CMP 11.12

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TOP BDMs Brokers name the 30 best business development managers in the industry

ALTERNATIVE LENDING GUIDE What you need to know to unlock new options for your clients

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YEAR-END RETROSPECTIVE A look back at the good, the bad and the ugly in the mortgage industry in 2016

MERIX FINANCIAL’S BORIS BOZIC On how the broker channel can fight back against further regulation

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ISSUE 11.12

CONTENTS

34

TOP BDMs COVER STORY

CMP shines the spotlight on 30 business development managers across Canada whose stellar service helps make brokers’ lives easier

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ISSUE 11.12

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CONTENTS

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UPFRONT 04 Editorial

Reflections on 2016 and predictions for 2017

10 UPFRONT

44 18

NEWS ANALYSIS

CMP looks back at this year’s roller coaster of low rates, new regulations and red-hot real estate markets

From choosing a lender to structuring a deal, here’s what brokers need to know to help clients who now find themselves in the alternative space

INDUSTRY ICON

Brokers weigh in on the impact of new mortgage rules

12 Broker update

A columnist points the finger at the government for driving up home prices in Vancouver

48 BROKER INSIGHT Mackenzie Gartside reveals how she’s been able to find success by sticking close to home

C

M

Y

CM

MY

16 Opinion

Merix Financial CEO Boris Bozic explains why now is the time for the industry to come together

30

08 Head to head

Asian investors are starting to move elsewhere in BC

PEOPLE

PEOPLE

Checking in with Canada’s major housing markets after a recordbreaking year

14 Commercial update

SPECIAL REPORT

ALTERNATIVE LENDING GUIDE

06 Statistics

Who’s really to blame for ‘shadow mortgages’?

CY

CMY

K

PEOPLE 55 Career path

Gary Mauris’ journey from owning a corner store to running DLC

56 Other life

The beat goes on with orchestra conductor Natalia Osypenko

50 FEATURES

DRIVING CHANGE IN YOUR BUSINESS A blueprint for transforming your brokerage – and making the changes stick

2

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UPFRONT

EDITORIAL

www.mortgagebrokernews.ca ISSUE 11.12

What was, and what’s to come

M

y, what a year it’s been. Covering the mortgage industry has never been more exciting, and working in it … well, we don’t want to assume things (you know what they say about assumptions), but we get the sense it has been both frustrating and exciting for you, our faithful readers and leading mortgage brokers.

The year started off with a bang, with Dominion Lending Centres announcing it had acquired Mortgage Architects. There were rumours for months about a pending merger, but all parties involved expertly remained mum throughout

Our prediction for next year: Brokers will defy the odds, adapt to the new reality, and continue to prove they are the best choice for mortgages in Canada the process. So it took many in the industry by surprise – at least those who still underestimate the determination of the country’s largest broker network.

March brought with it some uncomfortable news for brokers in British Columbia. FICOM, the province’s mortgage regulator, announced it was proceeding with plans to enforce new disclosure rules for brokers. The industry, unsurprisingly, called foul, but to no avail.

By May, DLC was making headlines once again. We reported midway through the month that the network had sold a majority stake. That deal was viewed by many as a major vote of confidence in the channel. Not to be outdone, two other major networks got in on the action. In July, Broker Financial Group and Real Mortgage Associates announced their own partnership.

And October … what can we say about October? MortgageBrokerNews.ca saw record performance following a bombshell of an announcement about new mortgage rules. That story proved to have legs for the rest of the year and, I’m sure we can all agree, will continue to in 2017 as the impact is fully realized.

With 2016 about to be put in our rearview, why not take time to look forward to what lies ahead? The holidays offer a great time to decompress and relax (although we all know brokers aren’t very good at that). Our prediction for next year: Brokers will defy the odds, adapt to the new reality, and continue to prove they are the best choice for mortgages in Canada. That, and there will be plenty of interesting stories for us to cover.

The team at Canadian Mortgage Professional

EDITORIAL Editor Justin da Rosa Writers Joe Rosengarten Libby Macdonald Ephraim Vecina Kimberly Banks Copy Editor Clare Alexander

CONTRIBUTORS Samantha Gale Michelle Gibbings

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1/12/2016 7:27:47 AM

UPFRONT

STATISTICS

What a year

STRONG SIGNS OF TROUBLE In its fourth-quarter housing report, CMHC said that its most recent national figures provide “strong evidence of problematic conditions,” prompting the Crown corporation to raise a red flag for Canada’s housing market as a whole.

With one major regulatory change still reverberating and another kicking in soon, 2016 has been nothing if not memorable

WEAK “MAY YOU live in interesting times” could be the motto of the past year in Canada’s housing markets. A new tax imposed on the country’s hottest market in the summer had a seemingly immediate impact that continues to play out, while the slate of changes to national lending rules announced in October won’t kick in completely until around the time of publication.

As has long been the case, Canada’s two biggest markets had a distorting effect on national trends. For example, in the second

quarter of the year, house prices (adjusted for inflation) climbed 11% from the same time the year before.

But once Vancouver and Toronto are stripped out, the figure falls to 6%. And if the provinces of British Columbia and Ontario are excluded from the data completely, thus omitting the spread of price inflation to neighbouring communities, that figure goes into the red – house prices elsewhere in the country decreased an average of 3% during the same quarter.

MODERATE

STRONG

Canada July 2016

Oct 2016

Vancouver July 2016

Oct 2016

Victoria

5.9%

Average rise in property prices nationally year-over-year for October 2016

$60,693

Average year-over-year price drop for BC properties in October 2016

21.1%

Year-over-year spike in average sales price in Toronto

July 2016

$2,000

Oct 2016

Estimated rise in the average home price in Toronto every eight to nine days

Sources: Canadian Real Estate Association, Real Estate Board of Greater Vancouver, Toronto Real Estate Board, The Globe and Mail

TRENDING UPWARDS

VANCOUVER TAKES A BEATING ...

Nationwide, things are still on the up for 2016 – the country as a whole recorded a year-over-year price increase of just under 6% as of October.

The imposition of a new tax on foreign buyers seems to have taken the heat out of a market that was apparently already cooling. Sales for October 2016 in Vancouver dropped 15% below the 10-year average for the month, while the average price was down 5.9% year-over-year.

AVERAGE PRICE

SALES OF DETACHED PROPERTIES, METRO VANCOUVER 1,500 1,437 1,200

$500,000

$481,994

$450,000

$455,147

900

Down 54.6%

October 2015

October 2016 Source: Canadian Real Estate Association

6

1,500 1000

600

0

1,543

SALES OF TOWNHOUSES, METRO VANCOUVER

Down 23.7 % 1,178

652 500

300 $400,000

SALES OF APARTMENTS, METRO VANCOUVER 2,000

October 2015 October 2016

0

October 2015 October 2016

800 700 600 500 400 300 200 100 0

666

Down 39.5% 403

October 2015 October 2016 Source: Real Estate Board of Greater Vancouver

www.mortgagebrokernews.ca

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Edmonton July 2016

St. John’s

Oct 2016

July 2016

Quebec City July 2016

Saskatoon July 2016

Oct 2016

Oct 2016

Moncton

Oct 2016

July 2016

Oct 2016

Montreal July 2016

Oct 2016

Toronto July 2016

Oct 2016

Halifax July 2016

Calgary July 2016

Oct 2016

Winnipeg

Oct 2016

July 2016

Ottawa

Oct 2016

Regina July 2016

July 2016

Hamilton

Oct 2016

July 2016

Oct 2016

Oct 2016 Source: CMHC Housing Market Assessment, Canada, fourth quarter 2016

... WHILE TORONTO’S STAR RISES

CALGARY LAGS

Markets out west might be cooling, but market activity in Hogtown shows no signs of flagging. October sales activity saw a spike of 11.5% year-over-year, setting a new record for the month.

Prolonged suppression of energy prices continues to stall markets in oil-dependent areas, of which Calgary is a bellwether.

TORONTO SALES ACTIVITY

TORONTO AVERAGE PRICE

Up 11.5%

10,000

9,768 8,759

8,000

$800,000

Up 21.1%

$700,000

$762,975

$600,000

AVERAGE PRICE

Increase of 0.81%

$630,254

$500,000

6,000

$400,000 4,000

$300,000 $200,000

2,000 0

$100,000 October 2015

October 2016

$0

October 2015

October 2016 Source: Toronto Real Estate Board

October 2015

October 2016 Source: Calgary Real Estate Board

www.mortgagebrokernews.ca

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UPFRONT

HEAD TO HEAD

What effect will the latest regulations have on brokers?

Many have warned of potential negative effects on first-time homebuyers – but how will that impact brokers’ bottom line?

Ron Butler

John Greenlee Mortgage agent The Mortgage Centre

President MMI Mortgage Mentor

“When low-ratio insurance rules changed, there were many gloomy predictions. Then nothing happened, and brokers breathed easy. Guess what? Things are now happening as predicted. Large monoline lenders are offering segmented pricing – different products, amortizations and purchase versus refinance attract different rates. Smaller lenders just plain gave up offering some products. A big bank added rate premiums to rentals.

The outcome will simply be less choice and higher rates for consumers. The harm to brokers is not deadly, but losing product choice and higher rates for refinances and rentals works against us.”

“The first thing I think of with the new changes is that mortgage brokers/ agents just became more valuable to borrowers. Our knowledge and expertise will allow us to better guide clients to the proper solution for their situation in an ever-changing market.

However, in the short term, I see pain for first-time buyers and those in smaller markets, as prices remain high in many areas. Those with sizable down payments will be at a clear advantage with the new qualification rules. The proposed changes to ‘sharing in risk’ may also change the rate world as we know it.”

“From a longer-term perspective, the new rules make great financial sense.

Guidelines and low rates have been used to get borrowers the maximum amount of debt now, with little consideration for future household budgeting. Explaining how the rules help ensure future affordability will open up an additional opportunity to talk with clients about their whole budget plan.

I expect to see more unique, targeted product differentiation amongst lenders. To truly get each client their best mortgage fit, brokers will need to expand their product offering past the ‘bank, two monolines and a couple of B lenders’ menu.”

Mortgage broker Butler Mortgage

Rick Robertson

FIRST-TIME BUYERS SQUEEZED Newly introduced mortgage rules compelling insured homebuyers to qualify at the five-year fixed posted rate set by the Bank of Canada (currently 4.64%) seem likely to put first-time buyers in a difficult position, at least for the short term, by eroding the purchasing power of those with down payments below the 20% threshold.

Finance minister Bill Morneau said at a news conference that the changes were spurred by evolving attitudes toward borrowing, pointing out that the low-interest-rate environment has gradually altered how both lenders and borrowers “view debt and indebtedness in this country. As these attitudes and behaviours have changed, some households began carrying high debt loads, and pockets of risk have begun to emerge.”

8 www.mortgagebrokernews.ca

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1/12/2016 7:30:23 AM

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1/12/2016 7:30:27 AM

UPFRONT

NEWS ANALYSIS

The year in review There was no shortage of news for brokers this year – both good and bad. For our final issue of 2016, we take a look back at the major headlines January

Montreal-based broker Walid Hammami.

The year started off on a somber note with the announcement that FICOM, British Columbia’s regulator, was considering forcing brokers to disclose the compensation they make off each deal. Several industry players were quick to question the efficacy of such a strategy. Others, however, were sympathetic to FICOM’s proposal.

“Anyone who thinks the regulators’ efforts to protect the consumer are easy or misguided should spend a few days in their shoes; look no further than the number of complaints they receive each year,” said Blair Anderson, a broker with Anderson and Associates.

February Cancellation fees were the talk of the industry in February, as one association called for a

March Industry economists gave CMP their predictions about where the Bank of Canada’s overnight rate might be headed.

“The Bank of Canada keeps putting out a time frame, saying they will raise next year,” said Michael Campbell, Verico’s economist.

“Each time they target ‘next year,’ it doesn’t happen; they underestimate the impact of commodities on the market.” Nine months later, we’re still looking to next year.

April January’s fears were confirmed when FICOM went ahead with its disclosure rule change.

Brokers were quick to point out how the decision put them at a competitive disadvantage.

Best prediction of 2016

Dr. Sherry Cooper, Dominion Lending Centres

10

At the end of spring, the country was reeling from the devastation of Fort McMurray’s wildfires, but one broker found the silver lining.

“This may actually be a kickstart to the economy, given the amount of money that will flow back in there to rebuild,” said Michael Cameron, CEO of Axiom Mortgage.

It seems his prediction will come true: Forecasts say the rebuild will add $5.3 billion to Fort McMurray’s economy by 2019.

