CMP 8.12

YOUR 2014 ALT. LENDING GUIDE

MORTGAGEBROKERNEWS.CA ISSUE 8.12 | $6.95

So how do you stack up against the average broker? Read the survey results

YOUR BROKER

LIFESTYLE

S R EV EA L E D FUTURE FORECAST BLEAK FOR BROKERS?

OFC_IFC_Spine.indd 2

GETTING YOUR NAME OUT ... AND PROTECTING IT

27/11/2013 1:59:06 PM

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CONTENTS

MARKET MATTERS 6 | Letters to the Editor 8 | Reading between the lines A look at what RBC’s forecast holds for next year.

10 | News analysis The market has slowed but there is still room for growth, according to a report commissioned by Genworth Canada

20

FEATURES 14 | Broker-to-broker advice Persistent professionalism

COVER STORY

38 | Data artistry Finding business value in data

CMP Lifestyle survey We dug deep for a down-to-earth profile of brokers: See what the average lifestyle looks like

issue

8.12 we make buildings appear and problems go away.

Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $1 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $4M to $100M. Blake Cassidy or Pierre Leonard | 800 494 0389 | www.romspen.com

DECEMBER 2013 | 1

License # 10172

01-07_TOC_Editors Letter.indd 1

November 20, 2013_3:20 Pm

7.5” x 2.875”

27/11/2013 1:04:45 PM 8.25” x 3.625” 8.75” x 4.125”

CONTENTS

NEWS

REGULARS

12 | Product News A bite-sized guide to the industry’s newest products and appointments as they come down the channel

46 | Favourite Things

18 | National Picture-at-a-glance

42 | Business Strategy A broker has to get her name out there, writes Doren Aldana, but you still have to protect it

48 | CMP Service Directory

MARKETING

46

44 | Analysis Annual fall CAAMP report

Twitter.com/ CMPmagazine Like Us on Facebook Canadian Mortgage Professional

2 | DECEMBER 2013

01-07_TOC_Editors Letter.indd 2

27/11/2013 1:04:51 PM

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01-07_TOC_Editors Letter.indd 3

TM

27/11/2013 1:04:53 PM

CONTENTS / EDITOR’S LETTER

I SEE YOU COPY & FEATURES EDITOR Vernon Clement Jones STAFF WRITER Justin da Rosa CONTRIBUTORS Mark David, Doren Aldana Lester Shore COPY EDITOR Tanya Enberg

ART & PRODUCTION GRAPHIC DESIGNER Alicia Chin

SALES & MARKETING ASSOCIATE PUBLISHER Trevor Biggs GENERAL MANAGER - SALES John Mackenzie MARKETING AND COMMUNICATIONS Claudine Ting PROJECT COORDINATOR Jessica Duce

CORPORATE PRESIDENT & CEO Tim Duce OFFICE/TRAFFIC MANAGER Marni Parker EVENTS AND CONFERENCE MANAGER Chris Davis

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

I’d like to let you in on a secret. Well, actually I feel compelled to let you in on a secret. I’d rather keep it to myself. But for years, CMP has been guessing as to who exactly our readers are. I mean, we know you’re brokers – dah! – but beyond that we’ve pretty much been making a whole lot of assumptions about who you are as people, demographically that is. That stops today, thanks to the industry’s first Broker Lifestyle Survey – the CMP Broker Lifestyle Survey.

The results of the online research, soliciting responses from hundreds of Canadian brokers over several weeks this fall, start on page 20. The survey’s answers to questions ranging from how much money you make to what type of car you drive allow CMP to finally piece together an outline of the average broker. We’re presenting those details for your consideration and, we hope, your entertainment.

The December issue has much more going for it, and that’s in no small way owing to the alternative lending guide we’ve placed within the magazine. Don’t miss the “Fixable Mistakes” brokers are making on their alternative lending applications. It’s a real eye opener.

So, read on and when you’re done, drop us a line or comment on a story. We now have a much better understanding of who that correspondence will be from.

Happy Holidays, Cheers, Vernon Clement Jones

CONNECT

Contact the editor:

vernon.jones@kmimedia.ca

4 | DECEMBER 2013

01-07_TOC_Editors Letter.indd 4

27/11/2013 4:40:45 PM

Earn More ask us how

@CENTUM /CENTUM

Join the Network that puts you first

1.888.928.1338

www.centum.ca

Independently Owned and Operated. ®/™ Trademarks owned by Centum Financial Group Inc. © 2013 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.

01-07_TOC_Editors Letter.indd 5

27/11/2013 1:05:02 PM

CONVERSATIONS / LETTERS TO THE EDITOR

LETTERS TO THE

EDITOR

Comments from Mortgagebrokernews.ca on the news stories making waves in advisor waters RE: RICHARD BRANSON (BUSINESS STRATEGY 1.1)

RE: SUPER BROKERS (CMP 8.11)

NETWORK KNOWLEDGE I think the forecasts from the broker heads is insightful in as far as it goes.

But I do think they need to be more candid in addressing the pressures brokers are under from the banks and the regulators. We shouldn’t be dancing around that threat.

MASTERMIND? This guy is a success. I don’t doubt it. But his strategy for that success is unique to him. As brokers, each of us has got to establish what makes us different and then play to that strength. That is what I took away from the article. Good job, CMP.

- Michael Graves

- G. Goldberg

PLANNIN FOR BUS G SUCCES INESS S

MORT

GAGE BROK

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FIRST EDIT ION

BR

EXCLUS

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ON BUASNSON IN How to turn you ESS r busine into ss

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an empire the Virgin wa y

MARKET MANAGINING, SALES CASHFL G OW

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THANKS FOR THE MEMORIES The more I hear from broker networks on what separates them from the competition, the more I am convinced that I will someday become an independent broker. I am currently with a network, but I’m looking at my business plan and wondering if I’d be better off as an SUPER RS independent if I choose to de- BROKE emphasize my use of agents.

fu

BUSIN STRATEESS GY

A

SMART BUSINES DESIGNS S OUR TIMEFOR S

07/11/20

13 12:43:36

PM

RE: BROKER-TO-BROKER COMPETITION (CMP 8.11)

DS G HEA TALKIN ON THE RY INDUST

D TO HEA HEAD KERS ON BRO ETITION COMP

LENDER UP BACKBAT TO GOING KERS FOR BRO

ERN GEB ROK MOR TGA | $6.9 5 8.11 ISSU E

EWS .CA

R SUPEERS BROK

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tworks re nal Ne Natio you and heey want tly what th er is exac have to off

- Doug in Edmonton

2 PM

2013

5:15:3

07/11/

RESPECTFUL COMPETITORS Sabeena and Dustan, the fact is that another broker is no less my competitor than a road rep. I keep that in mind when I talk with them and I keep my distance from them the same way I would with a bank employee. Competition is competition.

- Team Player

d 2

ine.ind

FC_Sp

OFC_I

Join the debate at mortgagebrokernews.ca

What goes around comes around, and brokers who have behaved in dishonourable ways with other brokers will suffer the same eventually.

- Missy Price

6 | DECEMBER 2013

01-07_TOC_Editors Letter.indd 6

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Un

fussy.

S GY

ITION

EW

N

S

s e

In the world of banking, common sense has become surprisingly uncommon. Rules are piled on top of rules, making life harder than it needs to be for everybody. Well, that’s not how we operate.

We strive to do right by our broker partners in a way that simply makes sense, like our Edge B mortgage program that offers solutions to customers without traditional credit backgrounds and who are undeserved by large banks. We’re Bridgewater Bank, and that’s just how we do things. bwballstarportal.ca

01-07_TOC_Editors Letter.indd 7

27/11/2013 1:05:12 PM

MARKET MATTERS / READING BETWEEN THE LINES

Monthly Housing Market Update | November 15, 2013

• •

Year-over-year, resales in Quebec City (-21.2%), Montreal (3.2%) and Regina (-1.0%) were down, whereas they were up (often quite substantially) in all other major markets.

Nationally, new listings in October eased by 0.8% relative to September and by 0.7% relative to October 2012.

The majority of local markets continued to be in balanced territory, although Calgary and Edmonton were among the few markets where the sales-to-new listings ratio suggested that sellers had the upper hand in setting prices. The sales-to-new listings ratio fell noticeably from levels in September in Vancouver and Toronto, such that balance between sellers and buyers returned in these markets. Nationally, the October sales-to-new listings ratio inched downward to 0.55 from 0.56 in September (values within the range of 0.40 to 0.60 are typically associated with market balance).

There were also 6.0 months worth of total inventory at the October pace of sales, representing a modest easing from the 5.9 months in September.

The annual rate of increase in the national composite MLS Home Price Index (HPI) accelerated slightly once again in October to 3.5% from 3.1% in September, marking the sixth consecutive acceleration in the year-over-year rate after reaching a two-year low of 1.9% in April. Calgary (+8.2%), Saskatoon (+4.9%) and Toronto (+4.5%) were the only three markets exceeding the national average. Victoria (-2.4%), Vancouver Island (-0.7%), Regina (0.7%) and Vancouver (-0.5%) continued to show year-over-year declines. The MLS HPI was flat in Lower Mainland, and rose modestly in Ottawa (+0.7%) and Montreal (+2.4%).

READING BETWEEN

THE LINES •

In mid-November the Royal Bank of Canada issued its housing forecast for the rest of this year and 2014.

“Recent market developments have not altered our views for 2014,” the report said. “We continue to project resale activity to remain largely static overall next year, although the in-year pattern is likely to show some cooling in the latter part of the year as interest rates gradually rise.”

Brokers, of course, have their own opinions.

Following is principle broker and partner at the Mortgage Centre, MOS MortgageOne Solutions, the take of Paul Mangion.

MLS Home Price I

Year-over-year % change in 25 20 15 10 5

-5 -10 -15 2006

2007

Source: CREA, RBC Economics Re

MLS Home Price I

Year-over-year % change in 70 60 50 40 30 20 10

-10 -20 2006

2007

MONTHLY HOUSING MARKET UPDATE

Commentary November 15, 2013 Home resales drop in Canada in October with morning is broadly consistent 1. All considered, CREA’s report this seven-month stretch of monthly gains in Canada’s home resale marour expectation that home resalesThe slightly moreReal 453,000 units ketwill ended total in October 2013. The Canadian Estate Association (CREA) today released statistics showing that home resales fell 3.2% in Canada in 2013, virtually unchanged from 2012.

This forecast asbetween September and October, representing the first monthly decline since February 2013. The latest tally continued to track higher than the sumes that the softening of activity that saw in October will be from susyear-ago level we (up 8.3%), although the pace moderated noticeably 18.2% rate recorded in September. Recent hefty year-over-year gains tained in the coming months as the we believe thatlastthe payback frominsur-the mainly reflected soft activity year when changes to mortgage ance rules exerted a significant dampening effect on market activity. The sales that were brought forwardOctober in 2013 anticipation ofon higher mortgage resales were essentially par with the 10-year average it marginally by 0.9%). Moreover, on a year-to-date basis, rates may have further to run. (exceeding home resales were effectively flat (edging 0.3% lower) from the same period last year, reflecting a very slow start to 2013.

While the drop in resales higher contributed to than loosen demand-supply conditions Home prices appear to be tracking slightly we expected, slightly in October, the earlier tightening in several key markets in Canada gave sellers more sway in setting prices.

While HPI remainingsuggest well conhowever, although the latest trend in the composite MLS tained, the rate of price increases accelerated slightly for the sixth conmonth in 2.3% October, with the home year-over-year rise in theoverall national only minor upside to our forecastsecutive gain of for prices composite MLS HPI moving to 3.5% from 3.1% in September. Calgary, and Toronto once more contributed most to earlier this annual increase. in Canada in 2013. Some laggingSaskatoon effect on prices from the tightThe resale decline in October was not entirely a surprise because we susening of demand-supply conditions inmuch markets as Toronto, Vanpected that of the strengthsuch in recent months reflected the unwinding of earlier restraint associated with the tightening of mortgage insurance couver and Calgary likely will keep prices a slightly accelerrules lasthome year and a rush by some on homebuyers to lock-in lower mortgage rates this summer. Developments in October were consistent with that ating path in the near term, thereby possibly lifting the from full-year 2013 view. Nonetheless, the latest batch of statistics CREA still indicates a fairly constructive state of affairs for Canada’s housing market. Resale rate of increase closer to 3.0% – still highly market. activity remains close manageable to average nationally andfor price the increases continue to be mostly contained. Renewed vigour since spring largely dispelled earlier fears of a severe downturn, and the decline in home resales in OcRecent market developments have our views for We tober not will easealtered the opposite concern that the market might2014. be rebounding too strongly. We expect home resales to stabilize near the current levels, continue to project resale activity to some remain largely static next although further modest pullback may occur in overall the months ahead as payback for sales that may have been advanced during the rush to lock-in year, although the in-year pattern lower is rates.likely Overall, we to expectshow total 2013 some home resalescooling to be very littlein 2012. latter part of the year as interest changed ratesfromgradually rise. While we expect The highlights from CREA’s October report were: 3. the Bank of Canada to leave its •overnight inOctober 2014, we Home resales fellrate by 3.2%unchanged between September and 2013 (on a seasonally-adjusted basis), representing the first monthly drop since February Relativemortgage to October 2012, resales rose by project bond yields – the main driver of2013. fixed rates – 8.3% to comdrift pared to 18.2% in September. The October level was just 0.9% above the 10-year average. gently upward throughout the year.

