compared to the same month a year ago.

Actual (not seasonally adjusted) activity came in 15.8 per cent below levels reported in February 2012. Almost 80 per cent of local markets posted year-over-year declines in sales activity in February.

“A rebound in sales in some of Canada’s largest and most expensive markets, similar to those we saw following previous mortgage rule changes, has so far remained elusive,” said CREA President Wayne Moen. New listings nationwide dropped 10.3 per cent for February 2013 compared to February 2012.

The Toronto condo market took a hit in sales, dropping 14.8 per cent compared to February 2012, but didn’t fall as hard as Vancouver, which saw condominium sales drop 20.3 per cent in the same period.

The one bright spot was Calgary, which reported an increase in condo sales in February 2013 of 10.5 per cent, compared to the same month a year earlier.

CM

MY

CY

CMY

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PROFILE / MORTGAGEBROKERNEWS.CA

Brokers win Dragons’ endorsement

1

Merix Paradigm-Quest wins new owner Worry over rule changes grows

2

ING departure teaches hard lesson say brokers Brokers recruiting brokers

3

Brave brokers enter the Dragons’ Den Credit union to make good on renewal fee promise

4

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M

Broker urges investment over trailer fees

5

Y

CM

MY

Client uses Twitter to challenge TD mortgage

6

MCAP B-20 a must read for brokers

7

9. Credit union to make good on renewal fee promise 8. Brave brokers enter the Dragons’ Den 7. Brokers win Dragons’ endorsement 6. Brokers recruiting brokers 5. Worry over rule changes grows 4. MCAP B-20 a must read for brokers

9

3. ING departure teaches hard lesson say brokers 2. Client uses Twitter to challenge TD mortgage

10

1. Merix Paradigm-Quest wins new owner

Here are the top 10 most-read stories on MortgageBrokerNews.ca, from Feb. 15 to March 12.

Which ones appeal to you most and in what order? Rank them from one to 10, and then compare your list with that of the website’s readers. We’ve already given you a head start by identifying the fifth most-read story in terms of reader clicks. The rest of the ranking appears below.

10. Broker urges investment over trailer fees

MASHUP

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CMY

K

Join us throughout the year as we celebrate th our 25 anniversary “We can’t think of a better way to say thank you than by making mortgage brokers the focal point of our celebrations.

Stay tuned for details.”

- Scott McKenzie, Vice President, Residential Mortgages

Thank you mortgage brokers for 25 years of shared success Ontario Mortgage Brokerage Licence No. 10514

SLOW MARKE

COVER / 2013 BROKER SENTIMENT POLL

R E K O BR

O B20 P T N E M I T SEN MORTGAGE RULES

2013

B20

Exposing your concerns over mortgage rules, an attack by the banks and whatever else the government has in store

N

o, the sky isn’t falling, say the majority of brokers responding to CMP’s fifth-annual Sentiment Poll, but their answers – recorded over a six-month period ending early March – suggest headroom is getting tight.

Even with interest rates falling instead of rising, broker worries have grown right along with economic uncertainty and the creeping slowdown in home sales that more stringent mortgage rules have ushered in.

Topping the list of concerns for 2013 remains stricter underwriting guidelines and the “poorer service” of lenders, many of them grappling with B20 guidelines. Those broker fears have actually grown, with 66 per cent of respondents identifying them as a primary concern – up from the 56 per cent of 2012. Still fears of abandonment are also high on the list, prompting just under 49 per cent to identify concerns that other lenders will follow ING’s lead and head for the channel’s exit.

Still, the changing real estate market is

32 | MORTGAGEBROKERNEWS.CA

increasingly what’s keeping brokers up at night, with concerns about new home sales (42.33 per cent) and, more specifically, falling home prices (32 per cent) rounding off the top four. They effectively supplant last year’s worries around industry reputation and rogue brokers, which held those spots in 2012.

It was against that backdrop, CMP asked brokers, for the first time, to rank their lenders, associations and networks in terms of just how well they’re helping promote mortgage professionals to consumers. It’s a role more brokers want those players to take on as a way of helping create leads in a slower market.

The results suggest that brokers are less than impressed with both lenders and their associations, 39 per cent and 18 per cent, respectively, describing efforts to promote brokers as “very ineffective.”

That supreme dissatisfaction falls to nine per cent for broker network attempts to promote mortgage professionals.

COVER / 2013 BROKER SENTIMENT POLL

LL

Proud sponsor of the 2013 Broker Sentiment Poll MCC has been growing its network for over 20 years and work continues.

Established in 1989, The Mortgage Centre FirstLine was one of the earliest mortgage broker networks operating throughout Canada. Through a combination of organic growth and strategic acquisitions, it have expanded market share to serve more Canadians, and more Canadian mortgage professionals.

That success and growth drew the attention of CIBC, a trusted Canadian financial institution, which acquired The Mortgage Centre in 1995. This special relationship has proven successful in giving MCC brokers and franchisees a high degree of stability while maintaining freedom in the local market.

Though it has experienced rapid growth, The Mortgage Centre has always maintained its goal of consistently providing its independent mortgage professionals with a stable and reputable environment to grow their careers.

When it comes to changes in the industry, brokers feel they will most likely occur over the next 12 months. Here, lenders and their business practices grabbed the top three spots, just as they did in last year’s poll.

Almost half (43 per cent) of those polled said mobile sales teams at the big banks and the competition they pose represent their No. 1 challenge for 2013, while one-third felt another big bank would say goodbye to brokers.

When it came to brokers sharing their feelings about the federal government’s handling of mortgage rules and the impact those changes have had on broker business, the results suggest brokers are more and more disenchanted, with more than half gave Jim Flaherty a failing grade.

The assessment is even more unfavourable than in the weeks following the introduction of tighter mortgage rules.

A tougher environment notwithstanding, brokers remain bullish on their jobs. (Story continues on P.39)

THE BRAND “The Mortgage Centre is the most reputable and understandable brand identity in the mortgage industry. It defines what we do. It is simple yet powerful. And with decades of helping consumers across the nation with their biggest financial decision, our immense brand equity has been built on the shoulders of continuous positive experiences.”

VISION STATEMENT The Mortgage Centre is committed to and believes: • Competent, collaborative teamwork is the key to success • Trust is earned through transparency, integrity, and respect • “Mistakes remind us that we’re reaching for success. We’re never afraid to take accountability” MISSION STATEMENT Our mission is to be the leading mortgage broker company of choice in Canada in terms of quality and professionalism. We are dedicated to maintaining a superior network of top professionals within the mortgage channel.

MORTGAGEBROKERNEWS.CA | 33

COVER / 2013 BROKER SENTIMENT POLL

CONCERNS T S E G G I B R U 1.WHAT ARE YOT 12 MONTHS? OVER THE NEX Stricter underwriting guidelines and poorer service from lenders

66%

Fewer lenders operating through the broker channel

48.67%

Economy/new home sales

42.33%

House prices falling

32%

Consumer/household debt

31%

Reduced revenue due to lower commissions

27%

Industry reputation damaged by rogue brokers

23.33%

Interest rates rising

18%

Meeting the requirements of new regulations/licensing

16%

My brokerage failing

4%

OTHER CONCERNS: “Bank reps putting themselves out as brokers”

3. ON A LEVEL FROM 1 TO 10

(1 BEING THE LOWEST) HOW D O YOU FEEL THE FEDERAL GOVERNMENT IS HANDLING THE IS SUE OF MORTGAGE REG ULATIONS?

