CMP 15.06

RISING FROM THE ASHES

Key lessons all brokers should take away from the COVID-19 crisis

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What motivated Axiom Mortgage Partners’ new relationship with Centum

QUALIFICATION ROADBLOCKS

Will CMHC’s latest underwriting rules shut out too many first-time buyers?

ALTERNATIVE LENDING REPORT CMP gets the insiders’ view on the current state of the market

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ISSUE 15.06

CONTENTS ALTERNATIVE LENDING REPORT SPECIAL REPORT

CMP sat down with four alternative lending insiders to find out how the market has changed and what brokers need to know to navigate it

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WELCOME TO THE FAMILY AXIOM! We aim to overwhelm with value.

That’s always been our goal, and this is just the beginning.

MORTGAGE

PA RT N E R S

It’s with great excitement and enthusiasm that we share with you CENTUM Canada has acquired Axiom Mortgage Partners Network.

A warm welcome to each and every one of you. thecentumnetwork@centum.ca | thecentumnetwork.ca ®/™ trademarks owned by Centum Financial Group Inc. (C) 2020 Centum Financial Group Inc. The intent of this communication is for informational purposes only, and is not intended to be a solicitation to anyone under contract with another mortgage brokerage operation.

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UPFRONT

EDITORIAL

From intentions to action

R

ecent comments by CMHC CEO Evan Siddall around limiting demand in the housing market provide an ideal opportunity for anyone working in the mortgage industry to have a serious, creative discussion with their colleagues about what effective, fair and unobtrusive government intervention into the housing market should look like. And creativity is exactly what it will take to ensure that all but the most financially challenged Canadians can own a little bit of property, because there are currently no good solutions on the table. Politicians have been repeating the same line for years – years – about how finding a way to increase housing supply will help restrain prices. Yet where are the concrete proposals, the actual plans, that will juice supply levels enough to make a difference for homebuyers?

Increasing supply cannot be the only answer. But neither can government intervention The discussion around increasing supply rarely goes on long enough to ask the question no one wants to answer: Considering that hundreds of thousands of people are moving to Canada’s most attractive markets every year, will there ever be enough supply – or enough space in which to build it – to come close to satisfying demand in these cities? Currently, the only possible answer is no.

When Evan Siddall makes references to limiting demand, it may be a tacit acknowledgement that increasing supply cannot be the only answer. But neither can government intervention. The 2018 stress test made it all too clear that nationwide rules meant to suppress demand do not work because Canada’s real estate markets are too diverse and too independent to be controlled – at least not in a fair way. If the average price in every market in the country was $800,000 and increasing at the same rate, a national policy aimed at limiting price growth might work. But you can’t govern the buying activity in Edmonton with measures inspired by how out of control the market in Ottawa is.

Rather than turning to elected officials who won’t be held accountable for their failed policies around housing, CMP believes mortgage professionals should be the ones to come up with more innovative, more practical ideas for increasing homeownership in Canada. There’s no simple solution, so why not turn to the people who eat complexity for breakfast?

The team at Canadian Mortgage Professional

www.mortgagebrokernews.ca ISSUE 15.06 EDITORIAL Managing Editor Clayton Jarvis

SALES & MARKETING Vice-President, Sales John Mackenzie

Writers Ellen Burkhardt Ephraim Vecina Kasi Johnston

National Account Manager Corey Bahadur

Copy Editor Clare Alexander

Global Head of Communications Adrijana Monevska

CONTRIBUTORS Clinton Wilkins Molly Moseley

ART & PRODUCTION Designer Joenel Salvador Production Manager Alicia Chin Production Coordinator Kim Kandravy Advertising Coordinator Ella Dayandante

Sales Executive Alan Stewart

Project Coordinator Jessica Duce

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

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

MORTGAGE PROFESSIONAL AMERICA Correction In CMP 15.05, we mistakenly ran an earlier draft of Lev Keselman’s Opinion article, which did not accurately represent his views. The correct version can be viewed at issuu.com/keymedia/docs/cmp15.05_lr. CMP apologizes for the error.

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UPFRONT

STATISTICS

Disaster averted?

CMHC MAKES ITS MARKET PREDICTIONS In May, CMHC released a special edition of its spring Housing Market Outlook, albeit with plenty of disclaimers about the challenges of making projections during a time of unprecedented uncertainty.

CMHC’s forecast posits that recovery in housing starts, sales and prices won’t truly begin until mid-2021 and that 2020 will likely bring decreases – some alarmingly significant – across all three metrics.

COVID-19 is still wreaking havoc on the Canadian economy, but some new data has moderated the level of panic in the market RECENT DATA suggests that worst of COVID-19 could be behind Canada. A few hundred thousand jobs have already come back. People can go to more than just grocery and liquor stores. Although anxieties remain elevated, the country has so far escaped with its economy intact, making a smooth but slow recovery seem more likely by the day.

In the housing sector, the available data

289,600

Number of jobs added to the Canadian economy in May

30%

Percentage of Canadians who resumed regular employment in May after job loss or reduced hours

likewise offers more reason for optimism than for despair. Although CMHC’s latest outlook on the housing market’s 2020 prospects was rather dire, major banks’ projections for the economy as a whole were much more moderate. In addition, the latest data on mortgage arrears, credit scores, and construction completion and absorption points to a relatively resilient housing sector.

5.8%

14%

Annual increase in outstanding mortgage credit in Canada in April

Proportion of deferrals within chartered banks’ outstanding residential mortgages Sources: Statistics Canada, Ipsos, Bank of Canada, Financial Post

ARREARS NOT YET A PROBLEM

HOW’S CONSTRUCTION HOLDING UP?

According to the latest figures from the Canadian Bankers Association, just 0.24% of mortgages are in arrears across the country. Although that figure pre-dates COVID-19, it’s still a long way off from the 0.65% arrears rate seen in 1992 or even the 0.45% rate of early 2010.

Even COVID-19 couldn’t kill Canada’s construction industry. Housing starts took a severe yearover-year hit in April, but the number of completions and absorbed units didn’t suffer the same level of disruption.

April 2019

April 2020

20,000 TOTAL NUMBER OF MORTGAGES 16,0000

4,808,172

12,000 8,000

NUMBER OF MORTGAGES IN ARREARS 4,000

11,510

0

18,094

12,765

Housing starts

12,218

Completions

3,970

3,643

Units absorbed Source: CMHC

Source: Canadian Bankers Association, January 2020

6

14,697

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TOTAL HOUSING STARTS

MLS SALES

MLS AVERAGE PRICE

2020 PROJECTION

2020 PROJECTION

2020 PROJECTION

600,000

600,000

500,000

500,000

400,000

400,000

300,000

300,000

$300,000

200,000

$200,000

100,000

$100,000

0

$0

200,000

147,100 high 109,501 low

100,000 0

$600,000 450,500 high 416,000 low

$518,400 high $493,200 low

$500,000 $400,000

ESTIMATED DECLINE FROM PRE-COVID-19 LEVELS

ESTIMATED DECLINE FROM PRE-COVID-19 LEVELS

ESTIMATED DECLINE FROM PRE-COVID-19 LEVELS

80%

80%

80%

60%

60%

75% high

60% 51% low

40%

40%

20%

20%

0%

0%

40% 29% high 19% low

20%

18% high 9% low

0%

Source: Spring 2020 Housing Market Outlook, CMHC

BUYERS’ CREDIT SCORES IMPROVING

THE ROAD AHEAD

The number of new mortgage holders with credit scores below 660 has been driven steadily downward over the years by CMHC policies aiming to limit exposure to delinquent loans. And yet, according to Equifax, the delinquency rate in Q4 2019 was the highest it’s been since 2012.

Despite all the fog, some of Canada’s major financial institutions have projected a reasonable future for the Canadian economy. None of their takes on how the recovery will pan out point toward a particularly catastrophic 2020.

SHARE OF NEW MORTGAGE HOLDERS WITH A CREDIT SCORE BELOW 660 8%

BMO

EMPLOYMENT GROWTH

4%

10%

2%

0% Q2 2013

Q2 2014

Q2 2015

Q2 2016

Q2 2017

Q2 2018

Q2 2019 Source: CMHC

-10%

0.3% -6.5%

5%

9.5%

9.4%

RESIDENTIAL CONSTRUCTION GROWTH

0% -11.8% -15%

CIBC

UNEMPLOYMENT RATE

10%

-5.5%

TD

10%

0%

6%

0%

2020 PROJECTIONS

9.6%

CONSUMER SPENDING GROWTH 10%

3.2% -4.2%

0% -6.7%

0.6% -3.0%

-10% Sources: RBC Economics, TD Economics, BMO Economics

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UPFRONT

NEWS ANALYSIS

The closing window Recent words and actions by CMHC CEO Evan Siddall point to an increasingly challenging path forward for first-time buyers

IT’S BEEN a busy month or so for CMHC CEO Evan Siddall, who has done or said little since late May that hasn’t raised the ire of professionals from one end of the Canadian real estate spectrum to the other. From public comments to actual policy decisions, the measures all appear to push first-time homebuyers farther to the margins of the housing market.

