CMP 10.06

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WOMEN OF INFLUENCE These 26 mortgage professionals are at the top of their game – and at the top of the industry

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ISSUE 10.6

CONTENTS

22

WOMEN OF INFLUENCE COVER STORY

Meet the 26 women behind some of the biggest deals and innovations in the mortgage industry

HOW PLANS BECOME SQUARE FEET. Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $1.5 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $4M to $100M. Blake Cassidy | 800 494 0389 | www.romspen.com

DATE:

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CONTENTS

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UPFRONT 04 Editorial

Broker commissions are growing abroad – but not in Canada

06 Statistics

The national employment picture, and what it means for the housing market

08 Head to head

Are low interest rates making household debt worse?

36 FEATURES

PRIVATE LENDING GUIDE

Everything you need to know about tapping into Canada’s growing private lending market

12 Commercial update

52 PEOPLE

BROKER PROFILE

Scott Peckford gives CMP a behindthe-scenes look at his popular “I Love Mortgage Brokering” podcast

How to overcome lulls in the market

14 Alternative lending update Challenges and opportunities for funding alternative deals

16 Opinion

Why appraisal management companies aren’t necessary

PEOPLE 55 Career path

James Shinners made the unlikely leap from auto loans to home loans PEOPLE

56 Other life

INDUSTRY ICON

When she’s not helping clients finance their homes, Kim Reddin is building them

Home Capital Group’s Gerald Soloway has built his career on clearing regulatory hurdles

18

10 UPFRONT

NEWS ANALYSIS How many associations does the Canadian mortgage industry really need?

2

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UPFRONT

EDITORIAL

A tale of two commissions

B

rokers in Australia have some pretty swelled heads right about now.

It’s an affliction their counterparts here in Canada are in no danger of contracting.

Competition down under has encouraged lenders in Australia to inflate broker commissions to record highs as they jockey for a bigger piece of their growing pie. That growing market share means lenders are beating a path to the doors of mortgage professionals – and they come bearing gifts.

“Industry estimates indicate that 40% to 50% of new housing loans are now sold through mortgage brokers,” wrote Australia’s central bank in its most recent Financial Stability Review. Lenders simply can’t afford to ignore that, say analysts, who point to the extra bps those companies are now putting into the pay packets of their broker partners.

“Competition is very volatile, and we’ve seen fee reductions just to remain competitve” Brokers in Canada should be so lucky. While their market share is almost as impressive – the latest CAAMP report pegs it at 34% – there’s little indication lenders are giving the slightest thought to upping their compensation, either on the upfront or the trailer fee side.

In fact, the opposite may in fact be true. Competition for a dwindling number of originations has already driven interest rates to record lows, and brokers argue they’re having to buy down rates in order to keep the punters coming through the door. They claim some lenders have left them little option but to engage in that kind of discounting – in effect, leaving mortgage professionals to take it on the chin for the channel while they hold onto their admittedly modest spreads.

Still, no matter who catches the blame, the Canadian market seems a world removed from the dynamics now reshaping broker compensation in Australia. “I don’t anticipate commissions will go up; they will likely remain flat,” says Ferd Gatt of Dominion Lending Centres. “Competition is very volatile, and we’ve seen fee reductions just to remain competitive.”

But there is hope – albeit remote. If brokers were to grow their market share by even 5-7 percentage points, they would conceivably up their bargaining power. But they may have to put on some speed. Market analysts anticipate the struggling Canadian economy will put the kibosh on mortgage growth, making it harder and harder for brokers to achieve the requisite volume.

Vernon Clement Jones, editor

www.mortgagebrokernews.ca ISSUE 10.6 EDITORIAL Editorial Director Vernon Clement Jones Senior Writer Justin da Rosa Writers Olivia D’Orazio Jordan Maxwell Executive Editor – Special Features Ryan Smith Copy Editor Clare Alexander

CONTRIBUTOR Rosemary Madden

ART & PRODUCTION Design Manager Daniel Williams Designers Loiza Caguiat Production Manager Alicia Salvati Traffic Manager Kay Valdez

SALES & MARKETING Associate Publisher Trevor Biggs General Manager, Sales John Mackenzie Marketing and Communications Claudine Ting Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Global CEO Mike Shipley Global COO George Walmsley

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Canadian Mortgage Professional is part of an international family of B2B publications and websites for the real estate and mortgage industries MORTGAGE PROFESSIONAL AUSTRALIA sam.richardson@keymedia.com.au T +61 2 8437 4787

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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 the magazine can accept no responsibility for loss

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UPFRONT

STATISTICS

National employment and you

GOT A JOB? BUY A HOUSE The inverse correlation between a province’s change in unemployment rate and its growth in home sales is usually strong. In British Columbia, for instance, a 10% reduction in the unemployment rate between May 2013 and May 2015 corresponded to a 43% spike in home sales over the same period. However, exceptions to that rule occur in some parts of the country. The Atlantic provinces of New Brunswick and Prince Edward Island saw a drop in unemployment but also a drop in home sales.

Despite rock-bottom rates, many are waiting for secure employment before purchasing a home IT’S A FACT of life: People struggling with employment aren’t likely to spend hundreds of thousands of dollars on a big piece of real estate. It follows, then, that the nation’s unemployment rate is closely tied to the country’s real estate market.

Take Alberta, for instance. More job losses are threatening the market there, resulting in double-digit declines in home sales. However, in Ontario, where the unemployment rate is equal to the national rate of 6.8%, home sales

have skyrocketed.

The trend among young people to delay entering the real estate market is mirrored by the high unemployment rates they face, which also contribute to their decision to put off buying a home.

With that in mind, CMP has gathered the most important employment statistics from across the country to help you educate your clients and better explain your market’s current state of affairs.

10.3% 43.1%

BC Improvement in

unemployment rate

6.8%

The national unemployment rate in April

13.6%

The national unemployment rate among those aged 15 to 24

18.9%

The national part-time unemployment rate

Increase in home sales

113.4%

Year-over-year change in the national labour force Source: StatCan, April 2015

THE CHANGING BREADWINNER Unemployment is slightly higher among men, leaving more women to carry the household expenses

5.3%

6.0%

JOB (AND MORTGAGE) CREATORS

BY SECTOR Certain industries are better at creating jobs – and opportunity for brokers – than others

6.0%

Educational services

2.5%

Women

Men

3.1%

Information, culture and recreation

Health care and social assistance

2.7%

Transportation and warehousing

2.4%

Accommodation and food services

Source: StatCan, April 2015

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CANADA Improvement in unemployment rate Increase in home sales

6.8% 7.9% QC Improvement in

unemployment rate Increase in home sales

MB Improvement in

unemployment rate Increase in home sales

1.3% 0.0%

unemployment rate Decrease in home sales

PE Improvement in

0.0% 2.7%

unemployment rate Decrease in home sales

unemployment rate Decrease in home sales

AB Worsening of

unemployment rate Decrease in home sales

-20.8% -15.1%

unemployment rate

-8.9% -9.9%

Decrease in home sales

ON Improvement in

unemployment rate Increase in home sales

1.8% -13.3%

8.6% -3.7%

NB Improvement in SK Worsening of

-19% -3.7%

NL Worsening of

11% 10.1%

NS Worsening of

unemployment rate Decrease in home sales

-1.1% -13.8%

Improvement in unemployment rate is the change in the % unemployment rate from May 2013 to May 2015 The home sales figure depicts the % change in the year-to-date home sales figure in May 2013 versus that of May 2015

HOME SALES SPIKE

2.2%

Professional, scientific and technical services

2.0%

Finance, insurance, real estate and leasing

1.5%

As unemployment rates have fallen over the last few years, year-over-year home sales have risen Unemployment Home sales

Construction 10% 8% 6% 4%

-0.8%

Manufacturing

-2.8% Agriculture

-6.6%

Natural resources

2% 0% -2% -4%

Source: StatCan, April 2015; figures depict the change in the total number of jobs in each sector between April 2014 and April 2015

2013

2014

2015

Source: StatCan, April 2013, 2014, 2015; CREA, April 2013, 2014, 2015

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17/06/2015 10:02:31 AM

UPFRONT

HEAD TO HEAD

Are low interest rates exacerbating the high amount of household debt?

Interest rates won’t stay low forever, and economists are already casting a jaundiced eye over what the future holds for mortgage brokers when rates go up. But do brokers feel the same?

Ross Taylor

Rob Jennings

Leanne Myles

Mortgage consultant Mortgage Intelligence

Mortgage advisor East Coast Mortgage Brokers

Mortgage consultant Verico Premiere Mortgage

“Absolutely [they are], but it’s a good thing for mortgage brokers. The media will have you believe that you need to scratch and save to do all you can, but the reality is that people are tired of sitting on the sidelines and are finding creative ways to get 20% down together.

I’ve heard of more and more people who are borrowing to invest, and that’s the reality facing the markets with low interest rates and ballooning house prices.”

“I don’t think low interest rates are making things worse … if anything, perhaps better!

Most of my clients carry a mortgage, car loan(s) and maybe a student loan – they are all low-rate, justifiable forms of debt. So when people talk about recordhigh amounts of debt, it’s not as bad as it seems. A lot of my clients are taking advantage of existing equity and the low rates to consolidate higher-rate debt they have accumulated over the years and improve their financial positions.”

“A low interest rate is almost never a bad thing, especially when financing the largest asset of your life.

However, a low interest rate – and subse­ quently a lower mortgage payment – can seduce you into a cash flow surplus that might not hold true when your mortgage renews. With a lower than normal mortgage payment, taking on added debt doesn’t feel like it’s creating more stress – until your mortgage rate changes, along with your mortgage payment.”

A BALANCING ACT In early June, Statistics Canada reported that the national household debt ratio had shrunk to 163.3% in the first quarter of the year, down from 163.6% in the fourth quarter of last year. It’s good news, of course, but that figure still suggests Canadians are carrying a high level of household debt.

Historically low interest rates are certainly not helping. However, in its June 2015 Financial System Review, the Bank of Canada said a sudden increase to the overnight benchmark rate could become problematic. “Low interest rates may lead some borrowers to take on additional, or larger, loans,” the central bank said in its report, “although more disciplined borrowers might instead pay down their debt at a faster pace.”

8 www.mortgagebrokernews.ca

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6/11/2015 16/06/2015 12:18:21 3:28:13 PM PM

UPFRONT

NEWS ANALYSIS

Divided we fall?

The idea of one unified association for the industry is a dream that never dies. But should it?

THE CALL for cooperation between industry associations has never been mistaken for a rallying cry. In fact, proponents of bringing those organizations into tighter alignment often have struggled to have their voices heard amid a fractious debate about com­ peting value-adds.

That was indeed the case earlier this year when The Canadian Mortgage Brokers Asso­ ciation launched, giving rise to a vigorous debate about whether it would work in tandem with CAAMP or as a lone wolf. The newly minted association is, of course, an association of associations. The umbrella group’s provin­ cially based members include MBABC, MBAAC and IMBA. Its mandate is ostensibly straightforward enough: to promote mortgage brokers and their services on a national and, presumably where necessary, a provincial or regional

“If they do it in unity and went together, there would be a stronger voice,” says Rajan Kaushal, managing director of Tribecca Financial Corp. “It would definitely be more effective.”

Still, it’s difficult to make the argument that a lack of overt cooperation erodes the organizations’ collective power, whether that’s in lobbying government or winning con­ sumer support.

“But it would be a service to our industry – as opposed to a disservice – if there were to be a meeting of the minds and they worked together when lobbying,” Kaushal says.