June

“The idea of action to slow foreign buying – such as, for example, a luxury tax – has been floated” tweak in BC’s rules to allow brokers to start using the safeguard, a suggestion supported by brokers across the country, who argued that the protection would lead to better service.

“After a few clients flee, the broker will have a bad taste in his mouth and will not act his best when he meets a [new] client,” said

May

“I see no attempt on FICOM’s part to move ahead with an initiative for full disclosure on the part of the credit union road reps they regulate and who work on a variable-rate compensation depending on what rate they actually offer the consumer,” said John Bargis, principal of Mortgage Edge.

As BC’s housing prices continued to climb out of reach, many started to speculate about the likelihood of government intervention and what shape it might take.

“Housing affordability is plunging … and there has been a rising number of voices calling for government action of some sort,” said Dr. Sherry Cooper, chief economist with Dominion Lending Centres. “The idea of action to slow foreign buying – such as, for example, a luxury tax – has been floated.”

July An independent panel called for the end of self-regulation in British Columbia’s real

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WHAT CHANGED IN THE BROKER INDUSTRY IN 2016?

Brokers in British Columbia now have to tell clients exactly what they make on each mortgage deal British Columbia implemented a 15% tax on foreign buyers Self-regulation was ended in BC New mortgage rule changes effectively decreased the purchasing power of many prospective homebuyers Vancouver’s market took a cool turn Toronto took over as the country’s hottest housing market

estate industry. Some applauded the effort to eradicate unscrupulous professionals.

“There’s a certain proportion of bad apples in every barrel,” said Dustan Woodhouse of Dominion Lending Centres Canadian Mortgage Experts. “It’s good they’re trying more aggressively to weed them out.”

August Dr. Sherry Cooper’s prediction that the BC government would target foreign buyers with

declines in housing prices in months.” A similar result would soon be seen in Canada.

Toronto would follow suit.

“As far as the brokerage industry goes, I’m not sure how much [a tax on foreign buyers in Toronto] would will affect us,” said James Laird, president of CanWise Financial.

September

November

It’s also been tough year for syndicated mortgages. The mainstream media ran with a few stories about project delays, and as the year went on, reports of delayed payments streamed in. All the bad press wasn’t good for brokers.

“I think it’s going to come at the expense of mortgage brokers because we are going to be

A tidal wave struck the industry near the end of the year with the announcement of new mortgage rules, which would soon make it harder for clients to qualify and more expensive for banks to lend money.

“Every single lender is dealing with the changes, and most of them got caught by surprise,” said John Panagakos, a broker with Dominion Lending Centres.

Most ominous quote of 2016

“I think [the backlash against syndicated mortgages] is going to come at the expense of mortgage brokers” David Mandel, First Source Mortgage Corporation a luxury tax became a reality in August. And once again, Cooper was right on the mark in foreseeing the effect the tax would have.

“As of April 2015, the [UK] government now takes up to 28% at the point of sale on foreign-owned residential property,” she said.

“In June 2015, they saw one of the largest

painted with a wide brushstroke,” said David Mandel of First Source Mortgage Corporation.

October With reports of BC’s real estate market grinding to a halt as a result of the 15% foreign sales tax, speculation abounded as to whether

December and beyond Each year brings with it a number of surprises, but there’s already a sense of what will make headlines next year.

Brokers and lenders will continue to grapple with the mortgage rule changes as the markets feel the effects. Syndicated mortgages will also continue to be a hot topic; some are already speculating that regulatory control will be handed over to a different organization. Finally, as the cost to lend money increases, so too will interest rates.

We’re still in a record-low rate environment, but how long will that last?

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1/12/2016 7:31:11 AM

UPFRONT

BROKER UPDATE

The government let Vancouver down One analyst says long-running pro-foreigner policies are to blame for unprecedented home price growth

becoming ridiculous. Such failures happen when politicians insist too strongly on deregulation and ‘cutting red tape’ and when they are more committed to making it easier for outside wealth to enter the city’s housing market than they are to protecting constituents.”

Among the unscrupulous practices that have flourished in this lax regulatory regime are shadow flipping and money laundering via Vancouver’s luxury properties, which has allowed many owners – who, in many cases, are not actually residents themselves – to successfully avoid paying taxes. This had the

“Politicians must, at the minimum, enforce their own laws and standards”

Over a period of several decades, the federal and provincial governments pursued policies that focused on making the Vancouver market more attractive to foreigners – policies that, one analyst argues, ended up sabotaging the prospects of Canadians instead.

In a recent column, Vancouver Sun diversity and migration writer Douglas Todd called out Immigration Canada and the Canada Revenue Agency – for failing to protect “Metro Vancouver residents from forms of rule-bending and law-breaking that have been significant contributors to city housing becoming gravely unaffordable.

NEWS BRIEFS

“The main dereliction of duty by Immigration Canada has been its refusal, until it was too late, to properly assess the Business Immigrant Program,” he continued. “Started in the mid-1980s, the BIP has arguably been the most crucial factor driving up Metro housing prices.”

A misguided attempt by the governments to avoid being deemed racist has led to the alarming rates of home price growth in the country’s hottest markets, he added. “[One] way or another … those responsible for immigration and taxation have been encouraging their staff to look the other way while subterfuge has contributed to housing prices

Co-ownership on the rise among Toronto residents

Joint purchases and ownership of residential properties have seen increased popularity in Toronto recently as city residents try to circumvent rising costs. “It makes sense for people to pool money and buy together so it’s not just the very affluent who have the privilege of owning in the city centre,” said local real estate agent Danyelle Boily, adding that this route has its caveats.

“People have a hard time finding someone who’s ready to [buy] at the same time they are, and who has the same financial equity, compatible values and mutual trust.”

two-pronged effect of cutting into the public coffers and igniting feverish bidding wars, thus leading to the current environment of unprecedented price inflation.

“Because of the absence of cooperation, many Metro house owners have been avoiding paying capital gains taxes,” Todd wrote. “They have been falsely claiming they are residents of Canada for tax and immigration purposes, when they are actually mostly living outside the country and not disclosing their foreign income.

“My simple hope is to show that Canadian and BC politicians must, at the minimum, enforce their own laws and standards,” he concluded. “Otherwise they’re not representing their constituents. And public trust is gone.”

New rules penalized middle-class buyers

In a recent blog post, DLC broker Dustan Woodhouse outlined how average Vancouver homes were within reach of the middle class prior to the new federal mortgage rules. “Previous to October 17, 2016, the income required for [the average sale price of $597,000] was $88,000 per year,” he wrote. “In other words, an experienced police officer, teacher, nurse or firefighter could pretty much pull that purchase off on their own income. They [will now need to] get themselves a $20,000 raise before they can buy what they could have bought.”

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1/12/2016 7:33:17 AM

Q&A

Bryan Jaskolka

Enticing new blood to the mortgage industry

Vice-president and COO CANADIAN MORTGAGES INC.

Years in the industry 11 Fast fact Canadian Mortgages Inc. offers a variety of different mortgage products, including home equity loans, commercial mortgages and investment vehicles

What’s it like being a mortgage broker today?

Before the financial crisis, there was a relatively even split between the number of mortgage-seekers who would go directly to the bank and those who visited a broker first. Over the past seven years, it seems like many more people prefer to consult with a broker before deciding on a mortgage product.

The business is growing significantly, but is also becoming more challenging with new and evolving lending rules. It’s a fast-paced environment that demands constant learning and adaptability.

How can the industry attract new and talented professionals?

Help young brokers build a successful brand for themselves. This includes teaching them about business, marketing and customer service in addition to the core technical skills. Also, highlighting the flexible nature of this work environment and its potential lucrative opportunities are great ways to get people interested.

What advice can you give to those who are looking to have a career as a mortgage broker?

For the past decade, I’ve lived and breathed the mortgage industry. To be successful in such a competitive market, you need to be passionate about it. If your plan is to come in when real estate is booming and exit when the market is tough, you won’t be successful. Rather than trying to ‘beat’ the market, ask yourself if this is the sort of industry you can see yourself being a part of on a long-term basis. While

Vancouver more open to risk of housing crash

The 15% foreign homebuyer tax and new federal mortgage rules have opened Vancouver to major risks that might materialize soon, according to David Madani of Capital Economics, who cites the dramatic plunge of home sales by 38.8% year-over-year in October. “[Vancouver] is in a full-blown correction,” he said. “Introducing [the rules] now, the risk is that this could be the trigger or catalyst that everyone fears the most. I do think the Vancouver market is going to have a very, very hard landing that will probably drag out for a few years.”

it can be highly lucrative, it is also very demanding. If you don’t carve out a priority market, or serve a key demographic and work very hard to get their attention, it’s unlikely you’ll develop staying power.

What drove you to the mortgage industry?

My primary motivation for entering the mortgage industry was to serve demographics that have a harder time obtaining home financing. I knew that many more Canadians needed access to credit than what the major banks were willing to give. People with bad credit, no credit and entrepreneurs with ‘nontraditional’ income all need a place to live. I wanted to be the person to help them.

What do you enjoy most about the job?

Ever-evolving lending rules and changing personal and economic circumstances make mortgage an interesting, albeit challenging, industry. Helping borrowers, homeowners and investors navigate the landscape to achieve their dreams is one of the greatest joys of being in this business.

How do you keep your firm relevant in a highly competitive environment?

During this period, we’ve expanded our investment arms, the CMI Mortgage Investment Corporation and Canadian Lending Inc. program. These investment vehicles allow investors to tap into Canada’s strongest residential real estate centres. And with each new venture comes new opportunity.

Too early to tell if mass migration from US will occur

In the wake of the US presidential elections, experts have said the surge in immigration and real estate inquiries by US residents doesn’t portend actual cross-border movements. According to Point2Homes, the number of visits from potential US homebuyers spiked by 282% the day after the November 8 election. “This could be an immediate reaction to events,” said immigration lawyer Arghavan Gerami.

“We have to assess this over the longer run to see how many of them actually follow through with immigration.”

Sales volume up across Canada – for now

Data from CREA revealed that Canadian real estate markets saw a record-breaking 42,473 sales in October, up by approximately 2% year-over-year – but experts expressed fears that the recent revision to federal mortgage rules might put a halt to this vitality. “More time will need to pass before its effect on housing markets can be gauged,” CREA president Cliff Iverson told the Financial Post. “The extent to which [the new rules] will push first-time homebuyers to the sidelines may vary among housing markets.”

www.mortgagebrokernews.ca

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1/12/2016 7:33:23 AM

UPFRONT

COMMERCIAL UPDATE NEWS BRIEFS Canadians’ hold on US real estate is waning While Canadians have bought US$92 billion worth of commercial real estate in the US since 2007, investors from Asia, Europe and the Middle East have gained ground recently. Major cities like New York have seen an influx of foreign capital from these other regions via investment firms, insurance companies and pension funds. “The allure of global capital to New York has always been high,” said Andrew Trickett, a Canadian who has resided in New York for seven years. “It’s always been one of the most – if not the most – liquid cities in the world for capital wanting to enter the marketplace.”

Chinese not following Americans’ immigration lead

Inquiries from Americans about immigrating to Canada have reached historic levels following Donald Trump’s victory in the US presidential election, but data from Chinese real estate portal Juwai.com suggests those in China are taking a more moderate attitude toward the president-elect. Traffic on Juwai.com did not exhibit any massive spikes before, during or after the November 8 election.

“I wouldn’t say the Trump win is as big a shock for the average Chinese property buyer as it might be for the typical Canadian,” said Juwai.com CEO Charles Pittar. “The Chinese think of Trump as just another president.”

Commercial real estate will remain active well into 2017

As interest shifts northward in the wake of the US election, Canadian commercial real estate can expect sustained activity throughout 2017, according to Allied Properties REIT CEO Michael Emory, who added that demand in the country’s hottest markets – and in Toronto, in

particular – isn’t likely to slow down in the near future. “Certainly post-Brexit, there was a discernible flow of funds into Canada because of its safe-haven status,” he said, “and it’s not unreasonable to think that post the current election in the United States, we may see a similar flow for the same reasons.”

Calgary office vacancy headed for 30% Real estate firm Cushman & Wakefield has ranked Calgary with Moscow, Houston and Aberdeen, Scotland, as the office real estate markets that have been hardest hit by the global oil price shock.

The firm predicted that the vacancy rate for downtown Calgary’s Class A buildings will hit 27.5% by the end of next year.

Canadian research director Stuart Barron added that the prediction will likely be revised higher to about 30% due to slowing demand and the addition over the next year of about 2.7 million square feet in buildings under construction.