Against this restraining effect, • The vast majority of local markets posted month-to-month declines in homebuyer demand will continue resales, to find from emincluding support Vancouver (-10.1%), Torontopositive (-4.9%), Montreal (2.9%), Ottawa (-2.5%), Edmonton (-1.5%) and Calgary (-0.3%). ployment trends and steady population growth (and still historically October Snapshot low Robert levels of interest rates). On the Home supply side, the high number of resales New listings MLS HPI (Composite) Sales-to-new listings ratio Hogue 2. condo units currently under construction in Canada’s largest markets will pose a risk; however, the evidence to date suggests that these units are being mostly absorbed and, therefore, are unlikely to have a destabilizing effect. We expect that the combination of flattening demand later next year and strong supply of newly completed condo units will rein in price increases in 2014. We project home prices to increase by less than 1% nationally next year. 4.

Source: CREA, RBC Economic

Home resales in Canada Thousand units, S.A.A.R.

600

500

MLS Home Price I

Year-over-year % change in 20

400

300

200 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

15 10

Source: CREA, RBC Economics Research

5

Sales-to-new listings ratio in Canada

1. I think home prices will stay fairly flat in

most parts of the GTA with a few pockets doing better than 2% and certain areas actually experiencing declining values due to high inventory levels. Overall price gains will be around 1 to 2%. I believe rates will inch higher which will put pressure on any price gains.

2. I think the condo market in the GTA will

experience a modest decline in sale prices with the demand for condo rentals preventing many people from being forced to sell at lower prices, which will help prevent any large declines.

S.A., monthly

0.80

Seller's market

0.70 0.60 0.50 0.40

Canada rate unchanged for 2014 and probably 2015 but like always the statements of rates going up will probably help bring buyers into the market in the 2nd half of 2014 but not enough to see a year-over-year improvement.

4. Overall, I see a very bleak picture for the

mortgage and real estate industry in 2014 and with increased competition for fewer customers you will see many agents leave the market, which will be positive as a whole for the industry.

8 | DECEMBER 2013

08-17_News.indd 8

-10

Buyer's market

0.30

2006

2007

0.20 0.10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: CREA, RBC Economic

Source: CREA, RBC Economics Research

MLS Home Price Index - Canada Year-over-year % change in the composite index

25 20 15 10

5

-5

-10 -15

3. I agree the bank of Canada will keep the bank of

-5

Balanced market

2006

2007

2008

2009

2010

2011

2012

Year-over-year % change in 9 8 7 6

2013

Source: CREA, RBC Economics Research

Senior Economist (416) 974-6192 robert.hogue@rbc.com

MLS Home Price I 10

Region

Y/Y %change

Y/Y %change

Y/Y %change

Canada Toronto Montreal Vancouver Calgary

8.3 16.0 -3.2 37.0 19.3

-0.7 0.4 -2.7 0.8 9.5

3.5 4.5 2.4 -0.5 8.2

0.55 0.59 0.49 0.54 0.74

5 4 3 2 1 2006

2007

Source: CREA, RBC Economic

The material contained in this report is the property of Royal Bank of Canada and may not be reproduced in any tion of the copyright holder in writing. The statements and statistics contained herein have been prepared by RB sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy tion of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.

2

®Registered trademark of Royal Bank of Canada. ©Royal Bank of Canada.

27/11/2013 1:49:26 PM

08-17_News.indd 9

SOLUTIONS. ADVICE. MOVE.

SMART

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27/11/2013 1:05:49 PM

MARKET MATTERS / NEWS

2014 MORTGAGE OUTLOOK

THE COUNTRY’S NO. 2 MORTGAGE INSURER IS OFFERING A SOBER SECOND LOOK AT PROJECTED MORTGAGE DEMAND IN 2014 — BRACE YOURSELVES The latest economic outlook for Canada comes courtesy of Genworth and pegs 2014 growth at a modest 2.4 per cent, but it’s the mortgage insurer’s take on mortgage activity that may interest you most.

Genworth Mortgage Outlook Mortgage interest rates are widely expected to increase in the next year, pushing up carrying costs.

Yields on bonds, from which banks finance mortgages, have already moved higher. Still, the Bank of Canada is not expected to start raising its overnight rate before mid-2014, and even then, the Bank will raise rates only gradually, giving households time to adapt.

2014 ECONOMIC OUTLOOK

Furthermore, employment and income growth will help to further alleviate some of the pressure of rising interest rates on households. In fact, rising mortgage rates could even provide a short-term boost to the market, as house-hunters with mortgages preapproved at low interest rates rush to buy homes before these contracted rates expire. The current outlook calls for the three-year conventional mortgage rate to rise from a record-low 3.8 per cent this year to 4.4 per cent in 2014 and 5.1 per cent in 2015.

The total number of mortgage approvals fell by 0.3 per cent in 2012, as the resale housing market slowed in the second half of last year. Approvals in the new home market continued to climb however, rising 2.2 per cent. Both markets are forecast to see lower levels of mortgage

approvals in 2013, reducing total approvals by 2.3 per cent. With growth in the new home market expected to be modest in 2014, the number of new mortgage approvals will decline once again.

However, thanks to the existing home market, total mortgage approvals are anticipated to rise in 2014, up by 2.9 per cent.

The dollar volume of mortgage approvals rose 0.7 per cent last year, thanks to price growth in the new and resale markets.

Not surprising, tighter mortgage rules are having a bigger impact on the number of high-ratio mortgage approvals (set to fall 3.1 per cent in 2013) than the number of conventional mortgage approvals (set to drop 1.7 per cent). Growth in high-ratio approvals will be 1.3 per cent for 2014, while conventional mortgage approvals will rise 4.2 per cent.

THREE-YEAR CONVENTIONAL MORTGAGE RATE 6% 5% 4% 3% 2% 1%

2013

2014

2015

THERE IS NO MISTAKE ABOUT IT, BROKERS: HOUSING STARTS HAVE SLOWED SINCE THEIR BURST OF ENERGY BETWEEN 2010 AND 2012.

But there is still room for future growth and the Canadian residential market remains solid, according to the Conference Board of Canada Autumn Metropolitan Housing Outlook commissioned by Genworth Canada.

“The housing market has transitioned back to a more sustainable pace and data suggests that it will remain stable,” says Brian Hurley, Chairman and CEO of Genworth Canada. “This means a healthy market with reasonable growth, which will enable Canadians to have more confidence in both home ownership and its relative affordability.”

AVG. RESALE HOUSING PRICE BY CITY: FORECAST 800k

Quebec City Montreal Toronto Ottawa Winnipeg Calgary Edmonton Vancouver

600k

400k

200k

2013

2014

2015

The report notes that this stability is due in part to the available housing supply continuing to be in line with demographic requirements, which will allow average new and resale prices to continue to grow, albeit moderately, in the foreseeable future.

The report confirms Canada’s continuing economic recovery, with GDP and employment both forecast to grow in all regions across the country throughout 2014.

While the Conference Board predicts mortgage rates to rise gradually, employment and personal income gains should allow consumers to adapt to the anticipated increases. The report also notes that while new home mortgage approvals grew in 2012, the total number of new and resale mortgage approvals is expected to come in lower for 2013 by 2.3 per cent.

However, even though new home mortgage approvals are expected to continue to decline in 2014 because of only modest growth in the new home market, resale mortgage approvals are expected to rise again in 2014 by 2.9 per cent.

Growth in prices for new and existing homes means the dollar volume for mortgage approvals will rise.

10 | DECEMBER 2013

08-17_News.indd 10

27/11/2013 1:05:55 PM

3585

FINANCIAL LP

“It is

important to have a

Aaron Deakin, Account Manager Jeff Cody, Mortgage Broker/ Managing partner, MortgageBrokersOttawa.com Matthew Littzen, Underwriter

lender that cares, First National

is on my team.”

“They are continually supporting us and working to help us succeed and I respect and trust them very much.”

At First National, we’ve spent the last 25 years proudly teaming up with brokers to help them build successful businesses. And we will continue that commitment for the next 25.

Behind the scenes

35852 FN25ad Jeff11 CMP Ev2.indd 1 08-17_News.indd

Thank you mortgage brokers for 25 years of shared success.

Ontario Mortgage Brokerage License No. 10514

2013-09-061:06:06 12:16PM PM 27/11/2013

MARKET MATTERS / PRODUCT ROUNDUP

PRODUCT NEWS AND INDUSTRY ANNOUNCEMENTS A bite-sized guide to the industry’s newest products and appointments as they come down the channel

WHO: CLOSINGCOSTS.CA WHAT: A “RATE SITE” FOR CLOSING COSTS KEY FEATURES: • • •

Closing costs – which include home inspection fees, legal fees and various taxes – add up to 1.5-4.0 per cent of the purchase price of a home ClosingCosts.ca allows homebuyers to accurately calculate those closing costs, compare quotes from home inspectors and real estate lawyers, and connect with the service providers directly.

Site mirrors Ratehub.ca and other rate sites now focused on mortgage broker offerings

They say: “We kept mortgages out of it purposefully so mortgage brokers could use it without fearing that they will lose clients,” says CEO Alyssa Richard. “We respect the fact that they don’t want to send them to RateHub. We’ve had the site up and running for a while now, and the brokers and real estate agents who have been using it love it.”

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12 | DECEMBER 2013

08-17_News.indd 12

27/11/2013 1:50:07 PM

CHIP

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

CHIP-CMP-Full_Sal13 & Jim-ART.indd 1 08-17_News.indd

12-09-19 4:08 PM PM 27/11/2013 1:06:15

MARKET MATTERS / BROKER ADVICE

What would you do if you knew you could not fail? More importantly, what would you do, what would you have and who would you become ?

PERSISTENT

PROFESSIONALISM ... 2014 What would you do if you knew you could not fail?

What would you do, what would you have and who would you become if success was certain? Industry trainer Doren Aldana asks those questions and here are his answers.

If you’re anything like me, it’s questions like these that inspire you to rise above your fear of failure and dream BIGGER than you’ve ever dreamed before.

Suddenly, a whole new world of possibility opens up to you – a world where you are the star and your greatest passions, dreams and goals are fulfilled. What if your dreams could be more than just wishful thinking? What if they could become your reality? The truth is, if you harness the power of persistence in your life your dreams are not only possible, they’re probable.

WHY PEOPLE FAIL

I once heard a statistic that 90 per cent of all failure comes from quitting. Thomas Edison affirmed this when he said, “Many of life’s failures are people who did not realize how close they were to success when they gave up.” If it weren’t for Mr. Edison’s dogged determination to keep going after thousands of failed attempts at creating the incandescent light bulb, who knows, we might still be lighting our homes with candles. Perhaps this is why Dale Carnegie, lecturer, writer and developer of self-improvement courses, noted that, “Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.” In other words, persistence beats resistance. Quitters never win and winners never quit. If you want to increase your chances of success you must have a dream worth fighting for and then resolve to never, ever, ever give up.

14 | DECEMBER 2013

08-17_News.indd 14

27/11/2013 1:06:23 PM

WHY MORTGAGE ARCHITECTS? I joined Mortgage Architects because of the company’s leadership, broker network and notable success in the industry!

I have been very fortunate to work with Albert Collu, our president, for the past few years. He is a very dedicated and approachable leader who has great vision, passion and drive to bring any business to the next level.

MA has a great group of like-minded professionals who have made mortgages part of their daily lives. It is one of the fastest growing, successful broker networks. I am glad to be part of their success.

That’s why,

CHRISTINEXU Mortgage Broker

Visit JOINMA.ca today to learn more.

JOINMA.ca /contact

© Copyright 2013, Mor tgage Architects Inc., All rights reserved.

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MARKET MATTERS / BROKER ADVICE

3 P’S OF PERSISTENCE So, how do we keep on keeping on when the going gets tough? Let me give you my three P’s of Persistence to help you become unstoppable:

P P P

PASSION PLAN POSITIVE

#1: PASSION To overcome life’s inevitable obstacles you must have an unwavering, deeply rooted desire to make your dream a reality. This is what I call your Magnificent Obsession -- something so important and meaningful that it’s worth giving your entire life to! It’s not just about getting more stuff – the fancy car, the big house, the fat bank account, etc. It’s about who you will become and the legacy you will leave. Jim Rohn, America’s foremost business philosopher, put it this way, “The major reason for setting a goal is for what it makes of you to accomplish it. What it makes of you will always be the far greater value than what you get.” Now that’s a passion worth pursuing!