Brokers in the field have expressed the same kind of wishful thinking. They’re encouraged by CMBA’s ability to bring together three strong provincial players in a way that the industry has otherwise failed to attain.

“I think about 80% of the things you’ll get, despite the fact that they’re two different organizations, will be common concerns” Derrek Foster, The Mortgage Centre level. Make no mistake: The end goal is to increase market share for mortgage profes­ sionals from coast to coast to coast.

But is that target achievable outside of a closer alignment with other provincial asso­ ciations and the national voice that is CAAMP?

10

“This is the right path for mortgage brokers,” says Blair Anderson, a long-time inde­pendent broker. “I’m delighted to see mortgage brokers standing up for themselves and controlling their own destiny. A national association, borne out of the provincial associations, exclusively representing mortgage brokers,

was the best origin to establish the CMBA.” But brokers continue to see the benefits of a national association bringing together both lenders and brokers to advocate on behalf of the customers they serve. That model has served the industry from CAAMP’s earliest days, say supporters of the association. They stood squarely behind CAAMP’s decision to give CMBA membership a pass – at least for now.

In a letter to its members, the CAAMP board laid out its objections to the apparent duplication of mandates between itself and the CMBA. “Another national organization was created to solely represent mortgage brokers – not the channel as a whole – potentially frag­ menting our unified voice, and further dividing our resources among duplicative

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ASSOCIATIONS ON ALL FRONTS

NATIONAL NAMES There’s no longer just one, but two players focused on influencing government and consumers on a federal basis

CAAMP CMBA PROVINCIAL PLAYERS Their numbers continue to grow, as does their influence – demand is growing for Saskatchewan and Quebec to come on board with their own organizations

British Columbia...............................................MBABC Alberta ........................................................................AMBA Ontario ..........................................................................IMBA Maritimes ..............................................................MBAAC

structures,” the letter said.

But, as sound as that argument is, say brokers, the industry is sufficiently large and diverse enough that its organizations must be able to enjoy autonomy from each other. That kind of liberal thinking also allows for – indeed, mandates – multiple organizations in any one arena, be it provincial or federal.

“If you have one concern, but it’s presented in different ways, it at least allows people at the other end to hear both arguments and filter out common points and then deal with the ones that aren’t common to each organization separately,” says Derrick Foster, a mortgage broker with The Mortgage Centre.

“On the whole, I think about 80% of the things you’ll get, despite the fact that they’re two different organizations, will be common

concerns. The other 20% will be self-interest, things that they think will be beneficial to their own organizations more so than the

himself a lender, understands.

“I like the fact that CMBA has a network of provincial organizations,” he says. “What would be nice is if they could work together when trying to accomplish something with the government – I think that’s important.

But the fact that there are separate provincial

“The fact that there are separate provincial organizations, as opposed to one national organization, is a good thing” Rajan Kaushal, Tribecca Financial Corp. industry as a whole.”

Foster’s model allows for industry-specific concerns, which may legitimately differ from one organization to the next. Still each is just as committed to promoting and advocating for the broker channel as the next. But a large part of CMBA’s appeal was its broker-only membership pledge, something Kaushal,

organizations, as opposed to one national organ­ization, is a good thing.”

But brokers can dream, can’t they? The idea of a unified front, even perhaps with one association acting both provincially and federally, is alive and well. That’s as it should be, according to a slim majority of brokers who answered a recent CMP poll.

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17/06/2015 9:28:38 AM

UPFRONT

COMMERCIAL UPDATE NEWS BRIEFS New top commercial broker honoured at CMAs

The ninth annual Canadian Mortgage Awards named a new top commercial mortgage broker, as Michel Durand of Mortgage Alliance Commercial Capital ended a three-year streak for Sandy Harrington.

In his speech, Durand thanked his family and business partner, and also paid tribute to a number of his competitors – and fellow nominees – including David Beckingham, president and CEO of Dominion Lending Centres Commercial Capital, who is a perennial top producer.

Commercial mortgage market growing One of Canada’s largest independent mortgage services firms has released its latest report on the com­mercial mortgage market. CMLS Finan­cial’s commentary uses figures from 27 mortgage lenders together with publicly sourced data.

The firm estimates that the commercial mortgage sector, excluding construction, was worth $195 billion in 2014, a 5.4% increase from 2013.

Commercial mortgage origination remained steady at 39%, despite the growing availability of capital and alternative financing options.

It’s good news for brokers who operate in this space, as many rely on a small number of expensive deals.

Asians dominate list of billionaires in real estate The latest list of the world’s billionaires has been published by Forbes.com, and this year there are more real estate billionaires. The list includes 157 people who have made their billions from

property investments – 23 more than last year.

Most of the 20 richest are from Asia-Pacific, four are from the US, three from the UK and one from the UAE. Overall, the US has the most real estate billionaires with 33. Generally speaking, they have made their fortunes through commercial real estate rather than homes.

Blueprint for commercial success Commercial brokers are busy in 2015, but as one recent report reveals, not all real estate in that sector is created equal.

“The attractiveness of renovated warehouse space turned into chic office space is especially high amongst creative agencies and technology companies, who attract younger employees,” said John Arnoldi, executive managing director for the Toronto Brokerage of Colliers International in an official release. “Brick and beam space, primarily found in the Entertainment District and Downtown West, is commanding gross rents in the $40 range, attesting to the appeal of these unique buildings.”

Commercial excelling in Calgary Despite the recent downturn in the energy sector and in residential real estate in Calgary, the commercial sector is reported to be holding up, particularly industrial. The area to the east of the city, in Rocky View County, is especially buoyant.

Jon Mook and Casey Stuart of Barclay Street Real Estate told the Calgary Herald that out of a development of 28 hectares, the first phase of the Point Trotter Industrial Park, just four lots remain.

Dealing with commercial lending lulls There are peaks and valleys in the commercial lending game – here are some tips for dealing with them MICHEL DURAND, a commercial mortgage broker with Mortgage Alliance Com­mercial Canada, is no stranger to the ups and downs of the commercial market.

But as a leading player in the space, he has figured out a way to maximize the odds in his favour.

“The thing I do different from other brokers is we have several channels bringing business in instead of just looking for one-off deals,” Durand says. “I’ve aligned with other brokerages, financial planners and Realtors who regularly send me deals.

Instead of hunting for deals, I’ve decided to put in place agreements to establish channels of business that send several opportunities a year.”

One of those partnerships that has borne a great deal of business fruit is a Durand’s relationship with Macquarie Private Wealth. A number of Macquarie advisors across the country send potential deals to Durand on a regular basis.

And that’s a good thing because, as any commercial mortgage broker will tell you, there are hot and cold months.

In Toronto, for example, May 2015 saw a severe drop in commercial space leased on a square-foot basis. TREB commercial network members reported 377,052 square feet of leased space in May, compared to 629,864 in May 2014.

“Commercial leasing activity is often volatile on a month-to-month basis, with one large deal, or the absence thereof, making all the difference to the aggregate

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h

results,” TREB president Paul Etherington said in a recent release. “However, the fact that the average industrial lease rate was up in May compared to last year suggests that the demand for space in this important market segment remains strong.”

Sales were also down. The total number of commercial spaces sold – including industrial, commercial, retail and office properties – fell to 52 in May 2015 compared to 61 in May 2014.

“Both the sale and leasing markets for commercial properties are dependent on firms’ outlook for the economy,” Etherington said. “While the positive impact of the lower

“Both the sale and leasing markets for commercial properties are dependent on firms’ outlook for the economy” Canadian dollar is promising for businesses in the Greater Toronto Area, uncertainty in the broader Canadian economic picture will likely feed through into some periodic volatility in results.”

Prices took a hit as well. “The average selling prices for commercial/retail and office properties were down by a greater amount, but this was largely due to a change in the mix of properties sold this year compared to last,” TREB said in the release.

Q&A

Oil’s effect on commercial

David Beckingham President DOMINION LENDING CENTRES COMMERCIAL CAPITAL

Years in the industry 28 Career highlight Meeting and developing relationships with a diverse group of people Career lowlight The economic slowdown in BC in the early ’90s

Do you see any challenges ahead for the commercial space?

Alberta is an area of concern. We’re seeing a lot of lender contractions.

There are concerns about what’s happening in the marketplace due to the fall of oil. In addition, they’ve had a change of government, so there’s some skepticism about their ability to run the government in an efficient way.

Western Canada as a whole will be affected by the downdraft in oil prices. Ontario, on the other hand – that’s a great market. I believe over the next 24 months, Ontario will be the second-biggest growth province after British Columbia. Quebec and the Maritime provinces will move upward too, due to the low Canadian dollar. So on the whole, I think, Canada’s pretty good. Areas of concern include the Prairie provinces, which are largely dependent on oil. On the other hand, British Columbia is on fire. Real estate prices are moving upward in many areas, including suburban areas. That’s on the residential side, and that has spin-offs on the commercial side.

So do those factors bode ill for commercial lending in the West?

We’re very dependent on what happens in the economy – even more so than on the residential side. But commercial brokers as a whole can find opportunities in marketplaces where there’s been an economic downturn.

Credit is contracting, and when credit contracts, alternative lenders become more dominant in the marketplace. That’s an opportunity for mortgage brokers ... to lend in areas that are traditionally not accessed by brokers.

How so?

Lenders decide to withdraw from the marketplace and no longer want to fund the avenues that developers have traditionally been using, so those developers turn to brokers like myself to find alternative sources of lending. It’s not necessarily a bad thing – it could be an opportunity to find new business. What changes is the type of business you’re doing. It’s an opportunity to adapt and overcome the challenges.

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17/06/2015 7:28:10 AM

UPFRONT

ALTERNATIVE LENDING UPDATE

The frustrating but rewarding Alt-A side One leading alternative mortgage broker shares his thoughts on the state of this ever-growing segment

CONVINCING CLIENTS in the subprime sector why you can’t offer record-low rates can be frustrating, but more and more clients are becoming realistic about what they can expect.

“It’s a totally different clientele in general,” says Jason Breau of Mortgage Intelligence. “A lot of people understand if they’re in the subprime [market], they aren’t going to get that A deal.”

Breau is no stranger to lending in the Alt-A mortgage segment. He was recently recognized as one of the top brokers in

NEWS BRIEFS

that space when he was nominated for The Home Trust Company Award for Alternative Lender Broker of the Year at the Canadian Mortgage Awards.

And even though Alt-A lenders offer higher rates, Breau believes they are still relatively low – and he hopes it stays that way.

“We’re starting to see more A clients having to go this route, so being aggressive in the rates is a positive. I’ve gotten some deals done with a subprime lender at 3.99%,” he says. “Just as long as the lenders keep being understanding of that market and continue

Alternative lender announces education initiative

easyhome Ltd., which special­ izes in financial services to cash- and credit-constrained consumers, announced a partnership with EnRICHed Academy, which will allow easyhome to offer a finan­ cial education program to its customers.

“Our goal is to help our customers by giving them an alternative when banks may not be an option and to empower them through a foundation of knowledge to forge the path towards a better financial future,” said David Ingram, president and CEO of easyhome.

14

to be competitive with rates.”

And while it’s a lucrative market, it isn’t without its frustrations.

“It’s not an easy side for sure,” Breau says. “It’s more of a soul-sucking part of the business because there are going to be more hoops, more convincing the clients, more obstacles, pickier [lenders] about certain things. Things the A side wouldn’t be picky on, the B side are, and vice-versa.