The first example came during an address Siddall made to the Standing Committee on Finance on May 19. Making his case for an approaching “deferral cliff ” – a scenario where unemployed homeowners who have deferred their mortgage payments are asked to start making them again despite not returning to work – Siddall shared with parliamentarians

be less towering.

He singled out first-timers again when he discussed the potential losses they could face if housing prices fall by 10%. “Unless we act, a first-time homebuyer purchasing a $300,000 home with a 5% down payment stands to lose over $45,000 on their $15,000 investment if prices fall by 10%,” Siddall’s statement read.

“In comparison, a 10% down payment offers more of a cushion against possible losses.”

Because CMHC will be on the hook for any insurance claims triggered by failing mortgages, Siddall also said the organization would be evaluating its underwriting policies – a whisper-quiet bit of foreshadowing. “If housing affordability is our aim, as surely it must be,

“Ultimately, it comes down to us as brokers being able to adapt to the market” Chris Kolinski, iSask Mortgage Brokers two key pieces of data that associate 5% down payments with increased risk.

The first, a chart that tracks the percentage of loans in deferral by their loan-to-value ratios, showed that 69% of the mortgages currently in deferral fall into the 90% to 95% LTV category. The implication seems to be that if there were fewer borrowers putting down 5%, the deferral cliff Siddall described might

8

then there must be a limit to the demand we help to create, especially when supply isn’t keeping up,” he said.

That’s the same logic that gave Canada its mortgage stress test. Many brokers are worried that a 10% minimum down payment would have a similarly chilling effect on business. “I think it would be a comparison you could draw a lot of parallels to,” says Anthony Venuto of

Centum InTouch Mortgage Solutions.

As with the stress test, Venuto feels that any desire to double the down payment requirement will be driven by the risk associated with lending in Canada’s most expensive markets – even though most, if not all, properties in the country’s largest cities sell for over $500,000, making them ineligible for 5% down payments anyway. It will be the smaller, softer, far more numerous markets where consumers will see their spending power evaporate – or, as Venuto puts it, “What about the rest of Canada?”

Chris Kolinski, a mortgage associate at iSask Mortgage Brokers in Saskatoon, estimates that 80% of the purchases he finances involve minimum down payments. Kolinski is also in regular contact with brokers in Alberta and Manitoba and believes borrowers across the Prairies would be heavily impacted by a change to down payment requirements. However, he feels brokers don’t have much choice: Either they view the potential doubling of the minimum

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A CLOSER LOOK AT CMHC’S NEW RULES CMHC’s new underwriting rules for insured mortgages take effect on July 1.

The changes include: The gross debt service and total debt service ratios have been reduced to 35 and 42, respectively, down from previous limits of 39 and 44 At least one borrower involved in the transaction must have a credit score of 680 Non-traditional sources of down payment that increase indebtedness (such as unsecured personal loans, unsecured lines of credit and credit cards) will no longer be treated as equity for insurance purposes

down payment amount as an opportunity to showcase their skills, or they stand back and watch as their clients find help somewhere else.

“I’ll adjust the same way I did when they introduced the stress test back in 2016,” Kolinski

“governments should prioritize pro-growth policies such as a land transfer tax holiday on the purchase to spur economic activity and get people back to work.”

After two weeks of industry hand-wringing

“[Evan Siddall] somehow thinks it’s a bad thing for first-time homebuyers to want to buy a home” Dr. Sherry Cooper, Dominion Lending Centres says. “It was a huge panic for me when it happened. But ultimately, it comes down to us as brokers being able to adapt to the market.”

According to Ontario Real Estate Association CEO Tim Hudak, doubling the minimum down payment would not only be harmful to the economy and damage consumer confidence, it would also illustrate an “extraordinarily tone-deaf ” government. “Instead,” he says,

over down payments, Siddall broadsided the country on June 4 when he announced that CMHC is tightening its underwriting rules in a way that will close the window of opportunity for first-timers another few inches. As of July 1, borrowers putting less than 20% down will need to have a lower debt load than previously required to qualify for mortgage insurance.

The maximum percentage of income a house-

hold can spend on housing costs, including the mortgage, will be reduced from 39% to 35%. CMHC is also raising the minimum credit score needed to obtain an insured mortgage by 80 points.

“Normally, you don’t rock the boat when you’re already taking on water, but that’s what CMHC has done,” said mortgage site RateSpy, which estimated that the new rules will lower a borrower’s maximum purchase price by 11%.

CIBC deputy chief economist Benjamin Tal estimated that between 5% and 6% of homebuyers will no longer be able to qualify for a mortgage once the rule changes are implemented on July 1.

“It’s kind of bizarre to me, frankly,” DLC chief economist Dr. Sherry Cooper says of the timing and intent of Siddall’s recent moves, which she believes run counter to the government’s and Bank of Canada’s goal of getting the economy moving again. “[Evan Siddall] somehow thinks it’s a bad thing for first-time homebuyers to want to buy a home,” Cooper says. “‘Our parents were able to do it, and our grandparents were able to do it, but you, young son, shouldn’t be trying to do this. It’s too expensive.’”

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UPFRONT

ALTERNATIVE LENDING UPDATE NEWS BRIEFS Atrium Mortgage Investment Corporation touts strong Q1 results

In the wake of robust first-quarter performance, Atrium Mortgage Investment Corporation said it is confident in its ability to weather the COVID-19 pandemic. As of the end of the first quarter, the company’s mortgage portfolio stood at $746.5 million, an annual increase of 2.3%. In addition, Atrium’s Q1 revenues were up 8% yearover-year, while net income rose 6.8%.

CEO Rob Goodall told Yahoo! Finance that the lender’s strategy for the second quarter “is to scale back lending in the short term in order to be in a position to lend actively when the real estate market emerges from the downturn.”

Merix Financial initiative aims to support reluctant homebuyers

In a bid to help borrowers who are struggling amid the economic fallout of COVID-19, Merix Financial has introduced a new ‘Interest-Free for Three’ promotion, in which the lender will pay the interest for borrowers for the first three months on new mortgage applications. While homeowners are still responsible for paying the principal on the loan, Merix saw an opportunity to chip off a significant portion of their first three mortgage payments. “This was our way of trying to do something that captures important needs at this time,” said Merix founder and CEO Boris Bozic.

First National Financial remains on solid ground after first quarter

Thanks to strong performance during the first three months of the year, First National Financial has been able to maintain stability despite the economic ravages of COVID-19. The lender reported that its single-family

originations increased by 53% during the first quarter, while renewals were up by 20%. “We attribute this growth to a strong economy in January and February, prior to COVID-19, and our growing market share,” said EVP Moray Tawse. However, First National did experience its first-ever quarterly loss in net income, which decreased by $2.3 million. CEO Stephen Smith added that while the lender is expecting a decline in origination volumes, “this is tempered by the wider spreads that we are earning on our new originations.”

Equitable Group braces for a rise in defaults in 2020

Equitable Group has said it is preparing for an increase in loan defaults this year after reporting a first-quarter net income of $25.97 million, significantly lower than the $41.66 million it brought in during the first quarter of 2019. Equitable president and CEO Andrew Moor said that the extra risk from COVID-19fuelled mortgage deferrals should be manageable as long as the job market improves and no dramatic price drops take place in the next few months, but he added that “we expect higher levels of defaults in the loan book in 2020 than we have historically experienced.”

MCAN Mortgage Corporation reports notable Q1 decline

MCAN Mortgage Corporation has reported a 168% year-over-year drop in net income for the first quarter of 2020.

However, the lender noted that its $15.7 million net loss on securities in Q1 – a significant decline from the $8 million net gain it reported in Q1 2019 – was unrelated to COVID-19 and instead “due primarily to fair value changes in our real estate investment trust portfolio.”

MCAN’s mortgage arrears also rose from $16 million at the end of 2019 to $36 million as of March 31.

Throwing a lifeline to lenders One asset manager has pumped $500 million into the Canadian mortgage market to offer liquidity in the midst of COVID-19 In late May, real estate investment platform Slate Asset Management announced it would be making $500 million worth of “transitional funding” available to the Canadian mortgage market to support borrowers, businesses, lenders and projects negatively impacted by COVID-19. Despite the laudable stimulus gymnastics currently being performed by the Canadian government, Blair Welch, founding partner at Slate, says more capital will be needed to keep the economy’s wheels spinning. “[Capital’s] starting to dry up or change,” he says. “I think people, certain companies and certain businesses are running into some liquidity problems. What we see is there will be an opportunity to put capital out because yes, we believe that capital will be harder to come by than it was pre-COVID-19.”

The funds will be used for a multitude of purposes: to provide bridge and traditional lending for borrowers for acquisitions and refinances, to assist lenders in refinancing both performing and non-performing loans, and to create flexible liquidity solutions such as preferred equity. Welch says Slate’s knowledge of the Canadian market and the fact that the $500 million is already on hand means the company can start providing assistance right away.

“Slate currently has capital – our own and that of our global institutional partners – to deploy right now,” he says.