#2: PLAN As the old saying goes, “People don’t plan to fail they simply fail to plan.” Without an effective action plan you’re like a blindfolded archer; you know the target is out there somewhere but you just can’t seem to hit it. If you’d like to bypass all the trouble and struggle of trial and error then you’ll want to model other people’s success formulas. One of my favourite mottos is “Never Invent, Always Improve!”

Why reinvent the wheel when someone else has already done the dirty work for you? So, start off your planning process by asking yourself the following two questions: a) Who has already accomplished what I want to accomplish? b) How can I model their success formula?

Conduct interviews, read books, attend seminars — do whatever it takes to get your success blueprint mapped out.

Once you have your basic plan in place, the next step is to take your big dream and break it down into smaller bite-sized chunks with annual, quarterly, monthly and weekly milestones or goals. A goal is simply a dream with a deadline attached. Regardless of how unrealistic or audacious your dream might seem right now, with consistent persistent action compounded over time you can make the impossible possible.

#3: POSITIVE ATTITUDE As you journey towards success you will be confronted with inevitable problems and obstacles. How you respond to these challenges will determine your degree of success or failure. Successful people throughout the ages have learned to adopt a positive attitude in the face of adversity. They don’t see obstacles, they see stepping stones to become the best they can be. They don’t see failure, they just see temporary setbacks and an opportunity to start again more intelligently. And thus, they forge forward like a perpetual motion machine, undeterred by anything in their path.

As you journey towards success you will be confronted with inevitable problems and obstacles.

How you respond to these challenges will determine your degree of success or failure CONCLUSION With a relentless passion to see your dreams realized, a solid plan and a positive attitude, your success is not only possible, it’s probable! In closing, let me leave you with a quote from Calvin Coolidge, the 30th president of the United States: “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.

The slogan ‘Press On’ has solved and always will solve the problems of the human race.”

C

t 4 t

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MBN_

FIXABLE FAUX PAS BROKER MISTAKES TO AVOID B20 BOTTLENECK GUIDELINE GAMESMANSHIP

SPECIAL GUIDE

JULIE DICKSON OSFI ON B20

ALTERNA T IVE

LENDING GUIDE A new b roker ap proach fo ran

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GUIDE / CONTENTS

2 Common broker submission mistakes... that are easily fixed There are several mistakes brokers are making with their growing number of alternative lending files. The good news, accoriding to Eclipse – MCAP’s alternative lender -- is that so many of them are fixable.

6 | Julie Dickson on B20 Brokers may be waiting with baited breath for OSFI to drop the other shoe but one can hope, at least, that the organization is content to merely kick rocks 8 | Post-B20: What Are You Doing to Manage?

At Optimum Mortgage, they’ve had a year to work through the requirements of B20 and the process hasn’t been as onerous as feared

12

14 | More pie, please Mortgage Alliance’s newest partnership aims to earn its brokers a bigger piece of the alternative lending pie

8

12 | Broker beef: Alternative lenders struggling to meet demand?

Mortgage rules have tightened and, as a result, alternative lenders are inundated with applications. Are they keeping up with demand?

Brokers want to know

Twitter.com/ CMPmagazine Like Us on Facebook Canadian Mortgage Professional

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GUIDE / COSTLY MISTAKES

COMMON BROKER

MISTAKES THAT ARE EASILY FIXED

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GUIDE / COSTLY MISTAKES

There are several mistakes brokers are making with an expanding number of alternative lending files. The good news, according to Eclipse – MCAP’s alternative lender – is so many of them are fixable.

We’re just over a year into the guideline changes that required stricter underwriting on all residential mortgages offered by federally regulated lenders.

The purpose of the new rules was to ensure the Canadian mortgage industry would avoid bubbling over and having a detrimental impact on the economy. Or, to put it more bluntly, to ensure the Canadian housing market continues to steer clear of a U.S.-style implosion.

The rule changes, nonetheless, have made it more difficult for buyers to obtain mortgages.

As an example, business-for-self applicants have seen their supporting documentation around income and debt-servicing ratios take on greater importance in lender decision making. More stringent guidelines have also been placed on conventional mortgage qualification, rental program verification, cash-back options, down payments and credit beacon scores.

It’s a new reality alternative lenders have been quick to pick up on.

“We’ve always believed in responsible lending so it’s business as usual,” reads one lender’s analysis of the new, more-stringent underwriting. “ As a critical stakeholder and trusted business partner, mortgage brokers will most likely have to provide more information for self-employed clients than in the

past in order to confirm that the income being used to qualify the mortgage is both reasonable and sustainable.

“As a lender, we need to work together with our referring brokers to conduct increased due diligence in order to ensure that we both know our customers and the clients you refer have the willingness and capacity to honour their mortgage obligations.”

But any corresponding increase in business for alternative lenders has come with some challenges as brokers grapple with what exactly they need to do to get those deals across the line. Here, courtesy of

W

As a critical stakeholder and trusted business partner, mortgage brokers will most likely have to provide more information for selfemployed clients than in the past

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GUIDE / COSTLY MISTAKES

ECLIPSE’S DEAL RUN: MCAP’s Eclipse, is a list of easily fixable but common broker mistakes that could mean the difference between earning an underwriter approval or rejection on your next alternative deal.

1

Payout penalty on an existing mortgage not verified (end result — shortfall at funding)

2

No confirmation of who is currently on title to property.

3

No verification of line of credit or second mortgage prior to submission.

4

Broker submits deal under own name, not principal broker registered with lender

5

Failure to confirm up front if business is registered or if there is a valid licence

No verification of property details (condition of home, age of home, whether or not it required updates; for example, a holdback may be required)

6

7

Broker does not reconcile all of the liabilities against credit report

Broker takes the value of the property from 8 the applicant at face value without doing any research

9

No confirmation of any liens on property that may need to be postponed or paid out

10

No verification if property taxes and/or existing mortgage are current and up to date

Broker has not verified details of employment such as guaranteed hours, whether contract or permanent, or on employment probation

11

12

We all know that time is money! Deal Run can provide timely answers to save the broker time.

At Deal Run depending on the scenario we can provide a quick “go” or “no” answer. Example: Can Eclipse entertain a deal where there is a sole client who is a beacon reject? Unfortunately, no. We do have a minimum beacon score requirement.

HOW DEAL RUN HELPS BROKERS:

Again Deal Run will save the broker time by reviewing details up front and giving them a quick GO or NO answer. GO = submit for review by an underwriter and NO = the deal does not fit our lending guidelines.

Deal Run will save the broker frustration – if they know we can’t proceed for whatever reason, then they haven’t had to wait to hear back from an underwriter after submitting.

Deal Run assists with setting expectations around documentation requirements, conditions and pricing.

Deal Run assists with packaging the deal for underwriter review. For example: What details are important to include in the submission notes for underwriter review.

Avoid this mistake: Broker didn’t verify property details (condition of home, age of home, whether or not it required updates; for example, a holdback may be required)

Address or telephone number of applicant incorrect

Insufficient details to the lender as to the reasons for the current credit challenges so underwriter can understand the current situation

13

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GUIDE / COSTLY MISTAKES

A SENSE OF...

URGENCY

As a broker, you’re under a lot of pressure. You have to respond to the needs of your clients at a moment’s notice. At Optimum Mortgage, we are dedicated to keeping our brokers informed of the status of their deal every step along the way. We guarantee you a response time within 24 hours of submitting your deal.

And for those times where you just can’t wait, pick up the phone and give us a call. We have a no voicemail policy at our underwriting centre and would be happy to help.

PH 1.866.441.3775 www.OptimumMortgage.ca

YOUR SENSIBLE LENDING PARTNER

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GUIDE / OSFI

JULIE DICKSON TALKS B20 TO BROKERS Brokers are still waiting for further B20 tightening, but in a speech to brokers, the OSFI head may now be allaying their concerns instead of adding to them Mention Julie Dickson’s name and the brows of many brokers furrow. The possibility that the head of the Office of the Superintendent of Financial Institutions will further tighten underwriting at federally regulated lenders continues to loom. That equates to a threat for mortgage professionals, who remain leery of more changes.

So, in September, when Dickson appeared to float the idea of more B20 guidelines because of low interest rates, brokers worried that move would scuttle market rebound.

“The longer it (low interest rates) goes on, the more people can start to think this is normal and it’s not normal; it’s very, very far from normal,” said Dickson. “I think that’s the big concern that I would have right now and I think there are many others who feel the same way.”

As Dickson sees it, a major priority for Ottawa is ensuring the economy stabilizes without the interference of rate stimulus.

“I think the concern is simply when a flood of money flows into an industry, there can be impacts that we, as a prudential supervisor, would not find helpful,” Dickson said at the Insurance Bureau of Canada event in the fall. “That’s in part why unwinding the monetary stimulus and getting back to a more normal situation is so important, because the unintended consequences of the impacts of this could be quite important.”

M

As for when and if OSFI will intervene in the housing market, Dickson reiterated the same sentiment she expressed in May of this year: That OSFI is still monitoring the housing market and willing to step in if it feels compelled to.

“We had looked at whether changes to B20 were necessary (and) that was before the summer; we concluded that we did not need to make any changes to B20,” she said. “At this time, we are spending a lot of time monitoring what is going on and we are also collecting more data from banks.

“If we do decide to make any changes to B20, of course, we’ll have public consultations, which is what we always do whenever we change any sort of guideline.”

DICKSON TO BROKERS: In November, Dickson finally spoke directly to brokers at the Mortgage Forum in Toronto. Here are some highlights from her speech: Today, we can read articles about the market being in a “soft landing,” or more ominously, “teetering precariously.” Over the past months, a range of observers have expressed a variety of views. The Organization for Economic Cooperation and Development (OECD) found Canada’s housing prices to be overvalued on the basis of two gauges: price-toincome, and price-to-rent. Both The Economist and the International Monetary Fund (IMF) concurred,

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GUIDE / OSFI

an unnecessary slowdown in lending by banks.

OSFI’s role is more about prevention, and ensuring that banks are prepared for the unexpected.

ON FOLLOWING THE BASICS: The basics are not rocket science. But time and again, it is by ignoring the basics that banks get into trouble. Indeed, while many observers have suggested the global financial crisis was caused by complex products and banks going beyond traditional lending, in fact major problems within traditional lending were a source of the problem — namely, unsound mortgage underwriting.

ON STRESS TESTS:

Julie Dickson

with the IMF also noting that residential investment as a share of GDP was at a two-decade high, and that house completions had outpaced household formation for the past decade and a half.

Furthermore, the household debt-to-income ratio in Canada has surged over the last decade, making the economy vulnerable to adverse shocks.

Beyond Guideline B20, a major OSFI focus has been on stress testing and thinking about worst-case scenarios. Many bank regulators around the world are doing the same thing. OSFI asks banks to run stress tests that provide expected results for a number of “what if” questions, including the likely impacts of overvalued markets, or a serious economic decline in Canada, as has occurred in some other countries. OSFI and the Bank of Canada also conduct macro stress tests to explore the possible implications of severe adverse economic scenarios, including episodes of significant housing price corrections. Such tests always cover a range of possibilities, given, as I noted previously, that different opinions always exist on where the market is, and where it is headed.

ON THE DIFFICULTY OF DETERMINING A BUBBLE SITUATION:

ON CONSIDERING THE CUSTOMER MORE SO THAN THE BANKS:

As a bank regulator, OSFI does study the market — but we do not volunteer opinions on whether a bubble exists. This is primarily because history has shown it is difficult to determine whether a bubble in any market exists, what the size of that bubble might be, or the consequences of it bursting. The dot.com bubble, for example, was easy to identify in hindsight, but few saw it coming. Usually only a few people accurately predict bubbles; most do not — and if someone was able to predict a bubble accurately in the past, this, unfortunately, is no guarantee of future performance.

Consumers must be considered here because, while banks may be able to withstand shocks, consumers may not. Banks have to set aside reserves for unexpected losses and are typically far better situated to deal with shocks than consumers — who may be highly indebted and therefore particularly vulnerable to significant increases in interest rates or unemployment.

ON THE DANGERS OF ADVISING ON A POTENTIAL BUBBLE SITUATION: Because bubbles are so difficult to identify, by taking a position one way or the other, OSFI could either provide positive reinforcement to banks to lend more (which could make a bubble bigger) or create

ON THE FUTURE: Before the summer, OSFI had looked at whether any changes to Guideline B20 were necessary. We decided that no changes were needed at that time.

However, we continue to closely monitor real estate lending, including seeking additional information to better understand what major financial institutions are doing. Any future changes to our guidelines would involve public consultations with CAAMP and other stakeholders.

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POST-B20:

HOW TO KEEP THE GEARS TURNING

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GUIDE / OPTIMUM

W

Optimum Mortgage has had a year to work through the requirements of B20, writes VP Lester Shore, and while it has brought significant change, it is by no means a deal killer WHAT SHOULD YOU EXPECT FROM YOUR LENDER POST-B20?

