cmp 6.4
DESCRIPTION
The magazine for Canadian mortgage professionalsTRANSCRIPT
www.mortgagebrokernews.ca
Broker
Sentiment Poll
PUBLICATIONS MAIL AGREEMENT #41261516
News ANAlysisNew accouNtiNg rulesmay affect brokers
MArketiNg DoN’t be a parasite
BrANdiNgget more baNgfrom your braND
and the award goes to...The 2011 CMA Broker of the Year finalists
april 2011, 6.4
34 And the award goes to…
The past year has been challenging for mortgage professionals, but this year’s finalists for the Canadian Mortgage Awards’ Broker of the Year awards have persevered and stand at the head of the class of 2010
62 SPeCiAl FeAtUre: 2011 Broker Sentiment PollCMP presents our third cross-Canada broker sentiment poll to gauge what’s on brokers’ minds. Some of the results may surprise, while others simply confirm what brokers already know
6. 04
issue
cover story
Straight forward lending
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and the
award
goes to...The 2011 CMA Broker
of the Year finalists
2
contents
mortgagebrokernews.ca
PrOFiles74 Provider: After hearing from brokers across
the country, Street Capital took that feedback and enhanced its product offerings and gave brokers more choice when it comes to compensation
76 insight: Innovation continues to drive The Mortgage Practice to new heights, as the company founded by Ravi Punnia branches out by offering a new model for brokers
regulars32 this time last year
33 international News
78 Favourite things
79 CMP service directory
8 letters & comments from mortgagebrokernews.ca: Some of the best stats and comments from CMP’s website
News10 News: MCAP going after the Big Five, IMBA names
new executive director, B.C. MIC managers take concerns to regulators, Brokers learn about Alt-A and commercial mortgages at CMP Mortgage Workshop, Vancouver rent appraisal company sets sights on Calgary, Toronto, Lender panel discusses mortgage issues at MBABC conference, Maureen Holloway to emcee Canadian Mortgage Awards, and more
14 Business Advice: Implementing your business fingerprint
18 News Analysis: New IFRS accounting rules may affect brokers
24 in the Community: Appraisers solidify charitable giving
56 Boosting your Brand: Looking for more bang from your brand? Andrea Cornish from our sister publication MPA reveals the secrets Australian mortgage brokers are using to set themselves apart from the pack
49marketing: six referral mortgage marketing mistakesIt has been reported that over 80 per cent of mortgage professionals fail within their first two years. That’s a staggering statistic. Doren Aldana explores some of the reasons why this happens and how new brokers can help themselves succeed in the final instalment of a six-part series
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We put you frontand centre in your local market.
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4
editor’sLetter
mortgagebrokernews.ca
6. 04
issue
State of the industryHaving only been at CMP for just over six months, I’m still getting my feet wet when it comes to learning about the mortgage industry in Canada and everyone involved in it. I’ve spoken to many brokers and lenders and met many of them in person at conference and other events, but it wasn’t until I spoke to this year’s Canadian Mortgage Award’s 15 Broker of the Year finalists that I came to truly appreciate the talent and professionalism this industry has to offer.
Each of the brokers I interviewed for our cover feature, (page 34), was unique in their own way, but what became crystal clear with each conversation was each individual’s passion for what they do. One after the other told me that they look forward to getting up every day and helping their clients achieve the dream of owning a home. It may sound a little corny, but the sincerity I heard from these brokers who come from points all across the country, couldn’t be questioned. Trust was one word I heard over and over from brokers, who said their No. 1 priority is ensuring that clients trust them with biggest purchase of their lives. With mortgage professionals like these representing the industry the days of consumers questioning the need for or the integrity of brokers may be numbered.
Numbers are at the heart of this year’s Broker Sentiment poll (page 62), which gauges the actions and opinions of brokers from across the country. While the recession is over, the economy still concerns many brokers, as do other issues, such as household debt and more lenders exiting the broker channel. Overall though, the mood seems to be one of cautious optimism as brokers feel secure enough in their jobs that very few are thinking of leaving the profession over the coming year and most are looking to spend the same or more money on marketing initiatives in 2011.
I would also like to welcome Vernon Clement Jones to the CMP team. Vernon is our new Senior Staff Writer and brings solid business writing experience with him to MortgageBrokerNews.ca and the magazine.
As always, I encourage to you contact us with any news related to the broker and mortgage industry or just to share your opinion about how we’re doing. It is an exciting time for our industry and we look forward to keeping you informed about the industry and your business.
Cheers.John [email protected]
Announcing: More Compensation Choices.Choose the Street program that’s right for your business.
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“I like the broadproduct offerings of the current Street program... and I prefer a traditionalbroker compensationmodel”.
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6
Quotables
mortgagebrokernews.ca
“the no. 1 strategic competitive advantage that people can have is to invest in their own abilities. recognizing your weaknesses is as important as knowing your strengths. the difference between the good and the great is commitment to continuous improvement. it’s so easy once you get some results to become content and even complacent. it’s my belief that the best people never stop trying to improve. they also realize that no matter how good you are, there is always an opportunity to be better.”
cma broker of the year finalist calum ross, of the mortgage centre canada mortgage professionals inc, toronto, ont. page 34
“We like to describe ourselves as halfway between a bank and a broker; we have locations, toll-free phone numbers and salaried employees like a bank, but we have the rates that only a broker can provide. We will give you advice on how to get the best mortgage even if that mortgage is not provided by us and having well educated, well-trained salaried employees was the only way i could see to achieve this goal.”
cma broker of the year finalist Dan eisner of true North mortgage, calgary, alta. page 34
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EDITOR John Tenpenny
SEnIOR STaff WRITER Vernon Clement Jones
SEnIOR STaff WRITER Shane Buckingham
naTIOnaL SaLES ManaGER Trevor Biggs
accOunT ManaGER Andrew Davies
OffIcE ManaGER Marni Parker
SuB-EDITOR Rachel Naud
DESIGn ManaGER Jacqui Alexander
DESIGnER Vivid Design Solution
PRESIDEnT Tim Duce
cEO Mike Shipley
April 2011
mortgagebrokernews.ca 8
readers Write web comments
Join the CMI TeamAgents that Stand Out
A Member of
Call Us Today @ 1-888-465-1432Submit Your Resume: [email protected] Us Online: www.cmiloans.ca/careers/Ethics. Technology. Connectivity.
Broker kicks off ‘revolution’ to promote industry ethicsIf a Realtor gets fined for misconduct, their name is published with the amount of the fine. Depending on the criteria, I think that would be an excellent idea for our industry. I realize that stuff happens and we all aren’t perfect, but if a broker has been blacklisted by a lender or something of that nature, it would raise the bar.
– @kiltedbroker
I have always believed that the number of people in our industry is far less important than the number of professionals. The Canadian public will be the judge of our future market share based on their perception of our industry as a profession and the level to which we individually aspire, train and continue to learn how to present ourselves as professionals, not order-takers. Hiring practices have played a part in the past in the number of unqualified people allowed into our profession for the sale of a number. Personally, I think there should be a mandatory two-year articling period for anyone entering our industry who has little or no financial background, before they can be licensed and then the broker of record has to sign off on a specific set of training criteria being completed, before they are allowed on the street.
– Brian Matthey
I would like to add that I think brokers, not associates, need to be more mindful of who they bring into their brokerage. For most brokerages, not all, it has been about the quantity not quality. I have heard of brokerages protecting some associates who are doing shady business due to
MortgageBrokerNews.ca reader Pollwhen will the Bank of Canada raise interest rates?
their volumes and I seriously hope this is not true. Brokerages need to take a zero tolerance approach to those associates who have been cut off by lenders and placed on Redx. Personally, I think the lender should hold the broker accountable for the actions of their associates.
– Jeremy Nagel
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July 19
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mortgagebrokernews.ca 10
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Maureen Holloway to host 2011 Canadian Mortgage Awards
radio personality and comedian Maureen Holloway has been announced as the host for the 2011 Canadian Mortgage Awards, sponsored by ICICI Bank.
“I can’t think of a better way to celebrate the Royal Wedding than by getting wasted with a bunch of mortgage brokers. Can you?” joked Holloway.
Maureen Holloway is Canada’s worst kept secret, as she is heard on radio from coast to coast as host of The Last Word, a commentary on the foibles of the famous, featured live every morning on Q104 Halifax, 103 The Hawk London, Power 97 Winnipeg, Joe FM Edmonton, Q107 Calgary and Rock 101 Vancouver. Maureen also brings a strong female sensibility to Q107 Toronto’s flagship morning show Derringer in the Morning with Maureen Holloway.
On television, Maureen has hosted The Dish Show, the Comedy Network’s Gemini-nominated gabfest, and Flick, the Life Network’s movie review show, as well as regular features on CTV’s eNow and Canada A.M. Her daily blog “More Mo” is read by thousands, or perhaps it is read thousands of times by the same person – who knows? Maureen is the recipient of the Canadian Association of Broadcaster’s Gold Ribbon Award for Humour, a fact she attempts to insert into every conversation. Diagnosed with a rare form of breast cancer in 2005, Maureen is an outspoken advocate for women’s health issues, and proud to be associated with fundraising campaigns for St. Michael’s Hospital, Princess Margaret Hospital and Women’s College Hospital. She lives in Toronto with her husband and two sons, and her dog Asta. CMP
Mortgage lender MCAP is taking direct aim at the big banks, with bonuses for brokers bringing in clients who would otherwise renew or refinance with the Big Five.
“We are taking the lead by launching the first, of what we hope will be many initiatives aimed at growing mortgage broker market share,” said Ron Swift, president of MCAP Service Corp. “We invite other lenders to join forces with us to support the mortgage broker channel and increase market share by targeting customers currently using the banks and other non-broker channels.”
The lender’s initiative will extend brokers an additional five basis points in commission on switches and refinances from banks. To be eligible, mortgages must fund with MCAP by June 30, 2011.
MCAP bills the bonus as a way of offsetting broker costs in acquiring the new business, but also a way of encouraging them to stay connected with clients long after the initial origination. Another goal is to inject new borrower blood into the non-bank lending market.
“I think it’s a phenomenal idea,” Wayne Goulding, a broker with Dominion Lending Centres – Forest City Funding, told MortgageBrokerNews.ca. “It’s also an acknowledgement of just how difficult it is to get a
borrower to leave a lender for another when it’s time to renew or refinance.”
According to a recent study commissioned by CAAMP, nearly two-thirds of Canadians at least consult brokers for their first mortgages, but only about 27 per cent use them to refinance. A mere 21 per cent turn to brokers for renewals.
That has a knock-on effect for non-bank lenders largely dependent on brokers to send mortgage business their way.
MCAP is asking brokers to be more aggressive in growing the sector’s market share by taking business from “lenders who do not support the mortgage broker channel as this would represent real market share growth for the broker channel.”
Growing broker involvement for renewals and refinances should also accrue to the client’s benefit.
The study, conducted by Maritz, shows that those renewing or renegotiating with a broker’s help reported a decrease of 1.4 points, compared to 1.0 among all renewals.
“I congratulate MCAP for taking this step, and coming up with an initiative to stimulate greater broker awareness,” Mark Kerzner, president of TMG The Mortgage Group Canada told MortgageBrokerNews.ca.” It’s fitting because brokers represent the best alternative for consumers seeking home financing.” CMP
mCAP going after the Big Five
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71%
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Vancouver rent appraisal company set sights on Calgary, TorontoA new Vancouver outfit offering online rent appraisals – in real-time – is pushing east, planning to offer the automated service in Calgary and Toronto where the number of income suites is on the rise.
“There are automated systems that provide real estate value assessments,” said Jason Upton, president of the newly minted Aedis e-rent. “But there’s never been anything that did it specifically for rental appraisals and for specific markets. We do.”
The company, quietly launched last fall, has developed appraisal software focused on Metro Vancouver’s burgeoning rental market. It gathers intelligence from thousands of past and present classifieds, MLS listings, its own appraisers and, even, Craigslist before crunching the data and spewing out a fair market rental value.