“You can’t do B-business with an A mentality,” he continues. “You can’t go in there thinking you could never give a client a certain rate. But you have to [have a] game plan and figure out how to get a client back on the A side down the road.”

“You can’t do B business with an A mentality. You can’t go in thinking you could never give clients a certain rate” The rewards also can be great. Breau details one of his most rewarding recent deals: “I have one client right now who basically was selling their house to realize equity out of the property, clean up their credit and still buy another house,” he says. “And I was able to get it done via a subprime lender and a private together to make it work. It’s funny because I said, ‘This is what the rate is going to be,’ and they said if it’s less than 7%, they would be happy.”

Alternative lending standout recognized at CMAs

Amid the growing reliance on alternative deals in an ever-tightening market, CMP recognized one of the top alternative lenders at this year’s Canadian Mortgage Awards. Christine Xu of Mortgage Architects Money Broker took home this year’s Home Trust Company Award for Alternative Lender Broker of the Year. In 2014, she funded $138 million in total volume, placing her third on CMP’s most recent Top 75 Brokers list.

“I’ve been in the industry for 15 years, and I’m so proud to be a part of its growth over than 15 years,” Xu said.

www.mortgagebrokernews.ca

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Q&A

Susan Zanders Senior mortgage broker/owner VERICO ZANDERS ASSOCIATES

Years in the industry 17 Career highlight Working with businessfor-self clients Biggest challenge to the industry The new mainstream lending rules

A good time for alternative lending Tightening requirements for traditional lenders are sending more borrowers to the alternative space New regulations are making it difficult for mainstream lenders. Do you see that as an opportunity for alternative lending?

With lenders tightening up their guidelines here in Canada, I think there’s going to be more and more private lending in the next 12 months. Individually, I think it’s a door-opener for us, because we enjoy that area.

Some people get clients in and it’s a tough deal, so they lose the client. But there are a lot of brokers out there who know how to work in alternative lending.

There are a lot of private lenders coming on the market and a lot of options available. There are a lot more people looking for an alternative lender.

So it’s a good time for to be a alternative lender?

Yes. Throughout the years we’ve seen that private lending and alternative lending used to be really expensive. Now it’s mainstream. We have a lender now who’ll do an equity product. They want to know the borrower can pay, of course, but mostly they’re going to be looking at the home they’re lending on.

And the rates can be a full discounted rate plus a half a point – which is an awesome deal. Years ago, you might pay 12%, 14% or 16% for that kind of product. I think there’s just competition in the marketplace.

There are more lenders on board who’ve written these programs.

A burgeoning demographic for alt deals

Canada is expected to draw up to 285,000 immigrants this year – a huge potential market for brokers to fund alternative deals.

“Broaden your demographic of borrowers,” suggests Lester Shore of Optimum Mortgage, who advises targeting ‘Echo Boomers,’ or those between ages 20 and 38.

“Their emergence is expected to significantly boost the housing market for the next five years, and many will require alternative financing due to high student loans, low monthly income and lack of credit.”

Do you see any issues ahead in the alternative lending space?

If the prices came down, there may be some issues with refinancing clients. Say we have a $500,000 home, and we’ve got an alternative lender who’s going up to 80% on that loan, and the plan was to pay the loan out at the end of the term. So they’ve got a mortgage of $400,000 on that home. Say that home drops to $450,000. That’s a lot, but it’s possible. So suddenly that 80% is only $360,000. Then we wouldn’t be able to [refinance] them out of that if prices went down and an alternative lender had maxed them out.

What kind of clients are alternative lenders looking for?

They’re looking for a make-sense deal that doesn’t fit the traditional guidelines. We have a lot of clients in business for themselves. Those clients traditionally can’t prove income, because they’ve got really good accountants who find all kinds of deductions for them.

They’re not showing the income, but they have good capacity to pay. Some of the lenders who have these alternative programs have found a niche in that market.

Or people who maybe have been in a bankruptcy and haven’t got enough credit reestablished to meet the mainstream lenders – they’ve got a great job, but they don’t have that credit established.

Referrals key to growing presence in alternative market

Brokers are intent on growing their number of alternative lending deals, but one lender exec argues they need to transfer lead-generating duties to referral partners in order to stay focused on arranging mortgages.

“Your cost of marketing ... is minimized; you’re working with a select number of individuals instead of dealing with the masses,” says Marc Ruttenberg, president and CEO of Paramount Equity Financial Corporation.

“You’re bringing a valuable resolution to the few who deal with the masses and letting that channel direct applications to you.”

Brokers need more education in Alt-A space

Brokers are increasingly relying on the alternative space to fund deals, but one leader believes the educational standard has lagged behind the growth in those deals.

“Today there is a larger cross-section of brokers accounting for the business because they’ve been forced into that space,” says Albert Collu, president of Mortgage Architects. “I do agree there has been growth, but I am concerned about some of the implications of new issues that may not be on our radar as a result of that.”

www.mortgagebrokernews.ca

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email mortgagebrokernews@kmimedia.ca

Cutting out the middlemen Appraisal management companies are difficult to deal with, take longer to get the job done and often cost the client more money, writes Rosemary Madden APPRAISAL MANAGEMENT companies are a relatively new addition to the industry, but they’re certainly not a welcome one. These companies tend to act as middle­ ­men between property appraisers and mort­gage brokers, unnecessarily complicating the lending process.

Personally, I find them cumbersome to deal with and find that they take longer to get the job done – too many cooks in the kitchen, so to speak.

A lot of these companies require you to go online to order the approval. That might be convenient in theory, but I don’t like asking my clients for their credit card information, and many clients aren’t too happy to submit that information online.

What’s worse, though, is that you can’t get in touch with the person who is actually doing the appraisal. These companies – and the lenders who insist on using them – don’t want you actually contacting the appraiser directly, for some reason. Maybe lenders think we might try to influence the appraiser and convince him or her to claim the value of the property is higher than it actually is.

However, that’s not the case. The value of a property is the value of a property. An appraiser has a long list of factors to check the property against – age of the home, upgrades to the property, neighbourhood comparables and a general look at what is happening in the market – that he or she can’t delineate from the property’s true value.

But even that can become a problem.

Many of these management companies don’t

16

disclose the location of their appraisers. That means you could have an out-of-town appraiser evaluating your client’s property.

How can they possibly understand the nuances of the local market if this is their first trip there?

Regardless, I would much rather contact the appraiser directly and open that dialogue. We can easily and quickly discuss the details of the property without that information being filtered through a third party.

appraisal management companies are charging your clients a premium, and that’s not fair to them.

What adds insult to injury is the fact that there are many independent appraisers who are just as capable – if not more so – than those working through larger management companies.

I know most of the appraisers who work in my area and have built strong professional relationships with them. I know where they are in relation to the property in question, so I know their level of understanding of the local market. Most important, perhaps, is the fact that I’ve worked with most of them in the past and have had good experiences with them.

All real estate appraisers are qualified to do the job. They’ve completed the same programs and have kept up with the same courses. Sometimes the property might not come out at what we want, but that’s not our job. Some appraisers may come in a bit low with their evaluations – maybe a bit conservative because of the risks they face. But, on the whole, they’re usually spot-on with the values they provide.

“It’s often a lot of back and forth that could have easily been settled with one simple phone call to – you guessed it – the appraiser” Those third parties aren’t ever easy to get in touch with. You’ll leave a voicemail, which will go unreturned. You’ll follow up with an email, which will go unanswered. You’ll submit a comment via the company’s online form, which will also go unanswered. It’s often a lot of back and forth that could have easily been settled with one simple phone call to – you guessed it – the appraiser.

As you might expect, the cost to clients is also usually higher when you’re forced to go through an appraisal management company – even if all that’s required for the property type is a drive-by. These kinds of companies need to pay their staff salaries, their overhead costs – and, of course, the appraiser.

Those extra costs are, unfortunately, passed on to your clients. That’s right: These

Developing these close professional relationships is important, too. You’re not going to ask an appraiser for a favour as far as property value goes, but what if you need an expedited appraisal? Maybe your client has a shorter closing than normal and you need the appraisal completed in a few days, rather than weeks. You want the appraiser to work with you to get the appraisal done as quickly as possible. If you have a relationship with the appraiser, they’ll likely do what they can to accommodate you.

M to to

L

*A

re Rosemary Madden is a mortgage broker with Mortgage Intelligence in Durham, Ont. She previously headed one of the region’s largest mortgage brokerages and worked as a manager for one of the big banks.

www.mortgagebrokernews.ca

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PEOPLE

INDUSTRY ICON

THE MAN WHO NEVER QUITS He may have had a moment of doubt during the one of country’s worst recessions, but that didn’t keep Gerald Soloway from helping to grow Home Capital Group into a billion-dollar company

GERALD SOLOWAY entered the mortgage lending business in the late ’80s, when the industry was in transition. He noticed a large potential market of homebuyers who were increasingly turned away by big lenders, and he helped pioneer the mortgage business for self-employed Canadians.

“As the years went on, the banks had to tighten up because when you had 1,000 or 1,500 branches, it was hard to train 1,500 people to use their intuition as to whether it was a good customer or not,” Soloway says. “The banks clearly needed a better criteria, which would be properly audited statements, proof of income like a T4 – they would need a higher base of income in order to lend the mortgage.”

Gone were the days when a friendship and a handshake with a bank manager were enough to obtain a residential mortgage.

“As the banks got bigger and more national and had more branches, the old model wouldn’t work, and, more and more, the criteria tightened up. By the time I got involved with Home Trust, which was in January of 1987, there clearly had been a tightening of the whole criteria,” Soloway says. “So I saw it as an opportunity to assist those people who didn’t fully meet the

18

banks’ criteria but were in other regards very hard-working and industrious people.”

And so business chugged forward for the first few years.

However, in 1990, just a few years after leaving a successful law practice to work for Home Capital Corp., Soloway was

“Everyone thought, ‘My God, if all those other companies failed, why will Home survive?’ But it was a combination, even in those days, of careful lending and sticking to a criteria and dealing with people who we thought were credit-worthy,” Soloway says. “Basically, we took our lumps and

“I saw it as an opportunity to assist those people who didn’t fully meet the banks’ criteria but were, in other regards, very hard-working and industrious people” unsure what the future would hold for himself, his company and the lending industry.

“The company was growing very nicely the first few years until the terrible recession that hit Ontario in January of 1990 and lasted three or four years,” Soloway says. “Real estate values went down 25% to 30%, and what it did is it wiped out about 85% of the small trust companies in Canada.”

According to Soloway, companies were having capital problems, and Home Capital’s stock fell to 25 cents.

were able to work through the problems.

That was the clearly the lowest part of my career.”

He has certainly suffered through the downs of the business, but he’s currently enjoying the ups – his company’s stock was trading at above $42 in May. Most recently, Soloway is credited with leading Home Trust into new territory, when it applied for its Schedule 1 banking license last November.

The application is currently under review by the Office of the Superintendent of Financial Institutions [OSFI]; if

www.mortgagebrokernews.ca

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17/06/2015 7:30:01 AM

PROFILE Name: Gerald Soloway Company: Home Capital Group Title: CEO Years in the industry: 29 Career highlight: Growing Home Trust to a point where it exceeded $1 billion in revenue in 2014 Career lowlight: The Ontario real estate recession in 1990, when home values dropped 25% to 30%

www.mortgagebrokernews.ca

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17/06/2015 7:30:12 AM

PEOPLE

INDUSTRY ICON GERALD SOLOWAY’S CAREER TIMELINE

approved, it will allow Home Trust Bank to expand its deposit product business.