Tech hotspots could drive market booms It’s no surprise that emerging tech hotspots help bolster housing markets.

CBRE’s 2016 Scoring Canadian Tech Talent report identified the top 10 Canadian markets expected to see tech industry growth in the near future.

Toronto leads the way, followed by Vancouver, Ottawa, Montreal, Calgary, Halifax, Edmonton, Waterloo, Winnipeg, and London. “The tech sector is becoming ever more critical by the day to the Canadian office market, with technology firms accounting for 16.1% of all major office lease deals in Canada last year,” said Raymond Wong, head of research at CBRE Canada. ““This percentage increases markedly in our larger urban areas – for example, tech accounted for 43% of all leases in Ottawa last year.”

Foreign buyers move on Asian investors are gradually asserting their market dominance in other areas of Canada as well as in the US Implemented earlier this year, Vancouver’s 15% foreign buyer tax is encouraging moneyed investors from outside Canada to look at other lucrative markets across the country, according to a recent report by the HM Commercial Group.

Among the most promising of these new destinations are Kelowna and the Okanagan Valley as a whole, the firm revealed in its October report.

“The past 18 months have seen a significant increase in Asian commercial and winery property investment in the Okanagan Valley, particularly in Kelowna, which, according to StatsCan, is now the fastest-growing metropolitan area in Canada with a 3.1% growth rate,” the commercial real estate firm said.

“Additionally, very low cap rates in the Lower Mainland, compounded by the 15% residential tax for foreign nationals, are driving Asian investment and development into Kelowna and the Okanagan Valley.”

HM Commercial Group reported that Asian investors are eyeing commercial projects in the area, most notably a $2.4 million downtown commercial building, a $6.5 million parcel approved for 161 hotel spaces and 128 condo units, and the $10 million 300-acre Lake Okanagan Resort.

“Asian investors are also actively pursuing wineries and golf courses throughout the valley, in some cases due to the prestige they offer,” the firm said. “There are numerous examples of large land parcels (often 50+ acres) being purchased, and because in some

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cases they include functional businesses, they also meet the criteria of the federal government’s immigration and foreign investment policies.”

HM Commercial Group added that “although cap rates have compressed over the past two years, both foreign and domestic investors are flocking to Kelowna

“Both foreign and domestic investors are flocking to Kelowna because the capitalization rates are much higher” because the capitalization rates are much higher than in Vancouver.”

Asian investors continue to make their presence felt further south as well – recent data from Real Capital Analytics reveals that the Chinese are gradually eating into Canadians’ status as the dominant foreign investor in US commercial real estate.

Earlier this year, Beijing-based Anbang Insurance Group Co. entered into a deal for Strategic Hotels & Resorts worth $6.5 billion.

This turning tide should come as no surprise, considering the prevailing regulatory climate, according to Ted Willcocks of Manulife Real Estate.

“Notionally, I think you’re going to find that China will start to outstrip us – I mean, just the sheer volume,” Willcocks said. “We don’t have all the transparency on some of the plans and some of the insurers that are coming out of China.”

Q&A

Chris Anderson President LEE & ASSOCIATES VANCOUVER

Years in the industry 27 Fast fact Anderson worked as a commercial real estate agent in both the Vancouver and Calgary markets for more than two decades

Competition grows in Vancouver What are the unique challenges that Vancouver commercial brokers face?

The Vancouver commercial market has traditionally had more buyers than sellers. Investment properties, as well as owner/user property, have always been in high demand. The challenge is aligning the expectations of buyers and sellers, particularly in a rising market.

New government regulations add red tape to the process, but typically aren’t the cause of transactions failing to complete.

Based on your transactions, do these challenges have an effect on how investors conduct their business?

The biggest effect any new regulations have is that they add time to a transaction. Generally, the longer the length of time to complete a transaction, the less likely it is to complete, particularly with foreign investors who are learning the Vancouver market for the first time.

What are your views on the growing influence of foreign investors in North American markets?

Foreign investors have been active in the Vancouver and the Lower Mainland commercial real estate market for decades. Canada is seen as a safe and stable country to invest in, and Lower Mainland commercial real estate has consistently performed extremely well.

Although it’s not as prominent as what we’ve seen recently in the residential market over the last five years, we see foreign investment continuing to grow and playing a big part in the commercial market for years to come.

What do you think are your clients’ prospects in this eventuality?

The ownership of downtown trophy assets in our market has traditionally been characterized by large national landlords and developers, institutional investors (REITS, pension funds), and a very sophisticated group of local developers and investors. These buyer segments have long controlled the large ($50 million+) assets. Foreign investors figured prominently in the Vancouver office market landscape in 2016 with Anbang Insurance Group of China acquiring the Bentall Centre, and German investor Klaus Kuehne acquiring the Royal Centre from Canadian ownership, for just over $1 billion and $589 million, respectively. The foreign investor is active, sophisticated and here to stay, with competition getting tougher for commercial real estate assets in all classes.

How would you prepare your clientele for the next few months, especially considering the uncertainty following the US election?

Staying on top of a moving market has its challenges, but we can best serve our clients by also being aware of where the market is going. I’m not sure anyone can predict what Trump, and a Republican US government, will mean for the real estate industry in BC, but as long as the fundamentals of our market remain solid, there will continue to be buyers for well positioned commercial real estate in Vancouver, the Lower Mainland and throughout BC.

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UPFRONT

OPINION

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

Banking in the shadows A closer examination of who is really pushing borrowers into ‘shadow mortgages’ might surprise you, writes Samantha Gale FOLLOWING THE October 3 announcement by finance minister Bill Morneau of new mortgage rules designed to stress-test borrowers and restrict mortgage lending, the media was quick to make some predictions concerning the mortgage broker industry. One Financial Post article pronounced that “Canada’s new mortgage rules risk pushing borrowers deep into the shadow lending market, with brokers set to line up secondary loans with private lenders as a means of circumventing tests on borrowers’ ability to repay debt.” Media personality Larysa Harapyn commented that “a rising number of borrowers are seeking out what is known as the shadow banking market – lenders who operate outside of the strict rules imposed by regulators of the country’s large financial institutions.”

Of course, most in the mortgage industry are acutely aware of the mischaracterization of alternative lenders as ‘shadow banks,’ which connotes a sense of mysterious, perhaps even nefarious, individuals lurking in a dark background, lending money to hapless victims in a clandestine, illegal fashion. Fundamentally, however, banks are deposit-taking institutions, with regulation designed to keep them fiscally afloat in order to protect those deposits, thereby protecting the integrity of the banking system. Alternative lenders do not carry such a heavy burden; those who invest with alternative lending entities take risks with their investment monies in the hopes of reaping rewards. Therefore, referring to alternative lenders as ‘banks’ is also a complete misnomer.

However, for the media and other commentators to suggest that alternative lenders are outside the purview of regulation and that

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mortgage brokers who use private lenders push borrowers into the unregulated world of shadow lenders is ignorant. Alternative lenders are subject to provincial market conduct regulation, usually in the form of mortgage broker and lender licensing. In addition, many – depending on their capital-

befuddle borrowers who walk into a bank expecting to get a conventional bank mortgage, and instead end up with a non-bank mortgage with an unfamiliar lender and unexpected broker or lender fees. Bank brokers do not provide borrowers with conflict-of-interest disclosures that explain who the bank broker represents or how much the bank and bank broker get paid. Consents to these bank broker arrangements are hidden in the midst of the small print of authorization forms without any separate, independent discussion of how these brokering arrangements work.

Licensed mortgage brokers represent their clients by finding them the best, most suitable mortgage to meet their particular needs. But unregulated bank brokers generally forward deals to those lenders with whom they have set up contractual, predetermined relationships, which may not be in the best interest of the borrower. While the number of bank brokers may be relatively small, in some communities

“Neither the prudential regulation over the banks nor the mortgage rules governing insured mortgages concern themselves with protecting consumers from predatory market conduct” raising model – are also subject to the fairly heavy hand of securities regulation.

For sure, market conduct regulation is quite distinct from the prudential regulation afforded to banks. It focuses more on protecting individual consumers than does prudential regulation. So the suggestion that mortgage brokers, who are also governed by market conduct regulation, ‘push’ borrowers into something that could hurt them is a particularly uninformed opinion. Ironically, neither the prudential regulation over the banks nor the mortgage rules governing insured mortgages concern themselves with protecting individual consumers from predatory or ‘shadowy’ market conduct.

The lack of market conduct regulation in the banking environment is a serious problem in the context of bank mortgage brokers – the ones who negotiate mortgage arrangements not with the bank itself, but with other thirdparty lenders. Some of these deals truly

in Canada, their volume of brokered mortgages can rival or even exceed that of licensed mortgage brokerages. Their business is therefore not insignificant, and looks, by every definition of the word, ‘shadowy.’

If you follow the Financial Post’s lead and take a look at who is “pushing borrowers deep into … shadow [mortgages],” it’s not the regulated alternative lenders or the licensed mortgage brokers who work with them, but rather the banks themselves by engaging in completely unregulated mortgage brokering.

The paradox of the ‘shadow banking’ concept is that it is the banks themselves that are the real shadow bankers.

Samantha Gale is the CEO of the Mortgage Brokers Association of BC and serves as executive director of its umbrella organization, CMBA. Gale practiced law prior to a 15-year stint at FICOM.

www.mortgagebrokernews.ca

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LENDING GUIDE MORTGAGEBROKERNEWS.CA

ALTERNATIVE LENDING The alternative lending space is poised for unprecedented growth. Here's what brokers need to know to adapt to the changing environment

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Our alternative lending experts are so accessible,

they’re virtually on call.

We’re always ready, willing and available to talk with you one-on-one to get your deal done.

“Excellent service. My Business Development Manager worked hard with me to make my deal fit. The underwriter was quick and efficient!”

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1.866.243.4301 • BwBbrokerinfo.ca •

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CONTENTS

ALTERNATIVE LENDING GUIDE 22 Change is opportunity

What new mortgage rules mean for brokers and borrowers, and how alternative lenders can help

25 Alternative lending 101

18

THE KEY TO ALTERNATIVE LENDING SUCCESS

What to consider when searching for an alternative lending partner

Common questions about the alternative space answered

26 Growth ahead for 2017

Why next year is poised to be a big one for alternative lending

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www.mortgagebrokernews.ca

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SPECIAL REPORT

ALTERNATIVE LENDING GUIDE

The key to alternative lending success Ready to get started in the alternative space? According to Bridgewater Bank, finding the right lending partner is the first step

THE NEW mortgage regulations have redefined affordability. Borrowers who previously sought mortgage solutions at brickand-mortar lenders will now be looking to mortgage brokers for advice and creative solutions. This doesn’t mean broker market share and opportunity is going away – it’s simply shifting.

“Brokers can’t change the direction of the wind, but they can adjust their sails,” says Todd Poberznick, assistant vicepresident of business-to-business solutions at Bridgewater Bank. “Alternative lending is a broker specialty. It’s harder and more time-consuming, but a very important part of a broker’s business.”

Early adopters jumped into the alternative lending space and took on the more challenging deals. Today, passing up alternative deals means passing up significant annual income, lasting client relationships and the reward for a job well done.

The new normal Genworth has said that approximately 50% to 55% of the mortgages that would have qualified under its low-ratio portfolio insurance will no longer be eligible after the most recent mortgage changes. For the past number of years, alternative lenders – through mortgage brokers – have been filling the void and helping business-for-self and other clients displaced by change after change in the mortgage market. Low-ratio equity-take-out refinances are expected to join the list, which means even more clients will be seeking the advice of a mortgage broker.

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SPECIAL REPORT

ALTERNATIVE LENDING GUIDE “If I were to give brokers advice, it would be to keep talking to your existing book of clients,” Poberznick says. “Previously straightforward borrowers are going to need advice

their business with an alternative lender, Bridgewater Bank surveyed more than 3,600 brokers across Canada in June of this year.

It came as no surprise that brokers need

“If I were to give brokers advice, it would be to keep talking to your existing book of clients.

Previously straightforward borrowers are going to need advice and creative solutions” Todd Poberznick, Bridgewater Bank and creative solutions. Having an experienced alternative BDM and underwriter available on speed dial could become the strongest value proposition and a strong component of your competitive advantage.”

Finding an alternative lender The decision to grow alternative business is just the first step. Finding the right alternative lending partner is the next, and probably the most important. To fully understand what mortgage brokers need to grow

a lender who will give them a quick decision – no different from prime lending. A lender who respects how important timeliness is to a broker’s business can make the difference in keeping a client.

On top of this, 59% of respondents said that a conversation with their underwriter was the most effective way to predict whether a deal was likely to be declined or approved.