1 13.67% 2 11% 3 16% 4 13.33% 5 18% 6 7.67% 7 10.33% 8 7.67% 9 2.33% 10 0%

72%

“Bank reps, without licensing being allowed to poach” “Banks gaining market share from brokers as they will loosen up their own lending guidelines”

THE LAST YEAR HAD A POSITIVE OR

WILL BE THE K IN TH U YO O D AT H W 2.

E INDUSTRY BIGGEST CHANGES IN TH S? OVER THE NEXT 12 MONTH Big bank mobile sales teams competing with brokers

4. HAVE MORTGAGE RULE CHANGES OVER NEGATIVE EFFECT ON YOUR BUSINESS?

43%

A decline in home sales 39.67% Remaining big banks leaving the broker channel 36% New commission structures 35.67% Lenders moving towards efficiency bonuses as opposed to volume bonuses 30.33%

POSITIVE NEGATIVE

11.90% 88.10%

5. WHAT PERCENTAGE OF YOUR LOANS WILL BE PUT THROUGH A BANK?

A steep decline in overall broker numbers 20.33% Brokers as multi-product sellers 17.67% Brokers charging upfront fees 9%

OTHER CONCERNS:

26-50% 0-25%

“Bank reps putting themselves out as brokers” “Feds changing mortgage rules yet again” “Real estate agents being paid directly by banks .50 % or more”

51-75%

“First-time buyers difficulty to qualify with new rules killing the market” “Mobile sales reps putting themselves out as brokers”

34 | MORTGAGEBROKERNEWS.CA

76-100%

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MCC Metrics Powered by CIBC World Markets, agents have access to real-time T-Bill, Bond, and Prime rate changes along with weekly world market insight from top CIBC economists Ben Tal and Avery Shenfeld.

Customer Survey A professional, easy to use satisfaction survey is sent out to your clients upon funding to help improve your best practices. Results are automatically stored, tracked, & analyzed for you to review.

MCC Communicator (powered by Adfeathers) A customizable automated newsletter sent out to your prospects and clients with a few simple clicks. We have exclusive content developed for The Mortgage Centre by renowned economists Benjamin Tal and Avery Shenfeld as well as top tax and estate expert Jamie Golombek.

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Each Mortgage Centre office is independently owned and operated. The Mortgage Centre is a division of CIBC Mortgages Inc., a member of the CIBC group of companies. ® The Mortgage Centre is a registered trademark of CIBC Mortgages Inc.

COVER / 2013 BROKER SENTIMENT POLL

6. WHAT PERCENTAGE OF YOUR LOANS WILL BE PUT THROUGH A NON-BANK?

0-25% 26-50% 51-75% 76-100%

8.67% 22% 35.33% 34%

O 10 (WITH 1 OU T 1 F O E L A C S 11. ON A WOULD Y W O H ) T S E W O L BEING THE ERAGE? K O R B T N E R R RATE YOUR CU 1 2

7. WILL YOU BE HIRING NEW STAFF OVER THE NEXT 12 MONTHS?

32.33%

67.67%

3 4 5

IF NO, WILL YOU BE REDUCING STAFF?

YES 0.90% NO 80.63%

7

Only if market conditions worsen 18.47%

8. DO YOU THINK YOU MIGHT LEAVE THE BROKER INDUSTRY IN THE NEXT 12 MONTHS?

YES 5.67%

6

NO 94.33%

8 9 10

9. IF AN INDEPENDENT, WOULD YOU CONSIDER JOINING A NATIONAL NETWORK OR BROKERAGE IN THE NEXT 12 MONTHS?

44%

56%

10. IF PART OF A NATIONAL NETWORK OR BROKERAGE, WOULD YOU CONSIDER BECOMING INDEPENDENT DURING THE NEXT 12 MONTHS?

YES 14.33% NO 85.67% 36 | MORTGAGEBROKERNEWS.CA

CMP Broker Sentiment Poll puts out an open call to the Canadian broker community each year to participate in an online survey. This year’s anonymous poll received hundreds of responses from mortgage professionals across the country over a period of six weeks, ending March 6, 2013.

COVER / 2013 BROKER SENTIMENT POLL

12. RATE THE DERS, INDUSTRY (LEN, ASSOCIATIONS TERMS NETWORKS) ING THE OF PROMOTIN NEL TO BROKER CHAN CONSUMERS: VERY CTIVE; 4 BEING 1 BEING INEFFE EFFECTIVE:

LENDERS

ASSOCIATIONS

NETWORKS

1 39%

1 17.67%

1 9%

2 27.67%

2 43.33%

2 22%

3 19.67%

3 27.67%

3 35%

4 9%

4 7.33%

4 19%

N/A 4.67%

N/A 4%

N/A 15%

MORTGAGEBROKERNEWS.CA | 37

COVER / 2013 BROKER SENTIMENT POLL

NCE (1 BEING A T R O P M I F O IN ORDER EGY THAT K T A N R A T R S E S G A N I E T L E P 11.

EACH MARK ) T N A T R O P M I MOST E IN 2012: S U O T N A L P U YO

1 2 3 4 5 6 7 8 9 10

EMAIL NEWSLETTERS

30.58% 17.87% 7.90% 6.87% 6.53% 4.81% 3.44% 7.56% 7.22% 7.22%

SOCIAL NETWORKING

22.95% 18.15% 10.27% 6.16% 8.22% 4.11% 6.16% 7.53%

ADS IN PRINT

11.96% 9.78% 8.70% 11.96% 7.97% 10.87% 6.52% 11.59% 6.88% 13.77%

DIRECT MAIL

17.27% 11.15% 10.07% 8.99% 11.51% 5.04% 7.19% 7.91%

YELLOW PAGES

13.45% 5.82% 5.09% 4.36% 6.91% 3.64% 4.73% 7.64% 11.27% 37.09%

BLOGGING

10.47% 7.58% 11.55% 6.50% 11.19% 7.58% 9.03% 8.30% 9.75% 18.05%

ADS ON BROADCAST (TV/RADIO) SEMINARS

16.91% 5.88% 8.82% 2.57% 9.93% 2.94% 4.04% 5.51% 7.35% 36.03%

COMMUNITY EVENTS/ TRADE SHOWS

10.83% 9.03% 11.55% 7.58% 11.55% 9.75% 10.83% 9.39% 5.78% 13.72%

OTHER

24.53% 8.18% 5.66% 2.52% 9.43% 8.18% 1.89% 5.03% 7.55% 27.04%

12.86% 7.86% 9.29% 12.50% 14.29% 6.43% 10%

8.21%

6.16% 10.27% 8.27% 12.59%

7.14%

11.43%

A SENSE OF...

RELIABILITY In an ever changing industry, the road ahead can be unpredictable.

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Contact your Business Development Manager for more information. 1.866.441.3775 | www.OptimumMortgage.ca

YOUR SENSIBLE LENDING PARTNER

38 | MORTGAGEBROKERNEWS.CA

COVER / 2013 BROKER SENTIMENT POLL

12. WHAT PERCENTAGE OF YOUR BUSINESS

14. WHAT PERCENTAGE OF YOUR BUSINESS WILL COME FROM (YOU

WILL COME FROM REPEAT OR REFERRAL

MAY SELECT MORE THAN ONE):

97.65% Commercial 34.90% HELOCs 29.19% Insurance 14.43% Reverse mortgages 2.68% Equipment leasing 3.69% Referral (database) 72.48% Referral (referral partners) 66.11%

CLIENTS?