During my visits to broker offices this past year, I’ve heard a lot of comments about the challenges you’ve faced when dealing with lenders – “A” lenders in particular. Hopefully, you recognize the difference between a lender who simply wants too much detail and a lender who asks for the appropriate amount of information to ensure the deal makes sense. To us at Optimum, the deals that make sense are deals that will improve the client’s financial situation; whether it is upgrading their home, buying a smaller home, or consolidating debt to reduce monthly payments. All lenders require more documentation to verify that there is a reasonable chance of repayment and to ensure your client is not misrepresenting their financial situation.

So yes, deals are harder to get done. Is it bad?

No, I don’t think so. We all have a responsibility to act in the client’s best interest and this additional information serves to ensure that the client’s best interests are being met.

WHAT CAN YOU DO TO MANAGE THESE CHANGES? Because of tightened lending rules, it has become increasingly more important for brokers to consider clients who do not match the “A” profile. However, packaging an alternative lending deal differs greatly from a typical A mortgage. Here are some tips to ensure your entry into the alternative lending market is painless:

KNOW YOUR CLIENT To ensure that you are working in your client’s best interest, make sure you really know who your client is. Often, delivering on what a client wants is not nearly as important as getting them what they need.

As a professional, you can guide the initial interview so that you both arrive at the same conclusions together. Providing your lender with as much upfront detail as possible will help to ensure that your deal’s lifecycle is seamless — meaning more approvals and less wasted time.

KNOW YOUR LENDER As professionals, it is important to know how lenders differ from one another and what area each lender specializes in. Any alternative lender can easily compete on rates and fees; but as many of you know, closing an alternative lending deal shouldn’t only be about the rate. Other factors to consider when choosing a lending partner include: whether or not they have reasonable conditions, a common sense approach, affordable prepayment options, mortgage portability/blend and extend options, and most importantly, service and flexibility.

Look for an alternative lender that will work with you to find a mortgage solution that meets your client’s personal needs. Your alternative lending deal should also provide your client with stepping stones to help them get back into the “A” market.

Ultimately, the alternative mortgage solution that your lender provides should be as unique as the client you serve.

Lean on Your Business Development Manager (BDM) and Underwriter Your BDM and underwriter see alternative lending deals every day. They are your best resource

10 | ALTERNATIVE LENDING GUIDE DECEMBER 2013

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GUIDE / OPTIMUM

for packaging, rate determination, and any other questions you have. It’s important to develop a strong relationship with your lending team and become well versed in their products and policies.

This will allow you to identify the solutions that are best suited for your client.

We’re all aware of the fact that close/efficiency ratios are becoming more and more important in the broker/lender relationship. Therefore, by combining your knowledge and experience with that of your BDM and/or underwriter, you can achieve those close/efficiency ratios – meaning more income for you.

USE YOUR DEAL’S NOTES Your deal’s notes serve as important “building blocks” for your lender. Alternative lending deals can be won or lost because of the notes section, so notes should be used to tell your client’s whole story.

As a general rule, telling it “as it is” is always the best approach.

Just remember that your notes will help you and your client avoid a CRISIS:

As a result of regulatory changes, more and more brokers are now entering the alternative market. By guiding your client, working with your lender, and packaging deals properly, you can put yourself ahead of that curve

C.R.I.S.I.S. CREDIT – identify any credit issues and how they are being resolved RISK – recognize the weaknesses and mitigate them INCOME – note how long your client has been employed in his or her current position.

SECURITY – inform your lender of any security issues related to the property.

IDENTIFY – provide your contact information so the lender can easily reach you.

STORY – answer why the borrower is coming to you, what their unique circumstances are, what strategy you are using to get them into the “A” market, and how long your exit strategy will take.

GUIDE YOUR CLIENT Because of online resources, the mortgage consumer is more educated on the mortgage industry than they have ever been in the past. They are aware of the A rates that are out there. However, they often don’t understand why these lower rates aren’t accessible to them and what industry terms, such as LTV, stated income, and TDSR mean. As a broker, you must become their trusted advisor by explaining to them why they don’t currently fit in the A market, but then provide them with a game plan that will get them back on track to qualify for the lower rates at the earliest opportunity.

As a result of regulatory changes, more and more brokers are now entering the alternative market. By guiding your client, working with your lender and packaging deals properly, you can put yourself ahead of that curve. Manage your clients’ 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 will come increased referrals, more repeat business, significantly improved close/efficiency ratios and, probably most important of all, reduced stress. Your experience will be smoother, hassle-free and faster.

Lester Shore

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GUIDE / ALTERNATIVE GROWING PAINS

BROKER QUESTION: ARE ALTERNATIVE LENDERS STRUGGLING TO MEET DEMAND? Mortgage rules have tightened and, as a result, some alternative lenders are inundated with applications. Are they keeping up with demand?

Brokers want to know Alternative lending has become an attractive and popular choice for brokers in the wake of increased restrictions in the A sphere. But some report having to deal with growing pains as Alt. lenders struggle to keep up with demand.

“Some definitely need to work on their infrastructure because the level of service is not what it needs to be,” Alan Gilman of Capital Mortgages tells CMP. “Especially with B-deals, time is of the essence and to be in a position and not get the answers and the paperwork you need in a timely manner is difficult.”

That said, one financial analyst anticipates that alternative lenders will experience continued demand in 2014 for their more flexible wares.

“Alt-A lenders should continue to see enviable

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GUIDE / ALTERNATIVE GROWING PAINS

NON-PRIME DEALS On average, 18.6 per cent of deals are non-prime

52%

of brokers say 0-10% of their deals are non-prime

27%

of brokers say 11-25% of their deals are non-prime

16%

of brokers say 26-50% of their deals are non-prime

5%

of brokers say 51-100% of their deals are non-prime

growth,” National Bank Financial analyst Shubha Khan, told reporters in mid-November. “We believe that near-term housing market risks have moderated, particularly in view of more dovish comments on interest rate policy from the Bank of Canada.”

And as they grow, alternative lenders will need to adapt to the surge of business being sent their way.

For his part, one broker has encountered a unique problem with one particular lender.

“I was dealing with one institutional alternative lender on a condo building and I guess because of their increase in business they couldn’t lend on (any more units in that) building – they had too many units and there was increased risk if something went wrong with management or something,” Jonathan Tillger of Dominion Lending Centres Mortgage Village says. “They have a set percentage they will go to and even if the client fits their guidelines they won’t (fund) it.”

Very, very few are proactive; they’re more reactive so they haven’t prepared themselves.

If they can’t service us quickly, someone else will Alan Gilman Alternative lenders may just be catching up to the increase in demand for their services, still brokers would like all of them to be more forward-thinking.

“Very, very few are proactive; they’re more reactive so they haven’t prepared themselves,” Gilman says. “If they can’t service us quickly, someone else will.”

B20 is now a fact of life for brokers, but also their lenders, and there is a lot more due diligence being done. The net result has been an increase in demand for supporting documents from clients.

The underwriting guidelines for residential mortgages that OSFI, the regulator of all federally regulated Canadian Financial Institutions, imposed last year have challenged the industry. These changes were created at the insistence of the Financial Stability Board, the financial oversight organization of all G20 nations. Their creation is a direct result of the financial crisis caused by lax mortgage lending practices in the States.

The result of compliance with B20? Better quality borrowers being brought to lenders by mortgage brokers, and delinquency rates as low as they have ever been.

It is essential brokers get a good overview of the situation: the components of B20 in general terms and what it means to lenders, what it means to them, the brokers, and, then, how lenders are responding, suggests Lester Shore at Optimum Mortgage.

40%

of people say their number of non-prime deals has gone up since last year

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GUIDE / PRIVATE INSERT

MORE PIE, PLEASE

Broker networks are increasingly working to win their members a bigger piece of the private lending pie

T

That pie analogy may no longer apply to subprime lending as brokers increasingly view that niche market as a staple and no longer the icing on the cake of A and Alt-A business. So, in fact, when Mortgage Alliance announced a partnership with Personal Lending Solutions (PLS) aimed at making that lending more accessible to brokers, it wasn’t so much winning them a bigger slice of the pie but putting more bread and butter on their table.

“It’s part of our long-term strategic plan to arm our brokers with the most effective technology, products and brand to help them build profitable businesses with enduring value,” says Michael Beckette, president and CEO at Mortgage Alliance.

“That’s why Personal Lending Solutions fits our mission so well. The unobtainable can become a reality for our customers using this dynamic

portfolio of competitively priced private and institutional lending solutions.”

PLS provides a wealth of alternative lending products, including first and second mortgages, bridge financing, equity lending, forecolusures, construction financing and other non-resident lending.

With private lending becoming a more popular solution for providing mortgages, the partnership will provide Mortgage Alliance brokers their own dedicated team to help facilitate the process. It’s not dissimilar from a growing number of programs at other networks and large brokerages.

“The importance of private lending market is expected to become even more significant with current regulations in place,” Ty Naemsch, president of Personal Lending Solutions tells CMP Magazine.

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GUIDE / PRIVATE INSERT

THREE QUESTIONS Three questions with Ty Naemsch, president of Personal Lending Solutions

CMP: What advantage do you see this giving Mortgage Alliance brokers?

“PLS arms Mortgage Alliance with the tools needed to be leaders in the changing Canadian mortgage landscape.”

And this announcement could not have come at a more opportune time from Mortgage Alliance brokers; as several industry players have recently complained about the wait times required when dealing with some B lenders and privates “Mortgage Alliance brokers are well positioned to offer our services to an important and growing demographic,” says Naemsch. “In turn, we’ll provide them with timely communication from a senior underwriter for all deal inquiries.”

Naemsch, for his part, is no stranger to the B side of lending having spent 12 years with a Schedule A player specializing in alternative deals.

Naemsch: Personal Lending Solutions is a game changer for Mortgage Alliance agents. We bring institutional-quality service Canada-wide to the private lending space.

Firstly there are no co-broker fees charged to agents. Personal Lending Solutions is a partner of Mortgage Alliance and we are there to provide the best private lending solutions for clients.

We received preferred pricing with the mortgage investment companies based on the Canada-wide volumes. This ensures Mortgage Alliance agents receive the most competitive approvals for their clients.

CMP: Privates are seeing an increase in volume across the country and several brokers are complaining about lenders not being able to keep up with demand. Will this partnership ensure MAC brokers have priority access to products?

Naemsch: The significant volumes and multiple partners of PLS Canada-wide brings the accountability and professionalism to Mortgage Alliance agents from the private lenders. The volumes ensure the agents will receive the best service and pricing Canadawide.

CMP: Do you see this partnership becoming an effective model going forward?

Naemsch: We entered this partnership to solve a growing need in mortgage lending today.

The concept is dynamic and will be extremely effective as everybody wins. The private lenders received streamlined applications that fit their lending criteria, the Mortgage Alliance agents accountability and professionalism with advice and private lending solutions.

Mortgage Alliance should be highly credited for recognizing the need for one of the largest growing areas in the Canadian mortgage sector and giving their agents the tools to access Multiple MIC’s via Personal Lending Solutions as a simplified one-stop shop.

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GUIDE / DOUBLE CHECK

A BROKER’S DOCUMENT CHECKLIST

by Dustan Woodhouse

CHARTERED BANKS

Mandatory documents: • Two most recent years of Notice of Assessments to confirm there are no income taxes owing and to test reasonability of reported income (in most cases stated income of over $100,000 will not be approved) • Two most recent years of accountant-prepared T1 General Tax returns to confirm sources of income Additional documents that may be requested: • Business licence covering two years • Notice of Articles, to confirm shareholder status • Two most recent years of accountant-prepared business financial statements • Six to 12 months corporate bank statements to demonstrate cash flow • The maximum mortgage offered by chartered banks is $1 million, and lenders may require a 35-per-cent down from the borrower’s own resources.

CREDIT UNIONS

Mandatory: • Two most recent years of Notice of Assessment Additional documents: • T1 General Tax Returns covering two most recent years • Business license covering two years • Notice of Articles • Accountant-prepared business financial statements covering two years • Corporate bank statements covering 6 -12 months • Because of increased demand since the banks tightened lending, Woodhouse says, the maximum mortgage offered by most credit unions is $500,000 and lenders typically require a minimum 35-per-cent down from the borrower’s own sources.

• MBS (non-bank) lenders Mandatory documents: • Notice of Assessment for two most recent years • T1 General Tax returns for two most recent years • Business license for two years Additional documents that may be requested • Notice of Articles • Accountant-prepared business financial statements for two years • Corporate banks statements for 6-12 months

INSURED BUSINESSES

Mandatory requirements: • Minimum 10 percent down. 5 per cent down payment from personal resources, additional 5 per cent can be gifted with one insurer, not all three.