“The main purpose of applying for the bank charter right now is to help us grow and diversify our deposit base,” Soloway said at the time. “We have been very successful with our Oaken Financial

“The change in technology will require the brokers to up their game. I strongly think there will still be a great need for brokers, but it will be a little different than it is today,” he continues. “They will probably have to spend a little more time to fully understand what the client has, what

“I think the portion of the population that is underserved by the banks has remained constant throughout my whole career” branded deposit products, and the bank would support and carry that initiative forward.”

The broker’s role Soloway credits mortgage brokers with helping Home Capital Group achieve its success. And he’s got a few ideas about how his broker partners can evolve with a changing industry.

“Clearly there will be more technology; there will be more speed in doing trans­ actions; the brokers will need to be more educated ... because what will happen is the public will be able to do a lot more research on their own,” Soloway says. “They will be able to go online … and be able to search all the company’s websites and learn about different products and pricing, and they will be a much more informed customer.”

Soloway likens the evolution that will be required of brokers to that of small independent shops that have had to compete with big-box stores.

“Reinvention is a requirement for growth when an industry is in flux, and part of that reinventions is ensuring that brokers are as up-to-date on product offerings and as educated on individual clients needs as possible,” he says.

20

the broker can do and what the broker can deliver.”

Part of that shifting role will require brokers to prepare for more mortgage rule tightening, according to Soloway.

“I don’t see an end to regulatory tight­ ening,” he says. “It is worldwide, and especially in the Western world – Canada, United States, Great Britain, etc. – there is increasing political pressure in those countries that the government should not have to bail out privately owned financial institutions in the event of a downturn or a bad market.”

But it’s not all doom and gloom for mortgage brokers and broker channel lenders, including the several monolines.

Soloway believes brokers will continue to excel in the areas often overlooked by the big banks, and the alternative lending space is one he predecits will continue to grow.

“There is a huge opportunity for mort­ gage brokers to continue to access funding sources that serve the underserved Canadian market,” he says. “I think the portion of the population that is under­ served by the banks has remained constant throughout my whole career. I see a bright future for brokers in the alternative lending space.”

1958 Earns BA from the University of Western Ontario

1961 Studies LLB at Osgoode Hall

1963 Is called to the bar

1986 Becomes director of Home Trust Company

1987 Is appointed the CEO of Home Capital Group, a role he holds to this day

www.mortgagebrokernews.ca

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FEATURES

COVER STORY: WOMEN OF INFLUENCE

WOMEN OF INFLUENCE CMP’s third annual Women of Influence report highlights the accomplishments of the female professionals who are reshaping the mortgage industry IN JUST a few short years, the broker channel has seen a shift to fairer gender representation. While there’s still a long way to go, this year’s Women of Influence report is a testament to those strides.

Here, we honour the professionals who are making waves in the industry. We asked you to nominate

22

www.mortgagebrokernews.ca

women you felt were making a difference in their communities and the mortgage business as a whole. It was a tough job, but we’ve narrowed the list to 26 women who are rising stars in the industry. From CEOs and company founders to top brokers, these women represent the broker channel’s best and brightest.

INDEX BY NAME NAME

PAGE COMPANY

SHAWNA MACDONALD

Bubber, Sabeena

28

Verico Xeva Mortgage

BROKER/OWNER TMG THE MORTGAGE ASSOCIATES

Calla, Angela

29

Dominion Lending Centres National

Campagnaro, Carmen

23

Pro Funds Mortgages

Cawley, Danielle

26

Neighbourhood Dominion Lending Centres

Clement-Allen, Adela

33

DLC Regional Mortgage

Cruz, Ana

29

LA Mortgage Team Mortgage Intelligence

Drage, Claire

30

Lion's Share Group

Freiman, Cindy

30

CAAMP

Gale, Samantha

32

MBABC

CARMEN CAMPAGNARO

Kahkesh, Lili Shen

25

FOUNDER AND PRESIDENT PRO FUNDS MORTGAGES

Royal International Financial Group – Verico The Kahkesh Group

Lewis, Melodie

23

DLC Regional Mortgage

Love-Alexander, Veronica

29

Merix Financial

MacDonald, Shawna

23

TMG The Mortgage Associates

McKeough, Janet

24

MBAAC

Pellerin, Lisa

29

LA Mortgage Team Mortgage Intelligence

Pikkert, Pam

24

DLC Regional Mortgage

Providenti, Jenna

24

OMAC Mortgages Powered

by TMG

MELODIE LEWIS

Reed, Keri

26

Verico Premiere Mortgage Centre

MORTGAGE BROKER AND SHAREHOLDER DLC REGIONAL MORTGAGE

Schiess, Sarah

32

TMG The Mortgage Group

Strandlund, Hali

31

Fisgard Capital & Fisgard Asset Management

Taylor, Elaine

28

MCAP

Valko, Tracy

30

DLC Forest City Funding

Venuto, Enza

28

Centum Streetwise Mortgages

Wambolt, Audrey

26

MBAAC

Wong, Kyra

28

Manulife Financial

Xu, Christine

26

Mortgage Architects

Shawna MacDonald entered the financial industry when she joined Trans Canada Credit at the age of 18 and quickly gained a reputation for her talent and ambition. In 2002, she was tapped to pilot the organization’s residential mortgage program and discovered her passion. Now a broker/owner with TMG The Mortgage Group, MacDonald is consistently one of the company’s top brokers. In 2012, she opened TMG The Mortgage Associates and built a superb team of originators, many of whom have been honoured as TMG Rookie of the Year and are among the company’s top brokers. MacDonald herself has been awarded TMG Prairies Broker of the Year six times in the last eight years, and she’s won the TMG Top 5% Broker of the Year award seven times. She was also honoured this year as one of CMP’s Top 75 Brokers, funding $62 million in 2014.

Carmen Campagnaro got hooked on real estate when she purchased her first property at the age of 18. Since then, her passion for real estate has been complemented by a keen eye for sourcing, purchasing, flipping and selling properties. But firsthand experience showed her how challenging mortgage financing could be, so she launched Pro Funds Mortgages in 1997 to make the process as smooth as possible. Campagnaro has spent nearly two decades honing Pro Funds into a boutique brokerage specializing in residential, multi-residential, commercial, construction and development properties with both institutional and private lenders. Along the way, she’s built a vast investor network, an army of satisfied clients, and a reputation as a role model to people in and out of the industry.

A compliance wizard, Melodie Lewis is DLC Regional Mortgage’s “rock,” according to colleague Scott Bourke.

Lewis is also a talented broker with a knack for solving tough loan problems – a trait that means she generally gets the toughest loans to come through the door. But Lewis isn’t stingy with her knowledge, freely advising others on difficult deals. “She will never turn anyone or any question away – even if they’re with another brokerage,” Bourke says. Lewis is active in DLC Regional Mortgage’s Golf/ Build a Kid to Cure fundraiser, which has helped raise nearly $2 million for Alberta children’s charities.

www.mortgagebrokernews.ca

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FEATURES

COVER STORY: WOMEN OF INFLUENCE JENNA PROVIDENTI

PAM PIKKERT

MORTGAGE AGENT OMAC MORTGAGES POWERED BY TMG

MORTGAGE BROKER AND SHAREHOLDER DLC REGIONAL MORTGAGE

Jenna Providenti has been steadily making a name for herself in the mortgage industry. Currently operating two offices in Windsor, Ont., Providenti has been tireless in her efforts to push the OMAC brand to the next level, spearheading the development of the firm’s enhanced online presence and working to optimize office efficiency.

She’s also active in TMG’s fundraising efforts with the Breakfast Club of Canada/Western Canada.

WOMEN IN THE MORTGAGE INDUSTRY While financial professions are often thought of as an ‘old boys’ club,’ the mortgage industry seems to be slightly ahead of the curve when it comes to gender equality. In 2014, 42% of mortgage brokers were women – compared to just 33% of financial planners.

42%

of mortgage brokers

33%

of financial planners

24

www.mortgagebrokernews.ca

A top broker at DLC Regional Mort­gage, Pam Pikkert is constantly striving to improve her already considerable skills. Pikkert attends every seminar she can find – not just in her area, but nationwide. A master recruiter, Pikkert has been instru­ mental in growing the Regional Mortgage team. She’s also a big part of the firm’s Golf/Build a Kid to Cure fundraiser, which has helped raise nearly $2 million for Alberta children’s charities.

JANET MCKEOUGH PRESIDENT MBAAC With more than 15 years of industry experience, Janet McKeough is one of the top brokers in her area. The broker for Verico Success Mortgages in Halifax, McKeough is an Accredited Mortgage Professional and a member of CAAMP. For the last two years, she’s also served as president of MBAAC, taking the organization to new heights.

LILI SHEN KAHKESH SENIOR MORTGAGE BROKER ROYAL INTERNATIONAL FINANCIAL GROUP – VERICO THE KAHKESH GROUP In her 15 years in the industry, Lili Shen Kahkesh has worked in brokering, under­ writing and mortgage administration. Known for being able to analyze complex proposals and find the best financial strategy for her clients, Kahkesh works with everyone from offshore investors to newly arrived immigrants – a passion aided by her fluency in English, Cantonese and Mandarin. Also passionate about social responsibility, Kahkesh is heavily involved in local Vancouver charities.

www.mortgagebrokernews.ca

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FEATURES

COVER STORY: WOMEN OF INFLUENCE CHRISTINE XU MORTGAGE BROKER MORTGAGE ARCHITECTS With 15 years of industry experience, Christine Xu is a force to be reckoned with. Ever she started as a rookie agent, Xu has increased her business by more than 20% per year. In 2014, Xu was ranked at number four of CMP’s Top 75 Brokers. This year, she moved up to number three. She’s also been named one of CMP’s Top 10 Commercial Brokers. Xu is a recipient of the Queen Elizabeth II Diamond Jubilee Medal for community service and the Chinese Business Chamber of Canada’s Social and Community Contribution Award.

AUDREY WAMBOLT VICE PRESIDENT MBAAC Audrey Wamboldt has two decades of experience in the mortgage industry, having worked as a mortgage specialist, business development manager for a monoline lender and a sales leader. She now operates DLC Nuvision, a successful brokerage in Dart­mouth, NS. Before entering the mortgage industry, Wamboldt worked in real estate and relocation – experience that gave her firsthand knowledge of what it was like to work in a highly regulated industry.

As vice president of MBAAC, Wamboldt continues to work tirelessly to further the interests of mortgage professionals.

DANIELLE CAWLEY BROKER NEIGHBOURHOOD DOMINION LENDING CENTRES Soon after she started with Neighbourhood Dominion Lending Centres in 2010, Danielle Cawley transformed the business. Continually leading the push toward new technologies, she transitioned the company to a paperless system. She’s also a top originator, increasing the firm’s business by 30% in 2014 and funding about 200 mortgages for approximately $56 million in sales volume.

Last year, she was among Dominion Lending Centres’ top producers in both dollar volume and number of deals, and as of this March, she was in the top 10 in Canada in both categories.

26

www.mortgagebrokernews.ca

KERRI REED VICE PRESIDENT AND OWNER VERICO PREMIERE MORTGAGE CENTRE Kerri Reed led the way for Premiere Mort­gage Centre’s Ontario branch to rack up $502 million in funding last year. Under her leadership, the business was recognized as one of Canada’s fastest-growing companies in 2013 and 2014, and last year Reed was recognized with the Verico National Network Ambassador Award. A supporter of several local charities, Reed has been especially active in Habitat for Humanity.