Residential

26-50%

51-75%

76-100%

15. WHICH SERVICES WILL YOU BE TAKING ON OR LOOKING TO

0-25%

BUILD IN THE NEXT 12 MONTHS? (YOU MAY SELECT MORE THAN ONE)

27.67% 25.67% 23.67% 36.67% 32.33% 15.33% 39% 13% 48.33% 19% 11%

Financial planning

13. WHAT PERCENTAGE OF YOUR BUSINESS

HELOCs Mortgage insurance

WILL COME FROM NEW CLIENTS?

0-25% 26-50% 51-75% 76-100%

Real estate

Commercial

27.33%

Equipment leasing

45%

Private lending Home, auto or life insurance

21%

Private mortgages

6.67%

Construction Development

16. DO YOU USE ANY OF THE FOLLOWING SOCIAL MEDIA PLATFORMS? (YOU MAY SELECT MORE THAN ONE) Blogging

78.33%

76.67%

44.33%

About 95 per cent of respondents said they would not be leaving the industry in the next 12 months, while 85 per cent of brokers affiliated with a national network have no plans of picking up stakes.

That last point translates into high scores for individual broker families, with a whopping 25 per cent awarding their network a 10 out of 10. A slower market appears to have slightly boosted that satisfaction.

That market reality means brokers are looking at diversifying their service to clients. Chief on the list of possible additions to their business models is

24%

23%

5.33%

private mortgages (46 per cent), followed by mortgage insurance (37 per cent), financial planning (28 per cent) and – please, don’t shoot the messenger – real estate (26 per cent).

But actual mortgage origination isn’t going anywhere, with nearly 98 per cent of survey respondents agreeing residential mortgages will remain the cornerstone of business.

The idea of selling reverse mortgages and equipment leasing remains a very small part of the overall plan for most mortgage professionals.

MORTGAGEBROKERNEWS.CA | 39

FEATURE / CMA FINALISTS ALTERNATIVE LENDING BROKER OF THE YEAR Cocktail Party Sponsor

Official Ballot Accountants

AND THE FINALISTS

ARE...

A difficult year for the mortgage industry has challenged even the strong – but this May, the very strongest will lay claim to what is rightfully theirs: the 2013 Canadian Mortgage Awards It’s that time of year again, with thousands of nominations having found their way to CMP in consideration of the Canadian Mortgage Awards on May 10. The event will bring together an estimated 600 guests - the cream of the nation’s mortgage industry.

But the battle for 21 categories will be fought among this list of finalists, including brokerages, lenders, brokers, networks, underwriters and BDMs. They represent the best in their respective fields and will vie for awards from the National Broker Network of the Year to the coveted Broker of the Year. The names of those finalists are now before the judges, with PwC auditing an exhaustive selection process culminating in a gala awards ceremony at the Liberty Grand in Toronto. For more information, log onto www.canadianmortgageawards.com.

40 | MORTGAGEBROKERNEWS.CA

Greg Domville, Dominion Lending Centres Plan B Mortgage Services Jeff Cody, MCC - Mortgage Brokers City/Ottawa Adam Hale, The Mortgage Centre- Hale/ Grifa & Associates Dale Matthysen, Reliable Mortgage

BEST ADVERTISING Bridgewater Bank Dominion Lending Centres MCC - Mortgage Brokers City/Ottawa Verico Financial Group Inc.

BEST BRANDING Argentum Mortgage & Finance Corp.

Centum FInancial Group Inc. Dominion Lending Centres Equitable Trust MCC - Mortgage Brokers City/Ottawa The Mortgage Centre Mortgage Architects Mortgage Teacher Verico Financial Group Inc. Verico Jessi Johnson Mortgage Team

BEST COMMUNITY SERVICE EFFORT Christine Xu, Argentum Mortgage & Finance Corp.

Paul Therien, Centum Financial Group Inc Sarah Bess Miller, DLC Canadian Mortgage Experts Gary Mauris, Dominion Lending Centres Dave McNabb / David Wild / Pam Pikkert, DLC Regional Mortgage Group Angels In The Night, Invis & Mortgage Intelligence Yvonne Wilchewski, Mortgage Architects - River City Financial Elisseos Iriotakis, Verico Safebridge Financial Group

BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE Centum Streetwise Mortgages First Foundation Residential Mortgages Inc. Mortgage Architects - Central Alberta Mortgages Verico Dreyer Group Verico Gibbard Group Financial Verico My Hometown Mortgage

BEST INDUSTRY SERVICE PROVIDER 180 Degrees Coaching D+H iToolPro Systems Inc Jolt Marketing Mortgage Protection Plan / Benesure The Lion’s Share Group The Mortgage Marketing Coach / Power Of Choice Coaching Inc.

BEST INTERNET PRESENCE Canadian Mortgage Trends Centum Streetwise Mortgages Dominion Lending Centres MCC - Mortgage Brokers City/Ottawa Verico Jessi Johnson Mortgage Team MortgageResource.ca

FEATURE / CMA FINALISTS BEST LENDER BDM OF THE YEAR Domenic Ciaravella, B2B Bank Ut Yue, Bridgewater Bank Sanjay Ramwani, Equitable Trust Company Doug Kenny, First National Financial Jody Comeau, First National Financial Randy Binstock, Home Trust Carla Gervais, MCAP Financial Gail Temple, National Bank of Canada Margaret O’Connell, Optimum Mortgage ®

BEST LENDER UNDERWRITER OF THE YEAR Sandra Carano, Canadiana Financial Corp.

Susan Louden, Canadiana Financial Corp.

Yvonne Hristova, First National Financial Jeremy Ciccarelli, Home Trust Company Rob Orban, MCAP Financial Lou Tavernese, Paradigm Quest Melissa Coburn, Paradigm Quest Michelle Wise, Paradigm Quest Timothy Hill, Street Capital Tom Wojciechowski, Street Capital

BEST NEWCOMER - INDIVIDUAL AGENT / BROKER Louise Williams, DLC Coastal Mortgages Jackie Touchet, Invis - Dundee Wealth Lavonne Melle, MCC - Design Mortgages Holly Cochrane, Mortgage Architects Michael Oziel, Mortgage Architects - Sherwood Mortgage Group Tim L. Walker, Real Mortgage Associates - RMAI Steven Levine, True North Mortgage

BEST NEWCOMER - LENDER BDM Joe Flor, Equitable Trust Company Cathy Godin, Home Trust Company Bart Rygal, MCAP Financial Danielle Stuart, Merix Financial Camillo Delli-Pizzi, Pillar Financial Brian Mason, Street Capital Jeremy Hewitt, Street Capital

BEST NEWCOMER - LENDER UNDERWRITER Harvey Brant, AGF / B2B Bank Michelle Mohabir, Equitable Trust Company Nitin Grover, Equitable Trust Company Justin Beadle, Fisgard Capital Erin Patten, Street Capital Giselle Miranda, Street Capital

BEST NEWCOMER - MORTGAGE BROKER FIRM DLC Canadian Mortgage Experts DLC Centura Finance DLC Primex Mortgages Invis / MI - Concierge Mortgage Group MCC - Design Mortgages Verico Clear Trust Mortgages

COMMERCIAL MORTGAGE BROKER OF THE YEAR David Beckingham, DLC Commercial Capital Dale Bilton, Dominion Lending Centres Commercial & Residential Mortgages Sandy Harrington, IC Funding Financial Michael Lee, Mortgage Alliance Commercial Canada

EMPLOYER OF CHOICE Genworth Home Trust The Mortgage Centre Street Capital Financial Corporation TMG The Mortgage Group Northwood Mortgage (Verico) Verico Ottawa Mortgage Advisors Verico Premiere Mortgage Centre Verico The Mortgage Professionals

MORTGAGE BROKER OF THE YEAR: 25 EMPLOYEES OR MORE Dave Trithart, DLC 1st Financial Link Jeff Cody, MCC - Mortgage Brokers City/Ottawa Bill Harries, MCC The Mortgage Centre-Sky Financial Corp.