This reveals that brokers need an alternative lending partner who provides easy access to a prime decision-maker.

Brokers were then asked what decisionmakers can do to help them succeed. An astounding 95% said it was using simple common sense, followed by alternative underwriting experience, customer service approach and deal packaging. Alternative deals can be challenging, necessitating a lender’s expertise to help manage client expectations, find suitable solutions and package deals so they fit. As a result, it is imperative for an alternative lender to create an environment where alternative lending specialists can thrive.

“Deal packaging is a challenge, there is no doubt,” Poberznick says. “But when done efficiently with expert guidance, it speeds things up, which is great for business. There’s nothing better than helping out the homebuyer, seller and Realtor … and impressing the lawyers.”

Change can seem daunting at first, but there is always opportunity to be found. Brokers who have embraced alternative lending as a part of their business know this. Those who have found an alternative lending partner who understands their needs and challenges have a partner who will enhance their business, providing a distinct competitive advantage.

WHAT’S THE BEST WAY TO PREDICT WHETHER A DEAL WILL BE APPROVED? Underwriter conversations BDM conversations In-depth policy guide Portal access Guideline/product webinars Accessible product guidelines Training by lender 0%

10%

20%

30%

40%

50%

60%

Source: Bridgewater Bank survey, June 2016

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SPECIAL REPORT

ALTERNATIVE LENDING GUIDE

Change is opportunity Optimum Mortgage explains the latest round of mortgage regulations and what opportunities they hold for brokers

ON OCTOBER 3, the Department of Finance announced several changes to mortgage regulations, including low-ratio mortgage insurance eligibility for all mortgages.

The guidelines will be fully implemented by November 30, 2016.

The new rules are meant to respond to the effects of years of low interest rates and changes in the way the market operates.

As some of the new mortgage rule changes have taken effect, there is some uncertainty about what these changes mean for brokers and lenders.

What caused these changes?

There is a growing concern about rising household debt and rapidly increasing house prices, especially in the Toronto and Vancouver markets, where they have been rising beyond the purchasing power of the average buyer. These changes aim to stabilize the housing markets and protect the financial security of Canadians.

What are the changes? • Bring consistency to mortgage insurance rules by standardizing eligibility criteria for high- and low-ratio insured mortgages, including a mortgage rate stress test. • Improve tax fairness by closing loopholes surrounding the capital gains tax exemption on the sale of a principal residence. • Consult on how to better protect taxpayers by ensuring that the distribution of risk in the housing finance system is balanced.

As your trusted alternative lending partner, we wanted to break down the new mortgage rules and share how they will affect you and business at Optimum.

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New rules require all mortgages from all lenders to qualify using the benchmark rate. Statistics show that this can reduce the purchasing power of the average family by 20% Mortgage rate stress test for all insured mortgages Prior to October 17, 2016, when a client was qualifying for a mortgage, the benchmark rate was required on all variable mortgages and terms that were less than five years. New

rules require all mortgages from all lenders, regardless of the term or rate offered by the financial institution, to qualify using the benchmark rate. Statistics show that this can reduce the purchasing power of the average Canadian family by 20%.

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SPECIAL REPORT

ALTERNATIVE LENDING GUIDE What does this mean for Optimum?

The new rule will not change how we lend to our alternative clients, as Optimum has used the benchmark rate when qualifying our mortgages for the past two years.

Low-ratio mortgage insurance requirements Mortgage loans that lenders insure for conventional mortgages will be required to meet the eligibility criteria that previously only applied to high-ratio insured mortgages. There are seven parts to this new rule (outlined below). We will continue to support each part that will be implemented.

Clients will turn to mortgage brokers as industry experts to help navigate these changes What does this mean for Optimum?

As a balance sheet lender, Optimum Mortgage has the ability to service your alternative clients’ needs during these changes. We can still lend to your clients with a GDS/TDS that doesn’t fit traditional guidelines and still lend to your BFS clients and those looking for rentals and refinances. Optimum Mortgage will remain the same alternative lender you are used to working with during these changes.

Now more than ever, clients will turn to

New criteria for low-ratio insured mortgages

24

mortgage brokers as industry experts to help navigate these changes. Manage their expectations and keep them (and your lender) aware of every single step in the process. By taking these steps, customer loyalty will increase, and along with it, increased referrals, more repeat business, significantly improved close/ efficiency ratios, and most important, reduced stress. Contact a member of our team with any questions – we are well versed in the new rules and ready to help.

Can Optimum service loans that don’t meet this criteria?

A loan whose purpose includes the purchase of a property or subsequent renewal of such a loan

Yes – we can finance low-ratio refinances for your alternative clients

A maximum amortization length of 25 years

Yes – we offer amortizations up to 30 years

A maximum purchase price below $1 million

Yes – however, we will not do a loan advance in excess of $1 million

For variable-rate loans that allow fluctuations in the amortization period, loan payments that are recalculated at least once every five years to conform to the established amortization schedule

Yes – we have flexible GDS/TDS limits and confirm the affordability of each deal

A minimum credit score of 600

Yes – we can offer purchase or refinance transactions for your alternative clients with Beacons of 550+

A maximum gross debt service [GDS] ratio of 39% and a maximum total debt service [TDS] ratio of 44%

Yes – we offer GDS/TDS requirements in excess of those required by typical insured mortgages

If the property is a single unit, it will be owneroccupied

Yes – we will continue to offer alternative mortgage financing up to 75% ltv on rental properties (up to a fourplex)

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SPECIAL REPORT

ALTERNATIVE LENDING GUIDE

Alternative lending 101

exit strategy. As an agent or broker, you need to be thinking in terms of the plan required for the borrower to establish a better credit score or a plan to prove more income and therefore be in a position to qualify for a loan via a traditional lender and be able to refinance the existing non-bank lender/MIC mortgage loan.

Firm Capital Corporation advises brokers on a few things to keep in mind when using an alternative lender

What advice would you give to brokers and agents selling alter­ native solutions, particularly as it pertains to rates and fees?

What should brokers and agents look for when assessing which non-bank lender/MIC to work with?

You should always be cognizant of the lender’s track record in the mortgage business. As a broker/agent, you should be aware of the product types the lender likes to focus on; the product features, namely mortgage terms, rates, fees, interest-only, prepayment options, etc.; and you also need to understand the lender’s underwriting process and requirements.

These are options that can be very important as to how you structure the loan

for your client. Non-bank lenders and MICs can be more flexible when it comes to these options. The more informed you are, the less stressful the process will be, and the faster you close your deal, leading to a satisfied client and repeat business for everyone.

What is the importance of an exit strategy for a non-bank lender?

It is important to understand that non-bank lenders/MICs are short-term lenders who provide bridge financing for 12 to 24 months.

Being a short-term lender, we focus on an

When borrowers do not qualify for a traditional mortgage with an A lender, they typically do not want to accept that their financial situation presents a higher level of risk for a lender. As a result, the broker/agent must educate their client on the pricing they should expect to pay to solve their financing problem.

Once the broker/agent obtains a mortgage commitment that will solve the client’s financing situation, the solution should be presented as short-term one with the ultimate goal to source a traditional mortgage in the next 12 to 24 months. On this basis, a reasonable borrower will be more receptive to the rate and fee structure offered by non-bank lenders/MICs.

ABOUT FIRM CAPITAL CORPORATION Firm Capital Corporation [FCC] is a non-bank lender that provides residential and commercial real estate financing, including construction, bridge and conventional real estate financing, across Canada. We have a 28-year track record in the mortgage industry, and our TSX-listed MIC, Firm Capital Mortgage Investment Corporation, has been in operation since 1999. FCC is one of the largest non-bank lenders in Canada with assets under management of more than $1 billion. Our approach is to provide a high level of service and competitively priced capital.

FCC is looking to grow and diversify its residential lending programs. We have been actively tailoring lending programs for the single-family residential market in order to better service brokers looking for alternative mortgage solutions. We have the ability to

quickly adapt to new market opportunities. As an alternative lender, we expect to see opportunities from the new mortgage rules, as some borrowers will be unable to secure mortgages through traditional sources. We offer shortterm lending programs (one to two years) that are typically interest-only and fully open.

As a leading non-bank lender, we offer a complete line of lending programs for the residential and commercial real estate markets, including land, construction (infill, low-rise and high-rise), bridge, equity and conventional real estate finance to builders, developers and investment property owners.

Firm Capital Corporation and the mortgage brokerage community Firm Capital Corporation’s origination team works closely with the brokerage community

to create short-term mortgage solutions for its clients. We also protect mortgage brokers/ agents and will collect your fees at the time of funding a transaction. We value our current working relationships and look forward to growing our broker business in 2017.

Firm Capital and infill construction financing FCC is a construction lending specialist and is very active in this segment. We finance 100% of the hard cost budget, and our streamlined construction draw process provides funds within 48 hours. Let Firm Capital educate and guide you in developing a new source of business for you, the broker, and your agents.

We encourage you to seek out one of our mortgage originators to better understand our infill construction financing program.

www.mortgagebrokernews.ca

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SPECIAL REPORT

ALTERNATIVE LENDING GUIDE

Growth ahead for 2017 Looking to the new year, Equity Financial Trust believes all signs point to a robust alternative lending market

THINGS ARE definitely looking up at Equity Financial Trust. The Toronto-based alternative lender has experienced impressive growth over the course of this year and expects to see more than $500 million in new mortgages funded by year end, thanks in part to the loyal support of its broker partners. Equity is positioned to maintain its strong growth trajectory next year.

When the New Year begins, the firm will have moved its operations to a larger space in one of Canada’s premier business

26

“We intend to partner with key accounts to empower them to provide the highest level of customer care” John Bourassa, Equity Financial Trust addresses within Toronto’s downtown core to support its growing operations. “We’re excited to be moving our offices to First Canadian Place in December,” says Michael

Jones, President and CEO. “We are adding staff to meet our expected business volumes, strengthen our existing broker partnerships and forge new ones as we

www.mortgagebrokernews.ca

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1/12/2016 8:45:37 AM

MICHELE STEKO

VICE PRESIDENT, ONTARIO Michele brings over 12 years of financial industry experience both in the broker and lender channels.

Michele’s experience in both sales and mentoring have contributed to the success and growth of brokers in her prior role as Senior Account Manager. She has also raised the bar for service that is unparalleled and earned her the respect of others in the industry.

Mortgage Architects proudly welcomes Michele to the MA Family.

Join an organization that is defined by its people.

JOINMA.ca

Š Copyr ight 2016, Mor tgage Architects Inc ., All r ights reser ved.

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SPECIAL REPORT

ALTERNATIVE LENDING GUIDE

“We are adding staff to meet our expected business volumes, strengthen our existing broker partnerships and forge new ones as we continue on the path of long-term growth in 2017 and beyond” Michael Jones, Equity Financial Trust

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continue on the path of long-term growth in 2017 and beyond.”

Drivers of growth The alternative lending space has been the fastest-growing segment in Canada’s mortgage market over the past two years, and recent rule changes to insured mortgages in the prime market will lead more mortgage brokers to look beyond their traditional funding sources to serve their clients. After a prolonged period of record low interest rates, yields in North American bond markets have been on the rise in anticipation of some of the possible key policy initiatives of the incoming administration south of the border.

If this trend continues, as many forecasters expect, consumer loan and fixed term mortgage rates will continue to be pushed higher, prompting near and non-prime borrowers to start to consider longer-term fixed-rate mortgages to protect themselves from further rate increases in the medium and long term. These factors all point to solid prospects for long-term growth in the alternative lending space as a whole.

Equity Financial Trust is an exclusively broker-focused lender. Before it develops new mortgage products, the company looks first to its Broker Advisory Council to guide it in ensuring that its suite of products and programs reflects the needs of its broker partners and their clients. Equity is focused on the development of key account relationships with mortgage brokerages that are dedicated to the growth and prosperity of the channel.

“We intend to partner with key accounts to empower them to provide the highest level of customer care,” says John Bourassa, Vicepresident of Sales and Marketing.

Equity is committed to delivering more value-added services for its broker partners as it grows in the coming years, with plans in development for a greatly enhanced digital experience in the form of a new broker portal for managing deal flow, as well as a leadingedge performance-based loyalty program for broker-owners and their agents.

The alternative difference The growing alternative mortgage segment is different from the prime A segment in two important ways. The first is that “alternative transactions are ‘story loans,’ which usually take a little more time and effort to evaluate and underwrite,” says Lorraine Sato, Equity’s Vice-president of Mortgage Operations. In other words, the development of a smooth deal flow is highly dependent on the full story being provided at the outset so that there are no surprises later in the process.