“Kerri is an inspiration to all franchise owners,” says fellow Woman of Influence Veronica Love-Alexander of Merix Financial. “She is loved by her agents, and attracts many new ones because of her reputation for leading by example. She always has time for others and pulls great people together.”

WE’VE DONE IT AGAIN!

MA brings home 2 CMA’s this year.

Be a part of an award winning organization

Christine Xu

Best Alternative Lending Broker Of The Year

Karen Fogel / Marketing Best Internet Presence

JOINMA.ca © Copyright 2015, Mortgage Architects Inc., All rights reserved.

FEATURES

COVER STORY: WOMEN OF INFLUENCE ENZA VENUTO

ELAINE TAYLOR

BROKER/OWNER CENTUM STREETWISE MORTGAGES

VP OF SALES MCAP

Enza Venuto is the owner and principal broker of Centum Streetwise Mortgages. In 2014, Venuto racked up $65 million in loan volume, earning her a spot on CMP’s Top 75 Brokers list. She also puts her 40 years of industry experience to work as a financial strategy coach. Venuto is the author of the Amazon bestseller Canadian Real Estate Investor Financing: 7 Secrets to Getting All the Money You Want.

As vice president of sales for MCAP, Elaine Taylor spearheads marketing strategies, product implementation, and policies and programs for one of Canada’s leading independent mortgage finance companies.

“Elaine is a mentor to many and a natural connector,” says fellow Woman of Influence Veronica Love-Alexander. “People gravitate to her, as she is a key resource in this industry – and so knowledgeable on so many levels.”

KYRA WONG

SABEENA BUBBER

NATIONAL SALES DIRECTOR, MORTGAGE PROTECTION PLAN MANULIFE FINANCIAL

CONSULTANT VERICO XEVA MORTGAGE

In addition to her duties as national sales director for Manulife Financial, Kyra Wong has a strong bent for helping other mortgage professionals improve their professional skills. “Kyra is amazing at supporting clients and coaching teammates and brokers, and is inspiring to see in action at industry events,” says Merix Financial’s Veronica LoveAlexander. “She always finds unique ways to attract people’s attention and have them take in education to help better their business.”

®

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Since 2004, Sabeena Bubber has helped her clients finance more than $600 million in mortgages. Currently a consultant with Xeva Mortgage, Bubber also has worked with companies such as CitiFinancial, Equity Plus Financial and the Royal Bank of Canada.

She’s won numerous awards for excellence in the mortgage industry, and has been included in CMP’s Top 75 Broker list for seven consecutive years. This year, Bubber was a nominee for the Canadian Mortgage Awards’ Mortgage Broker of the Year award.

VERONICA LOVE-ALEXANDER SALES AND TRAINING MANAGER – EASTERN CANADA MERIX FINANCIAL Veronica Love-Alexander recently took a position as sales and training manager at Merix Financial after spending five years at Dominion Lending Centres, where she quickly rose to become vice president of network development. Love-Alexander has worked in marketing, event management and public relations in the real estate, professional sports and charitable fundraising sectors. In addition to her professional duties, Love-Alexander has served as a professor and board member for Humber College’s event management certificate. She is also very active in health charities and fundraising for women’s and children’s shelters.

LISA PELLERIN AND ANA CRUZ PARTNERS LA MORTGAGE TEAM MORTGAGE INTELLIGENCE

ANGELA CALLA BROKER DOMINION LENDING CENTRES NATIONAL

Lisa Pellerin and Ana Cruz had an impressive 2014. In addition to increasing LA Mortgage’s revenue by more than 30%, they led the firm to win a Canadian Mortgage Award for Best Newcomer Brokerage. Pellerin and Cruz have more than 14 and 20 years, respectively, in the industry, and each has brought that expertise to bear in making their firm a runaway success. Both are active in their local community; Pellerin is a committee member for Habitat for Humanity, and Cruz is a co-founder of K.I.D.S. for the Future.

Angela Calla has long been an industry influencer. A frequent consultant to Canada’s national and regional lenders and insurers, Calla is also the longtime host of “The Mortgage Show” on CKNW. In 2009, Calla was named AMP of the year. She’s also quite the salesperson – her 2014 volume of more than $75.7 million was enough to land her on CMP’s Top 75 Broker list.

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News

InternatIonaL

FEATURES

&

u.s.

COVER STORY: WOMEN OF 90.6% INFLUENCE

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

U.S. housing market worse than thought More than two years after the recession The number of Americans who bought previously officially ended, many people can’t qualify for occupied homes rose in October. But the National loans or meet higher down payment Association of Realtors says it overstated more than requirements. Even those with excellent credit three million sales during and after the Great Recession, CINDY FREIMAN stable jobs are holding off because they fear showing the housing market was weaker than DIRECTOR OFand MARKETING AND COMMUNICATIONS Percentage of that home prices will keep falling. Sales are also previously thought.

CAAMP homeownership being hurt by a decline in first-time buyers, who The private trade group says sales rose four per costs, including are critical to reviving the housing market. cent in October to a seasonally adjusted annual rate of Cindy Freiman has aSales long have history withinCMP Asthe its fi founding mortgage payments, fallen four.of ve yearseditor, 4.42 million. That’s below the roughly six million homes utilities and property she helped launch thethe magazine inboom 2006went and the Canadian since housing bust in 2006.Mortgage a year that economists say are consistent with a healthy taxes that take up ain 2007.Declining Awards Freiman prices also has served as the director of rates PR and and record-low mortgage housing market. But it’s ahead of 2008’s revised sales, typical household’s been enough toCentres, boost sales. now considered the worst in 13 years. communicationshaven’t at Dominion Lending where she spread the monthly pre-tax At thethen same home construction hasas The trade group revised its sales from 2007 to 2010 word about the company, intime, its infancy.

In her new role income Vancouver begun a gradual comeback and should add to the down 14 per cent, from more than 20.6 million to director nearly of marketingin communications for CAAMP, Freiman helps educate members about and and Toronto, economy’s growth in 2011 for the first year since 17.7 million. Among the reasons for the lower figures, the organization’s mission and information critical to the industry. respectively (RBC the Great Recession began in 2007. Last month, the Realtors group says: changes in the way the Census Economics Housing builders broke ground on an annual rate of Bureau collects data, population shifts and some sales Trends and 685,000 homes, the government said recently. being counted twice.

Affordability Report) CLAIRE DRAGE October and That was a 9.3 per cent jump from The Realtors consulted with government and

52.1%

the fastest pace since 2010.

OWNER ANDApril CEO Most economists say home prices will keep LION’S SHARE GROUP falling, by at least five per cent, through 2012.

Many forecasts don’t foresee a rebound in prices The owner CEO of Lion’s Share Group, Claire until at least 2013. is well-qualified to train mortgage TheDrage high rate of foreclosures has made brokerscheaper to reachthan theirnew fullones. potential. resold homes The With as both anisagent and30 a lender, medianexperience price of a new home roughly per CoreLogic has estimated that the Realtors group cent above thehas price of one that’s been occupied overstated sales in 2010 by at least 15 per cent.

One of Canada’s hottest mortgage Drage increased her originations by more before –than twice the normal Investors The changing numbers could affect how economists brokers, Tracy Valko made CMP’s Top 75 100% per yearmarkup. since getting backare into taking advantage of theyears discounts. view the trade group’s data. It could also affect companies Broker list this year with nearly $47 million brokering three ago. She’s currently The housing market is struggling even that use the figures for hiring and expansion plans. in total sales volume. Valko is consistently ranked in the top 1% in her company in both as the broader economy has improved in Sales are measured when buyers close on homes. among Dominion Lending Centres’ top number of originations and dollar volume. recent months.

But many deals are collapsing before that point. producers nationwide, and has been founded Share inpace 2010 help TheDrage economy grewLion’s at an annual ofto two One-third of Realtors said they had at least one contract nominated for CAAMP’s Broker of the Year brokers sharpen their skills per centmortgage in the July-September quarter.

Manyand scuttled in October, up from 18 per cent in September. economists expect slightly better growth in the Contracts are being cancelled for several reasons: award. increase their business.

October-December quarter. CMP Banks have declined mortgage applications; home private housing experts, including the Federal Reserve, the Department of Housing and Urban Development, the Mortgage Bankers Association, the National Association of Home Builders, mortgage giants Fannie TRACY VALKO Mae and Freddie Mac and CoreLogic, a California-based data firm that first raised doubts about the annual MORTGAGE BROKER, OWNER DLC FOREST CITY FUNDING numbers earlier this year.

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HALI STRANDLUND SVP OF RESIDENTIAL MORTGAGE INVESTMENTS AND BROKER RELATIONS FISGARD CAPITAL & FISGARD ASSET MANAGEMENT Hali Strandlund is one of three founding members of Women in the Mortgage Industry, an organization that helps women get deals done, find marketing assistance and improve their professional skills through coaching and webinars. Strandlund was nominated for a CMA this year as Supplier of the Year, and was last year’s Hall of Fame inductee at the CAAMP Mortgage Forum. Passionate about the industry, Strandlund is a perennial volunteer for professional association events.

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FEATURES

COVER STORY: WOMEN OF INFLUENCE

SAMANTHA GALE EXECUTIVE DIRECTOR MBABC As head of the Mortgage Brokers Association of British Columbia, Samantha Gale has taken on a record number of issues, from anti-spam legislation to bank brokers. She’s also tackled privatelender issues like CRA super priorities, as well as broker issues such as the collection of fees by unregistered brokers. Gale is credited with advancingCMP thePrint broker agendaFNL.pdf on MIC1regulation and other fronts.

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SARAH SCHIESS BROKER TMG THE MORTGAGE GROUP Sarah Schiess has revolutionized customer service at TMG. She spearheaded improvements to Perkland, the company’s customer rewards program, and launched social media giveaways to attract clients. Schiess also helped launch a custom intranet site to improve communication within the company.

ADELA CLEMENTALLEN MORTGAGE BROKER AND SHAREHOLDER DLC REGIONAL MORTGAGE A mortgage professional for 11 years, Adela Clement-Allen regularly rakes in close to $30 million in volume a year – with no associates working behind her. Clement-Allen utilizes her intimate knowledge of the industry as DLC Regional Mortgage’s training guru, passing on her experience to the next generation of brokers. In addition to helping organize the firm’s Golf/ Build a Kid to Cure fundraiser, Clement-Allen is active in several other charities and local associations.

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FEATURES

PRIVATE LENDING GUIDE

PRIVATE LENDING GUIDE 36

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IN THIS FEATURE 37 | About private lending 44 | Cross-Canada directory

Your comprehensive guide to Canadian private lending – and the broker channel players who offer it FINDING FINANCING for difficult deals is what brokers are all about – but it seems the hoops and hurdles just keep getting tougher every year.

Enter the private lender.

“One of the things we’re trying to do is inform Canadians that there are solutions,” says Jim Dunbar, officer/director of Affirm Financial in London, Ont. “We’re getting very creative in trying to reach those customers about our services. We’re reaching a different audience than I think many are reaching today – we are speaking with clients who have been in insolvency; we’ve been talking with people who have been in bankruptcy. We have products that can help people that are in or coming out of that process.”

Although financing these deals can require extra legwork, the potential market for lenders and brokers is sizable.