Anthony Contento, Mortgage Architects - Sherwood Mortgage Group Kelly Wardle, Pro Link Mortgage Inc Don McVicar, Verico Premiere Mortgage Centre Janet MacDonald, Verico The Mortgage Professionals Nick L’Ecuyer, Verico The Mortgage Wellness Group Gord Ross, Axiom Mortgage Solutions

MORTGAGE BROKER OF THE YEAR: FEWER THAN 25 EMPLOYEES David Wild, DLC Regional Mortgage Group Laurie Furness, MCC - RDM Financial Sandy Higgins, MCC The Mortgage Centre Island Properties Greg Nowik, Mortgage Architects - Universal Mortgage Architects Cindy Faulkner, Verico Coastal Mortgages Jackie Bowen, Verico Essential Mortgagage Company Karen Gibbard, Verico Gibbard Group Financial Jonathan Askew, Verico Money Business Inc. - The Mortgage Store

MORTGAGE BROKERAGE OF THE YEAR: 25 EMPLOYEES OR MORE Argentum Mortgage & Finance Corp.

DLC Canadian Mortgage Experts Mortgage Architects - Sherwood Mortgage Group True North Mortgage Verico Premiere Mortgage Centre Verico The Mortgage Professionals

MORTGAGE BROKERAGE OF THE YEAR: FEWER THAN 25 EMPLOYEES Centum FairTrust Financial Group Inc DLC Regional Mortgage Group MCC The Mortgage Centre Island Properties Mortgage Architects - Universal Mortgage Architects Get Er Done Girls - Mortgage Intelligence Verico Coastal Mortgages Verico Gibbard Group Financial Verico Jessi Johnson Mortgage Team

NATIONAL BROKER NETWORK OF THE YEAR Argentum Mortgage & Finance Corp.

Axiom Mortgage Partners Centum Financial Group Inc Dominion Lending Centres Invis / MI The Mortgage Centre Mortgage Architects Real Mortgage Associates - RMAI TMG The Mortgage Group Verico Financial Group Inc. MORTGAGEBROKERNEWS.CA | 41

FEATURE / MIGRATION EAST

THE MIGRATION

EAST?

If you thought credit unions would be quick to go national just because the government says they can, think again, reports Donald Horne

42 | MORTGAGEBROKERNEWS.CA

Canada’s credit unions are applauding the recent federal move giving them the choice to operate nationally. But they are taking a long breath before taking the plunge.

“Credit Unions make up less than 12 per cent of the Ontario market, compared to the Western provinces,” says Robert Leaker, VP of emerging markets and innovation at Meridian Credit Union.

That suggests his company based in Canada’s most populous province is likely to stick close to home.

Still, all bets may be off for migration in the opposite direction.

In fact, credit union insiders point westward in identifying where lobbying to see the federal government allows credit unions to extend their charters nationally and become the federally regulated institutions Canada’s big banks are.

The government ceded to that request late last year, with that new protocol coming into force December 19. Credit unions have yet to take Ottawa up on its offer.

Traditionally restricted to operate within their home province, credit unions would reinvent themselves to go national – like B.C.’s Vancity – which formed the online Citizens Bank of Canada in

FEATURE / MIGRATION EAST 1997 to expand beyond the Rocky Mountains.

“In Manitoba and Saskatchewan, more than half of the population (in those provinces) are in credit unions,” Leaker points out. “Especially in British Columbia, there is a lot of competition in the credit union space.”

Credit unions in British Columbia are a considerable force in that province’s active mortgage market – and the opportunity to expand in Ontario to do battle with the big banks is likely, say analysts, pointing to lenders looking for new markets outside their mature and declining one.

“They have been lobbying for it,” says Leaker.

“They want the Ontario market.”

The big banks have historically dominated in Ontario, and continue to do so with a plethora of branches and massive national advertising campaigns. For credit unions, it means they’re like David fighting Goliath.

And flying under the radar has helped cement a relation with brokers, seen as key to driving growth where consumers don’t readily think of a credit union when looking for a mortgage.

Some of the best advertising and brand

marketing for credit unions are the mortgage agents themselves, says Phil Fiuza, manager of broker originations at IC Savings.

“We have roughly 2,000 mortgage agents in southern Ontario, and are expanding into the Ottawa and London markets,” says Fiuza. “Branding is absolutely important – some of the best ambassadors we have are our mortgage agents; the veterans who have been in the channel some time and understand what our needs are.”

IC Savings, which expects to expand to seven retail branches in the next few months, stresses

Some of the best advertising and brand marketing for credit unions are the mortgage agents

UP TO

85

%

LTV IN THE GTA ON OUR 2ND MORTGAGE PRODUCT www.tribecca.ca 261 Sheppard Avenue West | Toronto, Ontario | M2N 1N4 Tel: 416.225.6900 | Fax: 416.225.6905 | Licence # 12225

It’s time for a new perspective.™

MORTGAGEBROKERNEWS.CA | 43

FEATURE / MIGRATION EAST

We don’t work with formulas…we deal with people

personal relationships and local underwriting in analyzing its success.

“The mortgage agents we work with best understand that we need to know the client, know their story and what they need, so we can better serve their needs,” says Fiuza. “An automated adjudication system doesn’t work for us. We don’t work with formulas; we don’t deal with the matrix.

We deal with people.”

Like Meridian, IC Savings is focusing on the Ontario market, with no immediate plans on expanding outside of the province. The fact is, says David Phillips, CEO and president of the Credit Union Central of Canada, many CUs are taking a strategic look at applying for a federal charter.

“If I were to speculate, I would say it will be four or five years before you see a federally chartered credit union,” says Phillips. “Many are taking the long-term look – they are eager to take advantage of crossing provincial borders, but no one is jumping in just yet.”

As for credit unions losing that local, community approach to banking by going national, Phillips doesn’t feel that will happen.

“I don’t necessarily see it that way,” he says. “I don’t see it undermining the strength of credit unions – the local, community approach.

Maintaining the local service, the democratic principles; that is what credit unions were founded on.”

But more and more, the underwriting flexibility that credit unions enjoy by not being federally regulated entities is what’s driving broker originations. That’s something they may be loath to give up.

“We will go behind another lender for a second mortgage; or if the client has damaged credit, we will treat each on a case-by-case situation,” says Leake. “We will do 100 per cent financing; OSFI regulations won’t allow banks to do that.”

OSFI Guideline B20 regulates residential mortgage underwriting practices and procedures

44 | MORTGAGEBROKERNEWS.CA

PRINCIPLE 1: FRFIs that are engaged in residential mortgage underwriting and/or the acquisition of residential mortgage loan assets should have a comprehensive Residential Mortgage Underwriting Policy (RMUP). Residential mortgage practices and procedures of FRFIs should comply with their established RMUP. PRINCIPLE 2: FRFIs should perform reasonable due diligence to record and assess the borrower's identity, background and demonstrated willingness to service his/her debt obligations on a timely basis.

PRINCIPLE 3: FRFIs should adequately assess the borrower's capacity to service his/her debt obligations on a timely basis.

PRINCIPLE 4: FRFIs should have sound collateral management and appraisal processes for the underlying mortgage properties.