The second is that alternative under­ writing does not employ or rely on acrossthe-board formulas for credit adjudication.

Equity uses a solutions-based approach to review each application, taking all factors into consideration in order to craft mortgage solutions that balance the interests of both the borrower and lender. Equity’s dedicated team of business development managers and underwriters work closely with brokers, particularly in the early stages of the relationship, to build a comfort level with the way an alternative lender like Equity approaches each application. This helps increase funding efficiencies and ultimately results in faster turnaround times and better service levels for brokers and their customers.

Equity funds its mortgages through its book of CDIC-insured deposits. Equity does not insure any portion of its mortgage portfolio and is not bound by changing mortgage insurer rules and guidelines.

Therefore, it offers a clearly differentiated alternative to traditional A underwriting with risk-based, competitive mortgage pricing for borrowers. Through this unique value proposition, Equity expects to grow its business with brokers in the changing lending environment.

Equity remains committed to its partnership with professional mortgage brokers, whose expertise and advice to Canadian homeowners will only become more valuable in a rapidly changing lending landscape.

www.mortgagebrokernews.ca

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1/12/2016 7:49:21 AM

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OptimumMortgage.ca

1/12/2016 7:49:27 AM

PEOPLE

INDUSTRY ICON

PROFILE Name: Boris Bozic Title: President and CEO Company: Merix Financial Years in the industry: 28 Career highlight: “From a Merix perspective, we legitimized a new compensation model for mortgage brokers.”

Career lowlight: “What we all experienced back in 2008 when we were on the precipice – having to make decisions at that time, organizationally, which resulted in a number of job cuts. I know it was painful for a lot of people, and it wasn’t something we took lightly. At that point, we were really in survival mode.”

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STRONGER TOGETHER According to Boris Bozic, president and CEO of Merix Financial, it’s time for the industry to come together to safeguard the future of the broker channel BORIS BOZIC has been in the mortgage industry for nearly 30 years; he started as a broker in 1988 and became a franchise manager with The Mortgage Centre in the early ‘90s.

He then migrated to TMG The Mortgage Group, where he ran the company with Grant Thomas until 2000, when TD Bank appointed him director of broker services and builder business development.

Bozic was with TD until 2005, when he and his partner, Kathy Gregory, launched Merix and Paradigm Quest. “[We] finally got to the stage where we convinced ourselves we were smart enough to do it on our own,” Bozic says. “We put a business plan together, raised the capital and tried to create something that was unique to the marketplace that would maybe set us apart from the rest, and off to the races we went.”

Along with his team, Bozic has helped grow Merix into one of the most respected lenders in the industry, with an innovative trailer fee model that is consistently lauded by brokers.

Bozic believes the time he spent as a broker has given him a unique perspective that helped him develop a business model that’s in tune with brokers’ needs.

“When I sit across the table from our customers, I actually sat on their side of the table,” he says. “Even though I know the industry has changed dramatically since I brokered myself, I think I do have a unique insight in terms of

how a broker thinks – especially that emotional connection they make to their business, which is sometimes different. It’s contradictory to how a lender views the business. I think what that does is it gives me the ability to be empathetic when there’s a need.”

At the end of the day, Bozic understands how brokers operate, which has been invaluable from a lending perspective.

“More than anything else, if you know or get a sense of what your customer is thinking and

Bumps in the road According to Bozic, the industry is currently facing one of its most challenging times. In October, the Canadian government introduced new mortgage rules, many of which directly impact the channel. In Bozic’s view, those policy adjustments were implemented with one goal in mind: slowing the real estate market. But he believes the mortgage industry is prepared to adapt.

“The concern I have going forward is that I think we’re all prepared to face the consequences

“When I sit across the table from our customers, I actually sat on their side of the table. Even though I know the industry has changed dramatically since I brokered myself, I think I do have a unique insight in terms of how a broker thinks” how they feel and how they view the world, you can build a business model around that,” he says.

“You can speak to them in a language they understand. A mistake a lot of businesses make is that the more senior position you have, you have a tendency to be that much farther away from your customer. The farther you are away, the harder it is to understand their challenges.”

of the free market economy and the variances of it,” he says. “When levers are being pulled and markets are being manipulated to slow things down, my concern there is always how good is your forecasting and judgment? There is always a concern that we’re going to overreach and go too far. Brokers themselves, their role is going to change rather significantly.”

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1/12/2016 7:53:51 AM

PEOPLE

INDUSTRY ICON

And while he believes lenders and brokers will find a way carry on – as they always do – that doesn’t mean the recent changes aren’t frustrating.

“From a regulatory standpoint, we’re constantly being told we have to improve innovation and productivity, and the moment we do that, our regulatory agent comes in and literally sucks all the innovation, efficiency and productivity out of it,” Bozic says. “That is the challenge.”

However, he is concerned that too much regulation could put downward pressure on brokers’ earning potential.

“I do have some concerns about it being halcyon times for mortgage brokers in terms of what they earn and the amount of money that they earn,” he says. “Will brokers have to be accustomed to earning less? The answer to that, for me, is yes, if there is a scarcity of supply. If

of how they’ve grown over the years,” he says.

“There is always a political component to their business. They have created the alliances and relationships over the years to ensure their interests were being heard.

“And this wasn’t at some junior level – this is at the most senior level,” he continues. “And so I think, as an industry, what we must realize and what we have to do – at the ownership level, at the association level – we have to start working collectively, and we must become far more politically engaged.”

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1980

1988 Becomes a broker and eventually a franchise manager with The Mortgage Centre

The year ahead Not one to rest on his laurels, Bozic says Merix has plans to continue to adapt to the changing needs of homebuyers and brokers. To that end, one of its top priorities is becoming more digit-

“From a regulatory standpoint, we’re constantly being told we have to improve innovation and productivity, and the moment we do that, our regulatory agent comes in and literally sucks all the innovation, efficiency and productivity out of it. That is the challenge” too much control is in too few hands, then pricing obviously is going to be adjusted because of that.”

So what’s the solution? Bozic says that now more than ever, the industry needs to band together to ensure the channel can continue to thrive. And a large part of that is ensuring its interests are realized and respected by the government.

“First and foremost, more than anything else, this industry needs to go through a maturation process, and we must become far more politically involved,” he says. “As an industry, we’ve been far too reactive versus proactive.”

That may seem like a daunting task, but Bozic argues that the blueprint has already been set by a similar industry.

“If I take a look at the insurance industry, they were very smart and very clever in terms

BORIS BOZIC’S CAREER TIMELINE

ized, including becoming more accessible via mobile devices and simplifying the lending process through technology.

Another top priority for Merix is bolstering its lending offerings.

“We are going to look for a one-stop solution, even in this environment,” Bozic says. “In other words, we will be funding in the A space, but we are also going to look for even greater nearprime opportunities. We launched this year, and we are going to enhance that program in 2017 and beyond.

“We know that the mix of deals for brokers may become more varied, and they may be looking for more near-prime. We want to be there to be able to offer that solution for them, be it A or near-prime business.”

1990

1993 Leaves to help run TMG the Mortgage Group

2000

2000

Joins TD Bank as director of broker services and builder business development

2005 Launches Merix and Paradigm Quest

www.mortgagebrokernews.ca

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1/12/2016 7:53:56 AM

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1/12/2016 7:54:03 AM

FEATURES

COVER STORY: TOP BDMS

TOP BDMs Brokers name the BDMs who make their world go ‘round – or at least make it spin a little bit easier

BUSINESS DEVELOPMENT managers are much more than a cog in the mortgage industry machine. They’re the link between brokers and lenders, the people who spend countless hours making sure that brokers get what they need and understand all of the products available for their clients – all while keeping everyone happy.

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A good BDM can make all the difference when it comes to getting a deal done painlessly, and brokers know a good BDM when they see one. In CMP’s first annual Top BDMs feature, brokers nominated their favourite BDMs, and they, along with the BDMs themselves, share how these professionals stay a cut above the rest.

www.mortgagebrokernews.ca

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1/12/2016 8:08:59 AM

INDEX BY COMPANY Company

Name

Page

B2B Bank

John Kerr

36

Bridgewater Bank

Ut Yue

39

CMLS

Sam Samadi

42

Equitable Bank

Jennifer Anne Burrage

36

Equitable Bank

Lee Barnett

45

Equity Financial Trust

Suzy Fernandes-Arruda

44

First National

Richelle Morgan

36

First Source Mortgage Corporation

Steven Walters

43

Home Trust

David Neville

38

Home Trust

Donna Coo

36

Home Trust

Mike Ayoub

45

AJAY KAITH

Home Trust

Nicole Thomson

40

Oppono Lending Company

Home Trust

Reaza Ali

38

Home Trust

Rose Butera

46

HomEquity Bank

John Fries

38

HomEquity Bank

Liz Prendergast

40

Magenta Mortgage Investment Corporation

Dan Pauls

44

Merix Financial

Cristie Smith

46

Merix Financial

Lindsay Jurek

42

National Bank

Gail Temple

42

National Bank

Kamran Daryushnejad

41

Oppono Lending Company

Ajay Kaith

35

RMG Mortgages

Carlo Parise

44

Street Capital

Brian Mason

35

Street Capital

Ian Tenggardjaja

40

Street Capital

Linda Elkjar

38

Street Capital

Robert Nurnber

46

Street Capital

Shelayne Loeppky

35

We Can Lend

Richard Earles

38

XCEED Mortgage

Melanie Lapointe

44

SHELAYNE LOEPPKY Street Capital

Shelayne Loeppky goes above and beyond the norm to ensure deals are on track, including calling brokers on funding day to let them know when a lawyer hasn’t requested the funds. She understands the importance of urgency and timing: During the latest round of mortgage rule changes, she answered calls and emails both day and night to ensure brokers had the most up-todate information. She also monitors deals from the back end once they’re submitted to make sure she’s aware if anything goes awry.

“Shelyane is wonderful at showing appreciation for the deal submissions that I send in,” says Sheri Deibert, a mortgage associate with TMG The Mortgage Group. “She thanks me personally for each and every deal I submit. I feel such positivity and motivation to send her more. She is truly a pleasure to work with.” Loeppky also makes a point of asking brokers for their input when it comes to possible product offerings, a small gesture that goes a long way.

In the three years Ajay Kaith has been with Oppono Lending Company and the Mortgage Company of Canada, he has developed a reputation for being efficient and a quick responder.

Between his exceptional follow-up via calls and meetings to discuss various options and his unwillingness to waste a broker’s time on a bad deal, Kaith goes the extra mile to help brokers better understand their deals.

“I have found it very difficult working with many BDMs, as they don’t have the patience or are just too busy to give me the assistance I require,” says Priscilla Lanzellotti, a new agent with Centum Mortgage Group. “This has not been the case with Ajay. From the first time I contacted him to the present day, Ajay has always made the time to help me along with a file.”

BRIAN MASON Street Capital

Known as ‘Mr. Go-To’ by some brokers, Brian Mason is always quick to answer last-minute concerns. His proactive assistance has saved deals on more than one occasion, and his willingness to maintain good relationships allows for a smooth transaction from beginning to end.

“Brian’s quick response and efficient work ethic make getting deals done so much easier in an industry that gets increasingly harder year over year,” says Jeff Towner, a mortgage agent with Verico Capital Mortgages. “Brian never makes excuses or sets false expectations, but is also the first to tell you if you’re out to lunch, and I appreciate that, since efficiency is key in this business.”

www.mortgagebrokernews.ca

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1/12/2016 8:09:33 AM

FEATURES

COVER STORY: TOP BDMS JOHN KERR B2B Bank

Education is something John Kerr feels is one of the most important services a BDM provides. “In the ever-changing landscape of the mortgage industry, a great BDM must be able to help position their products to suit the needs of the brokers,” he says.

Since becoming a BDM last year, Kerr has been working with brokers to not only help them fully understand what he can do, but also to educate them about the type of business that isn’t a good fit, which he believes sets appropriate expectations and avoids wasting everyone’s time, thus building trust that’s essential to maintaining relationships. “Developing relationships with new and existing clients means that you are constantly learning new things, which is extremely valuable at all stages of life,” he says.

JENNIFER ANNE BURRAGE Equitable Bank

DONNA COO

36

Jennifer Anne Burrage started her career in the mortgage industry with CMHC in 2008 and began working with Equitable Bank in 2014.

Because Equitable Bank is the newest lender in Atlantic Canada, Burrage makes sure that she’s always available to brokers and attends as many events to support them as possible.

“It is very important to be visible in Atlantic Canada,” she says.