Lender and brokers are driving company growth, said Upton, also counting credit unions among users of a service billed as “cheaper and faster” than industry averages.
The service has proved particularly handy for mortgage professionals evaluating the revenue potential of a residential property’s income suite.
Vancouver’s mature housing market has led the country in the growth of basement, second-floor and garage-apartment conversions, all done with an eye to providing a revenue stream for homeowners grappling with the highest housing prices in Canada.
“The rent appraisal is a very useful tool for us given the number of income suites on the market and the fact that lenders don’t often require a full appraisal for owner-occupieds with loan-to-value ratios below 90 per cent,” said Deb White, a broker and owner of DLC White House Mortgages in Vernon, B.C.
Her brokerage has been using Aedis’s quick assessments for the past five months, even in cases where sellers can furnish lease agreements for their income apartments.
“Sometimes the rental agreements that you see can have overinflated values,” White told MortgageBrokerNews.ca, “and the economic rent appraisal letter provides the lender with a more objective valuation of the rental income potential.”
There’s also the problem of getting an appraiser access to a rental unit, said one Vancouver broker.
“A lot of times we have everything ready to go, but we’re held up waiting for a tenant to allow access,” said Garth Ellis, president of Verico Ellis Mortgages Canada, pointing to the rules and regulations of the Residential Tenancy Act, which set out restrictions on immediate access for landlords.
Calgary and Toronto brokers are increasingly in the same boat as Vancouver, with more and more homebuyers looking to defray the cost of carrying a property with the help of an income suite. The move reflects the real estate value climbs in those markets, only now coming under downward pressure.
Upton plans to adapt his automated system for Calgary and, then, Toronto – both within the year. The move anticipates the growing need for rent value appraisals separate and apart from the more-comprehensive property valuations that usually include that data.
Still, Aedis e-rent remains a niche service.“It’s not something that all brokers will need
all the time,” said Upton, “but it’s there when they do need it as a one-stop shop for economic rent appraisals.” CMP
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mortgagebrokernews.ca 14
neWsbusIness advIce
authenticity is at the core of virtually any successful enterprise. Authenticity means to
be genuine or accurate in representation, and that is in large part what creating your business fingerprint is all about. Knowing what your business is about beyond just the mortgage business, means an increased opportunity to serve clients at exceptional levels of satisfaction and tailor your message to reflect the promised experience of working with you. Knowing what you are about and sharing that with others will only take your business so far if the business you operate does not authentically reflect these promises.
Your business fingerprint is the customized mark your business leaves on everything it touches. If you read Part One of this series, you have clarity on what your authentic business fingerprint ought to be. Implementing, or putting it into action, is the next critical step. Reviewing your discovery notes, consider these five pieces to drive your implementation process in creating your business fingerprint.
know where you are goingJust as you would not head over to a client’s home without knowing their address, you cannot effectively implement your business fingerprint if you don’t know the destination of your business.
Where do you see your business in five years? Specifically. Write down as many points as are relevant to you and your business vision. Remember this is not a bucket list. It is a target you will spend the next five years striving for. As you write these responses, reflect on the notes you took from completing the discovery process to ensure your five-year vision aligns with what your business is authentically about – your business fingerprint.
As you look wide-eyed at the five-year vision of your business, put a date beside it to make it real. Wow.
Now let’s make it very real. Look at that five-year vision and write down what your goals are for one year from now. Write down that date too. Then start to make a similar list, reflecting on where your business is today, how much needs to change to get where you want to go, how much time and resources you have to drive that change, and of course, what will best reflect your business fingerprint.
Sit back, reflect and enjoy seeing your one-year goals and five-year vision. Mark those dates on your calendar. They are your new deadlines.
strategies for 12 monthsKnowing what the goals are for the next year, it is time to set some strategies on how to achieve them. Consider all aspects of your business, including
Creating your business fingerprint: part two – implementIn Part Two of Carla Wood’s series, she helps brokers with the next step of their Business Fingerprint plan – putting it into action
sales, marketing, finance, human resources, office operations, and so on. Look back on your SWOT and look for links between your strengths and how you can leverage them against your weaknesses and your opportunities. Consider your threats and how to most effectively mitigate them. Now it is time to start writing out your strategies.
If we reflect on the analogy of driving to a client’s home, the strategy would be to either use a map, or a GPS, or a web search to find directions. Your strategy might be focused around timing – the fastest way to get there, or around gas consumption – the shortest distance, or around cost – avoiding toll roads to get there. Whatever your strategy: decide, and then look to your chosen tool to solve your issues.
Each strategy needs to be measurable and specific with an end date indicated, so you know you have achieved it. It can be simple or complex.
An example of a simple strategy might be “Increase office efficiency to create an additional two hours of productivity in each team member’s work week by Aug. 1, 2011.”
A more complex strategy might be “Develop a social media campaign and a followup process that drives at least 100 web-inquiries a month and results in a web inquiry conversion rate of 25 per cent to followup and a conversion of 30 per cent from followup to business closed by Feb. 28, 2012.”
tactics drive actionThis is the good stuff. Now that you have done all the big picture work, here is where we break it down into what you need to do to achieve your strategies which authentically reflect your business fingerprint.
Think about tactics as step-by-step action items for each strategy that take you from where you are today to where you want to go. Each tactic requires an implementer and a deadline. An implementer is the person or people who will be responsible for completing that specific tactic by the specific deadline given.
In our client visit analogy, if we assume the strategy was to arrive in the fastest time possible using our GPS system, we can consider that each directional change indicated by the GPS is a tactic. It tells you how far before you need to make the turn (deadline), and it indicates who the implementer of that turn needs to be (the driver).
mortgagebrokernews.ca 15
neWsIndustry
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You have enough tactics when you can see that completing all your tactics would successfully achieve your strategy. In the GPS example, you would know when you arrive at your destination.
tracking for resultsThe success of implementing your business fingerprint is highly dependent on tracking your results. Tracking activities and results show you how successful your business is at living out its business fingerprint. Are you doing what you say you do? Is it working? If implementing your business fingerprint is not driving results for your business success, then there may be some adjustments that need to be made. These may be around the definition of your business fingerprint, the implementation approach, or how the business communicates the business fingerprint.
Decide what you want to track and distil that down to something measurable, so that you can have a simple gauge for implementation that keeps record of growth, decline or stagnancy. Tracking does not tell you why, but it does give you data to be able to reflect on in order to make informed decisions around improving results. The last piece of driving your implementation is often the clarifying piece on “why” and “how” your results can be improved.
Accountability for disciplineAccountability means choosing someone informed, trusted, at arm’s length and regularly available to hold you and your business accountable for implementing what you have set out to achieve. Make a short list of where you might find this individual. It could be an investor in your business, a spouse, a friend, a trusted mentor, or a business coach.
Without accountability, virtually every business gets distracted from the business fingerprint. Instead businesses tend to focus on the current mini-crisis, or imminent issue of the moment. Accountability keeps the value of implementation in perspective, while still resolving the unexpected challenges that inevitably arise in business.
As you complete your plan to implement your business fingerprint, remember that the act of implementing is the key. When you begin communicating this same message to prospects and consumers, they will experience the authenticity of your business, in that you provide what you promise. Get ready to change the way you drive business.
Carla Wood, MBA, MSRE – Managing Director, EDI Implementation Engineers (www.edicoaching.com) CMP
mortgagebrokernews.ca 16
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One edmonton broker has begun what he’s dubbed the “the Mortgage revolution,” bringing together industry professionals for a candid and often critical conversation on ethics, integrity and – in a troubling number of cases – the lack thereof.
“Our first discussion was in Edmonton in March and was about how we, as brokers, can stop giving a home to the men and women who give our industry a bad name,” Mike Cameron, managing partner of Axiom Mortgage Solutions, told MortgageBrokerNews.ca. “They’re guys who are running around out there but aren’t necessarily qualified; they intentionally withhold information from lenders; they blatantly lie about the competition; and they generally lack the integrity and ethics that our industry needs.”
The Alberta broker played host to a half-day professional development conference late last month, with industry trainer Greg Williamson addressing the group of 80 mortgage professionals on ways to grow market share even as competition -- with the banks and between brokers -- grows.
Those same pressures, along with the present economic uncertainty, have likely exacerbated the integrity and ethical lapses brokers increasingly cited as a major concern, said Cameron. He’s preparing to take his roundtable discussion of sorts on the road to Calgary, for a May forum focused on keeping alive a dialogue begun in Edmonton.
“We ‘the good guys’ need to band together and say ‘there’s no room for unethical behaviour in our industry,’” he said, suggesting the industry may want to study the more closely-regulated accounting and legal models.
Any move in that direction would raise the bar on licensing requirements and give the industry’s professional associations greater power to police their members.
Licensing authorities across the country already wield that kind of authority, said another broker in Edmonton for the discussion.
“I have concerns as a broker and brokerage owner, but also as the northern director of ethics for the Alberta Mortgage Brokers Association (AMBA),” Gord McCallum, president of First Foundation Residential Mortgages in Edmonton, told MortgageBrokerNews.ca. “I hear the complaints against brokers, but I don’t think the industry is any less ethical than any other. You can try to legislate good behaviour, but there will always be rule-breakers.”
Like many brokers across the country, McCallum would like to see continuing education requirements strengthened and greater emphasis placed on testing.
“This is complex work,” he said.Regardless, concerns about the industry’s reputation are already on the radar
screen of most brokers, although blame is frequently cast south of the border.According to a recent survey of 500 Canadian brokers, and conducted by The
Real Estate and Mortgage Institute of Canada, about 72 per cent of Canadian brokers feel that American media reports about the role of mortgage professionals in the subprime debacle have negatively affected their business.
That may be unfair given the oversight Canadians mortgage professionals are subject to.
“Canadian mortgage brokers typically employ sound business practices, are highly regulated and ongoing surveys show that their customers exhibit high levels of customer satisfaction,” said REMIC President Joseph White. It’s “a far different experience than what has been reported in the United States.”
But Canadian brokers can’t afford to rest on their laurels, said Cameron, asking brokers to encourage their colleagues to meet ethical guidelines they’ve agreed to uphold: “In Canada, brokers have a 70-plus market share that we can take from the banks, but we don’t have to beat each other up.” CMP
Broker kicks off ‘Revolution’ to promote industry ethics
Michael Cameron
An old question got a new answer during a panel discussion at the annual Mortgage Broker Association of British Columbia’s (MBABC) annual conference in Vancouver.
The first day of the event saw a five-member panel of lenders discussing topics of interest to mortgage brokers and when the age-old question “Who owns the client?” was posed to those assembled, Jim Smith, VP of Scotia quipped, “The client owns the client.”
“Consumers have become much more sophisticated,” he explained.
George Hugh, VP, lending sales with ING Direct commented that service is the key to client retention. “At the end of the day, whoever provides the best service will win the client,” he said.
Added Paul Grewal, president of Street Capital Financial, “The key to client retention is effective communication between the broker and the client.”
The panel also discussed issues as broker compensation and new accounting rules.
“The [IFRS] rules are calling for banks to hold more capital, which will cut into their income,” said Hugh. “It’s a cost to us.”
That cost might eventually be passed on to brokers in the form of changes to compensation models, though not everyone agreed on that point.
“I don’t think the right solution is changing broker compensation,” said Todd Poberznick, VP sales with Bridgewater Bank.
When the topic of trailer fees came up, Michel Cubric, director, mortgage servicing with Resmor, noted that while his company won’t rule out their use, it’s not something Resmor is considering right now.
“We believe brokers control their own destiny better when receiving upfront fees.” CMP
lender panel discusses mortgage issues at mBABC conference
mortgagebrokernews.ca 17
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British Columbia’s newest private lending association is calling a meeting with the province’s securities commission a significant first step in addressing concerns about new federal regulations and their potential impact on Mortgage Investment Corporations.