• Notice of Assessment for the two most recent years, to confirm there are not taxes owed and to test reasonability of income exception being requested (in most cases stated income of over $100,000 will not be approved) • T1 General Tax returns for last two years • Business License covering two years • Notice of Articles • Accountant-prepared business financial statements • Corporate bank statements for 6-12 months

16 | ALTERNATIVE LENDING GUIDE DECEMBER 2013

15-OBC_Radius.indd 16

27/11/2013 1:36:14 PM

Starting at

4.75%

FINALLY — a low beacon option A low beacon option (500 – 575) starting at 4.75% interest.

All Eclipse 1st mortgage deals will count towards partnership status and volume bonus.

MCAP Financial Corporation Ontario Mortgage Brokerage #10600 Ontario Mortgage Administrator #11790

15-OBC_Radius.indd 17

Contact Eclipse lending at: 1 866 260 D-RUN (3786)

27/11/2013 1:36:30 PM

SHARING THE WEALTH

WITH ALL IPAD SUBSCRIBERS THIS HOLIDAY SEASON! Subscribe to the iPad® app & receive a bonus gift on us!

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27/11/2013 21/10/2013 1:36:37 1:26:32PM PM

Reach over 90% of the broker community Every day of every month CMP and Mortgagebrokernews.ca delivers top quality, relevant content that independent mortgage broker professionals use to improve their business - no filler - no fluff.

Maximize your marketing ROI with the leading independent voice of the mortgage brokering industry.

ContaCt: trevor Biggs 416 644 8740 x 236 trevor.biggs@kmimedia.ca

MBN_No Fluff_Full 17 Pg AD.indd 1 08-17_News.indd

01/11/2012 27/11/2013 1:21:43 1:06:42 PM PM

NATIONAL PICTURE AT A GLANCE

This month’s roundup looks at the most recent data on residential new and resale listings The Canadian Real Estate Association (CREA) released its monthly numbers for all of Canada and – true to its forecast last month – home sales dropped in October 2013.

MLS home sales fell 3.2 per cent month-overmonth, returning activity back to where it stood in the beginning of summer prior to a surge of homebuyers looking to cash in before impending rate hikes.

“October’s lower activity provides early evidence confirming that sales in the later summer and early fall were boosted by homebuyers with preapproved mortgages at lower than current interest rates jumping into the market before their preapprovals expired,” said Gregory Klump, CREA’s chief economist. “Now that interest rates appear to be going nowhere fast, sales activity in the near term may be held in check by homebuyers who are in less of a hurry to purchase.

CREA sees this the drop-off in sales as a sign that mortgage regulations are having the desired effect, though the association is aware that Finance Minister Jim Flaherty will likely keep a close eye on the market.

“While the finance minister will no doubt continue to keep a close eye on Canadian housing markets for signs of overheating as interest rates remain low, October sales results may provide him with reassurance that tightened mortgage regulations and lending guidelines are working as intended.”

However, the seasonally adjusted numbers for October came in 0.9 per cent above the average October sales over the past decade. Sales also shot up, year-over-year, in more than half of the local markets; led by Greater Vancouver, Calgary,

115.4 per cent POWELL RIVER

100

per cent

57.7 per cent

SOUTH CENTRAL ALBERTA

LLOYDMINSTER (SASKATCHEWAN)

Edmonton and the GTA. According to CREA president Laura Leyser, the majority of markets are chugging along at a healthy pace.

“A majority of local markets across the country are still seeing a healthy balance between buyers and sellers coupled with modest price growth,” she said. “Even so, there are some markets in the Prairies and in parts of southwestern Ontario where competition among buyers has increased, while parts of Quebec and some areas in the Maritimes have been seeing increasing competition among sellers.

18 | NOVEMBER 2013

18-19_Stats.indd 18

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SALES ACTIVITY BY PROVINCE British Columbia: 26.5 per cent Source: CREA

Alberta:

16.1 per cent

TOP CITIES

Sales Activity

Saskatchewan: 3.2 per cent

Manitoba:

4.7 per cent

(year-over-year percentage change)

Ontario:

7.8 per cent

Quebec:

-6.2 per cent

New Brunswick: -12.2 per cent

Nova Scotia: -9.7 per cent

33.3 per cent

Prince Edward Island: -16.2 per cent

THOMPSON

5.8

34.4 per cent

STER WAN)

per cent

Newfoundland and Labrador:

60

per cent

5.6 per cent

YARMOUTH

Northwest Territories:

FREDERICTON

PARRY SOUND

10 per cent

Yukon:

-19.2 per cent

The broker’s resource for Real Equity Lending for Homeowners

British Columbia

Greg Kakuno 604.329.6067

gkakuno@capitaldirect.ca

18-19_Stats.indd 19

Alberta Paula Hutton 403.278.6200

phutton@capitaldirect.ca

Ontario

Hugh Doggett 905.299.6951

hdoggett@capitaldirect.ca

Atlantic

Trevor Bowie 902.894.7700

NOVEMBER 2013 | 19

tbowie@capitaldirect.ca

27/11/2013 1:07:26 PM

FEATURE / BROKER LIFESTYLE

A BREAKDOWN OF THE A V

BROKER L I Keeping up with the Joneses can be difficult; especially when each and every one of them is your peer. So how do you stack up against the average broker?

Justin da Rosa finds out

20 | DECEMBER 2013

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MORTGAGEBROKERNEWS.CA

A VERAGE

L IFESTYLE This isn’t just a first for us ... it’s a first for the industry. We all live a unique lifestyle; the way we conduct business, the leisure activities we partake in and – always a sensitive topic – how much of our hardearned money we choose to squirrel away for a rainy or, in the best cases, sunny day.

So here it is. We’ve challenged the broker industry to share these nitty-gritty details and much more.

We tried to assemble as comprehensive a view as possible and, without further ado, present CMP’s first ever Lifestyle Survey.

DECEMBER 2013 | 21

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FEATURE / BROKERS LIFESTYLE

SPONSOR

METHODOLOGY

SCORE-UP INC.

TAKES CREDIT EDUCATION TO THE NEXT LEVEL Score-Up Inc. takes credit education and credit maintenance to the next level.

One thing that all Canadians have in common is a file in each of their names at both Equifax and TransUnion. While these companies have been in existence as far back as the 1920s, their product has taken on even more importance as they collect data, apply algorithms and churn out credit scores.

Today those scores not only affect whether your client gets approved for a loan or a credit card, they are also key determinants in consumers opening new bank accounts, buying cell phones, applying for home or auto Insurance, and even, in some instances, gaining employment.

This is the reason that Score-Up Inc. is here.

As a credit education company, we analyze the credit report and provide a list of recommendations that will have a positive impact on your client’s credit score. As a result of following the recommendations, clients can start to see a significant increase in their credit score.

Clients can also continue to control and maintain good credit habits once enrolled in the program.

How is this possible? The answer is through Score-Up Inc.’s proprietary Point Deduction Technology (PDT), which is a series of algorithms that closely resemble the Version 9 algorithms used by credit bureaus. As a result, Score-Up Inc. is able to analyze the credit report and produce a set of recommendations that will have a positive impact on their credit score. These recommendations are not to dispute charges or accounts, but they do make suggestions on those aspects that affect the credit score. Score-Up Inc. offers a 24/7 gateway for consumers to view the progress of their file. The target score and money simulators take the guesswork out of credit decisions. Score-Up is the bridge between mortgage brokers and borrowers who are looking for the best deal possible.

– Alan Hoffman, VP Sales

We put together a comprehensive list of questions with the intent of figuring out what mix of variables best epitomizes the average broker.

To do that, we had to ask some sensitive questions pertaining to salary, finances and work/life balance; but you brokers were up for the challenge.

Of course, we asked some more personal ones as well – such as the size of each advisor’s family and choice of vehicle.

We received several hundred responses from brokers across Canada.

Many work under the banner of a broker network, although several were independents. There was a proportionate share of females and males, and those polled represent all levels of work experience.

Some of the conclusions may come as a surprise – they certainly did to us – but our wide sample pool has formed the most comprehensive snapshot of the Canadian broker lifestyle to date.

THE AVERAGE BROKER

We’ve collected the responses, crunched the data and assembled the mortgage industry’s equivalent to Frankenstein’s monster… minus the grunting and maniacal outbursts, we hope. Accumulated from the plethora of individual participants’ personalities comes the average mortgage broker. Does this resemble you?

In very general terms, he or she – we purposely left that question off the survey –works fulltime in Toronto, Ont., under the banner of a broker network and has eight years of experience. The average Joe orJosephine spends seven hours a day in the office, both during the week and on some weekends. And, by the way, he or she is pulling in a cool $108,000 a year.

Preferring comfort to stuffiness, the average advisor prefers to conduct business in more casual wear as opposed to a business suit.

As a professional who advises clients about one of life’s most important financial decisions, the average mortgage broker is, unsurprisingly, adept at managing personal finances – having stowed away $119,000 in investments and $26,000 into a savings account.

It’s worth noting that this modern-day broker also demonstrates the requisite savvy in securing a personal mortgage, with the average rate 2.2 per cent on a five-year term.

However — and we may want to keep this one on the down-low — the average broker chooses a bank’s mortgage product over a monoline’s.

Of course, education is a high priority. Even after graduating with an undergraduate degree, the average broker continues to focus on professional development through education and training.

On the lighter side, and at the end of a very busy day, the average broker drives a luxury sports utility vehicle home to a house shared with a spouse, two kids and a dog.

And while he or she may work hard, the average broker makes sure to spend time with the family by taking more than four weeks of vacation each year. Lucky dog.

22 | DECEMBER 2013

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MORTGAGEBROKERNEWS.CA

THE AVERAGE EXPERIENCE LEVEL IS 8 YEARS

51 PER CENT OF BROKERS WORK AND LIVE IN ONTARIO

HIGHEST INCOME OF THOSE POLLED IS $2.5 MILLION

91 PER CENT OF BROKERS OWN THEIR OWN HOMES

32 PER CENT OF BROKERS HOLD AN UNDERGRADUATE DEGREE

60 PER CENT OF BROKERS USE SOCIAL MEDIA DAILY

80 PER CENT OF BROKERS ARE MARRIED

59 PER CENT WORK WEEKENDS

DECEMBER 2013 | 23

20-37_Broker Lifestyle Survey.indd 23

27/11/2013 1:55:02 PM

CG_p

FEATURE / BROKER LIFESTYLE

HOW DO MORTGAGE BROKERS STACK UP AGAINST THE COMPETITION? Here are the average salaries of similar roles.

(Source: WowJobs)

DEMOGRAPHICS

FINANCIAL ADVISOR:

$72,421

REAL ESTATE AGENT:

$67,566

FINANCIAL PLANNER:

$66,865

MORTGAGE SPECIALIST:

2%

23% 15% 1.2%

7%

$55,316

51%

0.8%

BANKER:

$52,138 What does being based in Ontario mean in terms of competition?

“Competition is pretty intense in Ontario, especially in the GTA. The most experienced brokers out there have already got themselves established, and they have pumped a lot of money into advertising and marketing themselves.

The banks are a source of competition too because they are much more established in the marketplace, plus they have a wide variety of allocated funds for advertising, as compared to regular brokerages.”

-Merv Wadia, Mortgage Alliance, Toronto, Ont.

2% 2%

PARTICIPANTS REPRESENT

89 DIFFERENT CITIES

VICTORIA: . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 PER CENT VANCOUVER: . . . . . . . . . . . . . . . . . . . . . . . . 6.5 PER CENT EDMONTON: . . . . . . . . . . . . . . . . . . . . . . . . 1.7 PER CENT CALGARY: . . . . . . . . . . . . . . . . . . . . . . . . . . 7 PER CENT REGINA: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 PER CENT WINNIPEG: . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 PER CENT OTTAWA: . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 PER CENT TORONTO: . . . . . . . . . . . . . . . . . . . . . . . . . . 10 PER CENT QUEBEC CITY: . . . . . . . . . . . . . . . . . . . . . . . 0.4 PER CENT ST. JOHN: . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 PER CENT HALIFAX: . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4 PER CENT

24 | DECEMBER 2013

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27/11/2013 1:10:00 PM

CG_partners_ad_CMP_Mary 11/13/13 11:26 AM Page 1

‘‘

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- Mary Putnam Vice President, Sales and Marketing Canada Guaranty

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At Canada Guaranty, we understand that having more options is critical to providing your clients with the best possible opportunity for successful homeownership. We are proud to provide improved choice and greater access to mortgage solutions, available through our growing list of broker-focused lenders.

Across the country, our team is dedicated to serving the needs of today's mortgage and lending professionals. Discover how we can help support your business by contacting a Canada Guaranty regional Account Executive or by visiting our website at: www.canadaguaranty.ca

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20-37_Broker Lifestyle Survey.indd 25

27/11/2013 1:10:06 PM

FEATURE / BROKER LIFESTYLE

WORK LIFE EXPERIENCE:

38%

30%

18%

5%

4%

4%

1%

0-5 years

6-10 years

11-15 years

16-19years

20-25 years

26-35 years

35+ years

AVERAGE EXPERIENCE:

8 YEARS

Do you work weekends?