“Every broker and every deal counts, and is imperative. I try to assist my brokers with ideas and strategies to develop their businesses.”

She also finds it particularly enjoyable when she can provide alternative lending solutions to brokers, “especially when they thought their borrowers had no solution for their financing needs. Brokers, and their clients, are extremely appreciative.”

Home Trust

RICHELLE MORGAN

Dedicated, focused and resourceful, Donna Coo has been with Home Trust since 2014. Like all of the BDMs on this list, she’s quick to respond to inquiries, but if something requires a detailed or in-depth response and she doesn’t have time to reply accordingly, she’ll still check in to let the broker know she’s not simply ignoring them. She’s also a problem-solver, and whether it comes to working around a roadblock to satisfy a condition or providing advice on the best way to structure a deal, Coo is more than willing to help out and provide brokers with the tools and solutions they need to get deals done.

According to Greg Soucie of Centum One Underwriting Services, Coo also has an “outstanding attitude. Donna is smart – most BDMs tend to be – but she’s got a very forthright, good-humoured take on things that always makes it great to deal with her. Can’t recommend her highly enough.”

First National

For Richelle Morgan, being a BDM isn’t a typical punch-in, punch-out job, so she has adjusted her perspective accordingly. “I don’t treat my job as 9-to-5,” she says. “I make myself available at all times.” Morgan has been with First National Financial for three years, before which she worked for RBC. “My extensive career in the financial industry really helps me to relate to the brokers, especially my six years as a mortgage specialist,” she says. “I can really dig in and help them navigate a file and how best to present it to underwriting.”

Morgan says staying engaged in the industry and helping brokers through its inevitable “pendulum swings of change” is one of the most important aspects of her job, one that she accomplishes by keeping a positive outlook throughout all of the regulatory changes.

www.mortgagebrokernews.ca

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1/12/2016 8:09:34 AM

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10/26/2016 1/12/2016 12:22:56 8:09:35 PM AM

FEATURES

COVER STORY: TOP BDMS LIZ PRENDERGAST

NICOLE THOMSON

HomEquity Bank

Home Trust

The BDM for the North Central Ontario region at HomEquity Bank, Liz Prendergast has more than 25 years of experience in sales and sales management in financial services. She has puts a special emphasis on helping seniors and providing solutions to assist in their financial planning. In order to ensure broker satisfaction, she works closely with the underwriting team to ensure deals get funded.

“Liz is very passionate about HomEquity Bank and the service she provides to her clients,” a colleague says. “[She] coaches and educates the brokers, and has identified opportunities for the right fit to partner with HEB.”

IAN TENGGARDJAJA Street Capital

“How you do anything is how you do everything in life” is Ian Tenggardjaja’s motto. He knows that the mortgage industry can expect many more changes in the future, and his success rests on his ability to adapt to the shifting landscape through continual education, his accountability for each unique deal and his ability to provide solutions to brokers. In the financial industry since 2002 and with Street Capital since 2012, Tenggardjaja’s approach has always been built on trust and the drive to do whatever possible to ensure that all parties are aligned in order to achieve a collective goal.

“I take pride and ownership in the region I have been entrusted with by Street Capital,” he says. “I treat it as if it were my own business, continually striving to make my region the most productive, profitable and efficient. I never lose sight of the fact that if deals aren’t funding, people don’t eat.”

Nicole Thomson is proud of the work she does – that all lenders and brokers do – to help Canadian families achieve their financial goals, even if that work is in a support role. Given the current climate of economic and regulatory uncertainty, it’s even more satisfying.

“It’s no secret that our industry has undergone some dramatic changes recently, and this has led to more than a little apprehension,” she says. “I believe that I have been able to provide a measure of stability for my brokers, thanks largely to the experience that I bring to the situation. Having the support of an industry leader like Home Trust to draw upon provides additional support to help our brokers as we work through these changes together.”

Thomson has been with Home Trust for three years, and had worked in the mortgage industry for almost a decade beforehand. She’s learned that two-way communication is critical to providing good service, and is prepared to do whatever she can to help her brokers manage their files.

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1/12/2016 8:09:40 AM

UT YUE Bridgewater Bank

For the past 11 years, Ut Yue has been a BDM at Bridgewater Bank, during which time she’s gained a reputation in the industry for her honesty and stellar work ethic. A straight shooter, Yue works hard with brokers to provide the necessary information to get deals qualified. When others might simply call a deal dead in the water, Yue doesn’t give up, guiding brokers through the process and providing advice on ways to get it done. “If I am not sure about an answer, I am not afraid to say, ‘Let me find out and get back to you,’” she says. “I think brokers appreciate the honesty, good or bad. I am very transparent with my brokers, and if we can’t do a deal, I try to help them find another solution.”

Yue finds particular satisfaction in the alternative lending space. “Deals are more challenging – clients have often been turned down by other lenders, and people who are going through [difficult] life situations can still get a mortgage.”

Yue’s previous banking and alternative mortgage experience helps her succeed in this area since she’s able to structure a deal and review important documents for brokers. “As a BDM, brokers are looking to you to help them in regards to your company policy and guidelines,” she says. “My underwriting knowledge is key to my success, since I am able to help my brokers with the full application from beginning to end.”

Her broker partners agree. “She sets the bar high for how a BDM should work,” says Rob Fuccenecco, a broker with The Mortgage Centre. “She is a key resource. Her knowledge and drive to get things done are key ingredients in us sending Bridgewater deals.”

www.mortgagebrokernews.ca

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1/12/2016 8:09:50 AM

FEATURES

COVER STORY: TOP BDMS JOHN FRIES

DAVID NEVILLE

HomEquity Bank

Home Trust

With a wealth of knowledge and 40 years of industry experience, the last five of which he’s spent at HomEquity Bank, John Fries is passionate about each and every client and is always available to assist brokers to help get their deals completed.

“John has exceptional service and always goes the extra mile for the client and broker to ensure they have a good experience,” a colleague says. “John is a great relationship-builder. He has developed many new broker relationships over the years, which has resulted in his brokers sending multiple deals.”

Fries previously worked at RBC Financial for 17 years, and also worked as an independent advisor for Midland Walwyn, building and managing investment portfolios. Most recently, he spent 11 years with Credential Financial.

RICHARD EARLES We Can Lend

David Neville has been working in the lending industry since 1987, and that experience gives him a leg up on other BDMs. He’s learned not to be “an ostrich, which means don’t avoid uncomfortable situations – deal with any issues right away,” he says.

Earl Smith, a mortgage broker with The Mortgage Group, says Neville is “very knowledgeable, does not make promises he cannot keep and quickly lets you know whether he can do a deal or not.”

Perhaps more important, he’s always looking for ways to help brokers build their businesses. “Knowing that you helped solve a problem, put the client in a better position or helped them buy their first home – that is the best feeling in the world,” he says. “That makes me do a fist pump.”

REAZA ALI Home Trust

Richard Earles sets a high standard for himself to make sure every broker’s experience with We Can Lend is a good one, and to increase the bottom line by growing each portfolio he works for. And, he adds, there’s something to be said for consistency and good customer service. “There is nothing worse than working with a BDM who drags their feet or delays on their responses,” he says. “This is a fast-paced industry, and if you don’t make yourself available, the broker/agent will go to your competitor.” Good service is what keeps brokers returning to a particular lender, and those post-funding calls keep Earles motivated to deliver. “Getting the thank you follow-ups really makes my day,” he says.

LINDA ELKJAR Street Capital

Being a great liaison between lender and broker is important to Linda Elkjar, which means helping brokers package deals correctly and remaining present in the process until the deal has funded. “It is essential,” she says, “to be a point of contact that the broker can trust and turn to for assistance.”

Elkjar has been with Street Capital for two years, although her mortgage industry experience spans two decades. During that time, she’s witnessed the need for continuous education for brokers, so she helps them understand the entire process, not just the application they’re working on. “I provide reasoning behind each decision the lender makes and prepare my brokers with the tools to determine where a deal should be placed,” she says.

“This unique approach to education creates efficiency and streamlines the process.”

40

www.mortgagebrokernews.ca

A self-proclaimed people person, Reaza Ali has been in the business for 18 years, the last three of which have been with Home Trust. He takes a holistic view of how he can help his broker partners manage their client base, especially in this everchanging market. It’s not just about meeting specific mortgage needs; it’s also about the psychology and behaviours that drive a successful mortgage business as whole. “I truly believe my capacity for success rises and falls based on my ability to help others – and these opportunities are something I take very seriously and, at the same time, take great pride in,” he says.

Great BDMs measure their professional success in large part by how well they can help their broker partners take their businesses to the next level, he explains.

“This, in turn, helps deserving Canadian families turn their homeownership dreams into a reality – and that’s a great feeling,” he adds.

KAMRAN DARYUSHNEJAD National Bank

“Efficiency is a mutual path for success in this business,” says Kamran Daryushnejad.

In the 13 years he’s been in the industry, Daryushnejad has discovered that the most important part of a BDM’s job is to ensure accurate information with a good turnaround time in response to broker concerns, and to be able to assure the broker that he can resolve any challenges that arise in the application process. “Brokers not only need salespeople, but they also need BDMs who can help them get the deal approved and funded with least amount of challenges,” Daryushnejad says. “I am not there for their volume only, but to help them grow their business and work with them to get there.”

He works on building long-term relationships with his broker partners (whom he finds to be “one of the greatest alternate sources of knowledge in the mortgage industry for Canadian consumers”), and isn’t discouraged when some of the information he shares doesn’t get positive feedback. “There are times when I may not gain business, but I can provide a solution or direct my broker to one of my colleagues in the industry who might be able to help them out,” he says. “It helps them to find the right solution and right home for their customer.”

At the end of the day, Daryushnejad says his role is all about helping people achieve homeownership. “By choosing a mortgage broker, they are choosing the experts in the industry to get their hands on their dream home,” he says. “Buying a house and getting a mortgage is one of the most important decisions any Canadian will make, and knowing that I am involved in that process makes my job rewarding.”

www.mortgagebrokernews.ca

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1/12/2016 8:10:15 AM

FEATURES

COVER STORY: TOP BDMS GAIL TEMPLE National Bank

Gail Temple believes BDMs are the face of the lender they represent, and as such, she does more than just provide training on products.

Instead, she believes in the need to be involved in all aspects of the mortgage process from start to finish, knowing her broker partners rely on her vast experience to help them find solutions for their clients. Janet Whittle, a mortgage agent with Shoreline Mortgages, appreciates Temple’s holistic approach, saying that she “always has the answer.”

Temple has been a BDM with National Bank since 2012, and has been in the industry for more than 27 years. Having had many mentors who have helped shape and build her career, she eagerly gives back to others. “Whether they are an experienced broker or just starting their careers, I treat everyone with the same level of respect,” she says. “I have incredible business partners – mortgage brokers, lenders, insurance partners, etc. – and I’m proud to call many of them my friends.”

LINDSAY JUREK Merix Financial

SAM SAMADI CMLS

Sam Samadi has come a long way since he started with CMLS in 2014, and he’s found his niche in the mortgage industry. “No two days are the same, and every hour presents a new challenge with plenty of opportunity to grow my personal knowledge and skill set,” he says.

“I also feel like I have front-row seats to a concert that allows me to mix and mingle with some of the most creative and talented rock-star mortgage brokers on the planet.”

He draws inspiration from other BDMs, who push him to work hard, learn new ideas and seek out new tools to keep helping the broker community. The key, he says, is to recognize the specific policies and products that can assist clients who fall outside standard situations. “I see our industry from the long-term view,” he says. “If I can help that mortgage broker find a solution, and the client has a positive experience with a mortgage broker, they are likely to recommend using a broker in the future. As a community, and as a lender representative with CMLS Financial, we win every time this happens.”

Samadi is also passing his knowledge on to the next generation: “When your 5- and 9-year-old children can answer a question about what a mortgage broker is – is that normal?”

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Lindsay Jurek keeps the end client in mind every time she’s working on a deal with one of her originator partners. For her, it’s not just about the sale, the number or the rate; it’s about the client, the dream of homeownership and the future referral potential for the mortgage agent. Jurek stresses the importance of finding new ways to present product and policy changes, as well as sharing strategies to help her partners gain more business – because sharing knowledge goes a long way in the current climate. “It would be easy to dwell on what we can no longer provide or what used to be,” she says, “but I feel it is my responsibility as a BDM to be a true business partner and find ways to do business no matter what challenges are put in front of us.”