Assisting in bringing these funds to market will be Doug Podd, the newly appointed

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managing director of Slate’s Canadian office.

Podd, who has more than 25 years of experience in commercial real estate lending, says the funds will be made available across multiple channels.

“Tapping into the mortgage brokerage market

Being in need of hundreds of millions of dollars of private capital is not an ideal position for the Canadian lending space to be in, but the fact that Slate is willing to pump those funds into the country at a time of unfathom-

“We believe that capital will be harder to come by than it was pre-COVID-19” would be priority one,” Podd says, “[and] some direct lending as well, obviously.”

Lenders who might be looking to sell a portion of their portfolios or pair up with a capital partner to complete at-risk transactions will also get a bite of the apple. “What we bring to the table is the flexible capital,” Welch says.

“We can be pretty creative on how we structure that capital.”

able disruption should be taken for what it is: a sign of extreme confidence in the economy’s ability to rebound.

“All the things that a global investor looks for, I think Canada has,” Welch says, pointing to the country’s educated workforce, stable government and wealth of natural resources. “We think, long-term, it’s a no-brainer.”

Email lender notes, application, and credit bureaus to:

deals@vwrcapital.com D IMITRI K OSTUROS

Chief Operating Officer dimitri@vwrcapital.com

P AULA H UTTON

BDM - Prairies paula@vwrcapital.com

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UPFRONT

BROKER UPDATE

Weeding out broker corruption in BC BC has issued a permanent ban on a fraudulent broker, but some industry players feel it’s not enough

punishment as being “in many ways the ultimate regulatory sanction,” many brokers believe the punishment doesn’t go far enough to discourage similar attempts to game the system in the future.

“In my opinion, they should go to jail, not just lose their licence,” says Mortgage Intelligence agent Kim Gibbons. “This is fraud.

This is a crime. This is not just someone not following the rules. It’s intentional. If there were millions he dealt with, he’s got a nice

“This is not just someone not following the rules.

It’s intentional”

In mid-May, British Columbia slapped ‘shadow broker’ Ricky Kanwal with a $10,000 fine and a lifetime ban after he admitted to submitting falsified income and tax documents. Previously named in connection with last year’s investigation into unlicensed broker Vinita Devi Lal, Kanwal has confessed to transacting with two unlicensed middlemen whose clients never would have qualified for loans.

Kanwal and Lal’s dealings were associ-

NEWS BRIEFS

ated with 41 mortgage applications submitted between November 2015 and December 2016, all from just 17 borrowers. Documents submitted with the applications “were found not to be genuine, and employment and income information were found to be inaccurate,” according to court records.

Although Chris Carter, deputy registrar of mortgage brokers for the British Columbia Financial Services Authority, hailed Kanwal’s

North East merges mortgage and real estate arms

Montreal-based North East Mortgages has brought together its real estate and mortgage divisions to form one “powerhouse brokerage.” Now known simply as North East, the company initially kept its mortgage and real estate brokerages separate to prevent brokers from getting hit with additional fees.

North East anticipates that the combined brokerage will offer its 20,000-plus clients a more seamless process when it comes to buying, selling, financing, real estate investing and wealth management.

house probably, a nice car because of it all. In my opinion, his assets should be frozen and given back to the people he defrauded.”

Mortgage Alliance broker Daniela Peeva agrees. “The ban is not enough,” she says.

“These are people who have criminal minds. A simple ban will never change anything.”

Both Peeva and Gibbons say that while the frequency of outright fraud in the broker channel is low, examples of unethical behaviour do occur. Gibbons says she hopes that the flight to quality that often accompanies a lull in the market will be enough to shed a few more desperate and shady brokers from the industry’s ranks during the COVID-19 crisis.

“I hope our new normal will have them out of the industry,” she says. “The majority of mortgage brokers are amazing, and we don’t like to have these types of people in our industry.”

Centum acquires Western Canadian powerhouse

Centum Financial Group has acquired Axiom Mortgage Partners, a leading broker network operating in Western Canada. The deal creates a network of 2,500 brokers in over 200 locations, generating more than $9 billion in annual mortgage volume. According to Centum president Chris Turcotte, the merger is part of the company’s ongoing efforts to become the country’s leading mortgage brand from a value-to-broker perspective. “The joining of these two brands brings us one step closer to accomplishing this goal,” he said.

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Q&A

Eitan Pinsky

Taking advantage of COVID-19’s opportunities

Mortgage broker DLC ORIGIN MORTGAGES

Years in the industry 9 Fast fact Pinsky has been named to CMP ’s Top 75 Brokers list for four consecutive years, most recently coming in at number 21 in 2020

How have you been doing during the COVID19 pandemic?

What does DLC Origin bring to the table that’s helping you during this crisis?

Good! I believe we have been given a great opportunity here. In the past, I would likely get voicemail more than 50% of the time when I’d call a Realtor. Now I rarely get voicemails, and I’m able to have a deeper, more meaningful conversation because most people aren’t limited by time constraints.

On the team front, our spirits are pretty high.

We hold virtual meetings every morning where we troubleshoot and discuss all files that have completion dates. Most importantly, every day we start off with what we’re grateful for, and on Fridays, we show appreciation to each team member by saying thank you for something specific he or she did that week.

We’re all human, and too many people forget that we, our team members, our underwriters, BDMs, etc., need appreciation once in a while to feel good.

DLC Origin has been at the forefront of mortgage technology for years. I joined seven years ago, and we used an in-house program called OTTO, now known as Velocity. I don’t know of any other brokerage that puts as much time and effort into creating tools for their brokers. What was originally created to help teams properly manage pipelines has morphed into something so much more. It’s just so cool being part of a brokerage that’s at the forefront of technology.

Recently, DLC Origin has held a few lender ‘huddles’ where lenders tell us the lay of the COVID-19 land. We’ve also held a few successful mastermind sessions with an emphasis on marketing and lead generation today.

From your vantage point, what should broker networks be focusing on right now?

Networks have to provide support to their brokers and be leaders in education and information during times of uncertainty. I can’t comment on what other networks are doing, but I can say that DLC has blown my expectations out of the water. Of DLC’s recent initiatives, the one that has been most impactful for me is the series of conversations between Gary [Mauris] and high-profile individuals; we’ve heard from Dave Chilton, Phil Soper, Adam Contos, Darren Hardy and more.

M3 president touts the network’s stability

M3 Group is confident that the coronavirus outbreak won’t get in the way of its operations. In a recent interview with MortgageBrokerNews.ca, interim president Dino Di Pancrazio said, “The one thing you recognize very quickly during a change like this is how strong the team around you is.

We’re not feeling the crunch, so to speak, in terms of the changes that have happened.

It’s been a pretty smooth transition. That said, there’s still a lot to be done. We’re looking forward to when this thing’s over and we can hit the ground running.”

What advice do you have for brokers who are just starting out and are still unsure about what they should look for in a network?

I think the most important thing someone can do as a new broker is to learn how to be a broker: learn how to be an underwriting and policy expert. A new broker is never going to have confidence to ask for a referral from a Realtor if they don’t know their products and how to get a file completed. So, look to a network that provides education, has resources you can use or copy and is constantly innovating. If a network can help you become a better broker – and quickly – then look there.

Edison Financial plants roots in Ontario

In a bid to assist Ontario clients while the COVID-19 pandemic drags on, digital mortgage company Edison Financial has established its main offices in the city of Windsor. In addition to the 16 employees it hired in March, Edison is planning to expand its workforce by 40 to 50 local industry professionals before the end of 2020. “As a technology company, we’re looking for the best talent,” said founder and president Hash Aboulhosn. “In Windsor, we’ve found amazing talent, and we can grow here.”

CLC Network adds two new brokerages

The Capital Lending Centre Network has expanded its roster of brokerages with two new members: The Mortgage Coach and Integrity Tree Financial. With six offices throughout Ontario, The Mortgage Coach emphasizes a culture of collaboration, training and agent support. Headquartered in Thornhill, Ontario, Integrity Tree Financial prides itself on its full-service offerings, providing mortgages, accounting, insurance, investments and more under one ‘tree.’

www.mortgagebrokernews.ca

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16/06/2020 5:33:52 AM

UPFRONT

OPINION

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

Create a site that excites If you can’t remember the last time you updated your website, you’re likely giving away business and leaving money on the table, writes Clinton Wilkins A LOT of mortgage brokers believe their website is nothing more than a glorified business card and that the associated investment of time and money is a waste. This shortsighted assumption gives your competitors a leg up and makes it much harder for your business to catch up in the future.

Like many investments, returns on technology aren’t realized immediately, and I think this is what causes many brokers to give up on digital initiatives too early. Digital initiatives are time-sensitive, which means you need to get started sooner rather than later. You can back-date content, sure, but your online reputation, similar to your offline reputation, is built through consistent effort over time.

We are moving to a digital future where consumers are expecting you to provide a clean and concise website. If the thought of your website makes you uncomfortable, there’s a good chance potential clients feel the same way.