“We’re concerned that NI 31-103 regulations might possibly duplicate existing regulations with respect to investing in mortgages in B.C.,” Alan Cross, president of the British Columbia MIC Managers Association (BCMMA), told MortgageBrokerNews.ca. “Having met with the Commission, they seem to have a good grasp of our industry, and we were satisfied that they were representing our interests in discussions with their provincial counterparts.”
The new investment rules are focused on streamlining registration requirements and exemptions for securities dealers and advisers from one end of the country to the next. At the same time the federal instrument will impose new registration requirements for investment fund managers.
It’s that last objective that raised eyebrows in B.C.’s MIC community and helped drive the formation of the new association, which was formally announced at the Mortgage Brokers Association of British Columbia (MBABC) Conference last month in Vancouver. BCMMA now has 16 members, managers of $1 billion in lending capacity.
MICs in the western province are already regulated under B.C.’s Mortgage Brokers Act, and although those rules largely focus on broker obligations to borrowers,
they do regulate the sale of certain mortgages to investors. There is some indication that the NI 31-103 regulations – still being phased in by the B.C. Securities Commission – could needlessly duplicate industry oversight, said Cross.
One possible impact, argue critics, is the new requirements around increased capital, bonding, disclosure, compliance could prove too onerous for smaller MICs to handle. That would effectively slow growth of this niche area of private lending where investors buy shares in a mortgage investment corporation, which, in turn, acts as a private lender.
The new association promises to better position MIC managers to lobby government and address regulatory and external issues that directly affect their business, said Cross.
“We feel that we can present a common voice to regulators,” he told MortgageBrokerNews.ca. “Instead of each MIC hiring a lawyer to understand compliance issues, in the future we’ll be able to do that together.”
BCMMA does have other key mandates, with Cross pointing to the exchange of ideas between members and the bully-pulpit role of any professional association in helping to foster ethical and business standards.
It is, in fact, MIC managers, and not the MICs themselves, that are BCMMA members. To join, candidates must identify the management of a mortgage investment corporations as their primary source of income and agree to conduct business in “an ethical, professional and respectful manner.”
That attention to transparency should increase investor confidence in MICs, which continue to grow in B.C., Alberta and Ontario. Cross’s group is the first of its kind in Canada.
Despite any potential negatives, the new NI 31-103 regulations may bolster public awareness and interest in the industry, say analysts. They point to the additional licensing and registration standards likely to lend the relatively new sector greater legitimacy. CMP
BC MIC managers take concerns to regulators
Percentage of U.S. homes that were in negative equity at
the end of 2010 (Core Logic)
23%
mortgagebrokernews.ca 18
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those brokers hoping for a sea-change in the way they’re compensated may soon
have accountants to thank – more specifically, newly adopted accounting rules changing the way lenders themselves get paid.
Coming into effect starting Jan. 2011, those International Financial Reporting Standards (IFRS) will not only require lenders bring securitized mortgages onto their balance sheets but spread out interest gains from those mortgages instead taking that profit upfront.
“Under the IFRS accounting changes, going forward lenders who adopt the rules will be required to keep securitized mortgages on their balance sheets,” Jason Boggs, a partner with PricewaterhouseCoopers, told CMP. “Therefore, securitized gains will then be spread out over the life of the mortgage instead of being taken in a lump sum, upfront.” He suggests the change will primarily affect CMHC-backed mortgages that lenders have packaged and then sold as securities.
Albert Collu, the new president of the Independent Mortgage Brokers Association of Ontario argues that the change will have a knock-on effect for brokers, as lenders – both banks and non-banks – move to offer trailer fees as a way of better managing cash flow.
Under the terms of that compensation model, brokers receive only a portion of their compensation at mortgage closing, usually up to 75 bps. That excludes any finder’s fee or rewards. Equal “trailers” instalments then follow, paid out each year on the anniversary
date of the initial closing. Those smaller payments to the broker, often about 15-bps, continue if the borrower renews with the lender.
The model is relatively new to the Canadian market, with only a handful of lenders currently offering it as an alternative to upfront single-payment commissions.
That standard way of doing things has created the boom-or-bust revenue stream brokers grapple with, said Collu, whose Argentum Mortgages and Finance Corp. recently tied trailer fees to its own private-label, launched earlier this year. He welcomes any influence the IFRS changes have on compensation models.
“It seems very likely that the IFRS changes are going to encourage lenders to investigate a move to the trailer model,” he told CMP. “And I think that’s ultimately a good thing for the industry and marks its maturation.”
Not everyone agrees, with Home Trust President Martin Reid suggesting the accounting changes will have no real effect on broker compensation.
“I don’t see a move to trailer fees because for the IFRS accounting changes,” he told CMP. “This is just an accounting rule change and is not impacted by how the broker fees are paid out.”
Mortgage agent David Larock, president and mortgage agent at TMG The Mortgage Group Integrated Mortgage Planners, agrees that the IFRS changes, meant to bring
Accounting for change
Top: Albert ColluMiddle: Martin Reid
Bottom: David Larock
Brokers and lender disagree on the effects new international accounting rules will have on the mortgage industry, but those Vernon Clement Jones spoke to do agree changes are coming
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federally regulated lenders in line with their counterparts in the EU and most first-tier financial service centres, won’t directly affect brokers.
“I don’t think it will lead to a new rash of lenders pushing the trailer fee model,” he told CMP. “I think most brokers still prefer the upfront commission model, and if lenders aggressively push trailers they may end up trading their cash flow problem for a revenue problem.”
Even if lenders avoid upsetting a compensation structure brokers like, adoption of the international reporting guidelines as the new standard may impact another key facet of the mortgage business: rates.
Home Trust has now moved to increase its rates by 20 to 65 basis points in response to asset-to-capital multiple requirements mandated by the new accounting changes.
With securitized mortgages moving onto the balance sheet, federally regulated lenders like Home Trust must now allocate additional capital to cover them. That may significantly increase a lender’s capital costs depending on just how much of its book is in securitized mortgages. The Big Five face the same new requirements, although not until the end of October and the start of their fiscal year. Non-bank lenders generally begin their year on Jan. 1.
While Home Trust was already well-capitalized, said Reid, the IFRS changes have encouraged it to adjust some its own priorities. It is now placing greater emphasis on non-prime mortgages, which effectively increases spread margins. The lender has also raised rates on some fixed- and variable-rate prime product in order to maintain spread ratios in the face of higher capital requirements.
“If a lender has asset-to-capital constraints, it’s going to have to look at that which gives the biggest spread and that’s non-prime lending,” Reid said. “That’s a reality, but from a risk standpoint, the lender will need to look at the balance between risk and reward and may choose to do the lower spread business to mitigate risk.”
Not on the table for Home Trust, said Reid, are plans to reduce broker compensation in order to better adapt to the accounting rules. It’s one possible Collu anticipates. Home Trust, however, won’t be leading the charge.
“Lowering broker commissions has never been a part of the discussion at Home Trust because that is not the issue here,” Reid told CMP.
Brokers have, however, reacted to the rise in interest rates. That “conversation” may spread if the big banks decide to raise their own rates – a way of putting distance between what their borrowers pay and what their depositors receive. CMP
mortgagebrokernews.ca 20
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I F YO Ur e a l lY wa n t tO e x p e r I e n c e h Ow I n t e l l I g e n t
t e c h n O l gY c a n c h a n g e YO U r b U s I n e s s ,
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the independent Mortgage Brokers Association of Ontario (iMBA) announced the appointment of Albert Collu, CPMA as its new president at the association’s annual general meeting on March 24.
Collu is the president and CEO of Argentum Mortgage and Finance Company. Collu joined IMBA in 2007 and most recently held the position of vice president supporting partner relations and strategic development.
“I’ve been a member of IMBA for years and I thought if I can give something back, then I’m happy to do it – it’s really that simple,” Collu told MortgageBrokerNews.ca.
“We want to continue to add value and strength for our members and we want to be a leadership group that spearheads initiatives regarding key issues like regulatory changes, continuing education mandates.”
Collu also wants to ensure that IMBA is perceived by members and the public as it really is. “My goal is to rejuvenate and reignite our board,” said Collu. “Our board has been unfairly viewed as an old boys’ club and that’s a fallacy. We are a more youthful group that is well-positioned to inject some
excitement and grow the membership and take on the challenges that face us.”
“I am sure I speak for the IMBA board of directors when I say that we are looking forward to working under Albert’s leadership and growing IMBA into a dynamic association,” said IMBA executive director Joe Rosati.
IMBA also announced the results of our general election of the board of directors. Four new directors have been elected to serve a three-year term until the 2014 AGM. They are: Jeff Atlin, CPMB - Abacus Mortgage; Raj Babber - Canadian Lending Network; Jonah Bonn - Ontario Wealth Management Company; and Bill Nugent - Neighbourhood Dominion Lending Centres. CMP
IMBA names new president for 2011
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I F YO Ur e a l lY wa n t tO e x p e r I e n c e h Ow I n t e l l I g e n t
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mortgagebrokernews.ca 22
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Brokers prepared to let Alt-A and non-prime clients pass them by may miss out on the market’s fastest growing segment, those attending the recently held CMP Mortgage Workshop were told.
“Don’t be a B mortgage snob,” Albert Collu, president and CEO of Argentum Mortgage and Finance, told a group of about 50 brokers at the Toronto event, part of the Canadian Real Estate Investors Forum.” The fact is that one in five people looking for a mortgage are turned down by the bank. And there is an expectation that this market will increase.”
The advice came as part of Collu’s workshop, focused on that segment of the market analysts’ prediction that they will experience significant growth over the next five years. They point to the slow pace of economic recovery, a Canadian workforce in transition and tighter lending guidelines as key drivers.
The end result may be an increasing number of Canadians seeking high-ratio loans, but with the kind of bruised or battered credit preventing them from winning prime rates. Still, it’s important to remember, said Collu, that as many as 50 per cent of those borrowers will retain the “capacity to service the debt.”
That’s also the case for Alternative-A deals, also expected to spike and be driven by the growing number of self-employed Canadians, tradespeople and hospitality workers. The group is often challenged to provide the kind of proof of income – T4 slips, pay stubs and tax assessment notices – banks look for. Collectively, they represent as many as 6.74 million potential clients, said Collu.
An expanding divorce rate may also grow alt-A lending as Canadians experience isolated credit challenges and debt run-ups in their push to re-establish themselves.
“As brokers, we’ve got to find solutions to help these types of clients,” Collu told workshop participants.
Brokers already account for some 80 per cent of alt-A/subprime mortgage originations, although only a fraction of the country’s 12,000 mortgage professionals are actively courting the business.
“You know, brokers have to change their mindset about non-prime clients,” said Collu “They tell themselves that ‘The rates are higher than I’m used to selling’ or ‘I don’t like to charge fees.’”
In fact, the challenge of steering those borrowers through the transaction process can be relatively straightforward, although Collu and other industry veterans suggest a higher degree of client coaching is required. Even that investment, he said, is likely to pay off for brokers willing to put in the time.
“At the end of the day, that client is going to refer the hell out of you – more than your A clients – because you’ve been able to get them a mortgage when they thought they wouldn’t be able to,” said Collu. CMP
Brokers learn about fast-growing Alt-A market at CMP Mortgage Workshop the independent Mortgage
Brokers Association of Ontario (iMBA) recently named Joe Rosati as the association’s new executive director.
Rosati has an extensive background in the financial services industry, with over 25 years experience in mortgage financing, working exclusively with the mortgage brokerage industry. Prior to joining IMBA Rosati was a regional vice president with MCAP; and most notably with Scotiabank for 16 years as national director of mortgage broker sales.
“I am honored to serve as IMBA’s executive director,” said Rosati. “I saw a great opportunity with there being over 12,000 registered mortgage brokers and agents in the province of Ontario and I really want to be a part of the continued growth of this industry and our association. In my more than 25 years in the mortgage broker industry I have seen this become a respected profession.”