PRINCIPLE 5: FRFIs should have effective credit and counterparty risk management practices and procedures that support residential mortgage and underwriting and loan asset portfolio management, including, as appropriate, mortgage insurance. for Canada’s banks.

Understandably, Fiuza argues that the B20 guidelines are really not a concern for IC Savings.

“When the rules came in, the drafts for B20, we saw there was quite a bit there that we have already been doing on a consistent basis,” Fiuza says. “We didn’t have to change much.”

Set out in June of last year, all federally regulated financial institutions (FRFI) are subject to five onerous principles that effectively block transactions brokers have considered their stock and trade.

In many cases, these rules would handcuff how credit unions currently operate, especially In the case of HELOCs, OSFI expects FRFIs to cap LTVs at 65 per cent.

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BUSINESS / MARKETING

SHHH, ITâ&#x20AC;&#x2122;S A

SECRET Superstar brokers are superstars for a reason, writes Doren Aldana, helping you tap into their money-making secrets 46 | MORTGAGEBROKERNEWS.CA

Cover

BUSINESS / MARKETING

The Year ahead

21 S E C R E TS

ERSTAR P U S F O reality out there instead of trying ERS K O R B E to sell around it, then people will G A G T OR Mus.” trust

But any efforts the industry may undertake as a whole will have no effect if individual brokers don’t do their parts, which means giving clients the bestprofessionals value-addedhave service, Most mortgage it absolutely improving effi ciencies and funding backwards! They believe that they need to be the ratiostechnically with lenders, course, most adeptand withofthe best underwriting placing clients with the right lenders skills, product knowledge and customer service in for their needs. order to be successful. all ofofsudden “Focus on the bestWhile interest the those skills are nicefirst to have, certainly aren’t critical to your client and they foremost,” said success. fact,are most mortgage Therien.In“We atsuccessful a crossroads: we either go back being the person youtechnical professionals aretoquite mediocre in their go to when the banks say no as it was knowledge and abilities. However, they are extremely 25 years ago, orAnd become truly good marketers. if you’re antrusted excellent marketer, advisers to our customer and move up you have the power to attract clients at will and, to the next level.” CMP therefore, you have funds to hire a team to help you

SECRET #1:

48

morTgagebrokernews.ca

If you’re an excellent marketer, you have the power to attract clients at will and, therefore, you have funds to hire a team to help you with the customer service

71%

Source: Mortgage Insights: Highlights from CAAMP’s Fall 2011 consumer and industry surveys (CAAMP/Martiz Research Canada)

of homeowners say they are in a good position to weather a potential downturn in the housing market

MORTGAGEBROKERNEWS.CA | 47

BUSINESS / MARKETING

Now I am not suggesting it’s OK to be mediocre, I’m simply pointing out that marketing your services is far more important than how good you are at the technical stuff

with the customer service. On the flip side, without clients, you are out of business!

You see, a lot of mortgage professionals think that their business is like the movie Field of Dreams when Kevin Costner says, “If you build it, he will come.”

While that may be true in Hollywood, in the mortgage industry nothing could be further from the truth. If you hadn’t noticed by now, if you build it, they will NOT come -- unless you have effective marketing! It doesn’t matter how good you are at what you do, if you don’t know how to attract clients you’ll be the best-kept secret around.

And another point to remember is that good marketing covers many sins. If you are a great marketer and you have the ability to bring in clients, even if you’re a mediocre underwriter you can still have a very successful business.

Take Microsoft for instance.

When they first came out with their software it was somewhat buggy and it wasn’t a great product. Some of you Mac users would say things haven’t changed much! But here’s the point: because of Microsoft’s marketing, they were able to overcome those initial technical glitches and still become the dominant market leader today. Now I am not suggesting it’s OK to be mediocre, I’m simply pointing out that marketing your services is far more important than how

48 | MORTGAGEBROKERNEWS.CA

good you are at the technical stuff. In fact, you’ll have a lot more clients to practice on to get good at the technical stuff, if you are a great marketer!

You know I always like to remind my clients that they need to work ON their business not just IN their business. When you work on your business, you work at things like getting new clients, and developing and establishing processes, procedures and systems that allow your marketing and operations to run on autopilot. When you work in your business, you get mired down into the details of the day-to-day minutia and you never engage in the high-leverage activities that actually grow your business.

So the very first Secret of Superstar Mortgage Brokers is that they understand that their primary business objective is the marketing of their mortgage services, not necessarily the delivery of their services.

In next month’s second secret, I’ll teach you one of the critical keys in attracting potential clients to come to you (rather than you begging them for their business). Stay tuned...

ABOUT THE WRITER: Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach.

Since 2005, he has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions. For a free copy of Doren’s new CD titled, “21 Secrets of Superstar Mortgage Brokers,” visit: www.SuperstarMortgageBroker.com

FEATURE / COMMERCIAL FRAUD

FRAUDSTERS HEAD FOR COMMERCIAL GROUND A tough residential real estate market means fraudsters are on the move to commercial, writes Vernon Clement Jones, but will brokers be left holding the bag?

Commercial brokers may now be longing for the good old days, if they ever existed, when most fraudsters limited themselves to residential mortgage scams. Their reluctance to stray into commercial, meant only the occasional brave soul would try his luck in that more complex sphere where risk outweighed the most remote possibility of reward.

Times have officially changed, and today commercial real estate is no less a magnet for fraudsters than its residential counterpart. That means brokers dealing in the former are now increasingly as affected as those dealing in the latter. â&#x20AC;&#x153;Commercial real estate fraud involves such things as impersonation, forgery, fraudulent

50 | MORTGAGEBROKERNEWS.CA

FEATURE / COMMERCIAL FRAUD instruments registered on title and the fraudulent manipulation of corporate records,” says Eric Haslett, VP of legal services at title insurance provider FCT. “The common goal of all these schemes is the intent to steal mortgage funds that are legitimately advanced.”

While misrepresentation of a property’s value and the borrower’s income don’t necessarily garner a title insurer’s interest, those forms of fraud do concern mortgage professionals.

More and more, that may be the case as fraudsters enter the commercial sphere, intent on claiming their share of a hot market where lenders are hoping to make up for cooling in the residential sector.

“With the growth of the commercial real estate market,” says Haslett, also FCT’s chief underwriter, “it is clear that while it is attracting legitimate investors it is also attracting those with the intent to defraud.”

But there are some red flags that brokers should keep an eye out for, he urges, and that may require further due diligence on their part to protect the lender, the client and, indeed, their own reputations.

That list means that FCT and other title insurance providers ask brokers to provide up-todate lists of corporate directors and officers, among other key documents. The request stems from the number of past claims involving the fraudulent manipulation of registered directors and officers.

RED FLAGS 1. Vacant land 2. Clients who insist on completing the deal in a very short period of time 3. Private lenders and 4. Recent changes in the directors and officers of a corporation

Misrepresentation of a property’s value and the borrower’s income don’t necessarily garner a title insurer’s interest, but those forms of fraud do concern mortgage professionals

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| 51 MORTGAGEBROKERNEWS.CA Brokerage # 10160

FEATURE / COMMERCIAL FRAUD

Lawyers in Ontario, for example, are now prohibited from allowing staff to use their Teranet diskettes and must keep their passwords private Last year, in May 2012, alone, FCT’s use of its underwriting checklist helped it avoid $11 million in fraud associated with vacant land in the GTA. It’s one of the reasons why brokers, as well as their clients, are insisting on title insurance for the deals they arrange.

Haslett argues that coverage is best protection in ensuring that any loss through fraud is paid to the lender and keeping the broker out of “a significant and time-consuming legal case.”