Industry data supports the importance your website has in educating potential customers. CMHC’s 2019 Mortgage Consumer Survey found that 47% of homebuyers used both online and offline resources to gather information about mortgages.

Only 23% of homebuyers did their research completely offline, while 29% used social media for information about mortgages.

Around half of all buyers reached out to multiple brokers and lenders before deciding to work with them, and a staggering 87% compared interest rates online.

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There are a lot of places online where consumers can find information about your business. People will search review sites, brokerage sites and other areas of the internet to decide which mortgage broker or bank they should contact. The difference is that your website will provide information and resources to help guide consumers in their decision-making process.

It’s never been easier to build and update a website. It doesn’t need to be expensive; it just needs to be simple enough that potential

of the most expensive industries to advertise online.) However, there is a bright light at the end of the digital tunnel. If you can prove to Google that you are an authority in your space – if you have content that answers online inquiries and you make an effort to update your website – you get rewarded with free (earned) traffic.

I know of many high-performing broker websites that are driving the equivalent of tens of thousands of dollars worth of paid traffic each month organically through continued investment in the site. Sure, you can run ads and pay $60 per click on Google, but you’re buying clicks, not building relationships.

What happens when the cash runs out?

At the end of the day, everything comes down to your objectives as a business and the importance of building relationships with your clients. Your website is only one piece of the customer experience puzzle; a great website won’t fix poor service, shady practices or picking a product that benefits you more than your client.

But what a great website will do is make sure that you’re putting your best foot forward. Your website shows potential clients the advantages of building a relationship with

“If the thought of your website makes you uncomfortable, there’s a good chance potential clients feel the same way” customers can find the information they’re looking for on both desktop and mobile platforms. With the growth of drag-and-drop website builders via platforms like WordPress, Wix and Squarespace, there’s no excuse for not putting your best foot forward online.

Conversations about useful websites often lead to a discussion on search engine optimization (SEO). Successful SEO takes a lot of trial and error, content, and a long-term commitment to your site. Simply keeping your site up to date and creating blog posts from time to time will have a positive impact on SEO. Two of the three most expensive keywords on Google on a cost-per-click basis are ‘loans’ and ‘mortgage.’ (Finance is one

you. When you consider that acquiring a new customer can cost up to five times as much as retaining an existing customer, it highlights the importance of focusing on relationships.

If you don’t have a website or have neglected it for a while, a potential customer might not want to learn more about your business. You might have the best service in town, but if your website creates a poor first impression, you might not get a second chance.

Clinton Wilkins is the senior mortgage advisor at Centum Home Lenders in Dartmouth, Nova Scotia, and a two-time winner of Broker of the Year (Fewer Than 25 Employees) at the Canadian Mortgage Awards.

www.mortgagebrokernews.ca

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16/06/2020 5:34:15 AM

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PEOPLE

INDUSTRY ICON

RISKS, REWARDS AND RESETS Gambling. A heart attack. Brotherhood. The story of broker Dave Butler’s rise has a little bit of everything. Having avoided a sudden, disappointing ending, Butler is ready to write the next chapter

DAVE BUTLER was a hustler right from the start. Long before founding Butler Mortgage and reaching number one on CMP’s Top 75 Brokers list for three years running, Butler and his current business partner, Daniel Patton, were already dipping their toes into the risk/ reward game by running a bookie operation at their high school.

“We were kind of already in business,” Butler laughs. “We were always searching for the next opportunity to work together.”

The lifelong friends kept it up at the University of Toronto, where the pots kept getting larger. It was obvious, even before mortgages came into the picture, that the two had a thirst for doing the things others deemed too risky. That same urge drives Butler today.

“It’s doing something that others may not,” he says. “When people fear things, that’s what lures me to them. We were all in on risk because it felt like others weren’t. But it felt like a calculated risk.”

When Butler graduated with a commerce degree in 2002, his exposure to the mortgage space was considerable: His father, Ron, had spent decades establishing a presence in the business, but following in his father’s footsteps wasn’t exactly Butler’s first choice.

“I remember saying, ‘I’d never want to do

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what you do, Dad. It seems like it’s really painful sometimes,’” Butler says.

A few months later, they were co-workers.

The rise Butler took to mortgages like a bear to a honey pot. After working alongside his father for eight months, he felt confident enough to head out on his own. But he knew he would have to do it a different way.

“It was a numbers thing for me,” he says.

“My dad always said that you deal with a customer once every three years. It made sense that if an investor is possibly buying five properties in a year, that’s five mortgages.”

After eight months of father-son brokering, Ron Butler convinced Peter Doherty at Mortgage Intelligence that his son was ready for his own team. Six months later, Butler and Patton got the band back together. “I said, ‘Dan, let’s go.

“When people fear things, that’s what lures me to them. We were all in on risk because it felt like others weren’t. But it felt like a calculated risk” His dad is what Butler calls a “hyper marketer”: a firm believer in direct mail who worked himself to the bone attracting new clients. While that strategy was highly successful, Butler sensed a more direct path to steady business that wouldn’t require him to spend money on marketing materials he couldn’t afford: targeting real estate agents and their investor clients.

I’m ready. Let’s build this thing up,’” Butler recalls. “And we were off to the races.”

But the two were young and still relatively unproven. To make a name for themselves, they would need to find an edge, and they did so by accessing the same mentality that had made them such successful bookies: Do what others are afraid to do. In Butler’s case, that meant taking on a punishing workload.

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PROFILE Name: Dave Butler Title: Principal broker and co-founder Company: Butler Mortgage Based in: Toronto Years in the industry: 16

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16/06/2020 5:34:45 AM

PEOPLE

INDUSTRY ICON

“I remember thinking, ‘These guys all have families. They’re not going to work 16-hour days. They’re past that. That’s my opening,’” he says. “That was one thing I was able to draw on from my dad. If everyone’s putting in eight [hours] but you’re putting in 12 or 13, over time, it’s going to show.”

Butler worked himself ragged, but every increase in production was a sign to keep going, to do a little more tomorrow. He maintained the same Red-Bull-for-breakfast (and lunch and dinner) pace for an astonishing 12 years, capturing his first CMP Top Broker title along the way, but his body and his business were at opposite ends of the health spectrum.

time in my life,” he says.

The changes came fast. Staying alive become a priority for Butler for the first time in his life, forcing a serious rethink of his work habits and the areas of the business that could be further automated and streamlined.

“I had no balance,” he says. “And as much as that got me where it got me in my career, it also got me on an operating table getting a piece of metal put in my heart. I have some balance now.”

The Butler Mortgage team, formed in 2011 and consisting of Butler, his brother, his father and Patton, also had to adjust to account for the absence of their recovering leader. Butler

“I had no balance. And as much as that got me where it got me in my career, it also got me on an operating table getting a piece of metal put in my heart. I have some balance now” After polishing off Easter dinner in 2018, Butler went down to his office, cracked a Red Bull and settled in to do some work. After 90 minutes of wondering why his chest was hurting, a Google search told him he was having a heart attack.

The reset Butler and his wife drove to the hospital, where he discovered his blood pressure was a shocking 210/110. Two arteries on the right side of his heart had blockages of at least 90%, prompting emergency surgery. Butler eventually returned home with a shiny new stent as a souvenir.

He remembers lying in the recovery room, surrounded by far older, far sicker people – one of them had been dead on the floor before being resuscitated only hours ago; another was moaning in agony. Butler was 39. “I just felt like that was not the right spot for me at that

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believes the brokerage’s continued success since his heart attack can be directly linked to the rest of the team stepping in and stepping up back in 2018.

Now 70 pounds lighter and brimming with the energy that comes from running an increasingly profitable, increasingly innovative business, Butler can focus on more than just mortgages.

Without the confidence he has in his team, which allows him the luxury of stepping away from the office and tending to his long-neglected health, Butler might not even be alive today.

It’s little surprise that the man he credits most for his team’s success is the same one who was there right at the beginning. “Dan’s like my second captain,” Butler says. “He gets none of the recognition because he’s not the broker of record, but having someone like him in my corner to rally the troops and get them to change their mindset – I’m super lucky.”

DAVE BUTLER’S CAREER HIGHLIGHTS

Named Rookie of the Year by Mortgage Intelligence in 2004

Finalist for Broker of the Year at the Canadian Mortgage Awards in 2017, 2018 and 2019

Number one on CMP ’s Top 75 Brokers list in 2018, 2019 and 2020

Funded 1,094 deals worth $442.5 million in 2019

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16/06/2020 5:34:46 AM

SPECIAL REPORT

ALTERNATIVE LENDING

ALTERNATIVE LENDING REPORT CMP sat down with four alternative lenders to get their perspective on the current state of the market and find out how brokers can best serve their clients with alternative options

ALTERNATIVE LENDING continues to grow in popularity and competitiveness in the Canadian mortgage market. In the second quarter of 2019, the total number of mortgages extended by non-bank lenders increased by 34.1%, and the value of those mortgages rose by 25.4%. The growth has been driven in large part by the mortgage stress test implemented by the Office of the Superintendent of Financial Institutions in 2018, which made it more difficult for borrowers across the spectrum to qualify for mortgages with traditional bank lenders.