With new regulations coming from FSCO mandating continuing education for mortgage brokers, Rosati sees an opportunity for the industry to increase its market share with consumers.
“As we continue raising the bar of professionalism through regulation and education, what we’re doing is increasing the overall level of knowledge which will only resonate with the consumer going forward,” said Rosati. “The increased quality of advice and services that will be given to the consumer, that alone will increase market share through greater customer satisfaction...one client referral at a time, if you will”
Rosati says the entire industry, including national and other provincial mortgage broker associations is focused on this goal. “Everyone agrees that this is what we need to do. Everyone is committed to increasing the level of service and knowledge that we provide to the consumer.”
According to Rosati, the association has been working on a strategic plan. The basis of this plan has been derived from the feedback received through a membership survey done at the beginning of the year.
Reaching out to Ontario brokers is at the top of Rosati’s list of things to do. “What IMBA will be putting in place is continual communication out to our membership eliciting what their requirements and challenges are and what as an association we can do to help them with that.” CMP
IMBA names Executive Director
Joe Rosati
“ brokers already account for some 80 per cent of
alt-A/subprime mortgage originations, although only a
fraction of the country’s 12,000 mortgage professionals are
actively courting the business. ”
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Right Michael Kal (left), president
of Cornerstone Property Appraisals and Consulting
and Jason Smith, President and CEO of Solidifi.
Appraisers solidify charitable givingCharity may not always begin at home, but in Jason Smith’s case, it did find impetus there.
In February, the president and CEO of appraisal management firm Solidifi initiated Buck At A Time because of a medical emergency on his own homefront. The charity focuses on children’s rehabilitation, providing support funding for both hospital programs and research.
“When you nearly lose your six-year-old, you think of what you can do to make things better for other families going through the same thing,” Smith tells CMP.
In 2007, his six-year-old son, Alexander, battled bacterial meningitis. The insidious infection can start with a stiff neck and a mild fever before rapidly progressing to seizures, coma, brain damage and, all too often, death. With the help of Toronto’s Holland Bloorview Kids Rehabilitation Hospital, Alexander won that battle.
Four years later, he’s like any other nine-year-old, says Smith: “He’s running, skiing – doing everything a normal Grade 4 does.
Solidifi and a growing number of its appraiser-partners are now committed to getting other Canadian kids back on their feet.
Through the program, members of the firm’s appraiser network have begun donating $1 from each appraisal fee to Buck At A Time. The more than $4,000 raised in the first month is earmarked for child rehabilitation hospitals across the country, with 10 per cent of that money directed at research now underway at the Toronto facility that took care of Alexander. Each year, Solidifi will match those funds and expects to raise $50,000 by the end of the year.
“The support we receive from Solidifi’s appraiser community will ensure children and their families have access to the best research in childhood disability,” says Valerie McMurtry, president
After watching his son recover from meningitis, Solidifi president/CEO Jason Smith turned to the company’s network of appraisers hoping they’d help other children do the same. They have
Holland Bloorview Kids Rehabilitation Hospital Foundation. “We look forward to a long and meaningful partnership with Solidifi.”
More than 200 appraisers in the network have already made long-term pledges of support, with their donations going to child rehabilitation facilities in their respective communities.
The number “heroes” is growing.“Our appraiser-partners are signing up without
us doing any marketing of the charity,” says Smith. “The initiative has just sort of gone viral and has just grown.”
Michael Kal, president of Cornerstone Property Appraisals and Consulting, was one of the first in the Solidifi network to enrol in the program.
“I’m proud to be associated with Buck At A Time,” he says. “On behalf of all appraisers in Ontario, I truly appreciate the opportunity to make a difference in the community.”
The collective cause has had other benefits.“Even the notion for an appraiser having a great
relationship with an appraisal management system is kind of unheard of in North America,” concedes Smith. “But this program has helped us to connect not only with the community but with each other. It has reinforced the idea of a partnership.”
In very tangible terms, the effort is expected to provide the kind of mobility devices, therapy, respite care and home improvements that families need when grappling with a child’s catastrophic or debilitating illness. In sending a portion of donations into Holland Bloorview’s research around childhood disability, Buck At A Time also aims to positively impact the lives of children with disabilities across the globe.
“You hear about a car crash somewhere and that a child survived,” says Smith, “but there are so many challenges after that as they get back into the community. We can help them return.” CMP
mortgagebrokernews.ca 26
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mortgagebrokernews.ca 26
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EquitablePrintCMP_OCT_2010.pdf 1 10-10-20 3:31 PM
residential mortgage brokers continue to turn down commercial business rather than lead clients through the often-daunting application process, private lenders told a recently held CMP mortgage workshop, part of the Canadian Real Estate Investors Forum.
Commercial mortgage applications do, in fact, require a higher level of broker involvement, and carry a greater degree of uncertainty, said Lionel Larry, president of private lender First Source Mortgage Corp. But the potential payoff for brokers willing to stay the course – or even to co-broker multimillion-dollar deals – is great.
“The average residential agent throws away a commercial deal because they’re not familiar with it, because it’s significantly different from residential,” he told more than 50 brokers who gathered for the Toronto workshop. “We tell residential brokers: Don’t be overwhelmed and don’t just be a traffic cop – get involved with a commercial deal, stay with your client. If you have the skill set, there’s no reason why any of you shouldn’t bring a commercial client directly to us instead of going through an intermediary.”
Winning greater broker participation has and continues to be challenging despite the protracted economic recovery, which has cooled home sales and sent industry professionals scrambling for new opportunities. The reasons, said residential specialists attending the workshop, centre on the often onerous stewardship need to bring a commercial application to a lender.
Developing a bulletproof loan summary – a key element for any commercial deal – means obtaining environmental assessments, conducting financial, tenancy and market analyses, proposing loan structuring and, above all else, defining a clear exist strategy for the lender. Even then, only about one in 10 commercial deals come to fruition, with broker remuneration – usually a one per cent fee – dependent on a positive outcome.
It’s a lot of work for what remains a very uncertain outcome, said several residential brokers at the commercial workshop – part of the Canadian Real Estate Investors Forum, bringing together mortgage professionals and property investors for two days of networking and professional development.
“Generally, with commercial mortgage work, there tends to be a low return ratio on input,” mortgage agent Michelle Brienza told MortgageBrokerNews.ca at the workshop. “Also
residential brokers have to ask themselves if, at the end of the day, are they doing the best for the client in hanging onto the deal.”
There is help. The Real Estate and Mortgage Institute of Canada (REMIC) and others offer professional development courses specifically focused on commercial brokering. The programs centre on shoring up confidence, but highlight the need for brokers to leverage lender contacts and “package” the deal.
That presentation is usually key in selling a deal to lenders. For brokers, it’s like going into the Dragons’ Den, REMIC founder Joseph J. White told workshop attendees. “In the case of commercial mortgages, the lenders are the dragons.” CMP
CMP Mortgage Workshop brokers encouraged to learn more about commercial mortgages
Calling it a first in the industry, Pacific Mortgage Group Inc. announced the launch of a compensation model that allows its mortgage brokers to obtain an enhanced compensation split on their entire book of business of up to a maximum of 100 per cent commission splits with no back-end fees attached.
This model is being fully underwritten by myNext Mortgage Company Ltd., which along with its exclusive national mortgage brokerage brand Mortgage Architects comprises Pacific Mortgage Group, and based on the amount of business that is directed to myNext, applies to the mortgage broker’s entire origination volume placed with any residential lender in Canada.
Under the new program, the mortgage volume directed by affiliated mortgage planners and brokers to myNext is determined each calendar year. If on December 30th of each year, a minimum of 10 per cent of a partner broker’s book of business is placed with myNext, additional compensation will be paid on that broker’s entire origination for that year, not just on the volume placed with myNext. The additional commission is in addition to the existing base commission’s levels of the three business models now offered by Mortgage Architects.
“Our mortgage planners can keep up to 100 per cent of their commissions by supporting their own proprietary lender,” said Meini Ickert, SVP of national sales with Mortgage Architects “Since most of our mortgage brokers are owners of both the brokerage and lender, they gain further as shareholders through the bottom line growth such innovative programs deliver. This gives our franchise partners the ability to earn 100 per commission splits and our full-service partners 95 per cent commission splits on their entire book of business.”
“In today’s marketplace, it’s important to give our brokers a competitive edge through finding inventive ways for us to invest back into their businesses,” said Alex Haditaghi, Pacific’s CEO. CMP
Pacific Mortgage Group to offer 100 per cent commission model
Joe White
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An “election reprieve” from interest rate hikes may not translate into the busy spring season brokers were hoping for, with industry leaders identifying a possible downside to the federal campaign.
“Elections usually prove to be a distraction for buyers,” Chad Robinson, president of Best Interest Mortgages, told MortgageBrokerNews.ca, the same day opposition parties handed Prime Minister Stephen Harper his election mandate. “The campaign rhetoric tends to breed uncertainty and potential buyers tend to adopt a wait-and-see approach because of it. That’s especially true in my market, Ottawa.”
More than 20 per cent of capital voters are directly employed by the government, with another 25 per cent dependent on federal contracts. Robinson and other Ottawa brokers are now bracing for a possible slowdown as the country shifts into election mode.
They’re not alone.Industry professionals from across Canada
voiced similar concerns as they gathered in Toronto for the CMP Mortgage Workshop, part of the Canadian Real Estate Investors Forum. Still, many brokers told MortgageBrokerNews.ca they expect the run-up to a May 2 election will have little impact on spring buying.
Historically, say economists, the Bank of Canada avoids ratcheting up interest rates during an election, a way of distancing itself from partisan squabbling. A sluggish global economic recovery, a high-flying Loonie, conflict in the Middle East and
spiking oil prices have also quieted concerns the Bank would move as early as April to raise its key interest rate, now 1.0 per cent.
Ottawa’s move to tighten mortgage rules last month should also keep the Central Bank from nudging its overnight rate higher.
CIBC joined other big banks in adjusting its forecast, suggesting Governor Mark Carney won’t make that move until at least July.
That could give homebuyers a three-month window to find a property and move to closing before prime rates climb upward. It’s unclear how many will take that opportunity, said Rishi Sharma, a mortgage professional with Centum in Mississauga also attending the CMP Mortgage Workshop. He remains optimistic
“Election or no election, people are still going to be buying houses,” he said. Clients may, in fact, see past the uncertainty of the election and find real incentives to move ahead with new mortgages or refinance ahead of a fall rate hike.
“Many know where they stand now,” said Sharma. “They know what the interest rates are; they know what’s on the market and they know what their personal finances are. In the fall, they may not.”
Still, brokers may have already experience this year’s boom in the weeks leading up to Ottawa’s mortgage changes on March 18.
“We saw a 50 per cent uptick in business in the weeks leading up the changes,” Robinson said, offering another possible reason brokers could see a slower spring season. CMP
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APRIL 2010, 5.4
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NEWS ANALYSISWHY IT’S TOUGHBEING SELF-EMPLOYED
The 2010 CMA Broker of the Year fi nalists
toptopcoming out on
2010Banks start interest rate shake-upMany lenders increased their posted rates on fixed mortgages starting on March 29, 2010, signaling the start of an upward move on record-low interest rates.
Royal Bank, TD Canada Trust and Laurentian all moved their posted rates on five-year fixed mortgages by 0.6 per cent, a move soon followed by the remaining big banks and non-banks. The move prompted a surge in requests from variable-rate clients to lock into fixed rates.
“The phones have been ringing off the hook,” said Donna Ramsay, a Mortgage Architects broker based in Orangeville, Ont. “We have several clients that we have committed to calling to see if they want to lock into a fixed. We tell them that we’re not here to tell them what to do – we’ll just give them the facts.”
The interest rate increase will also mean higher qualifying criteria for new clients, who must meet the five-year posted fixed rate when the new mortgage insurance rules kick in on April 19.
CIBC economist Benjamin Tal told the Globe and Mail the rise in rates along with other factors means the booming housing market will slow down significantly after spring.