But there’s growing calls within the commercial brokering sphere for the industry to adopt a new rule now brought in by the Law Society of Upper Canada and aimed squarely at dealing with the escalating number of mortgage fraud claims.

In effect this year, all lawyers involved with real estate transactions in Ontario are required to sign a yearly declaration averring that they know how to avoid fraud.

Approved, Feb. 28, the declaration is essentially a list of fraud-busting practices lawyers are expected to know and exercise. It aims to nip in the bud any claims of ignorance attorneys for borrowers have routinely made over the years, arguing they simply

Got Plans?

STATS

7,400 - Nova Scotia Housing starts January 2013 Source: CMHC

We should get together.

We’ve been underwriting real estate backed Construction, Bridge and Equity Financing for over 35 years.

52 | MORTGAGEBROKERNEWS.CA

weren’t aware of their responsibilities to look for and, indeed, block client fraud.

The Law Society’s move is not with reason. Real estate matters accounted for some 20 per cent of all complaints its professional regulation committee received between 2006 and 2011.

The percentage is not dissimilar to those broker regulators across the country receive, both associated with commercial and residential files.

That reality suggests, say some industry veterans, that brokers can’t afford not to adopt the Law Society’s extra layer of protection against fraud.

Under the terms of a broker declaration, mortgage professionals would have to increase their oversight of employees and better restrict their access to client files and the personal information of innocent Canadians used to perpetrate real estate fraud.

Lawyers in Ontario, for example, are now prohibited from allowing staff to use their Teranet diskettes and must keep their passwords private.

They must also confirm their duty to supervise all non-lawyers they work with and acknowledge that they know they cannot represent both a borrower and a lender in the transfer of titled property.

Duplication of that particular prohibition would be especially problematic for commercial brokers, say industry players, pointing to the often dual role mortgage brokers play as go-between for borrowers and lenders, especially in the growing number of private deals.

Still, that notwithstanding, both commercial and residential brokers may soon find themselves facing just such a requirement as real estate fraud ramps up for the road ahead.

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FEATURE / GIC ADVICE

WHERE ARE THOSE INSTRUCTIONS? Home Trust has already handed brokers the gift of GICs referrals, writes Benjy Katchen, VP of deposits; now here are the instructions on how to build ‘em As we all know, the key to financial services is relationships. Yet not everyone in the industry is created equal. As a mortgage broker, you face challenges in relationship-building that other financial professionals may not.

The mortgage business is cyclical in nature. That means that your avenues for contacting clients may be limited compared to, for example, a financial adviser. You also don’t benefit from annual advertising blitzes around RSP and TFSA season.

And if you’ve sold your client the right product, your relationship may shift into low gear until renewal time rolls around—which can be five, seven or even 10 years away. So what opportunity is there to remind your client of who you are?

Like any good broker you are always looking for that kind of opportunity; and Home Trust has made it easier for you. While the lender is known for its leading role in developing the alternative sphere, its business involves more than just mortgages, with a well-established presence in the savings and investment space. To develop that business further, we have created a formal deposit referral program that brings our products to a wider market. The program presents a double-headed opportunity for mortgage brokers: to build revenues and relationships.

54 | MORTGAGEBROKERNEWS.CA

FEATURE / GIC ADVICE MAKE YOUR FUTURE BUSINESS YOUR CURRENT BUSINESS As a mortgage broker, your relationships can have a narrow focus. Your job is to find your clients the best mortgage for their needs, period—the best rate, the right options, the product to meet all their requirements. Once you’ve done that, you’ve earned an honest day’s wages. For some, there may be a temptation to file that happy client under “Renewal Prospects” and look forward to speaking to them in another five years.

Yet as a proactive broker, there’s every reason to keep those relationships active. The chances are that many of your clients– current and former– are looking for savings and investment vehicles, like GICs, RSPs, RIFs and TFSAs, right now, so you know that you’re filling a need.

Review your clients’ statements of net worth to determine how best to channel your efforts

HOW TO MINE YOUR DATA

A PROGRAM FOR ALL SEASONS

GICs are one of the most popular savings and investment vehicles on the market, and Home Trust offers a wide range with terms as short as 30 days up to five years. Our interest rates are among the highest in Canada. Our deposits are eligible for CDIC insurance up to applicable limits, and are available right across the country. They will appeal to those looking for a safe, reliable investment.

In today’s environment, that includes a lot of people. The extreme volatility of equity markets over the past four years has prompted a lot of Canadians to take another look at their investment portfolios, and to reconsider their asset mix. If you have clients with disposable assets, you’ll have a lot of potential referrals.

Some jump straight to mind: the long-time homeowner looking to save for their retirement, or the new immigrant who is just getting established in Canada. Others are not as evident, but just as valuable. Declined clients, for example, can be a good potential market, since they may be looking for a place to park their down payment while they wait for another opportunity. And of course, you can refer family, friends and even yourself.

Working your existing database is a fairly simple matter. Review your clients’ statements of net worth to determine how best to channel your efforts. You can also target your pre-qualified prospects through email blasts, direct mail and social media sites, such as Facebook. (We’ve even made it sweeter for your clients, because we are currently offering a 0.25 per cent bonus on the interest rate for all Home Trust GICs.)

The best time to leverage a referral program like this is around RSP and TFSA season, since you’ll be piggybacking off the huge awareness generated by advertising across the financial sector. Another great opportunity is renewal time, which happens throughout the year: you can use your steady stream of renewals to refer clients, improving your clients’ relationships and boosting your income.

But it’s important to remember that this is a program for all seasons. There is no time at which it isn’t right to raise the question of savings and investment with your clients, since they form part of the mortgage planning process. Every time that you speak to a client, you have the opportunity to bring savings into the conversation—and that’s an opportunity to refer clients.

As a broker, your biggest thrill probably comes from finding opportunity; after all, seeking out new leads is what your job is all about. But isn’t it nice when the opposite happens—when opportunity comes looking for you?

NO PAPERWORK – JUST REFERRALS So, your referral begins with pre-qualifying your database to find good leads, reaching out and obtaining their consent for the referral. But once that is done, you simply send in their name and contact information.

We take it from there, while you simply earn income from every referral that turns into a sale. We pay a fee for every GIC your referral books with us, and the entire amount is paid upfront. In addition, you receive the same fee for renewals of the original funds, for as long as they stay with Home Trust.

MORTGAGEBROKERNEWS.CA | 55

FEATURE / RUGBY AND BROKERING

MORE THAN A

SPORTING CHANCE

The ruck-ready world of rugby has well-prepared Michael James for brokering, writes CMP’s Don Horne

“Not many people are paid to do their passion.”

Michael James was speaking of his years as a rugby player for Canada and in France – but he holds that same passion for brokering today.

“Something I understood early on from rugby: you are only as good as your last game,” says the agent with Dominion Lending Centres Mortgage Evolution West. “As a broker, you are only as good as your last client.”

His years of knocking heads on the rugby pitch in Europe and North America provided him with the tools to be a successful broker.

“It’s a contact sport with no equipment,” he smiles, “you need to be pretty brave, and be pretty good on your toes. Those strengths I bring to brokering.”

When James started brokering in the spring of 2008, the recession was just beginning to deepen – and his days of fighting for every inch of ground were essential to winning new clients during those tough economic times.

“When I got my licence, the market was slowing down, and I had to weather the economic storm right from the start,” he remembers. “I learned from more experienced brokers, like Susie Inglis and Denise Devente, through osmosis and her mentoring.”

56 | MORTGAGEBROKERNEWS.CA

FEATURE / RUGBY AND BROKERING Inglis is the head broker at Mortgage Evolution, and Devente her business partner.