“This is the true growth space in the market for the broker channel in general,” says Michael Anger, marketing manager and investment account manager at Paramount Equity. “The A channel is largely open to the public via branch banking and mobile bank reps, but the restrictions placed upon the A channel are squeezing many otherwise good borrowers out. A ‘non-deal’ in one matrix lender’s opinion can be a slam dunk deal to another.”

“Private lenders have the flexibility to get creative,” adds Dimitri Kosturos, vice president of VWR Capital in Langley, BC. “What

that means varies from lender to lender, which is why it’s important for a broker to learn about as many private lenders as possible.”

“I think we’re offering products that are very important to the Canadian consumer,” Dunbar says. “I think it is a very unique kind of market, and for traditional lenders, it is a difficult market to try to get into – but a

“I think a big part of servicing Canadians is through that channel. Brokers are a big part of solving those problems and finding solutions” Jim Dunbar, Affirm Financial terrific opportunity.”

Mortgage brokers are embracing the popular private lending sector as increased competition from the bank makes alternative lending much more attractive.

“One of the things we’re focusing on with mortgage brokers is that they are challenged to find solutions for their customers,” Dunbar

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FEATURES

PRIVATE LENDING GUIDE

FROM BROKER TO PRIVATE LENDER Being a broker has its ups and downs: Your income is based primarily on which deals you can get funded at a particular moment. The challenge is finding lenders who will fund your loans (and trying to get a straight answer in a timely manner).

But what if you were the lender, and you got to make those decisions? Even better, what if brokers (like you) sent deals to you all day, every day, and you got to pick which ones were the best loans to fund? You would then be the ultimate decisionmaker for the transactions.

It gets better. What if, instead of just getting a referral fee, you got paid recurring revenue on each loan every month until the loan paid off?

If you did these things, you’d be a private lender – and you’d probably have more income. So how do you go from being a broker to being a private lender? Below are our top 5 tips for getting started: Start by lending some of your own capital.

That’s how most of our customers got started.

Get friends/family involved. Consider participating with new investors on each deal.

This will help give them the confidence to invest with you.

Do your due diligence. Only fund great deals with low loan-to-value ratios.

Contact your provincial regulatory body to determine what license you need (if any) to administer loans. In Ontario, it’s FSCO. Administer every loan. This will give you control of the portfolio and a connection with your investors.

Once you do this, you’ll be in the driver’s seat.

–A.J. Poulin, The Mortgage Office

says. “Often the mortgage can’t stand alone, and one of the solutions that we provide is flexibility around the term loan and the credit card for the purposes of additional financial products that are not included in the mortgage.”

“It is mission critical,” says Kosturos, pointing out that his company depends on deals that A lenders won’t do. “Most of our portfolio is made up of deals that aren’t a fit for many A lenders for one reason or another.”

Although private lending is becoming more popular, there are still brokers out there who are having difficulty finding the right private lender for their deals. With the changes that happened in the financial landscape in 2008, says Dunbar, US banks began to retrench – and in some instances, left Canada altogether.

“One of the things we’re finding with our clients is that they have either been with the banks in the past, or that they have an expectation that the bank can handle their traditional small balance loans, or money for emergencies or a credit card. In today’s market – certainly in the last five years – the banks have tightened some of their lending, and people who have traditionally gone to a bank now can’t for the purposes of getting secured lending – that is where we’ve been able to make a difference.”

For brokers, it may require a new mindset to serve this market.

“Many brokers have been accustomed to pushing ‘A’ paper,” says Tiffany Pedersen, assistant vice president for Capital West.

“While the market has changed, so have the lending guidelines. Brokers have adapted their best practices to fit a broader range of client needs. Self-employed borrowers paired with the average price of a [metro Vancouver] home demands alternative mortgage products; brokers can offer solutions that in many cases are not offered by their banks.”

Times are changing It has been a dramatic shift in the landscape in a very short space of time in the mortgage space, says Anger.

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“There was a time when A lending was at the peak of the mortgage market space.

CMHC guidelines for approving high-ratio mortgages had so many flexible insurable products available that clients who couldn’t get approved from an A lender were declined

“Private lenders can act quickly to fund a file without the mountain of paperwork traditional lending would require” Tiffany Pedersen, Capital West because of the terrible credit or bankruptcies.

Over the past 10 years, those flexible guidelines became less and less due to government restrictions placed upon the A lenders and the high-ratio mortgage insurance providers.

This is mostly due to the demise of the US mortgage markets and their subsequent economic crash.”

The best part is, these mortgage loans come at a fraction of the cost they carried 10 years ago, Anger says.

“In fact, they’re even cheaper than they were just three to five years ago. This means the debt load of having an alternative mortgage is more affordable to the borrower, and the default ratios for the lenders have been drastically reduced.”

Flexibility and being nimble are just a few strengths that many private lenders offer, Pedersen adds.

“With the housing market in Vancouver, it is not uncommon to see purchases going into multiple offers, subject-free, with quick closing dates,” she says. “Private lenders can act quickly to fund a file without the mountain of paperwork traditional lending would require.”

Another trend that Pedersen is seeing is

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17/06/2015 9:26:49 AM

FEATURES

PRIVATE LENDING GUIDE

“It is mission critical. Most of our portfolio is made up of deals that aren’t a fit for many A lenders for one reason or another” Dimitri Kosturos, VWR Capital

AMC_CMP_HalfPgHorz_Advert_v1.2_June08_2015.indd 1

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the client who has decided to purchase before selling their existing property.

“Private lenders can offer inter alia financing with an interest reserve option to allow clients to carry two properties while waiting for the sale to complete,” she says.

“Private lenders also have the ability to finance multi-million-dollar properties considering stated income and income coming from overseas.”

According to Dunbar, Affirm is a little more creative in how it creates a risk profile for the customer.

“There is the debt/service ratio; we certainly take in the person’s ability to pay as a primary driver of how much they can borrow and what is an appropriate payment,” he says.

Turning ‘non-deals’ into deals It is very important that the message get out to brokers and bankers alike that there are alternative solutions for many who hold equity in their properties, Pedersen says, as private lenders provide solutions on many deals that some feel are ‘non-deals.’

“Clients often need access to equity for a variety of emergency or time sensitive reasons,” she says. “Rather than borrowers just having to suffer without a bank loan, it is important that brokers and private lenders come together to educate brokers, and customers in general, that there are options outside of traditional lenders.”

But that doesn’t mean recklessness, she points out, as private lending is all about

6/9/2015 10:32:05 AM

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common sense.

“It is about looking at the marketability of the security being offered, the ability of the borrower to earn income to repay the debt and their track record of repayment,” she says. “Unlike lenders on the A side, there isn’t a formula for how this looks. It is based on experience, common sense and an understanding of the exit strategy for the loan, as private lending should rarely be used as the permanent lending solution.”

In the last five years, Dunbar has seen a lot of new players come into the market.

“They are coming in through a number of different channels,” he says. “Some are going directly consumer; some are doing it through retail financing strategies.

“We do a lot of work marketing directly to consumers,” he continues. “We have a large pool of accounts that we have done through acquisitions, but I think a big part of servicing Canadians is through that channel.

Brokers are a big part of solving those problems and finding solutions. As part of that process, we’re able to leverage that relationship and offer similar types of financial products. So that broker relationship is very important to us.”

The number of private lenders that are quasi-institutional, such as Mortgage Invest­ ment Corporations [MICs], has increased over the past 10 years. In addition, many

TOP 10 QUESTIONS YOU NEED TO ANSWER FOR PRIVATE DEALS Where is the property?

Province? City? Neighbourhood? Urban? Rural?

Desirable location?

What type of property is it?

Residential? Commercial? Owner-occupied?

Rental? Recreational? Marketable?

What type of transaction is this?

Purchase? Refinance? Equity take out?

Construction?

What is the use of funds?

Purchase? Debt consolidation? Cash flow?

What is the exit strategy? How will the loan be repaid and when? Sell?

Refinance? Borrow from family or friends? Is the exit reasonable?

How was the value determined?

Appraisal? Realtor valuation? Property tax assessment? Owner?

What is the LTV and loan amount?

Is the loan amount sufficient to accomplish the borrower’s goals? Does it include fee and closing costs?

What are the intangibles of the deal? What is going to happen to make sure this loan gets paid? New employment? New spouse?

Settlement? Inheritance?

What is the financial situation of the borrower? Employment? Income sources?

Credit? Assets?

eXPeRts

talk to the experts in private lending

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What is the story?

Why don’t they qualify conventionally? Divorce?

Job loss? Foreclosure?

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FEATURES

PRIVATE LENDING GUIDE

FINDING A PRIVATE LENDER

1 A well-known lender is not necessarily the best lender for your deal. Lenders that spend a great deal of time and money on promotion will have to cover those expenses somehow. They may be the most honest lender around, but they may also be more expensive than the competition.

2 Many lenders have very specific policies about collecting fees upfront. These are usually for very legitimate reasons, generally to cover possible legal expenses or other out-of-pocket expenses. You will have to read the lender’s terms and compare them to other commitments to determine the competitiveness of the offer for your client. Be aware that fees are regulated quite differently from province to province.

3 Get a written commitment before you present the lender offer to your client. Then, if there is a misunderstanding later, you at least have the commitment to refer back to.

4 If the terms of the commitments you receive appear to be too onerous for your client, or you feel they are too restrictive, be upfront about this with your client. Make sure you point out both the positive and negative items on a commitment.

Ultimately, your client has to decide if they are comfortable with the terms being offered.

5 The more thorough you are in presenting your file, the less likely there will be misunderstandings with the lender later in the process. Always speak to the deficiencies in your file. Ask your client the tough questions, and get straight answers. Back up whatever you can with documentation. Only then will you be able to present your file with confidence. With full disclosure upfront, there should be little reason for the lender to want to back away from their commitment.

6 The appraisal can make or break your deal. Bear in mind that the biggest cause for concern usually comes from the appraisal, so until

42

that is completed and reviewed, you can never be too comfortable with a commitment or allow your client to get too comfortable.

7 Be conservative with your property valuation – manage your client’s expectations.

The lender will appreciate it, and chances are your deal won’t have to be revisited (or collapse) when the appraisal is completed. Again, it’s one less item for the lender to address negatively.

8 In order to look after your client, you need options for them to consider. You may know a lender that will look after your particular client, but other lenders may have different or better offers – not specifically rates and fees, but more the overall package the lender offers. As with A lending, the lowest rate isn’t always the best deal for your client.

9 Once you have options for your client, you should check out the lender who appears to be the best fit. If you don’t know the lender already, you can talk to colleagues or even call the local regulator to see if there have been complaints against the lender in question.

10 Bottom line – if you have concerns about the lender or the offer from the lender, make sure you address those concerns with your client. Your client may be under considerable financial duress and may need you to be the strong voice of reason at a time when their need for money blinds them to matters that should concern them.

“The restrictions placed upon the A channel are squeezing many otherwise good borrowers out. A ‘non-deal’ in one matrix lender’s opinion can be a slam dunk deal to another” Michael Anger, Paramount Equity more individuals have turned to private mortgage lending as a way to earn more on their investment portfolios than they can in traditional GICs and riskier stocks.

“I expect that in the future, we are going to see more and more MICs get larger and possibly consolidate due to tighter regulatory requirements and scrutiny,” Pedersen says.

“Rates have been declining for several years, and with the use of leverage on the part of larger MICs, and increased competition from institutional lenders and other private sources, it appears that rates may continue this trend.”

Kosturos has seen a dramatic shift in the lending space in just the past two decades.