“Given where interest rates are now, I still think you’ll see an extremely strong spring. However, after that I think the housing market will stagnate,” Tal said. “We are in the ninth inning of this booming house market. We are not expecting a crash, but we will stagnate.”
One year later The move by TD Bank, RBC and CIBC and other banks to raise rates on fixed mortgages because of rising bond yields may result in a temporary boon for lenders able to resist following suit in the next 24 to 48 hours, said industry professionals reacting to announcements on April 4, 2011.
In a written release, TD Canada Trust was the first to announce it would increase most of its fixed-term mortgage rates anywhere from 20 to 35 basis points. The lender pointed to rising bond yields and a subsequent increase in the cost of funds. RBC and
CIBC quickly pointed to the same factors compelling similar hikes of between 15 and 35 basis points.
Outside of rates for its six-month convertible and one-year mortgages, all of TD’s fixed-rate product will be subject to the adjustment. Terms of five to 10 years will see the biggest increase, climbing 0.35 percentage points.
The posted rate for one of the most popular mortgages – the five-year closed – is set to rise to 5.69 per cent, while one-year, three-year and four- year terms will see a more-modest 0.2-percentage-point increase. Two-year terms go up by 0.3 percentage points.
Canada’s other big banks are expected to follow suit over the next 24 to 48 hours, said analysts, pointing to industry trends. The fixed rates at Canada’s non-bank lenders – also subject to the vagaries of the bond markets – are likely see the same changes, although the adjustments are likely to trail behind the Big Five.
That delayed reaction may accrue to the benefit of those hold-out lenders, as brokers focus in on rates ahead of the Central Bank increase expected in July.
“I will go to the lender with the lowest rate,” Michelle Brienza, an agent with Toronto’s Lending Logic Financial, told MortgageBrokerNews.ca within hours of the TD announcement. “I think that those lenders who are able to hold off on raising their rates the longest over the next 24 to 48 house will get an influx of mortgage deals.”
Mortgage lenders are now studying what if any rate changes they’ll have to make.
“We are also looking at our rates,” Ron Swift, president of MCAP Service Corporation told MortgageBrokerNews.ca. “The bond yields have risen… we do not know if any other mono-lines will see this as a short-term opportunity…like everyone else we always need to balance volume with profitability.”
Canadian banks are forecasting as much as a 100-basis point increase in five-year bond yields over the next two years, making for a corresponding hike in fixed-rates mortgages over that same period. CMP
mortgagebrokernews.ca 33
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u.s.
Mortgage defaults steadily dropping in U.s.: s&PThe number of Americans defaulting on their mortgages has steadily been declining, according to February data out this week for the Standard & Poor’s/Experian Consumer Credit Default Indices
First mortgages in default were down 14 per cent in February compared to a month earlier, and down 42 per cent compared to a year earlier. Second mortgages in default were down three per cent compared to January and 52 per cent compared to a year earlier.
Similar declines were seen in bank card and auto loan defaults.“Default rates continue to fall across all major categories and
year-over-year across the five highlighted cities,” said Craig Feldman, director at S&P Indices. “The overall trend lasted a number of months now, reflecting improved consumer health and the appearance of a continued economic recovery.”
But another study out recently by Core Logic showed 23% of U.S. homes were in negative equity at the end of 2010. CMP
u.k.
Borrowers pay back more of their mortgagesHomeowners appear to be taking advantage of low interest rates after Bank of England figures showed borrowers paid a record £24 billion last year.
According to the Bank, homeowners paid back more than £24 billion to lenders last year – the highest since records began in 1970.
Meanwhile, £7 billion was paid back in the final quarter of last year – also a record amount during any quarter.
According to Howard Archer, chief UK and European economist at IHS Global Insight: “Extremely low savings rates have made it much more attractive for many people to use any spare funds that they have to reduce their mortgages.” CMP
Mortgage availability to increaseIn its latest Credit Conditions Survey, the Bank of England reports that mortgage lenders expect the availability of home loans to increase during the second quarter of 2011.
However, a negative outlook for house prices and, to a lesser extent, the economy in general is likely to rein in recovery of the market.
The quarterly survey also reveals that bank and building societies increased the availability of deals with high loan-to-value (LTV) ratios (greater than 75 per cent LTV) during the three months to early March.
The trend is expected to continue, alongside rises in maximum loan-to-income ratios, owing to strong competition in the low LTV market.
Credit scoring criteria and approval rates were unchanged in the early part of the year, but the average credit quality of new mortgage lending increased somewhat, suggesting an improvement in the credit ratings of applicants.
Turning to mortgage default rates, lenders had expected these to stabilize in the first three months of 2011 but the period saw an increase and a further rise expected in the coming quarter. CMP
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34 mortgagebrokernews.ca 34
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Many in the industry tout themselves as being more than just a mortgage broker, but Darick Battaglia really does offer more than mortgages.
Battaglia, who has owned a brokerage since 2001, places a strong emphasis on education – for the benefit of his clients. In addition to an AMP designation, Battaglia also has his real estate broker’s licence, is a certified Canadian Residential Appraiser and has completed the Canadian Securities Course. Previously, Battaglia worked in the residential construction industry, as well as developing and owning commercial properties. He is also a founding branch member of Canadian First Financial Centres, which provides financial planning and insurance products through a network of top mortgage brokers. To ensure that he is kept up-to-date on industry changes, Battaglia says each professional designation requires its own ongoing continuing education requirements.
“I have a long history of real estate education that I bring to each deal,” he says. “And that knowledge is shared with each client.
“My passion for knowledge and ensuring my agents and clients receive the most I can offer is paramount. My last 10 years as a mortgage broker have been very satisfying and I have enjoyed being on the leading edge of creating new and innovative ways to add value to both my agents and their clients.
His agents have responded, with two of them having been nominated for the Canadian Mortgage Awards’ Best Newcomer category over the past few years, with one winning the award.
Clients also win when dealing with Battaglia – literally. A recent semi-annual promotion entitled the “Great Mortgage Giveaway” gave mortgage borrowers the opportunity to win their mortgage payments for a year.
For Battaglia it’s all about making sure the clients are happy, and not just with their mortgage.
“Success for me comes from a genuine concern for the clients’ welfare that’s associated with me ensuring their lives are where they want them to be.”
Darick BattagliaDominion lending centres Bankfighter inc, Barrie, Ont.
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Referrals don’t come into mortgage agents’ offices every day, but 20 years might seem like too long for some to wait. Not Roy Deeks.
“We’ve got repeat business from people that did their first mortgage with us 20 years ago and are now returning to us to buy a second home or to finance their children’s education,” he says. “Some clients are even third generation.”
Referrals come from a reputation built over a long period of time, something Deeks values more than anything.
“If you don’t have your reputation, when things get tough, the lenders pick and choose who they’re going to deal with,” he says. “I have seen a couple of downturns during my career and I’ve seen people who left an established brokerage and weren’t able to get status with lenders.
If you have a good reputation, you get the benefit of the doubt.
Gaining the trust of the client from the beginning is what pays off in the long run, according to Deeks.
“When something does come up and someone they know needs advice we do get the referrals, but sometimes it’s a long time in between, but they still
come and that to me tells us that we did the right thing, five or six years ago for that client for them to be sending that referral to us.”
It really does work, just ask Deeks’ wife. “I originally met my wife as a mortgage client and five years later I renewed her mortgage and we started dating,” recounts Deeks.
Before getting his start as a mortgage broker in 1988, Deeks spent 20 years in the financial services industry working with such companies as First City Trust and Montreal Trust in mortgage administration.
With two partners and 50 agents at the brokerage, Deeks believes in delegation and supporting staff and agents to perform tasks and earn revenue and ultimately taking over his responsibilities as much as possible. That way he can concentrate on mentoring and managing the business.
“You need to see the big picture to identify trends and recognize opportunities related to your services and products that will result in more value for your clients while resulting in varied sources of personal revenue,” says Deeks.
“My longevity in the business and comfortable lifestyle would not have been possible without the vision to adapt to a constantly changing industry and I pass this philosophy on to my younger partners and agents so that they can hopefully shorten their own learning curve to success.”
rOy Deeksthe Mortgage centre canada Unity Financial services, richmond Hill, Ont.
38 mortgagebrokernews.ca 38
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Nicole Drummond sees herself as a sort of librarian of mortgages. Information is power in her eyes and she transfers that to her clients.
“It’s important to gain the client’s trust by showing them the knowledge I have and the service I can provide,” she says.
Prior to entering the mortgage broker industry, Drummond spent 23 years in the financial services industry and when her institution closed its doors, instead of taking one of the jobs offered to her by other banks, she decided to take on the challenge that building her own business would provide. What Drummond strives to provide for her clients is guidance, not just about the mortgage but about their bigger picture financial future.
“I don’t sell rates, I sell features and benefits,” she says. “I not only look at the immediate need of a mortgage, but I also look at what the future needs may be.
NicOle DrUMMONDDominion lending centres the Mortgage source, Ottawa, Ont.
“You need to dig a little deeper and help [first-time homebuyers] understand what it means to buy a house and the budget they will have to deal with.”
Drummond feels this approach empowers clients to take an active role in their financial future. “I see my job as a facilitator. Looking at the whole picture will dictate the product they need now, while minimizing the penalties they will have to pay to refinance, sell or upgrade to another home, while maximizing their flexibility.”
Flexibility is also important for brokers. Drummond believes that in order to be successful brokers have to find a niche and “your niche can be anything,” she says.
Drummond’s niche is specializing in government relocation, which serves Canadian Forces, RCMP and Government of Canada personnel who are moving.
“[Having a niche] helps you to focus on finding the lenders that suit that niche. And that is what it comes down to, because there is so much out there. Clients have different needs and you have to find out what that financial need is and focus on the lenders that will be able to service those clients.”
For Tom Lam, being the father of three young children has taught him important lessons that he has applied to his day job as a mortgage professional.
“I’ve learned that you must be a good listener and patient in order to effect change.”
Lam certainly has a different take on who he views as his customers – and it doesn’t only include the borrower.
“Although the end user (the customer that is getting the mortgage) is still the brokerage’s client, we’ve made it a point to call our mortgage associates our customers as well. Our philosophy is if we can create excellent mortgage associates and treat them well, then they will ultimately treat their clients that way as well.”
Since founding the company in 2005, Lam has expanded its associate pool by 25 per cent on a yearly basis.
Lam focuses on ensuring that associates have proper support and training so that they
have the best chance of success. “I don’t focus on getting the deal in the marketplace, I believe if I take care of my people they will take care of the business.
“We are committed to creating an environment where families thrive, and associates excel,” says Lam. “Our unique business experience enables us to build better associates.
Lam does this by employing full-time managers in key roles such as marketing, training and business development that help build the business and support the associates.
Brokers need to focus on the relationship, not the transaction, says Lam. And offering clients the best choice is one way to build client relationships.
“We work closely with various lenders in Canada by researching the best products and by participating in the development of new and innovative products for the mortgage market,” says Lam. “And as consumer advocates, we have the privilege of offering these products to our ever-expanding client base.”
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Next time you’re hiring a new agent you might want to ask yourself a simple question: Would I want this person doing my mortgage?
“Make sure everyone who carries your business card reflects you,” says Don MacVicar. “If you wouldn’t want them doing your mortgage, then you need to think about who you are recruiting.”
After 17 years in the banking and mortgage industry, MacVicar relocated back to Halifax and opened the brokerage with his brother David, who along with Kerri Reed (in the Toronto office) make up the rest of a team that MacVicar says is the reason for the brokerage’s success.
“We are a completely transparent organization and have developed an incredible culture based on team work and sales excellence within a family atmosphere,” he says. “From a leadership standpoint,” adds MacVicar, “It’s being able to compile the
great people that make it all work, who do a great job every day.”
“Customer service is the heart of our business. It’s why we come to work every day. We call it the “Premiere Service Promise” to our clients, focused on contact and proactive communication to our clients and referral sources through the entire transaction and beyond. Our most significant role actually starts after the closing to maintain the relationship and generate referral opportunities.”