“My advice to anyone entering the brokering business – surround yourself with people who know the business,” he says. “It’s a tough nut to crack; it is like a scrum: you just lower your head and push.”

During the height of his rugby career, James lived in the south of France in Perpignan, playing for the the French Barbarians and the prestigious Stade Francais Paris club.

It was with Stade Francais Paris in 2005 that he played with New Zealand greats Justin Marshall and Kees Meeuws. An imposing 196 cm tall and 110 kg, he played the ‘lock’ position - the lock providing the power in the scrum. James was part of the Stade Francais teams that won the French Premiership titles in 2003, 2004 and 2007.

Born in 1973 in Vancouver, he is one of only a handful of professional Canadian rugby union players. His record includes 54 caps for Canada, nine of which have come from World Cup matches.

He has captained Canada on several occasions, and most recently in the match against France at Nantes. James has appeared in 4 World Cups – in 1995, 1999, 2003 and 2007.

A father of three, with boys age 13, 11 and seven, he jumped into the brokering world when he and his wife, Leah, returned from France to buy a home

Now I am looking at my first renewals coming up. It is a lot more rewarding to have the repeat business, to have clients renew

on Vancouver’s north shore.

“When I came back to Canada, I rejoined my old rugby club for three years, and played for the provincial team,” he says. “But as the boys got older, I had to take a step back. Now I’m on the board of directors for B.C. Rugby, and I enjoy coaching at the local and provincial level.”

Today James focuses primarily on the residential market.

“I cut my teeth on a number of different ventures, but I am mainly residential,” he says. “But if there’s a deal to be done, I will do it.”

In May of last year he switched to Dominion Lending and is now looking forward to his next challenge as a broker.

“In the beginning, it was building a book of clients, that was my first push,” he says, his language laced with rugby analogies. “Now I am looking at my first renewals coming up. It is a lot more rewarding to have the repeat business, to have clients renew.

“I like to focus on the relationship. Big banking institutions don’t do that,” he observes. “Brokers focus on the relationship. I like to keep in touch, and with social media, it is easy to drop an email or send a text from time to time.”

The driving need to succeed, inspired by his days as a rugby player and his source of strength as a broker, is complemented by a quiet humility that is sometimes lacking in the business world.

“The one thing I learned from sports is my sense of modesty,” says James. “I know I don’t have much advice to offer established brokers, they know what works and what doesn’t. All I can say for those starting out in the business is that you need to have a real commitment – a commitment to the client.”

The team approach, succeeding as a team, continues to be his life’s theme.

“My best games in rugby, I didn’t stand out at all,” he says. “We all won. And if I can find the best deal for a client, we all win, too.”

CMHC & Conventional Mortgages for:

Single Family Alternate Equity Lending:

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

Toronto CMHC/Conventional Financing Phone: 416-368-3266 Email: toronto@peoplestrust.com

Equity Take Outs Purchases/Refinances Homeowner or Rental Flexible Income Verification

Calgary CMHC/Conventional Financing Phone: 403-237-8795 Email: calgary@peoplestrust.com

Vancouver CMHC/Conventional Financing Single Family Financing Phone: 604-685-1068 Email: vancouver@peoplestrust.com | 57 MORTGAGEBROKERNEWS.CA

PROFILE / PROVIDER

THE HAND-OFF A competitive market requires handing brokers options for clients willing to deal on terms and rates, says RMG’s Bruno Valko

58 | MORTGAGEBROKERNEWS.CA

Bruno Valko, director, national sales, RMG Mortgages, sees the future of the Canadian real estate market and it rests with products such as his firm’s new low rate basic mortgage offer, 35-year amortization and other products that differentiate brokers from their competition.

The Low-Rate Basic is grabbing attention among professional brokers for its low payment at an ultra-competitive fixed rate that can turn purchasing a home into a reality for many buyers.

“A low-rate basic mortgage appeals to that target market especially home buyers willing to forego the bells and whistles of some product features to keep payments as low as possible and cash flow flexible,” says Valko, who acknowledges that the terms and potential penalties for breaking the five-year term mortgage early is the tradeoff and not for everyone.

“Many people will drive miles outside of town to shop the lowest price.”

Still, the mortgage, says Valko, is definitely attractive clients, including first-time home buyers

PROFILE / PROVIDER

STATS

4,100 - New Brunswick Housing starts January 2013 Source: CMHC

with five per cent down payments and understanding that a low monthly payment enables them to save for other things such as home improvements and investments such as RRSPs and RESPs. And since the chances of benefiting from a refinance to 80 per cent LTV within the first five years are minimal, the benefit of the low rate is more attractive.

This and other popular, innovative home financing products that serve the residential broker market are the calling card of RMG Mortgages, MCAP Financial Group’s new brand since acquiring and rebranding the residential mortgage operations of ResMor Trust Company last summer.

Coming on the heels of several mortgage lenders exiting the market, the move, one of the largest purchases to date of a mortgage lender in Canada, provides RMG a higher profile with more stable credibility and opportunity to grow within the broker channel.

“Backed by MCAP’s Canadian ownership and corporate structure, RMG is now ideally positioned for competitive market differentiation,” says Michel Cubric, RMG’s vice-president of operations. “It’s the perfect fit for both companies and gives RMG a definite home advantage.”

In a bid to differentiate itself as a financing alternative to big banks, credit unions and trust companies, RMG signaled its market positioning by throwing down the gauntlet with February’s re-introduction of the 35-year amortization mortgage on conventional LTVs and launch of a low-rate basic mortgage at extremely competitive rates.

Both products give brokers options for clients seeking home financing that fits their situation and lifestyle.

“These products are right for our times,” says Valko, noting a softening in some real estate markets means brokers need products and services that give them a competitive leg up in successfully

positioning the advantages of working with a professional mortgage broker.

For the 500-plus professional brokers across the country working with RMG Mortgages, that’s good news, especially when it comes to breaking down potential purchase barriers for clients who require financing between 80-95 per cent of the property value or those who are highly cost-sensitive and don’t typically fit major lender profiles.

With underwriting offices in B.C. and Ontario, RMG is also launching Gateway, its new online broker portal that lets brokers track their deal decisions, check the status of client applications and review documentation in real time.

In addition to the 35-year amortization program and low-rate basic mortgage, RMG’s products and services portfolio also includes:

•

•

•

•

A streamlined transfer-in/switches offer with features including RMG covering lender’s discharge fees up to $250, appraisal rebates, and at-home client signings A cash-back offer providing borrowers up to three per cent return of their total mortgage amount Conventional underwriting for mortgage financing (80 per cent LTV or less) that’s insurance-premiums free Bridge financing that provides clients with temporary funding borrowed against the value of their current home to secure RMG financing of a second property

Buoyed by positive feedback to date, RMG is excited about the future and opportunities to expand its products and services portfolio.

Valko sums it up: “RMG and MCAP … solid, separate brands supporting the broker channel with products and services that capture different parts of the market. We’re in a really good place right now!”

Both products give brokers options for clients seeking home financing that fits their situation and lifestyle MORTGAGEBROKERNEWS.CA | 59

PROFILE / BROKER

MORE

THAN A NUMBERS GAME Mortgage Architects is looking beyond volume, beyond numbers, says CEO Ron Swift, shared his calculations with CMP’s Donald Horne

60 | MORTGAGEBROKERNEWS.CA

I

t was almost a year ago that the CEO of Mortgage Architects Ron Swift accepted the Lifetime Achievement award at the 2012 Canadian Mortgage Awards, sharing a vision for the industry that continues to expand.