“I have young children, so it makes it a lot harder to justify working on the weekend. I usually get up between 4:30 and 5 in the morning to get most of the paperwork done during the week. Just like anything in life, you need to have a work-family balance. I love spending time with my family and, for myself, it’s easier to get up early in the morning, knowing that while my wife and kids are sleeping, I can get so much work done in those two or three hours.”

-Ryan Kirwan, HQ Mortgages, Sudbury, Ont. “I sometimes work with real estate agents and I like to be with them when they’re hosting an open house. Aside from that, I also gather all of my contacts for the week on the weekend, so if I’m looking to contact accountants or financial planners, I prefer to keep my schedule as open as possible for generating new business. I’ve developed a system where a lot of my research is done on the weekend.

The wonderful thing about this business is that everyone is an entrepreneur, so you have to do whatever works best for you.”

-Lior Hershkovitz, Mortgage Edge, Richmond Hill, Ont.

MOST EXPERIENCED: 40 YEARS

WORKDAY

AVG. WORKDAY

7.3 HOURS

+

33 PER CENT WORK MORE THAN 8 HOURS PER DAY

9 PER CENT WORK FEWER THAN 5 HOURS PER DAY WORK WEEKENDS

59%

FULL-TIME BROKERS 87%ARE PART-TIME BROKERS 13%ARE

41% per cent work per cent are within a broker 26independent 74 network

26 | DECEMBER 2013

20-37_Broker Lifestyle Survey.indd 26

27/11/2013 1:10:12 PM

21,652 children and youth are well nourished and ready to learn

DominionLendingCentresCanada

20-37_Broker Lifestyle Survey.indd 27

DLCCanadaInc

27/11/2013 1:10:17 PM

FEATURE / BROKER LIFESTYLE

MONEY MATTERS Why do you own rental properties?

“When you deal with pensions, most people who are employed by the government or any large corporation have a pension. If you’re self-employed, there is no pension. So, to create pension and have a passive cash flow down the road, owning rental properties is one of the ways to go, and that’s why I do it. If, for example, you have five or six doors in your working life, not only will you be sitting on a few million dollars in equity, you’ll be sitting on a cash flow in net of taxes of $4,000 to $5,000 per month.”

-Richard Morgan, President, Capital Mortgages, Ottawa, Ont.

AVERAGE INCOME

14 PER CENT

$0-40,000 16 PER CENT

$41,000-$60,000 12 PER CENT

$61,000-$80,000 21 PER CENT

Why do you own your home instead of renting?

“I would rather pay into my own equity than pay someone else’s mortgage. I definitely look at pride of ownership, and being proud of owning a home. I like to do work at home, and I don’t really see the point of doing work on a rental property if you don’t own it. “ -Steve Cochrane, Tusco Canada Mortgages, Ottawa, Ont. Why do you rent your home as opposed to owning it?

“It’s very practical. My family moved from Halifax to Victoria, B.C. over the last five years, and I find it’s more efficient to rent given the uncertainty of the property values. The benefit of renting in this market environment is that you do not have exposure to any potential downside in the real estate market. Also, once you get to a certain level, the rent levels off vis-à-vis the mortgage costs. In other words, you can rent a lot more house for the money than you can buy, once you get to the higher end.”

-Layth Matthews, CEO, RateMiser Mortgage Advisors, Victoria, B.C.

$81,000-$100,000 15 PER CENT

$101,000-$160,000 12 PER CENT

$161,000-$300,000 10 PER CENT

$300,001+

$108,000 AVERAGE INCOME

$2.5 million HIGHEST INCOME

28 | DECEMBER 2013

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MORTGAGEBROKERNEWS.CA

Average amount in savings account

AMOUNT IN SAVINGS

$76,000 - $150,000 $41,000 - $75,000

$21,000 - $40,000

$150,000+

9%

4%

$26,000

$0

7%

INVESTMENTS

9%

43%

12% 16%

$1-$10,000

$11,000 - $20,000

$0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 PER CENT $1-$10,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 PER CENT $11,000 - $20,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 PER CENT $21,000 - $40,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 PER CENT $41,000 - $75,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 PER CENT $76,000 - $150,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 PER CENT $150,001+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 PER CENT

AVERAGE AMOUNT IN INVESTMENTS MOST MONEY IN INVESTMENTS

$119,000 $8 MILLION

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DECEMBER 2013 | 29

20-37_Broker Lifestyle Survey.indd 29

27/11/2013 1:10:25 PM

FEATURE / BROKER LIFESTYLE

REAL ESTATE AND MORTGAGE MAT T OWNING A HOME

91 PER CENT

9 PER CENT

OWN THEIR OWN HOUSE

81%

19%

RENT

HAVE A MORTGAGE? VACATION PROPERTIES

MORTGAGE TERMS

Average mortgage term:

4.7 YEARS

YES 23% 87%

21

3%

4%

1 year

2 years

3 years

3%

4 years

5 years

2.2 per cent IS THE AVERAGE MORTGAGE RATE

NO 77% MOST OWNED BY ONE BROKER IS

3%

MORTGAGE RATES

70 PER CENT OWN A COTTAGE; 18 PER CENT OWN A U.S. OR INTERNATIONAL PROPERTY; 12 PER CENT OWN BOTH

AVERAGE MORTGAGE RATE A BROKER PAYS:

2.2 PER CENT

BEST POSTED FIVE YEAR FIXED-RATE:

3.23 PER CENT (source: RateSupermarket.ca) BEST POSTED FIVE YEAR VARIABLE RATE:

2.4 PER CENT (source: RateSupermarket.ca)

30 | DECEMBER 2013

20-37_Broker Lifestyle Survey.indd 30

27/11/2013 1:10:30 PM

MORTGAGEBROKERNEWS.CA

T TERS Why do you use a bank for your mortgage?

MORTGAGE WITH A BANK OR MONOLINE?

57 per cent

HAVE THEIR MORTGAGE WITH A BANK

43 per cent

HAVE THEIR MORTGAGE WITH A MONOLINE

THE AVERAGE EQUITY A BROKER HAS IN HIS OR HER HOME: 35.5 PER CENT 0-5% EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14.5 PER CENT 6-20% EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 PER CENT 21-30% EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 PER CENT 31-40% EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 PER CENT 41-60% EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.5 PER CENT 61-90% EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 PER CENT 100 % EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 PER CENT RENTAL PROPERTIES

42%

58%

Have at least one rental property

Don’t own any rental properties

CMHC & Conventional Mortgages for:

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

20-37_Broker Lifestyle Survey.indd 31

Why do you own rental properties?

“In general, rental properties are a good investment and can potentially be a good source of income for you.

But you also have to look out for your future, especially for your retirement. I have owned about half a dozen rental properties throughout my career, and I always keep it open to potentially add more in the future.”

-Richard Kitts, Principal Broker, The Mortgage Centre, Kitchener, Ont.

Single Family Alternate Equity Lending:

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

Toronto

“At the time, I wasn’t a broker. I had everything tied up with TD, and I got the best rate from them. My friend, who was a mortgage broker, started it up for me and when I shopped around for different rates from Home Trust and other (providers), they wanted a quarter per cent higher because my wife is self-employed.

The main reason why I went with TD was because it was a year prior to them becoming a collateral mortgage bank. My mortgage was grandfathered from the year before to be a regular mortgage.”

-Michal Zagol, MMZ Financial, Bolton, Ont.

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

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

Vancouver CMHC/Conventional Financing Single Family Financing DECEMBER 2013 | 31 Phone: 604-685-1068

Email: vancouver@peoplestrust.com

27/11/2013 2:47:48 PM

FEATURE / BROKER LIFESTYLE

LIFESTYLE

47 PER CENT DO BUSINESS IN A SUIT MOBILE DEVICES

BEST SUIT COSTS

46 PER CENT USE AN IPHONE

23 PER CENT

USE AN ANDROID PHONE

14%

48%

29%

9%

spent less than $100

$100-$500

$5,000-$1,000

$1,000+

Why did you choose to purchase an expensive suit?

30 PER CENT USE A BLACKBERRY

1 PER CENT USE A FLIP PHONE

Why do you use an Android phone?

“I think that for brokers, it’s inherent to have and be friendly with Android (technology) because that’s where customers want to be, and that’s where the market is moving. With an Android (device), I am able to talk the talk and help my customers find what they need. It also makes it easier for them to connect with me, and anything I can do to punch up my presence is crucial.”

-Stuart Lessels, Mortgage Alliance, Collingwood, Ont.

20 PER CENT

OWN A BESPOKE OR CUSTOMTAILORED SUIT

80 PER CENT

“Dress is an extension of my brand, and I view it as an investment in marketing rather than an investment in clothing. I never get a second chance to make a first impression, and so I want to make sure that my brand makes a good impression on my clients.”

-Calum Ross, President, VERICO Calum Ross Mortgage, Toronto, Ont. OWNERSHIP OF CAR

DO NOT

19.5% LEASE

0.5%

NO VEHICLE

80% OWN

32 | DECEMBER 2013

20-37_Broker Lifestyle Survey.indd 32

27/11/2013 1:10:40 PM

MORTGAGEBROKERNEWS.CA

COST OF VEHICLE

NEW VS. USED

SPENT LESS THAN $20,000. . . . . . . . .

SPENT $20,000-$25,000 . . . . . . . . . . .

SPENT $25,001-$30,000. . . . . . . . . . . .

SPENT $30,001-$40,000. . . . . . . . . . . .

SPENT $40,001-$50,000. . . . . . . . . . . .

SPENT $50,000 OR MORE. . . . . . . . . . .

19 PER CENT 15 PER CENT 12 PER CENT 19 PER CENT 13 PER CENT 22 PER CENT

60% BOUGHT NEW

40% BOUGHT USED

WHAT TYPE OF VEHICLE DO YOU DRIVE?

43 PER CENT DRIVE AN SUV

Do you feel that brokers don’t need to be as flashy as realtors when it comes to owning a car?

“For me, personally, I very seldom visit my clients. I do most of my business online or on the phone, and I don’t have personal contact with my clients as much as a realtor would have to. I think that we, as brokers, are more focused on selling information, and realtors tend to focus more on selling flash. Essentially, they have to sell their ability to sell to other people.”

-Patrick Maguire, Mortgage Alliance, Port Moody, BC

22 PER CENT DRIVE A SEDAN 15 PER CENT DRIVE A SPORTS CAR

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CMP Platnium Ad_v2.indd 1

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RMA_Mary_06.17.13.pdf

1

13-06-17

4:18 PM

FEATURE / BROKER LIFESTYLE

SOCIAL MEDIA USAGE

7%

33%

60%

Never use social media

Use it occasionally

Use it daily

PREFER FACEBOOK . . . . . . . . . . . . . . . . . . .

PREFER LINKEDIN . . . . . . . . . . . . . . . . . . . . .

PREFER TWITTER . . . . . . . . . . . . . . . . . . . . .

PREFER HOOTSUITE . . . . . . . . . . . . . . . . . . .

PREFER EMAIL AS . . . . . . . . . . . . . . . . . . . . .

THEIR SOCIAL MEDIA PLATFORM

72 PER CENT 16 PER CENT 10 PER CENT 1 PER CENT 1 PER CENT

Why is social media important for communicating with clients?

“Social media creates another means of communication. If a client is decisive about contacting you via phone or email, it’s sort of a soft touch. Often times, we will get messages through Facebook saying: “Hey, I’m thinking of buying a house.

Can we chat sometime?” So (social media) can be used as an icebreaker in that respect. It gives some clients a different level of comfort in connecting with you (and) in terms of marketing and being recognizable in the community, it’s just one more avenue.”

-Nick L’Ecuyer, VERICO The Mortgage Wellness Group, Barrie, Ont.

VACATION TIME PER YEAR

10 PER CENT TAKE ONE WEEK 23 PER CENT TAKE TWO WEEKS 28 PER CENT TAKE 3 WEEKS 39 PER CENT TAKE 4+ WEEKS 34 | DECEMBER 2013

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MORTGAGEBROKERNEWS.CA

FAMILY Almost half of the brokers we surveyed have a dog.

What does that say about them?

“I think it says that they have an above average disposable income. If you actually have a dog, you have to spend money to keep it. There are some people who live a lifestyle that does not permit them to have any pets. Plus, I am also a dog lover, and my daughters love having a dog.”

-Joseph Park, VERICO JP Mortgage Services, North York, Ont.

MARRIED?

80 PER CENT ARE MARRIED 69%

Twice as many brokers own dogs over cats. What does that say about their personality?

“I think the bottom line is that a dog is so loyal. This is a tough business and loyalty is an issue at the street level. We’re constantly battling that, so to have a little comfort at home is an important piece of the puzzle. Owning a dog gets me out daily, and I think that’s important because I sit at a desk, and I’m on the computer and the phone for the majority of the day. It forces me to have a half-hour of sunshine and fresh air. I work from home, so I’m able to give that little bit of extra attention.”