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Now that the COVID-19 outbreak has slashed interest rates, stalled the housing market and put OSFI’s plans to relax the stress test on hold, it’s not clear how housing prices or market conditions will react in the long term. However, one thing appears to have remained steady: the decrease in misconceptions and stigma among Canadian homebuyers about using alternative lenders to finance their mortgages.

CMP spoke to four lenders about the current state of the alternative market and what brokers can do to create a better alternative lending experience.

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MCAP FINANCIAL CORPORATION Susan Denomme, director, underwriting – Eclipse

CMP: How can brokers best position their clients in the alternative space?

Susan Denomme: Borrowers in the alternative space need to know they have options – they can have competitive rates while getting a solution to ease their monthly cash flow. The broker should determine their client’s short-term, mid-term and long-term goals so they can place them with the appropriate lender. Depending upon the client’s goals, standard options such as pre-payment privileges and penalties should be taken into account when selecting a lender. Client fees – including commitment fees, annual maintenance fees, tax holdbacks, etc. – should also be factored in when looking at the overall cost of borrowing.

CMP: How can brokers help improve the overall alternative lending process?

SD: It all starts with knowing your client to ensure a positive lending experience. Ask questions about their credit, income and employment, and details on the property. Have a checklist of questions you want to cover – the

‘five Cs of underwriting’ is a great place to start – and provide your client with a checklist of documentation they will need to provide. This gives the client a starting point of what to gather and helps set their expectations.

Provide a detailed story to the underwriter that explains the transaction purpose, life event, desired goal, income details, credit overview and expectation of rate. A well-organized documentation package supporting the story will assist in fulfilling conditions quickly and efficiently, thereby streamlining the process, which will help ensure a favourable customer experience.

CMP: How has the recent economic downturn affected the alternative lending market?

SD: With COVID-19, deals are taking longer to close due to social distancing restrictions impacting both the legal and appraisal processes.

For some clients, their income status has been negatively impacted by COVID-19.

Consequently, borrowers who previously qualified may no longer qualify due to their temporary income disruption. For deals

with clients who are actively employed, the validation process is taking longer, and in some instances, employers are not readily available to provide validation. As conditions change during these challenging times, [Eclipse is] evolving to accommodate the needs of brokers and homeowners.

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SPECIAL REPORT

ALTERNATIVE LENDING HOSPER MORTGAGE Jerry Wieliczko, business development manager

CMP: How can brokers best position their clients in the alternative space?

Jerry Wieliczko: The core principles of mortgage brokering – know your client and know your products – are especially applicable for brokers navigating the alternative space. Shopping for the lowest rate is a relevant factor to consider, but it shouldn’t be the only consideration. Some private lenders may be quick to approve but slow to close, and this may lead to additional penalties for your client if they are past maturity on an existing mortgage.

Other private lenders may offer low rates but steep penalties for late

payments or payout – this also should be considered in the overall cost. The more experience you have with any given alternative lender, the easier it will be for you to determine if they are a good overall fit for your client.

CMP: How can brokers help improve the overall alternative lending process?

JW: During submission, brokers can help by ensuring all information is presented in a clear and concise manner. Most lenders like to know what the money is being used for and how the broker plans to implement the exit strategy. At Hosper, because we are an equity-based lender, our decision to fund is based primarily on the property, not the person, and having the appraisal upfront helps expedite the approval and

www.hospermortgage.com 1st, 2nd, and 3rd mortgages No income documents required No credit qualification required Quick closings Flexible solutions for each deal 3 month or 6 month terms available, fully open Will lend behind private lenders* *Subject to underwriting Hosper Mortgage provides fast approvals and quick closings in the alternative lending space. We lend on residential 1st, 2nd, and 3rd mortgages all across Ontario. We’re an equity based lender, with no income or credit qualifications & no hidden fees.

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ADRIANO MORRIELLO Business Development Manager 647-868-1941 — adriano@hospermortgage.com JERRY WIELICZKO Business Development Manager 416-904-9749 — jerry@hospermortgage.com

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closing process.

After closing, we find that the brokers who remain involved are the most successful. We always advise the originating broker in the event of default of maturity so they can be available to assist their client.

This usually means arranging another mortgage for them.

CMP: How has the alternative lending market changed over the past year?

JW: The number of players in the alternative market has been increasing year over year.

With so much variety of choice and so

many newcomers to the space, it’s more important than ever to know who you’re working with. It’s important for brokers to understand that to the client, the private lender is not always viewed as a separate company. In many clients’ minds, we are an extension of you and your brand.

With this in mind, brokers should be really conscientious about which lenders they recommend. Aim to work with compassionate lenders who will work toward solutions for your client during missed payments or at maturity of the initial term. Understand that actions taken by a

“In many clients’ minds, [lenders] are an extension of you and your brand”

private lender can reflect very poorly or very positively on your broker brand.

CMP: Besides the recent economic downturn, what trends have you seen in the last 12 months that are affecting alternative lending?

JW: Historically, Hosper has received Filogix mortgage applications and Equifax credit reports by email submission. Both Equifax and Filogix have announced that they are taking steps to restrict the circulation of these documents from unauthorized lenders. This means brokers and agents should be careful to only send these documents to registered lenders. To ensure broker compliance, we are registered with Equifax and available for direct submission via Equifax and Newton Velocity systems.

It’s in our human nature to want to seek social companionship, understanding, and feel supported within our community. We recognize that when we express gratitude and pay that kindness forward we have the ability to create positive change… And then the #GratitudeProject was born.

We are grateful for the hard work and dedication of our industry peers, front-line workers, family, friends, and small business owners managing through today’s current events.

Thank you for doing your part to make the world an even better place.

Who are you grateful for?

Say Thank You on Facebook, Instagram and LinkedIn @CWBoptimum and help support our local small business owners. #GratitudeProject Learn more www.optimummortgage.ca/gratitude-project

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SPECIAL REPORT

ALTERNATIVE LENDING THE GROWTH OF ALTERNATIVE LENDING

CMP: How has the recent economic downturn affected the alternative lending market?

SH: The recent economic downturn is still evolving on what feels like a daily basis. The start of COVID-19 saw our company closing the office and our staff working from home.

This transition worked more seamlessly than we expected with very little impact on our broker partners.

Some borrowers were financially impacted by COVID-19, and we worked to ensure they got financial help where

Value of mortgages held by non-bank lenders

$325.5 billion

Q4 2018

$327.2 billion

Q4 2019

Financial assets held by mortgage investment corporations

$29.9 billion

BLUESHORE PACIFICA ALTERNATIVE MORTGAGE CENTRE Shannon Hillman, president

$9.6 billion

2007

2018

MICs have seen average year-over-year growth of 11.1% between 2007 and 2018 Overall, non-bank lenders grew by 10.9% between 2007 and 2018, compared to an 8.4% growth rate for traditional chartered banks Source: Statistics Canada

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CMP: How has the alternative lending market changed over the past year?

Shannon Hillman: In 2020, we have seen increased competition in the alternative space. This added competition is putting downward pressure on interest rates and has provided brokers with more lending options than ever before. We saw fewer refinance requests in the first quarter of 2020 and more purchase files, which was a sign that the market had adjusted to the new B-20 guidelines.

It is becoming increasingly important to provide top-level service to our broker partners to ensure they have the best possible experience and get the right product and pricing to meet the needs of their clients.

“Alternative lending doesn’t necessarily qualify a borrower by fitting a deal in a box; we rely more on the LTV, a detailed application and a clear exit strategy” needed. Temporary loss of employment has also pushed some borrowers who would normally qualify conventionally into the alternative space.

CMP: How can brokers best position their clients in the alternative space?

SH: Understanding what deals will work best for each lender and providing as much documentation upfront as possible are very important to a quick approval. Many lenders have similar lending criteria, but some prefer a specific geographic area or have a specific loan-to-value they prefer.

Alternative lending doesn’t necessarily qualify a borrower by fitting a deal in a box; we rely more on the LTV, a detailed application and a clear exit strategy. When a broker is detailed with their submission package, we can often provide an approval within hours.

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SPECIAL REPORT

ALTERNATIVE LENDING From here, make sure the client understands everything, then review the commitment with them. Focus on payments, not rates and fees. Keep them focused on the strategy so you can refinance them the following year into an A lender, if not get them a better rate, because their situation has improved.

RIVERROCK MORTGAGE INVESTMENT CORPORATION Nick Kyprianou, president and CEO

CMP: How can brokers best position their clients in the alternative space?

Nick Kyprianou: When brokers first meet with their clients, it’s very important to ask questions. Some of those questions include: What do you do for a living? Who do you work for, and how long have you been there? Are you self-employed? If so, can you verify your income? When did you file your last tax return? Do you owe any taxes? If you’re purchasing, where is your down payment coming from? If you’re refinancing, what do you need the funds for?

Once you’ve asked those questions, do the calculations with the client. Will the dollars they asked for cover everything and costs? If you can’t place the deal with an A lender, explain to the client why. If they have soft or poor credit, ask why.