Jurek, a trained chef, has been with Merix Financial, representing its three brands (Merix, Lendwise and NPX), for just over a year, but she has been in the lending industry for more than a decade. “It’s the little things that make it most rewarding – getting let in on dreams of retiring to Monaco, or seeing pictures of their pets,” she says. “It has been said before – this business is about relationships. Only those of us who are a part of this industry really know how true this is. We are colleagues, confidants and friends. We support one another, look out for each other and celebrate each other’s success. What other industry does this?”

www.mortgagebrokernews.ca

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STEVEN “SKIP” WALTERS First Source Mortgage Corporation

Steven “Skip” Walters has more than 30 years of industry experience under his belt.

He’s been a real estate broker, a leasing officer, a property manager and has worked in acquisitions. “I think I understand lending all the better because I’ve worn those hats,” he says. “It just makes you a better lender because you understand the problems that can happen. We listen carefully to [clients’] needs and then establish a loan scenario that ensures success of the project and/or income stability.”

Brokers benefit from his deep industry knowledge and market expertise, as well as his dedication to personal service. “Steven demonstrates his industry knowledge, strong work ethic and personal integrity to those who have the pleasure of working with him,” says Mark Hart, principal at NCompass Financial.

Walters sees his success as an extension of the success of First Source, which takes a committed, hands-on approach to lending, helping to guide clients to their goals. “We truly analyze and interpret what the client is trying to accomplish and within what time frame, evaluate the strength of the loan based on the value of the real estate, and then, of course, help them to arrive at an exit strategy,” Walters says. This ultimately results in the borrower coming back for their next loan because of the help and guidance they received at First Source, which will be launching a Mortgage Investment Trust product in early 2017.

For Walters, working with people who can provide this service is one of the best parts of the job. “We’re a strong bridge lender,” he says. “The people here, they’re great people to work with and have extremely high ethical standards.”

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FEATURES

COVER STORY: TOP BDMS DAN PAULS Magenta Mortgage Investment Corporation

Dan Pauls has a suggestion or a solution for any problem, something that has elevated him above other BDMs. He makes himself available to brokers – rather than simply passing deals off to underwriters, Pauls is more than willing to get involved in those that need a little help along the way.

“I have worked with Dan for the past few years, and I can honestly say he has a genuine concern for his agents and brokers,” says Patrick Faugh, a broker with Real Mortgage Associates. “Dan makes working with Magenta a pleasure, not a pain.”

MELANIE LAPOINTE XCEED Mortgage

Melanie Lapointe has rocketed up the ladder at XCEED. When she started with the lender in 2006, she was a newcomer to the industry. By 2012, she was a BDM for southwestern Ontario, drawing raves from brokers for being extremely professional and easy to work with.

“In the last four years, she won a lot of hearts and minds of brokers for her unparallelled service and great knowledge, and she has been instrumental to XCEED’s success in the channel,” a colleague says.

CARLO PARISE RMG Mortgages

Carlo Parise has been the BDM at RMG Mortgages for more than six years. He provides quick and thorough responses to any underwriting questions that arise on applications, in addition to communicating any new rates and/or special promotions brokers can take advantage of.

Perhaps most important, however, Parise goes to bat for each client to make sure they’re happy, while also ensuring the broker is taken care of when anything comes up regarding a particular deal. In addition to his professional attributes, Parise is “an all-around nice guy as well,” says Kalson Jang, a mortgage agent with Mortgage Architects.

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SUZY FERNANDES-ARRUDA Equity Financial Trust

Suzy Fernandes-Arruda prides herself on being available, accessible and able to understand both the client’s and the broker’s needs. She has been with Equity Financial Trust for two years, and knows that every deal is important and needs to be serviced effectively and efficiently.

“Timing is imperative in working with brokers to meet their needs,” she says. “I listen and empathize. Truly, it’s all about the end result, providing a proper solution for every client” – and that includes finding solutions for clients in challenging situations.

www.mortgagebrokernews.ca

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MIKE AYOUB

LEE BARNETT

Home Trust

Equitable Bank

It goes without saying that most BDMs are professional in their dealings, but Mike Ayoub is personable as well. He makes sure that his brokers are aware of all changes happening at Home Trust, not only via email, but also by making in-person visits.

“He makes a difference,” says Val Coolen Smith, a mortgage professional with Verico Premiere Mortgage Centre. “In our area, he is the only BDM to visit our office on a regular basis. He gets the business because of it.”

Ayoub ensures there are no loose ends and keeps brokers updated on the closing of their files, a small gesture that goes a long way.

Four hours – that’s the time frame Lee Barnett sets to reply to his broker partners. Relying on his underwriting background, he coaches brokers on understanding credit bureaus and gives advice on how to properly assess each deal, which in turn helps brokers determine where to place an application.

Barnett has been with Equitable Bank since 2010 and has served the GTA West region for the past four years. He feels the most important service a BDM can provide is product training, “to be able to explain and help a broker or agent understand credit and regulatory changes when they happen and how it can impact a mortgage application,” he says. “We are here to be the first point of contact for our respective companies and should be available to assist our partners with any situation that arises, giving the best broker experience.” He also presents Equitable Bank’s products and services to brokers’ referral sources, which results in increased business for the brokerage.

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FEATURES

COVER STORY: TOP BDMS CRISTIE SMITH Merix Financial

Responsiveness is something brokers obviously value in a BDM, and Cristie Smith of Merix Financial has gained a solid gold reputation for being a BDM who returns every single phone call – even when she knows the conversation she’s going to have won’t be a pleasant one. Wayne Martin, a mortgage agent with Mortgage Alliance, says Smith “has a perfect personality for her position and excellent communication skills.” And when it comes to that everimportant common-sense lending criteria, Smith goes the extra mile to work with underwriters and management to get applications to go through.

ROSE BUTERA Home Trust

ROBERT NURNBER Street Capital

A friendly and helpful BDM, Robert Nurnber has been with Street Capital for more than eight years. Nurnber is in constant contact with his broker partners to ensure that not only are they happy, but their clients are happy as well. “I have never, ever had a BDM work so hard for his brokers and give all his heart and soul in helping the brokers,” says Mathieu McCaie, a mortgage broker with Courtier Hypothécaire.

Relationships are key to how Nurnber does business, and he always finds the time to reach out to continue building them. “What I appreciate about Robert is the fact he makes himself available, even for a smaller producer like myself,” says Todd MacLeod, a mortgage broker with Dominion Lending Centres. “It means a lot when a BDM returns your calls promptly and answers questions, no matter how small the issue. He no doubt has larger-volume brokers, but he always takes the time for the little guys. I greatly appreciate the personal contact he affords us – we don’t always receive that from other BDMs.”

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A powerhouse in the mortgage industry for more than 25 years, Rose Butera has been with Home Trust since 2008. Strengthening the broker/lender partnership is a particular focus of hers, as is caring about the success of her brokers. Providing multiple solutions for her broker partners enhances the overall level of service they can provide to their clients and, Butera says, “is a critical part of building long-lasting client relationships.

This also generates increased word-ofmouth advertising, and in a business that is largely referral-based, this can lead to a measurable increase in activity.”

Butera also offers coaching on how to structure deals and assistance with packaging and presenting in order to promote quick approvals and commitments. “I appreciate that for many borrowers, the process of arranging a mortgage can be very intimidating, and being able to play a part in helping to make this just a little easier gives me a genuine sense of accomplishment,” she says.

www.mortgagebrokernews.ca

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Looking to build a team . . . or work with an incredible group of agents . . .

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For Golden Horseshoe contact Trevor - tdaly@dominionlending.ca For the GTA contact Sarah - smakhomet@dominionlending.ca For Toronto contact Jonathan - jtillger@dominionlending.ca They can be reached at 1-877-662-0225 HomeCapitalSolutions.ca

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PEOPLE

BROKER INSIGHT

The importance of local expertise BC-based broker Mackenzie Gartside of Select Mortgage Group talks to CMP about why connecting with her community has been key to her success

CMP: How did you get into the mortgage brokering industry?

Mackenzie Gartside: I used to work in a bank, so entering the mortgage brokering industry was a natural transition. My mum was an investment advisor for many years and was headhunted by a mortgage broker, but she wasn’t interested. Instead, she said, ‘Go and speak to my daughter.’ That happened in 2006.

CMP: Where do you operate, and how has the market been performing in 2016?

MG: We mostly focus in the Comox Valley [of British Columbia], although I do have clients across Canada. We used to be able to service them quite easily, but now with the regulation changes and everyone wanting a broker of record in the province, it’s been a little more difficult. But we can still give them advice because we’ve built that trust.

This year, in general, was a fantastic year for us in terms of our industry and our house sales and pricing – that was all great. But the changes going forward will have an impact.

CMP: How would you describe your time in the industry?

MG: Tumultuous! It has been a very interesting 10 years in terms of accommodating all of the changes. It’s been great, very challenging, and life is never boring. The biggest challenge has been adjusting client

48

expectations with each individual change.

I’ve had a great response because I was born and raised in my community, as are most of my staff and my husband. We have lots of local clients, so we have a great base here, and they’ve been accommodating to all of the changes.

CMP: Has it been advantageous to operate in the area in which you grew up?

MG: It has. Those relationships are very important. My husband and I were nerds though high school, so we had a level of respectability right off the hop. We were never crazy, so we didn’t have to earn anyone’s trust – it was already there because we were responsible growing up through our teenage years.

CMP: What are your thoughts on the recent regulation changes, and how are they impacting your business?

MG: Overall, I think the regulation changes

are way too drastic. In terms of their impact locally, because we are a small community, a 20% reduction in purchasing power for clients is hugely significant.

Most people are buying at the top of their preapproval threshold because they do have some sort of alternative income – they either have a second job or do something on the side. All of those incomes aren’t allowed to be accommodated in an application anymore, and it’s just huge.

CMP: How do you respond to these challenges?

MG: By educating our client base. We spend a lot of time on the phone doing reviews of our current clients and informing them of product changes, which takes a lot more staff hours. We take time to get the information out there.

CMP: What’s the secret to your success?

MG: We’ve always had a really good repu-

GARTSIDE’S TIPS FOR OTHER MORTGAGE BROKERS “Don’t be afraid to share your personal experiences with clients. I’m always very surprised when mortgage brokers have not owned multiple houses or rentals themselves. Personal experience is very important. Don’t be afraid to work hard and long hours for your clients, and don’t be afraid to put money into the business. We spend a lot of money on marketing and advertising, and I don’t think there’s anything wrong with that.”

www.mortgagebrokernews.ca

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FAST FACTS: MACKENZIE GARTSIDE Company

MCC Select Mortgage Location

Courtenay, BC Total volume in 2015

$77 million

Loans funded 2015

401

Ranked in CMP ’s Top 75 Mortgage Brokers for the last three years in a row Specialties

“We spend a lot of time on the phone doing reviews of our current clients and informing them of product changes. We take time to get the information out there”

First-time homebuyers

Residential mortgages

Second mortgages

Commercial mortgages tation in town, and I’m heavily involved in the community. I’m vice-chair of the chamber of commerce; I sit on the Business Improvement Association board; I have sat on our Young Professionals board and various other boards throughout the Comox Valley. That develops credibility and has definitely helped.

We spend a lot of face-to-face time with clients, whereas I know a lot of people try to minimize that client contact. I work

12 hours a day, every single day, meeting people. You get out of it what you put in.

New immigrants CMP: What do you get up to in your spare time?

MG: I have a 15-year-old daughter and two dogs at home, and we hang out with friends. I’m a local in the community, so I’m always going to charity events and wine fests. I love my local community; it’s very important to me.

Private lending

Refinance

www.mortgagebrokernews.ca

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FEATURES

DRIVING CHANGE

Driving change in your business Taking an established business in a new direction can be a daunting prospect. Here, change and leadership expert Michelle Gibbings presents a step-by-step approach to making change happen

THERE’S A famous saying: “May you live in interesting times.” There’s debate as to its origin, but there’s certainly no doubt that it applies today. Change is everywhere, impacting both large and small organizations.

For leaders, this means they are leading in an environment that is often: • Ambiguous: The environment in which they are working is uncertain and shifting, which can leave people questioning their roles and what they need to do.

• Boundary-less: Things are changing, and the normal boundaries of roles, organizations and work are altering.

• Complex: Problems are not predictable, nor are the solutions.

• Disruptive: People and organizations are constantly searching for the ‘next big thing,’ and the quest to be innovative is never-ending.

To survive and flourish in this environment, organizations need to master four key steps: 1. Build and implement a sustainable approach.

2. Know the landscape.

3. Develop leadership followship.

4. Maintain momentum.

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1

Build and implement a sustainable approach

A 2013 Towers Watson study reinforced what other studies have shown – that the majority of organizations’ change efforts fail. This is due to a number of factors, including a lack of leadership, the difficulty of sustaining momentum, and ineffective or absent mechanisms to support the change.