“The competition is more fierce than it’s ever been, with credit unions and new brokers all fighting over the triple-A customer,” says Swift, reflecting on current state of the business. “Things are slowing in the mortgage market, and we need to find ways to make our brokers as efficient and effective as possible.”

That’s been his raison d’etre since taking the helm of Pacific Mortgage Group, parent to both MA but also lender Radius Financial, now actively growing its funded volume from across the breadth and scope of the channel.

Still, He and the team at MA are just as busy helming the growth at that network.

One of those changes included the brokersrecruiting-brokers advertising campaign, which features MA members endorsing the network with an eye to attracting professional from outside the network.

“We are building brand awareness with our advertising campaign, creating a higher profile,” says Swift. “Why Mortgage Architects? What is good about MA? Brokers want to hear from other brokers about the positive aspects of the business, not the corporate line.”

That strategy appears to be working. MA again

PROFILE / BROKER grew in December 2012, welcoming Mississauga’s The Mortgage Practice into the fold. The acquisition was only the latest of several brokerages to join – with The Mortgage Practice bringing a team of 80 brokers responsible for more than $200 million in volume annually.

MA now boasts more than 500 brokers nationwide. But Swift is quick to point out that MA isn’t looking at sheer numbers, but the effectiveness of those 500.

“For our agents, we try to help them be more productive by finding more loans, not leads,” he says. “Yes, there are other brokerages that have greater volumes, but they have way more people on staff. “Our metrics show we have the highest productivity with our agents.”

New client and lead management tool technology has been brought online through the 2012 revamp, and with it comes a better ability to measure agent and broker performance.

“We need to understand and measure the numbers,” stresses Swift. “We are preoccupied with the end result, the final numbers. People don’t look at how efficient you are in the mortgage process, from leads to commitments to funded loans. We need to understand where the agent is spending their time.”

Beyond understanding what numbers need to be crunched, there is an ongoing need to train and improve brokers and agents.

“Five or six years ago when real estate was busy, when lenders could do more things, the business was coming to you,” he says. “Now with all of the regulation and rule changes – the requirements of qualified and unqualified clients ¬– the question is: ‘Do you know how to service these people?’”

For Swift, the solution was to hire on a full-time trainer, with a mandate to set up a program to train brokers nationwide.

“How do you train 500 people across Canada?

That is why we needed someone to fill a national trainer role.”

Swift’s credentials include holding down a variety of leadership roles at MCAP before coming over to lead Mortgage Architects in September of 2011. A former mortgage broker and native of Vancouver, Swift, now based in Toronto, has an extraordinary knowledge of Canada’s retail mortgage business.

The latest challenge presented to brokers, as Swift sees it, has been the growing popularity of rate websites. But instead of hoping they will just go away, he feels such websites should be used as a starting point for brokers – but not as a selling point.

“How do you adjust your business with the

Swift is quick to point out that MA isn’t looking at sheer numbers, but the effectiveness of those 500

STATS

32,000 - Quebec Housing starts January 2013 Source: CMHC

popularity of rate sites?” he says. “First of all, you need to not let the customer get hung up on rates.

Stop selling on rate, start selling on services.”

With the rate differential among lenders so small, it is incumbent on the broker to bring the client up to speed on what a basement-priced mortgage can mean down the road.

“There is one constant in the industry – that most consumers will break their mortgage if they are in a five-year fixed. We all have access to the lenders, but we need to show the client that they need a mortgage that allows them to ‘walk away’ without paying a big penalty,” he says.

Apart from educating the agents and brokers, the alternative lenders could learn a few things from the big banks – Mortgage Architects included.

“We have all fallen down on the refinancing aspect,” he admits, adding that the new client management technologies now allows even the smallest brokerage to remain up-to-date and in touch with a client, so as to meet their refinancing needs and retain them as repeat customers.

Like most broker networks, recovering from the tightening of mortgage regulations back in June of 2012, MA felt the hit, but is optimistic for the coming year.

“The new rules did affect the marketplace and impacted our business,” says Swift, “but we are better off now than a year ago. We will continue to grow.”

MORTGAGEBROKERNEWS.CA | 61

PROFILE / FAVOURITE THINGS

Favourite things…

Brian Nason Mortgage Architects, Hamilton, Ont. Drink: Water “I know it’s boring!!”

Vacation: Saas-Fee, Switzerland

NEW Mortgage Product:

An amazing 10-year

fixed at 3.69 per cent

Book: Hobby: Downhill skiing (pictured with Nancy Greene)

Flanagan’s Run by Tom McNab

Activity: Riding motorcycles, fly fishing Sports: Skiing, martial arts

Music: Electric Food: Bacon and eggs

NEW Mortgage Term:

10 - year term 62 | MORTGAGEBROKERNEWS.CA

ow!

N k o Bo rs

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This 8th annual black-tie gala is the mortgage industryâ&#x20AC;&#x2122;s event of the year and attracts over 600 of the biggest names in the business. Industry professionals will gather to praise the achievements of their peers at the Broadway-themed awards gala.

The LiberTy Grand, ToronTo onT. May 10, 2013 P: 1-855-283-2721

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canadianmortgageawards.com Award Sponsors

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SERVICE / DIRECTORY

Banks

B2B Bank b2bbank.com/mortgages Ph: 1 800 263 8349 Inside Back Cover

Bridgewater Bank www.bridgewaterbank.ca Ph: 1 888 837 2326 Page 10 & 11

Pillar Financial Services www.pillarfinancial.ca Ph: 613 282 1242 Page 53

Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 19

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

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

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

RMG Mortgages www.RMGmortgages.ca Ph: 866 809 5800 Page 45

National Bank www.nbc.ca Ph: 1 888 483 5628 Page 17

Tribecca Finance Corporation www.tribecca.ca Ph: 416 225 6900 Page 43

Non-Bank Lenders

TM

INVIS Mortgage Intelligence www.invis.ca • Ph: 1 866 854 6847 Pages 20-21

Mortgage Architects www.mortgagearchitects.ca • Ph: 1 877 802 9100 Page 7 & Outsert

Commercial Lenders

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

Capital Direct www.capitaldirect.ca Ph: 780 868-0550 Page 25

First National Financial LP www.firstnational.ca Ph: 416 593 1100 Page 31

RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 29

Vector Financial Services www.vectorfinancialservices.com Ph: 1 866 483 8018 Page 51-52 Insurance

Technology & Software

Canada Guaranty Mortgage Insurance Company www.canadaguaranty.ca Ph: 1 866 414 9109 Page 23

Home Trust www.hometrust.ca Ph: 1 877 903 2133 Page 13

MCAP www.mcap.com/brokers Page 15

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

Marlborough Stirling Canada www.morweb.ca Ph: 1 877 626 2022 Page 37

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

Optimum Mortgage A Division of Canadian Western Trust www.OptimumMortgage.ca Ph: 866 441 3775 Page 38

The Mortgage Centre www.mortgagecentre.com Ph: 1 800 423 0107 Page 35

Real Estate

Canadian National Association of Real Estate Appraisers www.cnarea.ca Ph: 1 888 399 3366 Page 24

Argentum Mortgage and Finance Corp www.argentummortgages.ca Ph: 1 888 402 7436 Page 49 Services

Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 57

64 | MORTGAGEBROKERNEWS.CA

Centum Financial Group Inc. www.centum.ca Ph: 1 604 257 3940 Page 5

Best Points Travel info@bestpointstravel.com Ph: 1 800 551 8786 Ph: 416 251 9944 Page 47

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