-Trish Hart, Invis Mortgages, Calgary, Alta.

14%

14%

3% Never been married

DO NOT HAVE KIDS

46 PER CENT

Been married three or more times

22 PER CENT

HAVE ONE KID

13 PER CENT

HAVE TWO KIDS

41 PER CENT

HAVE THREE KIDS

19 PER CENT

OWN A DOG

26 PER CENT OWN A CAT

Been married twice

Been married once

HAVE FOUR + KIDS

5 PER CENT DECEMBER 2013 | 35

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SOCIAL MEDIA USAGE

FEATURE / BROKER LIFESTYLE

EDUCATION

Broker on education

BROKERS BY EDUCATIONAL CREDENTIAL

3%

19%

31%

32%

15%

High school education

High school diploma

University education

Undergraduate degree

Graduate degree

85 PER CENT

PARTICIPATE IN ONGOING EDUCATION

“As a broker, there are three things you need to understand: sales, marketing and cash flow. You don’t need a graduate degree for these three things because this is a business, and to be in business yourself, you don’t need a master’s degree. I have a master’s because I needed one when I worked in the corporate world. I then decided that I wanted to be a broker because I wanted to have more control over how much I make per year. It’s a nice thing to have, especially if you want to be a megabroker, because you will have the analytical skills to be able to build a business. Although you don’t need a graduate degree, you do need some form of education to be able to understand your customers and match them to the rate that they need.”

-Danny Kellman, VERICO The Mortgage Leaders, Ajax, Ont.

It’s time for a new perspective.™

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36 | DECEMBER 2013

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27/11/2013 1:11:01 PM

MORTGAGEBROKERNEWS.CA

THE QUINTESSENTIAL BROKER… STATISTICALLY SPEAKING

By Mark David

Hundreds of you filled out CMP’s first-ever Broker Lifestyle Survey, and then we crunched the numbers to come up with a profile of the average broker. Little did we know that amongst our many respondents was an actual broker who, point by point, fit that profile to a T. But as CMP soon found out, there’s nothing average about Joseph Park.

Still, the similarities between Park, principal broker of VERICO JP Mortgage Services in North York, Ont., and our “average” broker are uncanny: For one, he lives and works in the country’s biggest province – something all that number crunching revealed as representative of, ahem, the average broker.

Park’s statistics are on par with several of the average figures we tabulated. Our results showed that 57 per cent of respondents have their mortgages with a bank, and Park is included within that majority. We also discovered that 46 per cent of our respondents are dog lovers. Park wasn’t barking up the wrong tree when he told us that he too enjoys canine companionship, as compared to the 26 per cent who prefer cats.

But as close as Park is to matching each of our 35 areas of analysis, he does differ in some areas. We found that the average amount of industry experience is eight years. Park ranks slightly above that, as he has been an active broker for 10 years. Our stats also indicate that most brokers work an average of 7.3 hours per day, while Park pulls a nine-hour workday.

When it comes to mobile technology, 45 per cent of our respondents said that they use iPhones. Park is among the 23 per cent who opt for Android devices.

Originally from South Korea, the father of two cut his teeth in the financial services industry with one of the country’s biggest banks.

“In 2000, I joined TD Canada Trust as a financial advisor,” Park recalls. “I worked there for two years, and was interested in selling mortgages.”

Park admits that moving into the mortgage industry was a somewhat unpopular decision at the time, but he was more than willing to take a chance.

“Jumping into the mortgage industry was unknown territory at the time,” he says. “I decided to join TD Canada Trust’s Mortgage Sales Force. I won Rookie

of the Year in 2003, which is the most prestigious award you can win as a rookie (broker).”

After a successful run with TD, where he was one of the top 10 brokers in Canada, Park branched out and joined VERICO. He later founded JP Mortgage Services, and has built up a team of mortgage professionals who are dedicated to customer service and professionalism.

Park’s inspiration to forge his own path in the industry stemmed from wanting to offer a wider range of mortgage products than those available at the bank.

“I was frustrated with the limited (amount) of products I had access to,” he explains. “To me, as a mortgage specialist, I should be able to offer many types of mortgage products so I can (provide) the right product to the right customer.”

Despite working within a challenging industry, Park enjoys his work because he loves helping his clients to find the solutions that work best for them.

“I truly enjoy working as a broker, and I don’t do it for the money,” says Park. “I am able to advise my clients and find the right product for them. I have many options (available) to find them the best rate, and ultimately buy a home.”

While the subject of what makes the ideal broker is one of great debate within the industry, Park believes that the ideal broker should establish and maintain key relationships while also staying up-todate about new developments in the industry.

“I think that mortgage brokers should view lenders as their biggest partners, and maintain clear communication with them,” he says. “Additionally, all mortgage brokers should take webinars from various lenders to update their knowledge of the products and services that different lenders offer.”

He also considers honesty key.

“I have consistent meetings with my mortgage brokers and agents, and I tell them that honesty is both the best answer and the best medicine,” Park says.

“Relationship building is very important to me and revealing authentic information to clients and lenders is key.”

Joseph Park

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FEATURE / DATA

DATA ARTISTRY FINDING BUSINESS VALUE IN DATA

Data science is the new ‘rock star’ business profession that picks up where big data and analytics leave off. Tim Phillipps argues that, to become more predictive, organizations should recruit those who see the future and others who can visualize it for the rest of us 38 | DECEMBER 2013

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27/11/2013 1:12:29 PM

News

InternatIonaL

u.s.

U.S. housing market worse than thought The number of Americans who bought previously occupied homes rose in October. But the National Association of Realtors says it overstated more than three million sales during and after the Great Recession, showing the housing market was weaker than previously thought.

The private trade group says sales rose four per cent in October to a seasonally adjusted annual rate of 4.42 million. That’s below the roughly six million homes a year that economists say are consistent with a healthy housing market. But it’s ahead of 2008’s revised sales, now considered the worst 13 years.

The “data scientist” is in a new breed of analytics The trade group revised its sales from 2007 to 2010 professional who takes an experimental approach down 14 per cent, from more than 20.6 million to nearly to analyzing data. Professor Thomas H. Davenport, 17.7 million. Among the reasons for the lower figures, visiting professor at Harvard Business School, is one the Realtors group says: changes in the way the Census of the world’s authorities science Bureau collects foremost data, population shifts on anddata some sales and a senior adviser being counted twice. to the Deloitte Analytics Institute.

He The saysRealtors a dataconsulted scientist isgovernment “part hacker, with and part private housing experts,part including theadviser Federal and Reserve, quantitative analyst, trusted part the Department of Housing and Urban Development, scientist.” the Mortgage Bankers Association, the National Organizations are interested in data science Association of Home Builders, mortgage giants Fannie because it has the potential to transform business Mae and Freddie Mac and CoreLogic, a California-based models newdoubts ones. about It alsothe replaces data firmand thatcreate first raised annual gut instinct data-driven numberswith earlier this year. decision-making and is the basis of a newhas form of competitive that is CoreLogic estimated that theadvantage Realtors group overstated to sales in 2010 byConsider at least 15 per difficult replicate. thecent. following The changing numbers could affect how economists examples: view the trade group’s data. It could also affect companies LinkedIn owes much of its success to the “people that use the figures for hiring and expansion plans. youSales may know” function – an experiment instituted are measured when buyers close on homes. by former data scientist, Patil, who also Butits many dealschief are collapsing beforeDJ that point. coined the thatsaid applies One-third ofterm Realtors they to hadthe at new least profession. one contract General Electric realized growing scuttled in October, up from 18 per that cent inthe September.

Contracts are produced being cancelled for several reasons: amount of data by sensors in the firm’s Banks have declined mortgageand applications; home gas turbines, jet engines other industrial

&

MORTGAGEBROKERNEWS.CA

90.6% 52.1%

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

More than two years after the recession officially ended, many people can’t qualify for products could be collectedloans and or analyzed in real meet higher down payment requirements.

Even those with excellent credit time to improve machine performance and operations, and stable are holding off because they fear turning unscheduled intojobs scheduled Percentage of maintenance that home prices will keep falling. Sales are also maintenance and identifying potential operational homeownership being hurt by a decline in first-time buyers, who disruptions before they occurred.

The insights it has costs, including are critical to reviving the housing market. mortgage drawn from payments, its devices are already Salesimproving have fallenthe in four of the five years utilities and efficiency of itsproperty customers’ businesses, saving boom them went bust in 2006. since the housing taxes that take anywhere from tensup ofathousands of dollars to millions Declining prices and record-low mortgage rates typical household’s haven’t been enough to boost sales. for each analytics-based service. monthly pre-tax thehotel sameempire time, home construction has Worldwide gaming, resorts At and income in Vancouver begun a gradual comeback and should add to the Caesars Entertainment analyzes data from slot and Toronto, economy’s growth in 2011 for the first year since machines to present offers and marketing respectively (RBCreal-timethe Great Recession began in 2007. Last month, Economics promotions toHousing its patrons. builders broke ground on an annual rate of Trends and While organizations are building in-house 685,000their homes, the government said recently.

Affordability Report) ability to use data to peer into the future, Kaggle, That was a 9.3 per cent jump from October and thetofastest pace since April 2010. a platform that allows companies crowd-source data Most economists say scientists, has attracted the backing home prices will keep by at least five per cent, through 2012. of Silicon Valley high-flyers whofalling, were behind the online Many forecasts don’t foresee a rebound in prices payments platform PayPal. Kaggle allows businesses until at least 2013. to farm out complex business problems data scientists Theto high rate of foreclosures has made around the world in return forresold cash prizes. homes cheaper than new ones. The median price a new home is roughly 30 per Although data science is the future of of decisioncent above the price of one that’s been occupied making, businesses must hurdle two obstacles. First, before – twice the normal they must bridge a skills gap and, second, understand markup. Investors are taking advantage of the discounts. and act on the predictive business insights that data The housing market is struggling even scientists produce. as the broader economy has improved in recent months.

A SHORTAGE OF SCIENTISTS The economy grew at an annual pace of two per by centEMC in therevealed July-September quarter. Many A survey carried out last year economists expect slightly better growth in the that two thirds of data science practitioners expect October-December quarter. CMP demand to outpace supply over the next five years.

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DECEMBER 2013 | 39

12-01-18 10:51 PM 27/11/2013 1:12:38 PM

FEATURE / DATA

THE KAGGLE STORY

Decisionmakers have to be able to absorb the insights from data science to effectively use them to solve problems

Even first-year business students know what happens when demand exceeds supply: prices go up.

We’re already seeing this, with organizations willing to pay top dollar for data scientists. However, this is a risky strategy. It involves considerable expense, and there’s no guarantee an individual will be a good cultural fit.

So, where can organizations find the data scientists of tomorrow? Mark Grabb, Analytics Technology Leader at GE’s Global Research Center in New York, suggests that PhD graduates are likely to continue to be a major source of data scientists in coming years.

The private sector, universities and industry bodies like INFORM are also developing tailored data science courses. However, there’s a question as to whether these courses are teaching the right skills.

Most of the courses that are currently being developed focus on the data cleaning, mining and analysis skills necessary for data scientists to do their job.

However, less attention is being paid to the ability to communicate those insights, says Davenport.

“Communication still doesn’t have the importance it should in most programs,” he says.

MARRYING ART WITH SCIENCE

Tim Phillipps is the DTTL global leader of Deloitte Analytics and an authoritative voice on the application of analytics as a source of managerial insight and competitive advantage.

Bridging the communication gap is paramount importance. It’s great to have a team of big brains that can crunch data, but their efforts are useless if they can’t explain what they find to decision-makers.

Communicating the message hidden within data requires a rare capability to combine the right-brain analysis with the left-brain creativity needed to communicate with non-specialists. This isn’t just about running experiments with data; it’s about being able to paint a picture with the results. In many respects, this skill is more art than science, namely “data artistry.”

There are two key elements to data artistry. First, the data artist must be able to speak both the language of data and the language of business.

Second, data artists need to be able to tell stories with data, understanding the most effective way to communicate results and being able to work with different media to deliver those insights. This typically involves using data visualisation tools.

In the past, these might have been static reports, PowerPoint presentations, heat maps and charts.

Now, data artists are increasingly turning to new and more creative ways of telling stories with data. They are now using audio-visual presentations, dynamic

Offi

Kaggle is an online marketplace that connects organizations with the world’s best data scientists.

Now based in San Francisco, the company has two products: 1. Data science competitions for optimising a company’s existing algorithms 2. A matchmaking service called Kaggle Connect, which connects companies to data scientists who can help them solve challenging data science problems (whether new or existing) With competitions, companies can post datasets and problems to Kaggle, and the community of 100,000 data scientists compete to create the best solution. Competitions are effective for well-specified problems, where predictive accuracy is most important. Good examples include retailers that want to forecast demand more accurately (to optimize pricing and prevent out-of-stock situations) and insurance companies that want to more accurately predict risk.