“In that time our industry has matured, and the number of alternative lenders has grown,” he says. “Five years ago, we were one of a handful of private lenders at a regional conference. This year, there were dozens of private lenders all vying for the attention of the brokers attending the event. The best lenders are developing strong operations and marketing systems. As we move forward, relationships and marketing are more important than ever.”

www.mortgagebrokernews.ca

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Credit  Income  Debt Servicing  Title Issues  Down Payment  Immigration Status

Alt A And B comBined for one stop shopping When the property is not the problem, SIMPLE, FAST, FRIENDLY, DONE. To discuss a potential file to see if it’s a good fit with Magenta’s programs, to learn more about how Magenta can support your sales goals, or to escalate any mortgage issues:

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www.magentainvestment.ca

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FEATURES

PRIVATE LENDING GUIDE

CROSS-CANADA DIRECTORY 2015 More and more, private lending is being used as a bridge to get clients into a traditional mortgage Following on the success of last year’s directory, this year’s CMP Private Lending Guide offerings a crosscountry map and directory of lenders grouped by region and area of focus. The guide outlines the lending criteria for each player, ensuring you’ve synced your client’s needs and borrowing abstract with the best lender covering that vertical.

Yukon Territory Northwest Territories

Nunavut

British Columbia Alberta Manitoba Saskatchewan Pillar Financial Services

Ontario

Magenta Capital Corporation VWR Capital Corp.

Fisgard Capital Corporation, Fisgard Asset Management Corporation Affirm Financial Services Paramount Equity Financial Corporation Premiere Mortgage

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Mortgage Administration and MIC Software Powerful, Flexible, and Easy to Use Increase productivity and accuracy Administer loans in any Province Service syndicated loans Manage MICs Support GST/HST Issue T5s, T3s, and GICs Attract more investors Newfoundland

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Quebec Prince Edward Island New Brunswick

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800 . 833 . 3343 the mortgageoffice.com

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FEATURES

PRIVATE LENDING GUIDE AFFIRM FINANCIAL SERVICES

Lending markets Available nationally (excluding Quebec)

Niche/focus: Alternative lending products to the banks

Minimum Beacon: 550

Products: Unsecured term loans up to $10,000, and unsecured credit card up to $5,000

Terms: 60 month repayment terms on term loans Rate type: Fixed rate, open loans

Customer type: Near-prime and subprime borrowers, including those completing a bankruptcy or consumer proposal, and those already discharged

Fees: No fees on term loans; $7 per month for credit card

Purpose: Debt consolidation, improving credit score, unexpected expenses, recently bankrupt

Preferred loan amount: $7,500 term loans and $5,000 credit card

Maximum LTV: 65%

FISGARD CAPITAL CORPORATION (in Saskatchewan) FISGARD ASSET MANAGEMENT CORPORATION (in BC, Alberta, Manitoba and Ontario)

Lending markets BC, Alta., Sask., Man., Ont.

Niche/focus: Just outside the banking box – residential, commercial, construction, modular homes Products: First and second mortgages

Terms: • Up to 2 years • Fully open (no pre-payment penalties) • Interest-only payments (amortized payments an option)

Customer type: Private non-bank borrower Rate type: Fixed Property type: • Single-family, multi-family • Modular and manufactured homes • Recreation • Mixed-use • Apartments • Fully tenanted industrial • Retail centres • Offices • Hospitality • Condo and lot inventory • Pre-sold, spec and owner/builder construction • Will consider other property types on exception Purpose: Purchase, refinance, equity take out and more – you name it, we will consider Maximum LTV: Currently 75% but soon 85% through our new MIC – Fisgard Capital II

Maximum amortization: All mortgages are fully open, but we do offer amortization up to 35 years if requested Fees: • Residential – no lender fees • Residential – no renewal fees (if paid as agreed) • Commercial – lender fee from 1% • Construction – lender fee from 2% • We collect and pay the broker’s fees Preferred loan amount: Maximum loan amount $5 million (but we will participate in large loans with preferred lenders) We DO NOT lend on: Leased land, rental pools, environmentally sensitive properties (i.e. gas stations, properties along railway tracks, retail centres with dry cleaners, etc.)

Minimum Beacon: Not applicable

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Affirm

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affirmfinancial.ca | 1-855-220-7531 For more information contact Peter Young | 519-266-4401 | peter.young@affirmfinancial.ca Fixed interest rate of 28.8%. You must have completed your bankruptcy or consumer proposal process to qualify for a credit limit up to $2,000. This card is issued by Peoples Trust Company pursuant to license by MasterCard® International. MasterCard® and MasterCard® Brand Mark are registered trademarks of MasterCard® International Incorporated.

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FEATURES

PRIVATE LENDING GUIDE MAGENTA CAPITAL CORPORATION

Lending markets Eastern and Southwestern Ontario – primarily urban settings (full city limits plus 10 km)

We are a property lender first and will discuss all files as a general guideline.

We review all files on a case-by-case basis.

Niche/focus: Owner-occupied properties, single and multi-unit rental properties, student rentals, commercial and mixed-use, construction, and raw land.

We offer ‘No-Doc’ and ‘Stated Income’ products as well.

Products: First and second residential mortgages, construction, seasonal properties, lot and land, equity lending, small commercial, and mixed-use.

Minimum Beacon: None Terms: One to two years; 2.5% lender fee for first mortgages; 3% for second mortgages and raw land.

We always cap our fees.

Rate type: Fixed Maximum amortization: 40 years max; interestonly available

Customer type: Experienced builder, self-employed, salaried, bruised credit, new to Canada, nontraditional income sources, anything that falls outside of regular bank parameters

Fees: Generally a 2.5% lender fee for first mortgages; 3% for second mortgages and raw land.

We always cap our fees. Our fees could change with any rate/product specials we have.

Property type: Single family, multi-use residential, large homes, store and apartments, condos

Preferred loan amount: Residential properties up to $750,000; small commercial to a maximum of $1.5 million. No minimum loan amount, but a minimum fee on our second of $2,000.

Purpose: Purchase or refinance; bridge lending available Maximum LTV: 85%

This Is Magenta’s New ‘No-Doc’ LOOK WHAT YOU CAN GET WITH JUST AN APPRAISAL AND AN NOA SHOWING NO TAXES OWING ****NO OTHER DOCUMENTS REQUIRED****

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75% LTV

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4.99%

with a 1.5% fee Beacon scores over 650

with a 1.5% fee Beacon scores over 575

RATE SPECIAL REQUIREMENTS • Properties within the city limits of our traditional urban markets, which include Ottawa/Kingston/Brockville • Owner-occupied properties only • Max amortization is consistent at 40 years • Fee for the first is 1.5% (capped) and 50 bps to broker from the fee on all rate special files **Please ensure you put “Rate Special” in the notes section of your application in Filogix**

PARAMOUNT EQUITY FINANCIAL CORPORATION

Lending markets All Provinces excluding Quebec and PEI

Niche/focus: Residential, income-producing rental, construction, mixed-use residential/commercial, industrial, land development Products: Bundled first and second mortgages, interest-only second mortgages Customer type: All borrower types; equity/collateral lending focus (include notes on borrower financials and circumstances) Property type: Single-family, multi-unit, large homes, mixed-use, commercial, apartment buildings, condos, land development

Maximum LTV: 85% typically, occasionally up to 90% under certain conditions Minimum Beacon: 450 Terms: Six and 12 months Rate type: Fixed Maximum amortization: 30 years, interest-only on second mortgages Fees: Varies by application and deal type Preferred loan amount: $25,000 – $2,000,000+

Purpose: Debt consolidation, refinance, bridge lending, other (include notes on purpose of loan)

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The Paramount of Private Lending Stop sharing your broker fees... submit your deals directly and we’ll pay you 50bps*!

• Rental & Owner Occupied • Single, Multi-Unit, Mixed Use • Stated Incomes Accepted • TDS/GDS almost Irrelevant • Beacon Scores from 450

• Urban & Suburban • Population 25,000 min.

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Submit applications to bundles@paramountequity.ca • Proudly serving the Broker community since 2006. See what we can do for you!

• Sign up to our weekly rates list at paramountequity.ca/mortgage-brokers • For more details on our offering, phone 1 (905) 201 2282 ext. 430.

*50bps paid on approved & funded mortgages. **O.A.C. Terms & Conditions apply. Rates are subject to change at any time.

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FSCO LIC: Brokerage 12158; Administrator 11747

16/06/2015 3:31:39 PM

FEATURES

PRIVATE LENDING GUIDE PILLAR FINANCIAL SERVICES

Lending markets Ontario

Niche/focus: Residential, construction, large renovations, rural, self-employed, bruised/damaged credit, cottage Products: First mortgages Customer type: Those that are ‘outside the box’ of typical lending criteria Property type: Single-family residential, multiples, large homes, second homes, rural properties with well and septic, new construction Purpose: Ensure long-term financial well-being of borrower by providing solutions in an ever tightening

market. Short-term solutions for long-term success.

Maximum LTV: 80% Minimum Beacon: None Terms: One to two years Rate type: Fixed Maximum amortization: 30 years Fees: 2% with 80 bps to broker on every deal Preferred loan amount: $200,000 and up

PREMIERE MORTGAGE

Lending markets BC, Alta., Man.

Niche focus: Equity-based mortgage financing for urban and small town/rural residential properties Products: First, second and third mortgages Customer type: Borrowers that are unable to qualify for conventional financing – our common-sense lending solutions are based on equity in real estate, not income or credit. We can even help with difficult situations like bankruptcies, collections, judgments, divorce and tax issues, even foreclosures.

Maximum LTV: Up to 75% LTV in urban areas and up to 65% in small town/rural locations. We also have a large pool of associated private lenders and investors catering to situations that fall outside of our typical lending criteria, up to 80% LTV. Terms: Through our in-house mortgage fund (MIC), we can provide your client with exceptional pricing and terms on virtually all forms of residential mortgage financing.

Property type: Funding options are available for mobile homes, acreages, farms, raw land and small commercial

VWR CAPITAL CORP.

Lending markets BC, Alta., Sask., Man., and Ont.

Niche/focus: Residential

Terms: One-year term – open mortgages available

Products: First, second and third mortgages

Rate type: Fixed

Customer type: Individuals, holding companies, operating companies

Maximum amortization: Up to 35 year amortization; interest-only available

Property type: Single-family, townhouses, condos, row homes, serviced land, raw land, multi-family

Fees: Starting from $750 for first mortgages, and $500 for second and third mortgages

Purpose: Finance borrowers who may not qualify at traditional institutions

Preferred loan amount: $25,000 up to $2,200,000

Maximum LTV: 75% Minimum Beacon: None

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PM 8

Quick. Simple. Approved.™ Your private lending experts since 1985!

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PEOPLE

BROKER PROFILE

The mortgage industry’s jack of all trades Between writing books and producing podcasts, Scott Peckford is a busy man. But he still finds time to run the successful Impact Mortgages, and, as he tells Olivia D’Orazio, it all stems from educating clients

A CONVERSATION over a beer. Like many great things, that’s how Scott Peckford’s “I Love Mortgage Brokering” podcast was born. Still, it’s clear that Peckford would have been on the fast track to dominating the mortgage world – beer drinker or tea toddler.

“If I had any sense, and if I listened to my wife, I would just mortgage broker,” Peckford says. “I can’t help myself. I like to invent things and do different things.”

Peckford didn’t start off as a jack of all trades. He entered the business in 2006, joining his wife’s mortgage brokering business. He always had an interest in the financial services sphere – he completed a financial securities course at 21 – but his baby face kept him from being taken seriously.