Many change efforts are started before the necessary planning and analysis takes place. For example, there’s often no assessment of the organization’s capacity to absorb the change, or understanding of the capability of impacted stakeholders to adopt the change. Instead, there are multiple change programs occurring at the same time, often impacting the same group of people.

This creates confusion, particularly when the implementation efforts are disconnected from each other. All the end user sees is a barrage of changes coming down the pipeline, but little information as to how the changes connect back to the organization’s strategic agenda and what it means for them holistically.

Your organization needs to ensure its change approach is thoughtfully considered and executed. There are five elements to this:

• Ensure strategic alignment. This involves understanding what’s driving the change. Are the factors external (such as new regulation or new entrants) or internal (such as a new CEO or productivity challenges)? Also be clear on where your organization wants to get to, and how this change connects and supports your organization’s vision and strategic agenda.

• Consider the options. Develop and review the options available, and their potential risks and impacts. The options selected should have a clear benefits case.

That way you can measure if the intended benefits of the change have been delivered.

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• Develop the plan. Undertake the necessary planning to map out the steps that need to be taken to make the change happen. This is not about creating an inflexible plan; it’s about having a strong sense of direction and clarity on the way ahead and what is needed for success.

• Check the infrastructure. Identify and ensure that the necessary infrastructure to implement the plan is available and in place. This involves architecting the way in which the change program is sequenced, monitored, governed and executed to account for the organization’s capacity, capability and objectives.

• Balance the people equation. This is one of the most important elements, and it entails more than just communication and training. Helping people to cope with and thrive through change is most effective when it operates at a mindset, values and behaviour level. This includes providing people with the personal and technical skills and tools to help them best operate in changing environments.

2

Know the landscape

Once the approach to the change has been outlined, it’s a good idea to take stock and determine if your organization is ready, willing and able to change. This assessment

will help your organization understand if there are gaps or areas that need to be addressed to help improve the likelihood of a successful and sustainable change.

• Ready: Your organization knows where it wants to get to and has a plan for execution, with a logically and thoughtfully sequenced change roadmap. There are always unknowns with change, and it is impossible to plan for everything. Your organization can, however, ensure it is ready to be flexible and adaptive through the change. This way it can take advantage of opportunities and respond swiftly to issues as they arise.

www.mortgagebrokernews.ca

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FEATURES

DRIVING CHANGE TAKING ACTION IN YOUR BROKERAGE

Go through the change checklist (opposite page) to ensure your ambitions are realistic

Identify who in your brokerage will support or resist change (especially if working in a partnership)

• Willing: Your organization has effective leadership, and the roles and responsibilities of those involved in the change are clear. For example, there may be a sponsor who is accountable for the change and a project team helping to deliver the change. They need to know what roles they must play. So, too, do the leaders across your organization. Their accountability in leading the change can’t be delegated to someone else.

• Able: Your organization has the capacity and capability to execute the change and is able to invest the resources to ensure that impacted stakeholders are well prepared for the change. Your organization needs to devote both financial and people resources to ensuring that those impacted by the change are not only able to cope with it, but also know what is expected of them and have the behavioural and technical skills to thrive through it.

If your organization doesn’t meet all of these criteria, you need to do further work on designing and refining your change approach.

Define some goals that your changes will involve and ultimately achieve

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3

Develop leadership followship

Warren Buffett said that “a leader is someone who can get things done through other people.” Leaders don’t lead if there is no one following them. Leaders who can inspire and support those around them are essential in times of change, and this requires your organization’s leaders to be able to build engaged and healthy teams – teams that, in turn, create a groundswell of support and movement toward the change.

In times of change, it is not just the team and individuals who need to change. To consciously lead change, leaders need to be prepared to change themselves – their mindsets, operating styles and leadership behaviour. This is more than just pinpointing new technical skills. It’s about delving into the meaning that drives your leaders’ behaviour and the mental models they are applying to the decisions they make.

One way to do this is for leaders to identify

their ‘leadership moments of truth.’ These are the actions that they take – often subconsciously – that define how their leadership style is viewed by colleagues, peers and team members. They include, for example: • What they pay attention to • What they prioritize • How they react to issues and when things go wrong • What they say, and what they do and don’t do • How they allocate resources and rewards, and recruit and promote Red flags arise when a leader’s behaviour is inconsistent or if they are playing favourites with team members. Team members quickly notice when a leader says one thing and then does another. If leaders want followship, they need to create an environment in which people feel valued and that their opinions matter.

How leaders engage with, support, involve and communicate with their teams will determine if a change is landed safely or not. It’s therefore critical to ensure that leaders at all hierarchical levels are equipped and motivated to lead their teams through change. This is critical, as the change needs to be driven by the leaders, and they need to have the confidence and accountability to take this on.

4

Maintain momentum

Harvard professor Rosabeth Moss Kanter talks about the trap of failing in the middle. In regard to getting change to happen, she says: “Everyone loves inspiring beginnings and happy endings; it is just the middles that involve hard work.”

This is natural. As a change starts, challenges will inevitably be encountered.

Unexpected obstacles and roadblocks will arise, making progress slower and more difficult than planned. What looked easy in the beginning seems much harder in the middle.

As reality hits home, leaders can become anxious and uncertain as they see momentum waning and milestones slipping. The team starts to question their ability to deliver, and

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This is not about creating an inflexible plan; it’s about having a strong sense of direction and clarity on the way ahead and what is needed for success teamwork starts to suffer as people look for someone to blame for the lack of progress.

It is at this point that deliverables start to be de-scoped and activities reprioritized, and the project team is often restructured.

This is the time when change leadership really needs to come to the fore. Leaders have two options: They can lose their nerve, or they can confront the challenges head-on. If they choose the latter, they need to: • Be clear on the project’s goals and what every person on the team needs to do to get there. Don’t get sidetracked by interesting but irrelevant matters.

• Be open with the team about what is and isn’t working. Seek their input on how the team can work better to produce more effective results.

While it is hard battling through the ‘middle,’ bravery and tenacity will pay off.

5

The change checklist

Compelling case • Is the appetite for change enough to sustain your organization through the transition from current to new state?

• Ensure these goals are able to be delivered in a meaningful and relevant time frame so the team can show regular progress.

• Is the change linked to your organization’s strategy and mission so its purpose and rationale are clear to stakeholders and team members?

• Highlight the progress being made and ensure it is visible to every team member.

Celebrate this progress in a way that is meaningful to each team member, and share this success with your stakeholders.

Clear vision • Is there a compelling vision of the future?

How was this vision created and shared across your organization? Is it understood, and do team members buy into it?

• Know where the leader’s and team’s efforts will produce the most effective results.

This is the old 80/20 rule. Focus on where you know you will get results.

Leadership alignment • How much time are your executive team and other leaders devoting to the change?

Do they see leading the change as a core part of their role?

• Work to eliminate friction in the system that makes the change harder than it needs to be. This may involve removing bureaucratic processes and unnecessary activities.

• Make it safe to fail so the team is encouraged to try new things and new ways of working. Otherwise, the team will be discouraged from trying to find better and faster ways of achieving good results.

Benefits realization • Is there an agreed benefits realization framework and approach that helps ensure that the expected benefits from the change will be realized?

Program governance and monitoring • Is there an agreed way of monitoring and reporting on progress with the change?

Process for change • Is there an agreed-upon methodology or process for designing and implementing the change?

• Is the change appropriately resourced with the right mix of skills, expertise and decision-making authority?

Sequencing and integration • Has your organization’s capacity to absorb the change been assessed? If necessary, have adjustments been made to implementation timings to ensure the best outcome?

Maintaining momentum • In what ways will momentum be sustained through the change, particularly during periods of difficulty (i.e. the ‘hard middles’)?

Culture and communication • Is your organization’s culture considered a critical aspect that can affect the success of the change? What culture changes are needed to support the change?

• Will communication be frequent enough, targeted and two-way, enabling team members to provide feedback and contribute through the change process?

• What level of experience do leaders have in coaching and guiding their teams through change?

Empowering team members • Do team members have the competencies, skills and tools to be able to change?

• If not, what will be done to support and upskill them? How will they be involved in the change?

Michelle Gibbings is a change and leadership expert, founder of Change Meridian, and the author of Step Up: How to Build Your Influence at Work. She works with leaders and teams to help them accelerate progress.

www.mortgagebrokernews.ca

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1/12/2016 8:30:17 AM

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PEOPLE

CAREER PATH

EVER THE ENTREPRENEUR From losing his shirt to taking the right risk at the right time, Gary Mauris has always been open to the next opportunity

Mauris credits his strong work ethic to his upbringing as the child of a single mom who worked almost around the clock to make ends meet. A natural entrepreneur, Mauris bought sunglasses wholesale in the summer, and with the help of a fake ID, peddled BECOMES AN them in restaurants and bars ENTREPRENEUR “I had a very entrepreneurial spirit at a very early age; I was always looking for opportunities”

1980

1995

STARTS A NEW VENTURE With the help of a partner, Mauris patented, built and sold a wall-mounted cigarette machine to bars and nightclubs across Canada. Coming just before the prohibition on cigarette advertising, the timing was perfect. Eventually, he sold the Canadian rights to Rothman. As part of the sale, Mauris trained the company’s Canadian sales team during the transition and built a relationship with Rothman’s director, running its Canadian bar/nightclub network, which would prove instrumental in his next endeavour

2006

LAUNCHES DOMINION LENDING CENTRES DLC had its origins in a conversation between a vacationing Mauris and his Palm Springs neighbour, a mortgage broker who raved about his booming business

“That night, my mind kept replaying that conversation, and I began thinking, ‘Whatever happens in the US eventually happens in Canada.’ We began drafting the roadmap and plans to launch DLC that following year” 2016

IS INDUCTED INTO THE HALL OF FAME Mauris’ year has been replete with successes, including being selected to have a personal televised interview with Prime Minister Trudeau and winning the bid to acquire Mortgage Architects. He capped it off with an induction into the Canadian Mortgage Hall of Fame “It is a huge honour. Those before me have pioneered and shaped our industry, and I appreciate and admire every one of them. This has been an amazing year”

1988

LOSES IT ALL Mauris started his first business – a corner store – at age 19, just before the advent of the GST “We thought our advertising campaign – ‘A GST-free zone’ – was going to be very compelling. We lost our shirts and had to continue paying back the GST that we collected long after we sold the store at a major loss. We never were that great at following rules – that’s why we had to be self-employed!”

2000

LEARNS THE VALUE OF A DIME A friend in the ATM business asked Mauris for his help in securing a few locations for his machines – an easy task, given Mauris’ connections – and promised to pay him a dime per transaction “Months later, he asked me to lunch and presented me with a check for a few thousand dollars – those transactions added up. I officially entered the ATM business; three years later, I sold it to a company that’s now the largest ATM provider in the world”

2012

GIVES BACK TO THE COMMUNITY Inspired by the suicide of cyber-bullying victim Amanda Todd, Mauris co-founded the I AM SOMEONE Campaign to End Bullying. The initiative was complemented by his Bikes For Kids charity, which Mauris founded in 2014; last year, it provided almost 3,000 new bicycles for underprivileged children “My proudest achievements and the ones that have had the largest impact would be our charity/service work. We are doing great work and making a huge difference in the lives of kids at risk”

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OTHER LIFE

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STRIKE UP THE BAND

25

Number of mandolin players in the mandolin orchestra

84

10

Age of the oldest player Number of concerts Osypenko conducts the mandolin orchestra (the youngest is 20) performs monthly

When she’s not working on mortgages, Natalia Osypenko can be found conducting NATALIA OSYPENKO, a Regina-based mortgage agent with Centum, started playing music when she was 10. But soon, she found her leadership skills directing her toward the role of conductor; she even holds a degree in music with a specialty in orchestra conducting from her native Kiev. These days, Osypenko conducts not one, but two orchestras: the orchestra of the Poltava-Ukrainian Ensemble of Song, Music and Dance, and the Regina Mandolin Orchestra, which boasts 30 primarily self-taught musicians.

The orchestra of the Poltava-Ukrainian

Ensemble, which accompanies dance performances, is particularly challenging for Osypenko, as she must constantly monitor not only her musicians, but also the on-stage performers simultaneously.

“You have to watch the dancers all the time,” she says. “You have to have a specific tempo – if you go slower or faster, the dancers can’t match that. We have to be like the same body.”

Her effort has paid off: The orchestra has accompanied its dance group to festivals as far afield as Ukraine, Walt Disney World and Portugal.

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