Also, do not quote a price, rate and fee.

Once you get the commitment from an alternative lender, go over the strategy with the client. Explain that this is shortterm. If they have soft or poor credit, coach them on how they can improve it.

If they can’t prove their income, provide some advice on how they can make their income more provable.

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CMP: How has the alternative lending market changed over the past year?

NK: The alternative market will be different in 2020 from 2019 because of COVID-19. This healthcare crisis has created an economic crisis. I think that many alternative lenders, being private individual lenders and mortgage investment corporations [MICs], may not exist by the end of 2020. Private individual lenders will back away because of fear and maybe losses. MICs will have to make their investors feel comfortable and safe, or they will have redemptions – aka no money to lend. At some point, if a large amount of their investor pool wants to redeem, they won’t have a business anymore.

We will see how this unfolds, but I think the alternative lending space could get hit harder than the A lending space.

WHO ARE ALTERNATIVE LENDERS?

Local credit unions

Mortgage finance companies

Trusts

Insurance companies

Mortgage investment corporations

Private lenders CMP: What other effects has COVID-19 had on the alternative market?

NK: This pandemic has created a lot of fear and uncertainty. When people are fearful and uncertain, they don’t purchase homes.

Many private individual lenders have stopped lending because they are scared and uncertain about where the market is going. Many MICs have stopped lending due to redemptions, and now they don’t have funds to lend or are concerned about their arrears. Many lenders have changed their lending policies.

Also, incomes have been reduced or stopped for many people. Sales have dropped dramatically. I think alternative lenders need to be more cautious lending right now. I think high-rise condos could drop in values; 50% of condos are owned by investors. With Airbnb demand dropping dramatically and the hardest-hit people in

this downturn being lower-income people who are predominantly renters, and with immigration dropping substantially this year and next, all of this will put pressure on investor-owned condos. Vacancy rates will increase. Many investors will have to sell, which will put downward pressure on values.

Regarding detached, semi and townhouse owner-occupied homes, I believe these values will stay relatively stable, especially for homes under $1 million.

This is a government-induced economic downturn. I feel that when the economy starts to open up, slowly things will start to move ahead. I think by the end of 2021, the market will be looking much better – not big increases in values, but much more activity.

However, I believe commercial real estate could be in for a longer downturn.

www.mortgagebrokernews.ca

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16/06/2020 5:35:41 AM

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16/06/2020 9:09:36 PM

SPECIAL PROMOTIONAL FEATURE

BROKER NETWORKS

Blazing a trail for independent brokers Despite uncertainty and volatility in the market, independent brokers continue to gravitate to CIMBC as a trusted source of guidance and leadership

RYAN DENNAHOWER Co-founder of Bespoke Mortgage Group Member since March 2016

“From the very beginning, CIMBC not only backed up their pledges of introducing us to a new way of doing business, but also supported us in achieving each of our goals and managing growth every step of the way,

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with no strings attached. Based on my experience over the last four years with the coalition, it has changed the way we operate and taught me valuable lessons in building a thriving business. Prior to joining CIMBC, I didn’t fully understand the value in lender partnerships, efficiency and profitability.

With their help, we’ve established strong lender partnerships that keep getting better, with direct, unfettered access to lenders’ executive management teams. This strategy is very refreshing and unlike the one we experienced under our previous network, where support in building these important relationships was virtually non-existent.

In the last year alone, Bespoke added 16 new mortgage agents, which would not have been possible without the influence and confidence instilled in us by the strong support of CIMBC and John Bargis. Bargis provides value that continues to benefit not only the brokerage, but also our agents. We are honoured to have him as a mentor and leader whose vast experience in the broker industry is invaluable.”

THE COALITION of Independent Mortgage Brokers of Canada (CIMBC) continues to be a pillar of strength for its members throughout the COVID-19 pandemic. The co-operative has had seven new brokerages join its team since the start of 2020, bringing it to an impressive band of 66 broker members from coast to coast. John Bargis, founder of CIMBC and broker-owner of Mortgage Edge, says there’s no sign of a slowdown anytime soon.

“We’ve signed over $1.3 billion in volume in Western Canada with very well-respected firms, which only adds to CIMBC’s mandate of working with lenders to form stronger partnerships,” he says.

While its growth has been impressive, Bargis adds that CIMBC is still in the early

ROWAN SMITH Senior mortgage planner at City Wide Mortgage Services Member since May 2020

“There were many reasons we decided to align ourselves with CIMBC when our contract with a network expired this year. First, CIMBC offered a flexible contract in an ever-changing

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stages of its long-term goals. The coalition officially launched its technology platform, Empower Connect, which has been getting solid traction, largely due to its non-invasive structure for broker partner data.

“Brokers are very nervous about the mass collection of their data, which is gold to the corporate networks – and to the brokers who aren’t paying close attention to the mortgage tech space, I say ‘too bad,’” Bargis says.

Rather than offer his own perspective on why CIMBC has experienced quality growth and continues to benefit independent brokers across the country, Bargis asked some new and veteran members of the coalition to share their experiences as part of the industry’s “best-kept secret.”

PAUL THERIEN broker market, which was important to us based on our experience with our previous network affiliation. CIMBC’s terms made us feel like we could pivot quickly if necessary while we plan for our continued growth.

Their inclusive co-operative structure was designed for brokers by successful brokers, and we are free to build our own independent brand with our customers and lenders. CIMBC also offered exclusive arrangements and service agreements with new and existing lending partners, which in turn allows our brokers to provide optimal service and better options to their clients.

CIMBC boasts a high level of transparency throughout the entire process, sharing several current and upcoming technological innovations that will benefit our firm and agents. It’s clearer now than ever that the value of a broker business is in the database, and CIMBC permits us to retain all rights to our clients, files and marketing with no access to their personal information, which allows us to maintain ownership of the business we build.”

Founder and CEO of Haystax Financial Member since January 2019

JOSH PEREZ Principal broker at Synergy Mortgage Group Member since August 2019

“When we began to explore options to scale the brokerage, we started by comparing three of the major network offerings. It was only after we heard what CIMBC had to offer that we truly understood the opportunities that come with owning

“When choosing who to affiliate ourselves with, it became clear to us that CIMBC would provide all of the benefits of associating with a larger organization without the need to give up our brand or technological independence.

Haystax launched in January 2019 to deliver a new and enhanced mortgage experience to consumers and to simplify what is often a confusing and deeply stressful experience. As the first company to develop a proprietary active adjudication platform, we needed a partner that would allow us the freedom to build our dream while providing us the opportunity to share best practices and learn from some of the top brokerages in the country. CIMBC was the perfect choice and will help us continue to grow and serve Canadians.”

and running an independent-branded brokerage. CIMBC’s culture is based on empowering broker-owners to understand the business and industry on a whole new level, which helped add another layer of value to our clients, partners and mortgage agents.

Something that’s always been at the forefront of our business is developing relationships with our lenders, a core value at CIMBC. In a short period of time, the introductions, service and overall package of working with lenders have changed considerably, bringing the focus of our lender relationships to the same high level of our clients, referral partners and agents. This partnership has opened our eyes to exactly how powerful our brokerage can be as a stand-alone under a collective structure.

It has provided us with a lot of clarity on how to quickly build and manage our business effectively and efficiently, which aligns with our core values and long-term business strategy.”

www.mortgagebrokernews.ca

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SPECIAL PROMOTIONAL FEATURE

BUSINESS STRATEGY

Weathering future storms Home Trust explains how the skills mortgage brokers have acquired during COVID-19 can help them build more resilient businesses

COVID-19 HAS created unprecedented challenges in the mortgage industry and for the Canadian economy in general. It seems likely that it will continue to change the way we work and do business. As part of adapting to new ways of living and working, we have also acquired valuable skills that can be used to manage times of uncertainty for years to come.

Rather than focusing on what can no longer be done, perhaps we should look at how the sudden change in business models has opened up a new world of possibilities. Let’s consider the ways that we can embrace the learnings of COVID-19 to help shape the future of client communications and meet the needs of a new generation of homeowners.

Staying connected while staying apart If there’s one thing we’ve learned during this mandated period of physical distancing, it’s that staying connected through digital means is more than just a possibility. In some cases, using technology to stay connected to clients may even be preferable. The digital tools that have become part of our daily lives out of necessity due to COVID-19 will help us usher in an era of efficient client communications in the future.

The increased use of digital communication

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will no doubt benefit clients who prefer to work online, but it can also ultimately benefit your business. If a client prefers to communicate by email or text rather than meeting in person, this shift to digital can allow you to instead focus your energy on activities that can help grow your business. For example, you could consider developing an ongoing communications plan to help you stay top of mind with your clients, past and present.

Though the challenges of COVID-19 are new, the tools we’ve now become adept at using can help facilitate effective communication.

With that said, there is more to exceptional client service than staying in touch. Many of the tactics we employed in the pre-COVID-19 market, like taking time to understand a client’s situation to identify the best mortgage solution, will continue to be of great importance.