For less well-specified problems, Kaggle provides a matchmaking service called Kaggle Connect, which matches companies with a data scientist who has a track record of solving a particular problem (as demonstrated through their competition performances). Kaggle Connect is suitable for problems such as helping retailers and CPG companies optimize their pricing, or telecommunications companies better target their customers or potential customers with personalized marketing offers or customer retention initiatives.

The Kaggle Community now contains over 100,000 data scientists, including many of the world’s biggest names (from the IBM Watson team to the Google Prediction API team).

Deloitte announced on 28 May 2013 that it had entered into a preferred alliance with Kaggle. This alliance will combine Deloitte Australia’s analytics, business advisory, technology and process consultants with Kaggle’s data scientist network to bring the best analytics solutions to clients.

charts, interactive games, 3D models and apps to convey meaning.

WHAT CAN ORGANIZATIONS DO? In the short term, organizations will struggle to find a professional who embodies a data scientist and data artist in the one “rock star” package. A better approach is to create rock bands: data science teams with a breadth of expertise. By focusing on forming teams, organizations can blend a mix of top skills without staking everything on a single risky hire.

It also enables organizations to fish in a wider ocean of talent, rather than the existing pool of data professionals.

40 | DECEMBER 2013

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27/11/2013 1:12:42 PM

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27/11/2013 1:12:47 20/11/2013 4:08:00 AMPM

BUSINESS STRATEGY / SECRET #10

KEEPING YOUR NAME OUT OF THE

MUD

S

A broker has to get her name out there, writes Doren Aldana, but it always needs to be protected, too

SECRET #10: THEY CREATE AND JEALOUSLY GUARD THEIR BRAND NAME CREDIBILITY.

All superstar mortgage professionals know that their credibility and brand name is their most important asset. They refuse to do certain things that might undermine their reputation. For example, they never promote or recommend something just for the money.

A lot of times mortgage professionals can get hooked into the temptation of doing lucrative deals that are unethical or not in their client’s best interest. But superstar mortgage professionals know that everything they do, say and recommend is linked to their brand name credibility, so they are very careful to operate with the utmost integrity and ethical standards.

As we’ve seen in the careers of countless politicians and professional athletes, it can take years — and even decades — to build credibility and a solid reputation but all it takes is one foolish move to lose it forever. Don’t make that mistake. There is no amount of short-term gain worth throwing away your integrity and self-respect.

In the words of lecturer and author Denis Waitley, “A life lived with integrity — even if it lacks the trappings of fame and fortune — is a shining star in whose light others may follow in the years to come.”

In next month’s 11th secret, you’ll discover how superstar mortgage brokers have the uncanny ability to get things done, open new doors, and create profitable strategic alliances. Stay tuned ...

42 | DECEMBER 2013

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MORTGAGEBROKERNEWS.CA

CREDIBILITY BUILDING PRINCIPLES HERE ARE FOUR CREDIBILITY-BUILDING PRINCIPLES THAT SUPERSTAR MORTGAGE PROFESSIONALS LIVE BY: They are committed to providing the best overall result for their clients, even if it means turning down extra commission in the short term.

1

They refer only the best service providers to their clients. There is nothing worse than referring a Realtor, financial planner, home inspector or appraiser to a client and having their service fall short of expectations. It reflects poorly on your name and your brand identity. So superstar mortgage professionals only refer the best of the best service providers that are certain to not just meet — but exceed — their clients’ expectations.

2

They always talk about their clients’ success to help build their brand name and credibility.

There is nothing more powerful for building your credibility than sharing your client successes.

That’s why superstar mortgage professionals always weave stories, case studies and testimonials that highlight their clients’ successes into their ads, sales letters, newsletters, brochures, websites and in their meetings with prospective clients.

3

They use their name as their trademark and their rallying point for their marketing efforts. In short, successful mortgage professionals take their brand name seriously.

4

Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach and has won the Best Industry Service Provider award two years in a row at the 2012 and 2013 Canadian Mortgage Awards. Since 2005, he has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions.

For a free copy of Aldana’s new CD titled, 21 Secrets of Superstar Mortgage Brokers, visit: www.SuperstarMortgage Broker.com

PREPARE YOUR CLIENTS FOR

LIFE’S

UPS, DOWNS, TWISTS AND TURNS!

DID YOU KNOW?

79% OF CANADIANS have no individual disability insurance!**

• 44% of Mortgage Protection Plan® claims are made in the first two years of a mortgage!1 • Nearly half of mortgage foreclosures are due to medical problems!2 Make sure your clients are covered!

36% OF CANADIANS

say no one has approached them about insurance.**

58% OF CANADIANS

find it difficult to decide on the type of insurance to buy.**

Mortgage Protection Plan® is offered by Credit Security Insurance Agency Inc. (“CSIA”). ®Registered trademark of Benesure Canada Inc.; used under license.

1 According to 10 years of MPP claims data. 2 Get Sick, Get Out: The Medical Causes of Home Mortgage Foreclosures, Health Matrix: Journal of Law-Medicine, 2008** SOURCE: Manulife Financial survey of 1,000 Canadian homeowners between the ages of 30 and 50 with household income of $50,000 to $150,000 per annum. Conducted on-line by Research House, March 2001.

DECEMBER 2013 | 43

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27/11/2013 1:13:30 PM

FEATURE / 2014 MARKET OUTLOOK

THE STATE OF YOUR MARKET

The annual report on the state of the Canadian market is casting light on past challenges and those that lie ahead. CAAMP reports SIGNIFICANT STATISTICS

• For homes purchased in 2013, 82 per cent had fixed rate mortgages. Overall, 66 per cent of homeowners have fixed rate mortgages, 26 per cent variable rate mortgages and 8 per cent combination mortgages.

• For homes purchased in 2013, 84 per cent have amortizations of 25 years or less.

Overall 81 per cent have amortizations of 25 years or less.

•

40 per cent of all new mortgages in 2013 were obtained through a mortgage broker, while 42 per cent were obtained from a bank. Overall mortgage broker share has increased from 25 per cent to 28 per cent since last year.

For borrowers renewing their mortgage in the next six months, 96 per cent will see a lower rate.

For borrowers who renewed their mortgage in 2013, 64 per cent saw a lower rate.

96%

64%

Renewing in the next six months

2013

will see a lower rate

saw a lower rate

• For mortgages that have been paid off in the last two decades, repayment periods have been 30 per cent shorter than the original contracted period.

• During 2013, the average discount on a five-year fixed rate mortgage was 2.13 points – the average mortgage is 3.06 per cent, compared to the average posted have fixed rate of 5.21 per cent.

82%

mortgage • On average, home equity in Canada is 66 rates

25%

28%

2012

2013

per cent of the value of a home, compared to less than 50 per cent in the U.S., and 83 per cent of Canadian homeowners have at least 25 per cent equity in their home.

44 | DECEMBER 2013

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MORTGAGEBROKERNEWS.CA

• Mortgage credit has slowed from an average of 8.6 per cent in the last decade to 4.5 per cent for 2013 and is projected to be even lower at 3.25 per cent in 2014.

• Among those who purchased homes in 2013, 57 per cent were first-time buyers.

• During 2013, 38 per cent of borrowers took steps to accelerate their repayment period, including increasing their payment

amount, making a lump sum payment or increasing their payment frequency.

• Overall, 80 per cent of those surveyed say mortgage credit is good debt, 84 per cent say that real estate is a good investment and 80 per cent expressed positive feelings of confidence and security toward their mortgages and home ownership in general.

A copy of the full report is available to download at www.caamp.org

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

57%

of the homes purchased in 2013 were first- time home buyers

What’s in it for you? > A unique product portfolio including our award unique product portfolio including our award winning All-In-One Banking™. winning All-In-One Banking™. > Niche product lending allowing you to meet a > Niche product lending allowing you to meet a variety of your client needs; including mortgage variety of your client needs; including mortgage solutions for first time homebuyers, rental solutions for first time homebuyers, rental properties, new immigrants, non-residents properties, new immigrants, non-residents and more 1. and more1. > An incentive program built on your feedback, > An incentive program built on your feedback, 2 including reward options such as: $2,000 towards 2 including reward options such voucher as: $15,000 travel 3 marketing, $15,000 travel towards voucher a trip lifetime, great a trip oftowards lifetime, rateofdiscounts up tocashback 15 BPS, offers, and more! free appraisals, great cashback offers, and more! >A

Contact your local BDM or email mortgagebroker@nbc.ca

TM 2 TM 2 National Bank All-In-One is a trademark National BankofofNational Canada. 1Financing be subject1to the credit approval

by National Bank. $15,000 tripapproval paid for every deals in the fiscal year up to a marketing maximum of 2 fee trip National Bank All-In-One is aoftrademark Bank ofshall Canada.

Financing shall be subject to the credit by125 National Bank. $2,000 3 vouchers.

Minimumreward approve for to fund of 60% for fiscalor 2014 is required to be either financial incentivestrip and payments be made Februaryor 2015.

The funded fiscal year in is from 1, 2013 31, $15,000 paid forwill every 125in deals $40M the November fiscal year.

ThetofiOctober scal year is a one-time theratio first 65 deals $20M funded ineligible the fifor scal year.

2014. is from November 1, 2011 to October 31, 2012.

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27/11/2013 1:14:02 PM

PROFILE / FAVOURITE THINGS

Favourite things Janna Dawdy, Real Mortgage Associates

Favourite Book: I have a variety of books that I love, however Emily Giffin is my favourite author. I enjoy her storylines, which seem to have a mix of real life and fiction, so they are often easy to relate to.

Favourite Mortgage Product: My favourite mortgage product is a variable rate product ... Just like me you never know what you may expect — just kidding :) Favourite Drink: My favourite drink — chocolate martini

Favourite Celebrity: I can’t say I have a favourite celebrity. I don’t spend too much time or energy following any specific celebrities. I enjoy a variety of celebrities in their different roles.

Favourite Place to Be: My most favourite place to be is home with my family. As a mother of five kids and running a busy successful mortgage practice, some down time at home is always nice!

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MORTGAGEBROKERNEWS.CA

Favourite Sport: I really enjoy running and soccer. Keeping physically fit is important to me to try to be at the healthiest me I can be!

Favourite Music: I love music ...

I enjoy all genres of music from dance, pop, jazz, rap to some down time with Diana Krall.

Favourite Thing about Working in the Mortgage Industry: I love helping people obtain not only their mortgage goals but their financial and future outlook and as a mortgage agent I have the opportunity to do this.

Favourite Vacation Spot: Vacation spot these days would be home.

Favourite Movie: By far my favourite movie is Dirty Dancing ... like many other women ... I wished Patrick Swayze would call me “Baby”!

Richard Earles

Business Development Manager 1-866-907-5407 richard@vwrcapital.com Twitter: @VWRCAPITALCORP

Your Private Mortgage Solution Funding Mortgages In: x x x x

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x Competitive rates and nominal lender fees x Purchases, refinances, ETO, and renovations x Rental properties, owner occupied, raw land, serviced land, small multi-family x No income qualification x No minimum beacon score

Your Underwriting Team: Dimitri Kosturos: VP Underwriting Richard Earles: Business Development Manager Leah Wilson: Underwriter

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SERVICE/ DIRECTORY

Banks

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

Bridgewater Bank www.bridgewaterbank.ca Ph: 1 888 837 2326 Page 7 HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 13

Tribecca Finance Corporation www.tribecca.ca Ph: 416 225 6900 Page 36

TM

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

Mortgage Architects www.mortgagearchitects.ca Ph: 1 877 802 9100 Page 15

Non-Bank Lenders

V.W.R Capital Corp www.vwrcapital.com Ph: 1 866 907 5407 Page 47

Capital Direct www.capitaldirect.ca Ph: 1 800 959 9290 Page 19

RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 34

Insurance

www.canadaguaranty.ca Ph: 1 866 414 9109 Page 17 Commercial Lenders

First National Financial LP www.firstnational.ca Ph: 416 593 1100 Page 11

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

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

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

Mortgage Protection Plan www.mppbroker.com Ph: 1 866 677 4677 Page 43

Keystroke Quality Computing Inc. www.keystroke.ca Ph: 1 800 857 0558 Page 12

First Canadian Title www.fct.ca Ph: 1 800 307 0370 Page 33

MCAP www.mcap.com/brokers Page 9 Optimum Mortgage A Division of Canadian Western Trust www.OptimumMortgage.ca Ph: 866 441 3775 Guide

VERICO www.verico.ca Ph: 1 866 983 7426 Inside Back Cover

Canada Guaranty Mortgage Insurance Company

Eclipse Ph: 1 866 260 3786 Guide

Marlborough Stirling Canada www.morweb.ca Ph: 1 877 626 2022 Page 2

Broker Networks

Score-Up www.score-up.ca Ph: 416 479 9585 Page 29

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

Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 31

Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 27

Canadian National Association of Real Estate Appraisers

www.cnarea.ca Ph: 1 888 399 3366 Page 39

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