It’s something they’ve already been recognized for, having won the CMP Canadian Mortgage Award for Best Customer Service and the Verico Award for Best Customer Service in 2009.
The key to success says MacVicar is to stay true to your values.
“In our business it’s so easy to look at production and make decisions for financial reasons. But if you stay focused on your core values and why you get up every day, then you’re going to make the right decisions. We come across decisions every day that can help our business or hurt our business and sometimes the easier one is not the right one.”
DON MacVicarVerico Premiere Mortgage centre, Halifax, N.s.
BriaN MattHeyVerico the Mortgage Professionalskingston, Ont.
Using your garage as an office isn’t the ideal situation when opening your own mortgage business, but for Brian Matthey there wasn’t much of a choice. Besides, it only lasted two months and since that fall in 1989, what is now The Mortgage Professionals has grown from three people in Matthey’s garage to three partners who operate six offices with a staff of 30 in the greater Kingston area.
“We opened the garage doors everyday for business and went into the house to plug in the telephones,” laughs Matthey as he recalls how the company was created out of the ashes of Coulter Financial Group. “When [Coulter] went into receivership, the receiver didn’t even know about the Kingston office,” he says. “I called him up and ending up buying the office furniture and moving it into my garage for two months while our new office was being built.”
For Matthey, raising the profile of brokers is directly linked to the manner in which brokers practice their chosen profession.
“If I’m an advocate of anything, it’s for professionalism,” he says. “[That] will raise us to where we need to be. Our market share will grow in direct proportion to the effort we put into raising the bar of professionalism in the public’s eye.
“While we’ve grown as an industry in numbers, a lot of people don’t necessarily make a good industry. A lot of professionals make a good industry.”
And Matthey doesn’t just say the words, he puts his thoughts into action through his hiring process. “As a company, we could have hired a lot more people, but we’ve been very careful about who we hire and how we hire,” he says. Most of the new hires complete a two-year training stint as an underwriter, according to Matthey, “before we let them on the street.”
For Matthey, growing the industry means going beyond just doing mortgages. Adding to what his brokerage does is a partnership with Canadian First Financial Centres, a financial services company. To Matthey this is just another evolution for the mortgage broker industry,” he says.
“Many people don’t have a high level of financial expertise and a mortgage is a lot more than a rate. You’re not just doing a mortgage for them today, but you’re looking at the mortgage and how it’s going to impact them today, down the road and for a lifetime. It’s about making their mortgage fit into a financial plan and that’s different than the traditional mortgage broker, who’s already looking for the next deal to close instead of spending more time with their clients and addressing all their financial goals.”
Matthey’s motto is “Never stop thinking.” When in 2002 he started updating his clients on economic conditions online to help them make informed decisions, he was “blogging” before it was called blogging. “The mortgage market is continually changing and evolving and you never stop learning and adapting if you are to grow.”
After 22 years and at 61, when most people are thinking of retirement, Matthey says he is very excited about the future of this industry and has no plans to leave. “I may slow down a bit at 70.”
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Bill NUgeNtNeighbourhood Dominion lending centres, Newmarket, Ont.
Bill Nugent can thank his wife Tina for his move to the mortgage industry 16 years, where he has had considerable success.
“[Tina] has been in the mortgage industry for over 30 years, as a business development manager for some of our lender partners, and I was always intrigued by the mortgage brokering industry,” recalls Nugent. “I loved the idea of building my own business as a mortgage broker, and assisting clients through the mortgage process, so I decided to take the plunge. It has been the best experience of my life, and I thoroughly love going to work each day.”
But Nugent doesn’t work alone and feels it’s a bit misleading for one broker to receive an award.
“It is an award that I feel should be offered to my production team,” he says. “Without them, we would not have achieved the goals we set
each year, as a team. In this business, the entire team plays a role in making each look their best and succeed to their full potential. We all win when we improve our own businesses each year by working together and sharing best practices.”
Those practices include treating the customer with respect and treating mortgage brokering as a profession, not a job.
“Put yourself in the position of the client on the other side of the table and ask yourself, how would you want to be treated? Be honest, upfront and don’t waste their time, your time or the lender’s time,” says Nugent.
Doing that requires knowledge. “Know your numbers,” he says. “Sometimes new brokers don’t take the time to understand what their break-even point is and they don’t take the time to understand what the products are that are available from the different lenders in the marketplace. Most lenders have a niche product and if you know what the niches are then you can match the right product with the right client.
“We feel our No. 1 strength is that we listen to the client to identify their mortgage needs.”
Calum Ross is a mortgage broker, not a stockbroker. But he will venture to make one recommendation – that you buy stock in yourself.
“The No. 1 strategic competitive advantage that people can have is to invest in their own abilities,” he says. “Recognizing your weaknesses is as important as knowing your strengths.”
And how do you that?“The difference between the good and the great
is commitment to continuous improvement,” says Ross, who topped CMP’s 2010 Top 50 Brokers list. “It’s so easy once you get some results to become content and even complacent. It’s my belief that the best people never stop trying to improve. They also realize that no matter how good you are, there is always an opportunity to be better.”
For Ross, that means investing money in your professional development. “You are an extension of your brand. You are the team leader and you have to lead by example. The best leadership example you can provide is a continuous commitment to improvement.”
A huge part of my success Ross says can be attributed to his commitment to educating the public on real estate investment and personal
calUM rOss the Mortgage centre canada Mortgage Professionals inc., toronto, Ont.
finance issues. He is regularly featured in the media as a mortgage expert including appearances on television and in print media.
“In the process of arranging a mortgage, we are helping people create likely the largest debt in their life, and I believe that as mortgage originators we have a professional responsibility to help them manage that debt – and by doing this I have made a difference in people’s lives,” he says.
Ross isn’t the only expert in his office. His team’s unique skill set includes financial planning, tax/estate law and accounting, which, according to Ross, allows them to look at the client’s mortgage from a much broader perspective than most other brokers in the industry.
“We manage our clients’ mortgage proactively and review everyone’s needs once a year to ensure that both their short- and long-term financial goals are being met and adjusting their mortgage accordingly when the need arises,” he says.
Ten years after opening his own mortgage brokerage, Ross says he’s more committed than ever to helping his clients.
“I think the mortgage industry is a great industry. We earn a great living, we have a fantastic opportunity to make a difference in people’s lives and I enjoy going to work every single day.”
mortgagebrokernews.ca 45
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cOlliN BrUceDominion lending centres Mortgage Mentorsedmonton, alta.
Collin Bruce got his start as a mortgage broker thanks to a microwave.
In 2006, after having worked in commercial lending at a Big Five bank and owned a pair of Subway restaurant franchises with his brother and coming out of it with debt, Bruce was flipping houses without much success and the career path of mortgage brokering was suggested to him by his own agent.
“After we had sold the franchises, I had applied and been given another bank job, but I was also considering mortgage brokering,” says Bruce, who has been a mortgage agent since 2006 and opened his own brokerage in 2009. “Not only was I concerned about working solely on commission, but I also didn’t have any money to pay for the agent course. But one day, when I checked my bank account online I discovered a commercial microwave that we
You know you’re doing something right when people you turn away are sending you business referrals in return.
“Sometimes we can’t do anything for the client and they’re sending us referrals anyway, because they have faith that what we’re saying is true,” says Gail Di Stefano, by way of explanation. “No matter who walks through the door, we treat them with respect, whether we think we’re going to be able to help them or not.
“We’re upfront and people appreciate that.”Di Stefano embarked on her career in the
mortgage industry in 2006, after resigning her position as branch manager of a finance company and convincing her husband Mike to become an agent as well. What followed was eight months of commuting from Niagara Falls to Toronto to obtain her broker licence, made all the more difficult with three small children at home.
In 2008 the first BTB Mortgage Solutions office was opened. “I waited until I was 100 per
gail Di steFaNOBtB Mortgage solutionsNiagara Falls, Ont.
cent ready,” says Di Stefano. “Failure was not an option.”
What began as a two-person operation is now a team of 10 with two additional satellite offices.
The key to their success Di Stefano believes has been creating awareness in the community by maintaining a strong advertising presence with radio and newspaper ads and online via Facebook, Twitter and a company blog.
“I do many community events. It’s safe to say if you live in Niagara, I’m in your face in some way helping out at the schools or with a local charity,” says Di Stefano.
Even when rate shoppers call the office, Di Stefano has a strategy. “I will reverse 411 the telephone number and send them a thank you card for their inquiry,” she says. “I find this usually brings the client back to me. It’s not always about the rate, it’s also about proving customer service is my No. 1 priority.”
That can take many forms. Every month Di Stefano sends a selection of clients what she terms a “movie package” consisting of a thank you note, a video store gift card and some microwave popcorn.
“Everything helps,” she says. “Staying in touch with my clients helps with repeat business and I do this in many ways.”
had bought and returned, was credited to my credit card for $800. I can remember thinking, ‘Collin, you didn’t have the money five minutes ago, so you won’t miss it. Register for the course.’”
For Bruce, having fun is important. “I truly love my job. Because our office is so full of laughs, it doesn’t feel like work.” He adds, “You can’t do it all yourself, so you have trust other people to help you.”
When it comes to his work, Bruce says it’s always about putting the client first. “Matching their unique needs to a specific lender offering a specific product is the priority,” he says. “I spend time on an ongoing basis ensuring I know what’s happening in the market, as well as what rates and products are available.” He will, for example, advise clients not to refinance their home if it’s not the right thing to do.
“I feel blessed to be involved with such a great business that truly makes a difference in the lives of borrowers and offering our trusted advice to ensure our clients receive the best products at the best rates.”
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Dan Eisner is not a negative person, but you might not be sure what to think if you read his business plan.
“I believe a strong business strategy is based on things you won’t do, rather than things you will do,” says Eisner. “And that is what will set you apart from your competition.”
“We’ve been successful because we think differently and act differently than the vast majority of brokers.”
True North Mortgage, based in Calgary with offices in Toronto and Halifax was started by Eisner in 2006 after a stint in business consulting in Toronto after getting his MBA. The company plans to open offices in Montreal and Vancouver very soon.
“I moved back to Calgary and started working as a mortgage broker to make a little money on the side,” he says. “All the while I was continuing to hunt for a job. As it turned out, I was a bad fit for the consulting industry and being a broker was my niche, so I decided to take up mortgage brokering full time.”
DaN eisNertrue North Mortgagecalgary, alta.
Don’t ask Luisa Hough about her numbers. It’s not something that she spends a lot of time worrying about.
“It’s never about reaching a number,” she says. “As long as my clients are happy and I did a good job for them, that’s what matters.”
The only number she will admit to keeping track of is customer satisfaction and according to her, of more than 700 clients, only two have not had a satisfactory experience with her brokerage.
“That is more of a success for me than a reaching a number,” says Hough.
Hough entered the mortgage broker profession in 2004 after working as a legal assistant for many years and discovering she enjoyed working with numbers and real estate transactions. She began part time after the birth of her daughter, but soon realized her new career required a greater commitment.
“After the first year, it became evident to me that part time would not be enough for me to fully look after my clients and grow a business,” says
lUisa HOUgHexclusive Mortgage Professionalssurrey, B.c.
Hough. “I felt the drive to do more so I focused on my career full time”
From there, Hough reaped what she believes are the rewards that come with helping her mortgage clients. “I experienced the reactions from people that I have helped and I found it fulfilling to help people achieve their dreams. My clients have become like my family; they are with me throughout the life of their mortgage.”
For Hough, it’s about building trust with her clients and having the ability to make them feel like they are her only clients. She advises brokers not to be “desperate for the deal.” If your client trusts you, says Hough, they won’t care about what rates are out there, but rather they will want to make sure they’re taken care of by their mortgage professional and the deal will take care of itself.
“I empower my clients to understand the mortgage products and how they can benefit from them,” says Hough. “It’s about not just being an order-taker but to be a solution provider and helping my clients to achieve their long-term goals and showing them how to get there faster.”