Flexibility will continue to be an asset There are many daily activities we didn’t know how much we valued until they were no longer an option. Think about how frequently you used to hop in the car for an in-person meeting with a client to keep a deal moving. The responsiveness and diligence with which these in-person touchpoints have been replaced with

digital ones are part of the unique benefit of working with a mortgage broker, and that dedication will not go unrecognized by clients. They will continue to value a mortgage broker who takes the time to understand their whole story to help them make a sound financial decision.

After all, buying a home is the biggest purchase most people will ever make, and according to CMHC, 52% of homebuyers look to their mortgage broker to help them save time while navigating this process.

As provinces across the country enact plans to reopen businesses, the advice that mortgage brokers provide to their clients may be needed

www.mortgagebrokernews.ca

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The digital tools that have become part of our daily lives out of necessity due to COVID-19 will help us usher in an era of efficient client communications in the future more than ever. The economic challenges that COVID-19 has brought about cannot be underestimated. However, by providing sound guidance that allows clients to make prudent borrowing decisions based on their individual circumstances, the mortgage industry as a whole

can move beyond these challenges.

Home Trust has always been willing to look beyond the surface details and work with our broker partners to customize lending solutions that are tailored to the needs of individual applicants. This commitment has not

changed, even as we work to adapt to what will inevitably be a new mortgage landscape.

The mortgage industry rapidly adapted to the changes that were made necessary by COVID19, and collectively we will adjust to the new normal, whatever that may look like. The most important thing to keep in mind is that we will be most successful when we work through it together.

To read case studies and learn more about how Home Trust has helped clients facing financial challenges, both before and after the events of COVID-19, please visit hometrust.ca/realstories.

www.mortgagebrokernews.ca

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16/06/2020 6:31:18 AM

PEOPLE

BROKER INSIGHT

When the going gets tough Kyle Green of the Green Mortgage Team tells CMP how building a niche around real estate investors propelled his business to new heights and has helped him weather the current economic downturn

KYLE GREEN loves people and numbers, so it made perfect sense when he found his way into the mortgage world and very quickly figured out how to differentiate himself from others in the business. Early on in his career, Green started working with investors in Vancouver while also growing his own real estate portfolio. He soon realized that creating a niche is a critical step for any broker looking to grow their mortgage book.

Pairing his personal interest in real estate wealth with his affinity for financing solutions became Green’s ticket to success.

“I just click with investors,” he says. “They are more analytical in nature compared to the average homebuyer. Investment deals are a lot more challenging, and I love putting that puzzle together and solving a client’s problem.”

Starting in the industry at age 19, Green needed to find a way to stand out from the crowd. Building his knowledge and experience within the narrow pillar of investment financing gave him a leg up on the competition and took his age out of the equation.

While being young in the mortgage industry can often translate to being inexperienced, Green found a way to turn it into a competitive advantage.

“As soon as I started seeing success, I leveraged that, and my age became less important,” he says. “Plus, now that I’m leading a team and building my company,

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being a young, charismatic guy helps promote a great working culture.”

Green opened his own shop in 2009, focusing his business almost entirely on property investors and building a team of young, energetic professionals with a similar mindset. Today, he leads a team of eight: two documents people who work hand-in-hand with two underwriters, plus a commercial and private lending underwriter, two account managers who act as the primary point of contact for clients, and a general manager who holds everyone together. This strong team has become a stable foundation for the company’s future growth.

“It took a couple of years for me to become a good mortgage broker, but it took a lot longer to learn how to be a good businessperson,” Green says. “As my business evolved, I began to understand the importance of systems and processes, which has been a big focus of mine for the last couple years.”

Developing a positive team culture has

been paramount, Green adds, as it allows him to better attract talent and retain good employees. “This business is stressful and can be really tough on people,” he says. “We embrace the fact that mistakes will happen, learn from them and try our best not to make the same mistake twice.”

Green’s growing team has also proved to be a competitive advantage. Working with investors is often more challenging than a typical transaction, he explains, and having a larger team allows Green to accommodate big fluctuations in business and volume while still giving each deal the extra time and attention it requires. It also allows him to take on more of an advisory role and leave much of the operations in the very capable hands of his team members.

“When doing more complicated deals, advice becomes more valuable compared to pricing,” he says. “When your niche is complicated, it creates really sticky clients. They know they aren’t likely to get the same level

GREEN ON RECRUITING AND RETENTION CHALLENGES “As your team grows, there tends to be more turnover inside the company, and you can’t really prevent that. My top underwriter and my top sales guy left a few months ago to start up their own brokering company. You can’t prevent people from wanting to grow to be their future best. We’ve developed a strategy to always be in a constant state of hiring. Generally, we want to be consistently finding and sifting through top talent.”

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FAST FACTS: THE GREEN MORTGAGE TEAM Principal broker: Kyle Green Network: DLC Location: Vancouver Coverage area: Primarily BC Specialty: Commercial and residential real estate investors Accolades: Kyle Green was among DLC’s Top 10 for annual volume funded in 2018 and 2019, received the DLC Legend Award in 2018 and 2019 for being among the top 0.4% of mortgage professionals across Canada, and has been one of CMP ’s Top 75 Brokers four times

“When your niche is complicated, it creates really sticky clients. They know they aren’t likely to get the same level of expertise and service elsewhere” of expertise and service elsewhere.”

In recent months, Green has doubled down on his digital marketing strategies to stay top of mind with existing and prospective clients. From email campaigns to social media marketing, the team has been working hard to reconnect and re-engage

with people online.

“During the COVID-19 pandemic, we cut expenses almost everywhere, except for our social media presence,” Green says.

“People are spending more time online, so we actually ramped up our digital marketing.”

His mission in the coming months is to

continue building the Green Mortgage Team’s digital presence by updating the brokerage’s database and producing more focused, relevant content. The most successful businesses, Green says, are the ones that can best adapt to change, and in the current environment, that rings truer than ever.

“If you’ve been a mortgage broker for the last 10 to 15 years, there’s been a hell of a lot of change in our industry,” he says, “and the ones who can continually adapt and manoeuvre are the ones who will come out ahead.”

Reflecting on the start of his journey in the mortgage industry, Green says that while the heyday of easy deals might be over, the complex nature of the industry will only drive business to the more skilled brokers.

“The nice thing about working with investors is that when times get tough, we get busy,” he says.

www.mortgagebrokernews.ca

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SPECIAL PROMOTIONAL FEATURE

BROKER NETWORKS

Value for all The new partnership between Centum Financial Group and Axiom Mortgage Partners promises to deliver unparalleled value to brokers at a time when it’s needed most FINDING THE right opportunities to grow a business can be challenging – unless you know exactly what you’re looking for.

For Chris Turcotte, president of Centum Financial Group, it always comes down to good people. “Opportunity abounds when you surround your organization with the right people, whose strategy and values align with your own,” he says.

When Turcotte first met Gord Ross, president and co-founder of Axiom Mortgage Partners, the two became fast friends and discovered a shared passion for helping people and creating value for others. This joint vision led to discussions of a possible partnership – and the timing couldn’t have been better.

With all the uncertainty in the world, the mortgage industry needs to band together to thrive amid a tremendous amount of change and new challenges.

“More than ever, brokers need our support and the opportunity to stay connected,” Ross says.

On June 2, the two brands officially announced their partnership, which encompasses more than 2,500 brokers across over 200 offices and nearly $10 billion in annual mortgage volume. As independent mortgage

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brokers, both Turcotte and Ross have seen firsthand the benefit of being part of a network. The goal of this new joint network is to provide unparalleled value, tools and support to brokers to alleviate the stresses of going it alone.

While growth is always a desired result in business, Turcotte explains that expansion wasn’t the primary

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driver of the acquisition. “Gord and I saw an opportunity to not only grow together, but to deliver additional value to the brokers in the Axiom network that wasn’t immediately available,” he says.

Axiom Mortgage Partners, a dominant force in Western Canada, has been in the industry for more than 14 years. When it came time to scale the business, Ross sought to over-deliver on value to his brokers. He met with many of the large networks to discuss collaboration, but the fit was never quite right.

For Ross and the Axiom team, it wasn’t the size of the organization or claims of being number one in the channel that mattered; it was more about the vision and commitment to helping mortgage professionals succeed.

“The history and origin of the Axiom network is distinctly unique in that the company was not formed to make a huge profit from our broker members, but rather the opposite,” Ross says. “Our focus was

provides the greatest opportunity and value for the Axiom network.”

In 2019, Centum doubled its volume by adding more than 20 new offices under its banner. With this acquisition, the network

“Opportunity abounds when you surround your organization with the right people, whose strategy and values align with your own” Chris Turcotte, Centum Financial Group to help independent mortgage brokerages become more profitable by adding value and capitalizing on the economies of scale a network could provide.”

That focus remains unchanged today.

Whether with tools and technology or marketing and support services, adding value for mortgage brokers has always been at the forefront of Axiom’s offering.

“Providing these services at the best price possible continues to be our priority,” Ross says. “Centum’s value proposition is unlike any other in the marketplace and

has now reached that milestone for a second year in a row. With all of that growth, what’s next for Centum?