“I always wanted to be in the financial planning world,” Peckford says. “When I was 21, I took my securities course, but I looked like I was 15. I knew nobody would give me their money, so I became a paramedic.”

Then, after several successful years as a broker, Peckford’s wife opted to close her business, and he took the opportunity to start his own: Impact Mortgages.

“It seemed like a good thing to do at the time,” he says. “I didn’t have the, ‘I’m going to take over the world’ idea in mind. At the time, the corporate structure was the most active vision for our business.”

Impact Mortgages is focused on education. Many clients arrive at Peckford’s door with little to no understanding of the contract they’re about to sign. The rate tends to cloud their vision, he says.

For that reason, Impact works to help clients grasp the finer details of a mortgage.

“We like to educate our clients,” Peckford says, adding he would probably have become a teacher if he wasn’t a mortgage broker. “I like to educate people on their options.”

To help with that education, Peckford provides his clients with a book he wrote, entitled How to Rob Your Bank. The book was written as an outlet for Peckford’s

“I think brokers are interested in how other people are doing things. They like to learn, and they want to improve”

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frustration with the way the big banks were taking advantage of their loyal customers. “[The banks] don’t discuss anything other than rates,” he says. “They don’t discuss any of the terms of the contract, which can be detrimental to a client – or it could benefit a client, but the clients just don’t know.”

Clients have been responding well to the book.

Peckford, who is planning a follow-up to How to Rob Your Bank, says he’s made more money based on the referrals he’s earned from readers than he’s made in book sales.

“The amount of money I’ve made from referrals from the books has eclipsed book sales by a factor of 25 times,” he says. “It’s been extremely beneficial.”

A little more conversation His “I Love Mortgage Brokering” podcast also has been of great benefit, albeit in a very different way.

Peckford says his favourite part of going to conferences was sitting at the bar, having a beer with a colleague and discussing the business. Often he found those conversations were the most valuable parts of these conferences.

Peckford craved those conversations with his peers, but of course, attending a conference every week is hardly productive.

“I figured I could probably simulate those conversations in a podcast – but I don’t drink beers every episode,” he laughs. “The reason that I started it is to keep myself excited and interested in our industry.

I’ve been doing it for a while, and sometimes you get bored, so it’s good to have that inspiration and keep it exciting.”

What’s more, Peckford says he’s been able to develop a web of contacts within the industry to whom he can turn if he has a question.

“It gives me ideas to improve my process, and it gives me connections, so when I have a problem I don’t know the answer to, I probably have somebody’s cell phone number who I’ve interviewed, and I can call them and say, ‘Hey what do you think about this?’” he says. “They’re totally open to sharing with me.”

The podcast, which Peckford has never advertised, also has been very well-received among his fellow mortgage brokers. It has surpassed 20,000 downloads – all via word of mouth.

“I think brokers are interested in how other people

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PEOPLE

BROKER PROFILE

“Gone are the days of just offering a slightly lower rate than the bank and being able to get a mortgage – that doesn’t happen anymore”

are doing things,” he says, adding that he often re-listens to his own podcasts to learn from his interviewees.

“They like to learn, and they want to improve. I think that’s why it’s been so well-received.”

The podcast also fosters a camaraderie between mortgage brokers – a relationship that will certainly come in handy over the next several years as competition in the industry heats up.

Peckford says he sees competition – between banks, between brokers, and between banks and brokers – as the greatest challenge in the business. It’s a problem many industries face as they mature, and it’s one that often fixes itself as those brokers chasing a commission drop out of the industry once the going gets tough.

But even veteran brokers could face hardships in the future. “You’re going to have to be efficient, you’re going to have to be smart,” Peckford says. “Gone are the days of just offering a slightly lower rate than the bank and being able to get a mortgage – that doesn’t happen anymore.

“You have to be a professional and be constantly learning and adapting,” he continues, “and the people who refuse to do that will find themselves on a business that’s declining.”

Peckford says he also expects brokers to increasingly join consolidated networks as lenders put higher requirements on volume. Brokers, who now need access to 10 and more lenders, will benefit from an increased sense of camaraderie in this situation, too.

“I also think you’ll see more consolidation on the national broker side – the Vericos and the Invises,” he says. “And [because of this joining forces], I think you’ll see billion-dollar teams – I think that’s coming, and I think that could come faster than even I was expecting.”

Laying the groundwork That’s a good deal of change that Peckford expects to come his way, and he’s anything but unprepared. He says he’s hoping to hone in on a niche market and really work to serve that demographic as best he can.

“For us, that [niche] is first-time buyers and [the plan is to] really serve that niche well,” he says. “It’s hard to be good at all things for all people.”

WHEN HE’S NOT MORTGAGE BROKERING …

When Scott Peckford isn’t recording podcasts, educating first-time homebuyers, arranging mortgages, or writing books – whew! – you can find him spending time with his wife of 17 years, Janet, and their three children: Alyana, 9; Carson, 8; and Jiah, 6.

He’s also something of a fitness buff, spending time at the gym lifting weights. “It’s more for my mental health than anything,” he says. And while he’s taken a bit of a break from the sport lately, Peckford has also done Brazilian jujitsu.

“It’s like problem solving in real time,” he says. “It’s like chess but more physical. I like to spin that problem-solving part of it.”

Plus, Peckford says, first-time buyers tend to be excited to purchase their first home and are often easier to work with.

First-time buyers also can best benefit from Peckford’s particular emphasis on education, since they’re more likely to have questions about the different products available to them.

“They need the most educating,” he says. “I think [first-time buyers] are one of the most profitable niches, and they tend to be happier people to deal with.

They’re more inclined to be [happy] that somebody’s teaching them this stuff. There’s a reason why mortgage brokers have a large percentage of first-time buyers, [and that’s] because it’s an area we can excel at.”

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PEOPLE

CAREER PATH

AN UNLIKELY PATH

Odd as it sounds, James Shinners learned about mortgages by working in the auto sector – and has continued to blend the two ever since 2010

TEACHES MORTGAGE COURSE

2009

RECEIVES CMA HONOURS

“I was nominated for Best Newcomer Mortgage Brokerage and Brokerage of the Year . . the same thing happened in 2010, so it let us know we were on the right track” In addition to starting a new business, Mortgage Managers, Shinners began to share his knowledge with other mortgage brokers “I was riding high of our position in the market and decided it was time to give back and teach. We were trying to establish education standards for mortgage brokering in the province, which didn’t exist back then. So I taught at the Maritime Business College and developed a Mortgage 101 course”

2005

BEGINS SELLING MORTGAGES AT MORTGAGE INTELLIGENCE “It was a bit of a learning curve. At Wells Fargo, I was selling mortgages at almost 29%, but when I started at Mortgage Intelligence, it was 6%. I thought it’d be a cinch, but it turned out I was a little green, a little naive. There was a clear difference in name recognition that had an effect. I spent about $10,000 for ads to build myself up, and things slowly improved”

2002

GOES TO WELLS FARGO

1998

Working for Wells Fargo in Burlington and later Halifax, Shinners had the opportunity to dip his toe into the mortgage industry “I started selling mortgages to some of our auto customers, and it took.

Wells wanted me to move back to Burlington for another position, but I was pretty much married to it, so I decided to go out and start full-time as a mortgage broker”

LAUNCHES AMERICREDIT IN CANADA When Mercury Finance went bankrupt, Shinners found himself establishing the first Americredit branch in Canada “Again, it was in the sub-prime market. We turned chicken poop into chicken salad, so to speak. I did a lot of training over this period, which helped to hone my own skill.”

Shinners got his educational foundation at Georgian College in Ontario and Northwood University in Michigan, where he landed on an unexpected road “The [Northwood] program specialized in automotive marketing, which helped to break me in to the industry with the Canadian Association of Japanese Auto Dealers.

Cars and homes are usually separate fields, but little did I know that cars would get me into the home business!”

1995

STARTS IN AUTO INDUSTRY AS MARKETING REP

1991

STUDIES BUSINESS AND FINANCE

After getting his degree, Shinners went to work for Mercury Finance, helping middle- to low-income borrowers obtain auto financing “Those skills translated well to what I do now, because we had to sell this idea – not only to the lenders and auto dealers, but also to the clients – in how they dealt with debt. I learned a lot of fundamental skills”

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PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email mortgagebrokernews@kmimedia.ca

RIGHT AT HOME Being one of the top mortgage professionals in Atlantic Canada doesn’t take away from Kim Reddin’s other ‘job’ – building homes for needy families AS A FINANCIAL professional for more than 20 years, Kim Reddin of Centum Mortgages has been through it all, from working in big banks to jobs at smaller financial institutions, but for her, nothing is as rewarding as her career in mortgages.

5

Years volunteering with Habitat for Humanity

Just about the only thing you can get her to admit is more rewarding is her work as a volunteer for Habitat for Humanity. Not only does she get to put people in homes, but she also gets to be a part of the crew that builds those homes from the ground up.

4

Houses built as a volunteer

“You see somebody with a family and they are trying hard,” she says. “[It is rewarding] when you see the success and the happiness [people feel] when they have their own place that they can call home.’’

10

Years working as a mortgage broker

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2015-06-17 11:08:04 AM

Alternative Lending Mortgage Broker of the Year Greg Domville

Best Newcomer, Mortgage Broker Firm of the Year

Best Commercial Mortgage Broker of the Year DAVID BECKINGHAM

Mortgage Broker of the Year 25 Employees or More COLLIN BRUCE

Dominion Lending Centres A Better Way

Plan B Mortgage Services (A division of Dominion Lending Centres)

Dominion Lending Commercial Capital Inc.

Dominion Lending Centres Mortgage Mentors

Best Commercial Mortgage Broker of the Year TINA MU

Mortgage Broker of the Year, Fewer Than 25 Employees DEBBIE BELAIR

Best Customer Service From An Individual Office GEOFF LEE

Mortgage Broker of the Year, Fewer Than 25 Employees TRACY VALKO

Best Industry Service Provider JAY SEABROOK & KEVIN COCHRAN

Mortgage Brokerage of the Year 25 Employees or More

EnRICHed Academy

Dominion Lending Centres Mortgage Mentors

Diversifier of the Year

Mortgage Brokerage of the Year Fewer Than 25 Employees

Dominion Lending Centres Acer Mortgage

Dominion Lending Centres Geoff Lee Mortgage Group

Dominion Lending Centres Smart Debt

Dominion Lending Centres Forest City Funding

Dominion Lending Centres Powerhouse Mortgages

Dominion Lending Centres Expert Financial

Best Newcomer, Individual Agent or Broker of the Year FRANCES HINOJOSA

Mortgage Brokerage of the Year Fewer Than 25 Employees

Dominion Lending Centres Regional Mortgage Group

Dominion Lending Centres The Mortgage Source

JOIN THE COMPANY THAT IS ALWAYS FIRST TO POWER ITS MEMBERS WITH THE BEST!

1-888-806-8080 DominionLendingCentresCanada

56-IBC_Other Life.indd 57

JoinUsNow.ca DLCCanadaInc

16/06/2015 3:32:41 PM

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•

Local support, national coverage

BANKING THAT WORKS FOR BROKERS® b2bbank.com/mortgages | 1.800.263.8349 All mortgages are funded by, registered in the name of, and administered and serviced by B2B Bank. Mortgages are subject to credit approval by B2B Bank. Some conditions apply. B2B BANK and BANKING THAT WORKS FOR BROKERS are registered trademarks of B2B Bank.

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