That’s how Hough measures her success. “I believe that our success is not always measured by volume.”
But Eisner’s vision of a mortgage brokerage was a little different than everyone else’s. True North only has retail locations, staffed by full-time salaried employees and they only deal with clients with good credit.
“We like to describe ourselves as halfway between a bank and a broker; we have locations, toll-free phone numbers and salaried employees like a bank, but we have the rates that only a broker can provide,” he says.
“We will give you advice on how to get the best mortgage even if that mortgage is not provided by us and having well-educated, well-trained salaried employees was the only way I could see to achieve this goal.
True North also deals with a select number of lenders, so as to offer better service to clients says Eisner. “Each agent must know everything about our top lenders and be able to answer the client’s mortgage question regarding lender policies and lender documentation requirements without hesitation. This is the primary reason we have only four top lenders. Anymore and we would not be able to train our staff to the levels needed.”
It’s a different model and for Eisner that’s the advice he would give any other broker. “You’ve got to do things differently, whatever it is. Just make sure it’s not what everyone else is doing.”
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Operating a mortgage brokerage transparently and remaining true to the values of the people who work there is more than a slogan on a business card to Dan Mass.
“If we combine those two qualities we will come out with some good results,” he says.
That was the goal when Mass and his wife Stacey launched their mortgage brokerage in 2005, five years after they got their start in the industry.
“When we launched our own brokerage we decided to surround ourselves with like-minded individuals who share the same philosophy and vision,” says Mass.
A big part of that philosophy is giving back to the community. “We are passionate about contributing,” Mass says, referring to Inn From the Cold, their chosen charity in Calgary. “We can sometimes forget about the less privileged, who not only cannot afford to get into a home to call their own, but simply do not have a home at all. Inn From the Cold allows these individuals to call their facility a home for an interim period of their lives; all the while receiving assistance to get
DaN Mass,Verico canada First Mortgagecalgary, alta.
Setting and reaching a goal is something Trish Pigott takes very seriously, whether it’s for her own life or meeting the expectation of her mortgage clients.
In 2006, just one year into her mortgage broker career, Pigott set the lofty goal of opening her own brokerage with five years. In 2010 she achieved that milestone, a year ahead of plan.
“No matter what my volume was, I stuck with my business plan, week in, week out, month by month and I’ve always believed in that,” says Pigott. “I believe that hard work pays off.”
Prior to becoming a mortgage broker, Pigott spent 14 years in the corporate world with Home Depot Canada, where she rose to operations manager managing a $60-million store with more than 200 employees. Wanting a change and control of her own destiny, she decided to take her business and financial experience and apply it to the mortgage industry.
trisH PigOttVerico Primex Mortgagescoquitlam, B.c.
“I had a strong understanding of business, which gave me a good foundation when I started in this business,” she says.
This is where goal-setting and planning come in. “I have a very strategic client touch-point plan that plots out month by month what communication my clients receive. I contact them in various ways 18 times per year. My goal has always been top-of-mind awareness, so I’m constantly re-evaluating the things I’m doing as to whether or not I’m going to achieve what I’m hoping for.”
The goal is to make sure the deal is the best fit for the client, period. “I will never place a client in a product just to complete a deal,” says Pigott. “If there are better options available that I cannot provide, I will find a solution, even if it means losing business.
“At the end of the day the goal of our brokerage is to continuously improve the experience for the client, because in this industry there are so many opportunities for the experience to go poorly. We are that experience for the client.”
them back on their feet with finding employment, helping organize financial affairs, as well as provide counseling for many facets of life.”
Building long-standing relationships with customers is paramount says Mass. Doing that in new ways in today’s landscape of evolving technologies is challenging to say the least.
“We are trying to integrate grass roots with newer platforms such as social media,” says Mass. “Although I’m a firm believer in the face-to-face and the good old handshake, the relationship can begin on many different levels these days and there is increasing opportunity to turn your electronic introduction into a handshake; to begin the conversation.”
Being armed with the proper information when talking to clients is something that is very important to Mass. “Being educated is something we value in our role, as we represent not only our company, but the mortgage profession in general.
“Knowing your product, having the training, and being able to speak to your colleagues on any given day for support and advice is extremely important so as to be able to provide the best customer service, and provide it with confidence.”
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Relationships are important for any business, and particularly for Diana Zitko.
I’ve been in the real estate and mortgage industry for 15 years and I never take for granted the referrals that we have coming in. Every day I’m continually making sure that all the relationships we have stay strong.”
According to Zitko, service is what sets you apart in this industry. “However service is not for clients alone, we also keep our service level high with lenders and other partners.
“We all know this is a stressful business and the best way to keep things amicable is to have good relationships and to be nice to each other,” she says.
Zitko’s brokerage employs four women full time and also includes five sub-brokers who work in the office.
DiaNa ZitkOMeridian West coast Mortgagescoquitlam, B.c.
“I hope to be an inspiration to young women in finance and enjoy mentoring new brokers,” she says. “My goal is to always be growing and learning and ensuring the success of my team.”
After five years as a real estate agent in BC’s Lower Mainland, Zitko decided to take her knowledge of the industry and became a mortgage broker with Meridian Financial Services Ltd. in 2001. She then opened her own franchise in 2006.
During that time Zitko has received many honours, including being named Broker of the Year five years in a row while she was with Meridian. In 2008 she was named Business Woman of the Year by WOW (Women of Worth) and was recently shortlisted for Small Business of the Year by the Tri-City Chamber of Commerce.
With so much accomplished in such a short period of time, Zitko is very clear as to why.
“We focus on the solution, not the problem.” CMP
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six referral mortgage marketing mistakesthat make you work harder, not smarter
Mistake #6:
Being a
parasite
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H ave you ever left a voice mail for a potential referral partner, only to find
that they never call you back? Are you tired of being brushed off with the usual smokescreen objection that they “already have a mortgage lender”? Does it feel like you’re chasing after your referral partners instead of having them chase after you? If you answered yes to any of the above questions, rest assured you’re not alone. Most mortgage professionals suffer from the same frustration and unfortunately, few ever find a solution. The rare few who do, become the envy of the industry, enjoying an income and lifestyle most only dream about.
So, what’s the big secret that allows top producers to quickly and easily win the hearts of their referral partners and attract all the referrals they can handle, while the mediocre majority continues to be thwarted by resistance and apathy? Admittedly, there is no simple answer however, much of their success can be attributed to something called the law of reciprocity. This law states that we should try to repay, in kind, what another person has provided to us. In other words, if someone does us a favour, we naturally feel compelled to reciprocate with some favour in return.
For example, Robert Cialdini, Ph.D., in his book Psychology of Persuasion, cites an experiment conducted by Professor Denis Regan of Cornell University where two subjects are asked to rate the quality of some paintings as part of an “art appreciation” event. One of the raters, named Joe, was posing as a fellow subject but was actually Regan’s assistant. The experiment was conducted under two different conditions. In some cases, Joe would ask to leave for a break and then came back with two cans of Coke, one for his fellow subject and the other for himself, stating “I asked him [the experimenter] if I could get myself a Coke, and he said it was OK, so I bought one for you, too.” In the other cases, Joe just left for his break but returned empty-handed. Later on, when the experimenter left the room, Joe asked the subjects to do him a favour by
It has been reported that over 80 per cent of mortgage professionals fail within their first two years. That’s a staggering statistic. Doren Aldana explores some of the reasons why this happens and how new brokers can help themselves succeed in the final instalment of a six-part series
buying some raffle tickets for a chance to win a new car. What was the result? In the cases where Joe had given the subject a free Coke, he had a 200 per cent increase in raffle ticket sales.
As you can see, when it comes to persuasion, the law of reciprocity can be a major game-changer. If used properly it can open the floodgates to your success. If neglected, it can keep you bound in mediocrity. You’d think this is somewhat intuitive, yet rarely will you ever see a mortgage professional send a Realtor a free gift (i.e. a nice pen, Starbucks card, movie tickets, box of brownies, etc.) in advance of their phone call asking for referrals. Instead, they simply pick up the phone and start making cold calls. No gift, no unique value proposition, no nothing. And then they wonder why Realtors aren’t giving them the time of day. The truth is, if all you’re doing is asking for referrals without giving value in advance, chances are you’ll be seen as a “pesky parasite” rather than a profitable partner.
Top producers, on the other hand, understand that their prospective referral partners don’t give a rip about their “great rates” and “great service.” After all, isn’t that what everybody says? They’ve come to terms with the fact that everyone is tuned into the same radio station: WIIFM (What’s In It For Me?). Therefore, they put aside their own needs (i.e. referrals) and focus entirely on what matters most to their referral partners. They ask questions to identify their referral partners’ aspirations, challenges and frustrations. In many cases, just the mere fact that they take the time to ask a few questions
“ as you can see, when it come
to persuasion, the law of reciprocity can be a game-
changer. ”
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and then actually shut their yaps and listen sets them apart from the crowd as someone who really cares. Real, attentive listening is a gift in and of itself. As the old saying goes, “people don’t care how much you know, until they know how much you care.”
With that in mind, here are six ways you can add value to your referral partners before you even ask them to send you any referrals:
1) Free business assessment. This involves asking your referral partners a series of high quality diagnostic questions so you can determine how, and if, you can be of service to them. Like a physician, your job is to simply diagnose their pain and then, if possible, prescribe a cure.
2) Database marketing systems. Most of your referral partners are terrible at staying in touch with their database. They usually have no systems and no plan, and as a result,
they’re leaving thousands of dollars in referrals and repeat business on the table. That’s where you can come in and provide them with a turnkey, ready-made, done-for-you client newsletter. In exchange for this value-added service, they would allow you to put your photo and contact info below theirs on the first page. This gives you instant credibility as an implied “partner” and allows you to get in front of hundreds – and even thousands – of your ideal prospects for free.
“ real attentive listening is a gift in and of itself. As the old saying goes, “people don’t care how much you know, until they know how much you care. ”
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“ you can have everything in life that you want if you just give enough to other people what they want ”
3) Lead generation systems. Remember, every time you help your referral partner generate a new lead for their business that becomes a new lead for you as well. For example, you could show your Realtors how to generate more buyer leads for their listings by helping them implement highly effective just listed cards, real estate weekly ads, Craigslist ads, social media, etc.
4) Advertising opportunities. If you have a database of over 200 clients, you can give your referral partners the opportunity of being featured in your next newsletter mailing (you have a newsletter, don’t you?) as the “Resource of the Month.” For best results, make this a freestanding, separate coloured insert that promotes your referral partners’ special offer (i.e. free consultation, free analysis, free report, etc.). More often than not, this will generate a substantial influx of leads for your partner. You can easily charge 50 cents to $1 per piece. Or if you prefer to enact the law of reciprocity, you can give it as a free gift – it’s up to you.
5) Testimonials. From now on, make it a habit of sending all your purchase clients a client satisfaction survey, asking for their feedback. Now here’s a little secret: add a question to your survey asking for a testimonial on behalf of their buyer’s agent. Every time you generate a testimonial now you have a bombshell gift guaranteed to blow away the buyer’s agent.
6) Selling tools. As you’re well aware, it’s not just how many leads you generate but, more importantly, how many you’re actually able to convert into closed deals. With that in mind, your referral partners are always looking for ways to improve their lead-to-sale conversion rates and if you can help them do it, they’ll love you for it. For example, you could provide your Realtors with a killer-effective listing presentation on a PowerPoint slideshow that they can use to knock the sellers’ socks off and improve their closing ratio.
I could keep going and going but you get the idea. There are loads of ways you can provide unique value to your referral partners, all you need is a little creativity and a go-givers’ attitude. Give soon and often and the law of reciprocity will take care of the rest. In closing, let me leave you with one of my favourite quotes from Zig Ziglar, “You can have everything in life that you want if you just give enough to other people what they want.”