“We are devoting our time to welcoming nearly 500 fantastic brokers to our family,” Turcotte says. “We’re excited to introduce them to Piper, our unique technology that sets our brand apart. We have so much to offer, including a robust CRM, down payment verification, workflow management, e-signatures, direct-to-lender submission and so much more.”

Centum also remains committed to providing brokers with technology and marketing services at no additional cost.

“We aim to overwhelm with value,” Turcotte says. “That’s always been our goal, and this is just the beginning.”

Centum Financial Group is privately owned by the family-run Charlwood Pacific Group, which operates in more than 60 countries and oversees over 1,700 franchised locations worldwide with more than 20,000 associates. The group’s companies include Century 21 Canada, Century 21 Asia Pacific, Real Property Management and Uniglobe Travel International, which is the world’s largest single-brand travel franchise company.

www.mortgagebrokernews.ca

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SPECIAL PROMOTIONAL FEATURE

ALTERNATIVE LENDING

An open letter from Haventree Bank TO OUR BROKERS,

Michael Jones President and CEO, Haventree Bank

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Over the last couple of months, Canadians have pulled together like we’ve never seen before, and our Haventree Bank family is no exception. The entire bank made the successful transition from an office environment to a work-from-home operation literally overnight.

What came next was an unprecedented number of inquiries from our customers.

Many of the clients you have placed with us over the years have now suffered layoffs, reduced income or temporary loss of income. Haventree Bank team members from across several departments rallied to help answer an overwhelming amount of calls and emails requesting payment relief.

Thanks to their commitment and dedication, each one of those requests has been answered, and I am pleased with how quickly our service levels were returned to full capacity.

We understand that this is a challenging time for the broker community, and we are thankful to all of our broker partners who have continued to trust us with their customers. Being responsive and efficient with Canadian borrowers throughout the application process has never been more important, which is why we are now offering an additional 500 Elite Loyalty points on every funded deal. To qualify, brokers must simply fulfill the conditions on the original

commitment letter within 10 business days.

In the past, many of you have redeemed your Haventree rewards to travel to destinations around the world. As we temporarily shift to spending more time at home, you may have some summer goals like building an outdoor oasis, creating a home theatre or maybe enhancing your work-from-home experience; your Haventree points can get you there faster.

We also recognize that many Canadians need help to improve their family cash flow and weather the storm of a closed-door economy. In response, we have expanded our very popular second mortgage program and introduced a Seconds+ Mortgage with a fully open term option.

Through collaboration, we have been able to pivot and will continue providing the service you have come to expect from us. We are adapting to physical distancing by leveraging new technologies to fulfill mortgage conditions, including e-signatures, modified appraisals, automated valuation models and instant bank statement verification.

Together we will continue to support Canadians through these difficult times. Let’s be there for each other, stay connected and stay healthy.

Our thoughts are with all of you.

Michael Jones President and CEO Haventree Bank

www.mortgagebrokernews.ca

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FEATURES

FEAR AND SUCCESS

The power of fear Rather than being a warning of failure, fear can often be a sign of approaching success. The challenge, explains Molly Moseley, is learning to work through it

YOUR PALMS are sweaty. Your stomach has that light, unsettled feeling. Your mind races eagerly from thought to thought.

Fear is an innate part of the human experience and has been essential to our survival as a species for thousands of years. While fear keeps us from danger, it also can keep us from many other amazing experiences.

When I was asked to speak at a community

I accepted the offer and decided not to let fear get in my way. To do the best job possible, I knew extensive preparation was essential.

I took plenty of time to prepare my points, hone my message and practice out loud. I was nervous but ready.

Ultimately, the presentation went well, and I got tons of great feedback. I’m glad I accepted the offer and tried something new.

While fear keeps us from danger, it also can keep us from many other amazing experiences networking event, I was excited about the opportunity, but fear reared its ugly head. Like it is for many others, public speaking is outside my comfort zone. The thought of addressing a crowd full of people was overwhelming.

Would I speak well? Would they learn from me? Could I inspire them?

Doubt sunk in. A flurry of negative thoughts raged through my mind, from stumbling over my words to physically stumbling over the podium. I had a choice: Give into fear and maintain the status quo, or challenge myself and give it my best.

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When faced with a career challenge, it’s easy to take the comfortable path. However, when you do this – whether for public speaking, a big promotion or a move across the country – you’ll always wonder about the road less travelled.

The next time fear creeps up, rather than considering it a warning of impending failure, view it as a sign you’re on the right path. Some of the world’s most successful entrepreneurs and inventors attest that fear isn’t always a warning of the negative; it’s often a signal that you’re on your way to success.

When facing doubt, it’s important to realize fear is not unique to you. Everyone experiences fear, even those you might feel are immune to it. Will Ferrell’s 2017 commencement speech for the University of Southern California made this point perfectly.

“You’re never not afraid. I’m still afraid,” Ferrell said. “I was afraid to write this speech.

And now, I’m just realizing how many people are watching me right now, and it’s scary. Can you please look away while I deliver the rest of the speech? But my fear of failure never approached in magnitude my fear of ‘what if.’

What if I never tried at all?”

For the graduates about to embark on a brand-new adventure, he offered some advice that I think is fitting for just about anyone:

• Enjoy the process of your search

without succumbing to the pressure of the result.

• Trust your gut.

• Keep throwing darts at the dartboard.

• Don’t listen to the critics – you will figure it out.

So next time you feel fear holding you back from trying something new – whether in your personal or professional life – push those feelings down and stomp them with your foot. Then be bold and see what happens. Chances are, you’ll succeed. At the very least, you’ll be glad you tried.

Molly Moseley is a marketing strategist and brand evangelist. She serves as part of the cross-functional leadership team at LinkUp in developing, managing and positioning products that capture new market share and expand existing relationships. For more information, visit linkup.com.

www.mortgagebrokernews.ca

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CMA20

Brought to you by

OCTOBER 30, 2020 • TORONTO

CONGRATULATIONS TO THE 2020 FINALISTS The selection of individuals and organizations across 20 categories are a true representation of excellence in the mortgage industry for their outstanding achievements, innovation and leadership over the past year.

CELEBRATE YOUR SUCCESS Join hundreds of your industry peers as we celebrate your successes and reveal the big winners at the award show in October.

For more information, visit:

canadianmortgageawards.com

Brought to you by

Publications

Sponsors

Organizer

Photo Booth Sponsor

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PEOPLE

OTHER LIFE

10

Age when King first started fishing

150 lbs.

Weight of King’s biggest catch so far (an amberjack caught in Costa Rica)

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

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Minutes it takes King to get from work to his cottage in Honey Harbour

King pulled this monster salmon out of the water near Port Hope, Ontario

REELING THEM IN For broker Kevin King, the joy of fishing is encapsulated in two very different moments: the thrill of the catch and the tranquility that follows FOR KEVIN KING, broker-owner of Centum King Mortgages, few places compare to being on the water near his cottage in Honey Harbour, Ontario. “I think I’m going to pretty much come here full-time,” he says.

And why not? With his cottage a mere 18-minute boat ride from his office in Midland, working out of Honey Harbour means easy access to both his clients, his

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staff and the fish lurking beneath the surface of Georgian Bay. Fishing has been a major part of King’s life since he and his friends started piling into boats with their fathers when he was 10. Back then, it was all about the thrill of the catch. It mostly still is.

“I don’t like fishing if I’m not catching fish,” King says, explaining that his nature as someone who needs to keep busy isn’t a

fit for days when the bites are few and far between. “I’m not one of those guys.”

But over the years, King has developed a deeper appreciation for the moments between catches. While they might not be nearly as exciting as a man-versusnature adrenaline rush, they do wonders for the mind.

“When you’re out there,” he says, “you forget about everything.”

www.mortgagebrokernews.ca

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EMPOWERING INDEPENDENT

MORTGAGE BROKERS

TO BUILD THE VALUE OF THEIR BRANDS BRINGING INDEPENDENCE BACK TO BROKERS

TO MAKE MEANINGFUL CHANGE TOGETHER.

IT’S CLEARER NOW THAN EVER THAT THE VALUE OF A BROKER BUSINESS IS IN THE DATABASE AND CIMBC PERMITS US TO RETAIN ALL RIGHTS TO OUR CLIENTS, FILES AND MARKETING, WITH NO ACCESS TO THEIR PERSONAL INFORMATION, WHICH ALLOWS US TO MAINTAIN OWNERSHIP OF THE BUSINESS WE BUILD. - Rowan Smith, Senior Mortgage Planner, City Wide Mortgage Services

CONNECT WITH US TO BECOME A PART OF THIS REVOLUTIONARY GROUP! @CIMBC COALITION OF INDEPENDENT MORTGAGE BROKERS OF CANADA

CIMBC.CA | INFO@CIMBC.CA | 1.888.423.0315 40-IBC_Other Life-SUBBED.indd 41

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Everybody has a story

A mortgage application is just a snapshot Let’s partner and ask the right questions to truly understand your client’s story. Together, we can develop the right financial solution. To see the whole picture, visit hometrust.ca/realstories

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