About the Author: Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach. Since 2005, he has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions. Aldana is also the author of a new 3-disc DVD/CD set titled, “7 Secrets to Attract More Referrals on Autopilot.” To pick up your free copy, visit: www.freereferralsecretscd.com. CMP
The Right Partner Makes All the Difference.
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Mary NearySouth Albertacell (403) 880-3447 e-mail [email protected]
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Bruno Valko, AMPDirector, National Sales cell (866) 735-4303 x3504 e-mail [email protected]
Tania HatcherBritish Columbia, Island & Interior cell (250) 818-3884 e-mail [email protected]
Sach Desai, BSC British Columbia, Lower Mainlandcell (604) 328-6901 e-mail [email protected]
Quentin Warawa, AMPPrairies and North Albertacell (780) 446-4440 e-mail [email protected]
Mary NearySouth Albertacell (403) 880-3447 e-mail [email protected]
Corbett ConnorsSouth Albertacell (403) 650-7965 e-mail [email protected]
Steve Futyer, CIM, AMPSouthwestern & Northern Ontariocell (519) 575-8605 e-mail [email protected]
Carlo Parise, AMPGTA, Golden Horseshoecell (647) 404-2297 e-mail [email protected]
James BriniasGTAcell (416) 268-5417 e-mail [email protected]
Julie SandersonEastern Ontariocell (905) 925-2908 e-mail [email protected]
Terrianne Young, AMPAtlantic Regioncell (902) 240-2568 e-mail [email protected]
Your Business Development Manager Team
Industry-leading compensation
CMHC or Genworth insured mortgages
3% Cash Back towards down payment
Dedicated Business Development Managers to serve you
Competitive Fixed & Variable Rates
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boosting your
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brand
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most rely on traditional methods to spread the name of their business: advertising and
word of mouth. The upside of advertising is that it lets you tailor the message you want potential clients to see, but the downside is it can be expensive and not always effective. Word of mouth, on the other hand, is free but brokers have no control over what is said, and it’s a passive form of promotion in that it relies on your customers to spread the word.
But there are proactive ways to build your brand that won’t cost you a bundle. This article breaks down three cheap, but effective ways to boost your brand.
Charity gives backNicole Cannon, managing director of Pink Finance, donates 10 per cent of her trail commission to the McGrath Foundation, which supports breast care nurses in rural and regional Australia and educates women to be breast aware.
Cannon, who has been a mortgage broker since 2002, says prior to the financial crisis she was in a rut, but it was the negativity in the industry during the crisis that really inspired her to do something positive. ‘The whole idea actually came from [department store chain] Woolworths,” she says, recalling that every aisle was decked out in pink in support of breast cancer awareness.
In March 2009, she attended a McGrath Foundation event. Cannon went along to get contacts, but she ended up approaching Glenn McGrath himself.
Within a month she had an official meeting with the McGrath Foundation’s managing director and a month after that they finalized the contract. Pink Finance opened its doors in July 2009.
Cannon, who is a self-described cricket lover, says partnering with the McGrath Foundation was the natural choice. While breast cancer hasn’t touched her life, she strongly identifies with the need to provide breast care nurses in rural and regional Australia.
“Throughout my whole life, my mum was in and out of hospital,” she explains. “And so I know that support is so important.”
She says peers and colleagues have been very supportive, including many of the lender BDMs that she has dealt with for years. Many have even participated in charity events and charity cricket matches she’s put together.
And her customers are equally impressed, she says. ‘The customers love it because, without them having to really do anything, they’re giving to a wonderful cause as well.”
According to Cannon, not only has it created goodwill among her existing customers, but it has drawn many others to her business that she might otherwise not have reached. ‘People who I don’t even know interact with me on my Facebook page,” she says, adding that it has also helped create links with referral partners.
As for her brand, aligning herself with the McGrath Foundation and creating a ‘pink’ mortgage business has given her a strong corporate identity. And by linking to one of the most recognizable and trustworthy charities in the country, she has created an element of trust in her own brand.
At the end of the day, giving regularly to a charity has increased her overall job satisfaction. “It makes it more worthwhile,” she says, adding that the job is not just transactional anymore.
social media marketingFor some brokers, social media marketing seems like a time-waster. Maybe that’s because the usual mediums — Twitter, Facebook, Linkedln — are what people gravitate towards when they want to kill downtime.
But Sarah Taylor, director of Spicy Broccoli Media, a Sydney-based company that specializes in branding, says there are several reasons why mortgage brokers should integrate social media marketing into their brand management.
The first — and it’s hard to argue with this one — is because it’s free. “You have nothing to lose and everything to gain,” she says. She points out that social media marketing can reach a huge audience.
Peter Butler, director of Smart Mortgage Marketing, also argues that it’s a chance to put your brand in front of an audience that could soon be your target market.
Looking for more bang from your brand? Andrea Cornish from our sister publication MPA reveals the secrets Australian mortgage brokers are using to set themselves apart from the pack
“ at the end of the day, giving
regularly to a charity has increased her overall job satisfaction
”
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“You have access to and are exposed to an audience that you wouldn’t otherwise be in front of. And it’s a big audience. And when you look at the demographics, for the most part it’s a mix of your current database age range and your future target market. There’s nothing better than being able to get to your prime target market before they come of age,” he says.
Because social media is all about ‘relationships,’ Butler argues that it gives brokers a chance to genuinely connect with people. It’s a much softer sell than other forms of marketing, Taylor adds. But both warn that if you go in to ‘sell’ on the social scene, you’ll probably disenfranchise most people, and very quickly.
Butler adds that if brokers approach these mediums with an attitude of genuinely trying to help, contribute and engage with people, then they will basically be doing what they do offline, online. “In our businesses, we operate as consultants by providing valuable information to help people make the right decisions. The social scene is the most powerful way to leverage that. And you’re starting to ‘get to know’ people and they’re starting to get to know you.
“The thing is, people want to do business with people, so being real and authentic is the way to go,” Butler says.
So where do you start?According to Taylor, some online media is
better suited to small businesses than others. But it really comes down to what service or product you are selling.
The big five for brokers are Facebook, Linkedln, Twitter, YouTube and WordPress, Butler says, adding that you should start with your Linkedln profile.
“Make sure it’s set up and your profile is complete. Start to build your connections. Next, make and get recommendations. These are simply testimonials you have given, and received. What others say about you is infinitely more powerful than what you say about yourself. This will improve the perception of your online profile.”
Butler argues that people are increasingly using the Internet to do their ‘due diligence’ on brokers. “So the question is this, what does your online profile say about you?” he says.
The next priority would be Facebook, Butler says. In addition to building a personal page, build a ‘business’ page, which will allow people to interact with you and your brand.
According to Spicy Broccoli, a Facebook business page not only gives you a new place to build your brand identity, but it shows people you are up-to-date with technology, generates traffic to your business website, improves your Google rank when it is integrated with your website, allows you to contribute to your
community and gives you a new avenue to interact with your customers, receive raw feedback and build a trusting relationship.
Another huge advantage is that it offers user analytics, which are similar to Google analytics.
This allows businesses to view information about the users of their page such as the city they are from, their gender, age and language.
Spicy Broccoli also advises brokers and other small business owners to give Facebook users a reason to navigate from your business page to your website.
Twitter, YouTube and WordPress can all be used to provide updates and useful information to your clients.
Twitter, which limits you to 140 characters, can be a valuable medium for dispersing quick hits of information such as interest rate rises or unique bank offers. Tweets are quick and easy ways to keep your customers abreast of industry developments and are a very non-invasive way to keep your brand top-of-mind.
YouTube is a valuable medium for explaining complicated concepts to your clients. If you’re comfortable being in front of a camera, then linking a YouTube video of yourself to your web page gives your customers another way to feel connected to you.
And lastly, WordPress is a great way to post blogs. The blogs could be anything from interest rate speculation, to tips on how to save a deposit. It’s a simple system that is very user-friendly.
And best of all — it’s free.While all of these mediums are cost-effective,
there is a time commitment involved. Butler advises brokers to be very specific with their time input — have check-in times and time slots.
“You may need to set more time aside initially so you become conversant with the social language and best practices, but that’s OK. More knowledge, better leverage,” he says.
trusted media sourceBecoming a trusted media source is another fantastic way to build your brand — just look at John Symond.
Symond, who’s been compared to Virgin founder Richard Branson, has cultivated a brand that is inextricably linked to his personality. In the beginning, Aussie Home Loans had little money for advertising, so John Symond learned how to market himself.
He was very vocal in newspapers, television current affairs shows and the
Contact your local BDM or email [email protected]
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TMNational Bank All-In-One is a trademark of National Bank of Canada. 1Financing shall be subject to the credit approval by National Bank. 2$2,000 marketing fee is a one-time rewardfor the first 50 deals or $15M funded in the fiscal year. 3$15,000 trip paid for every 100 deals or 30M funded in the fiscal year. The fiscal year is from Nov 1, 2010 to Oct 31, 2011.
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FREE Websites that allow you to add/create/delete pages at anytime and is fully integrated with the CRM software
Aggressive compensation models
Marketing and loyalty programs for your clients that will be sure to increase your customer retention and referrals
Health Benefit Plan
Strong commitment to ongoing training and support
Access to Argentum’s Central Underwriting Unit to grant you access to lenders, products and pricing
•••
••••••
Argentum_FP_APR11_v3.pdf 1 4/12/2011 10:44:59 AM
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radio in his challenge to the big banks. His sometimes controversial message attracted media like bees to honey, and Aussie Home Loans benefited from the brand exposure.
When customers see your name in the media they think that you know what you’re talking about. Putting yourself out there publicly also helps engender trust. Rogue brokers are generally not looking to invite media attention.
So, how do you do it? There are three keys: be connected, be available and be interested.
To connect with your target audience, think about the media they are most likely to read, watch or listen to. Editors and journalists are constantly looking for sources to quote and the best way to connect with them is to send an email letting them know you’re available for comment. If you can bring to the table some story ideas, you will have an even better shot.
The second key is to be available. Once you’ve been contacted for comment from a newspaper,
TV program or radio show, it’s important to respond in a timely manner. Media professionals are slaves to their deadlines, so responding as
“ there are three keys: be connected,
be available and be interested ”
quickly as possible helps ensure that you won’t miss out on a golden opportunity.
And the last point is — be interesting. Media professionals do not expect comedy gold, but they are looking for someone who can provide more than just informative answers spoken in plain English. Most journalists can get a textbook answer from the Internet, but what they want is a quote that really paints a picture for their viewers or readers. Be honest and authentic, but also don’t be afraid to pull any punches. For instance, if you think the timing of an interest rate rise will negatively affect borrowers or the market — say so.
Speaking your mind will not only stand you i n good stead with media professionals, it will resonate more strongly with potential customers. CMP
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says…survey
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88% OF CANADIANSwant to obtain their mortgage from an institution where they have other financial products.
SOURCE: CAAMP Survey, January 2011
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated.
...but you ONLY do mortgages!
For information on how you can do more than just mortgages contact Wane Davis, VP Marketing & Business Development
1-866-601-7632 · www.canadianfirst.com
w ith the recession in the rearview mirror and the housing market
holding its own, you might think worrying about the economy would have faded from mortgage brokers’ consciousness. CMP’s third annual Broker Sentiment Poll, however, shows that to be a misleading statement.
When asked to name their biggest concerns for the year ahead, 33 per cent of brokers cited the economy slowing and interest rates rising as their No. 1 fear. While not a majority sentiment, brokers this year seem to have an eye on numerous
The Broker Sentiment Poll puts out an open call
to the Canadian broker community to
participate in an online survey where
comments are invited. This year CMP received
nearly 300 responses from brokers across
the country.
CMP presents our third cross-Canada broker sentiment poll to gauge what’s on brokers’ minds. Some of the results may surprise, while others simply confirm what brokers already know
Stay the same
Increase less than 50%
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43%
31%
15%
7%
4%
your marketing budget for 2011 will:
issues, as they also cited fewer lenders in the broker channel (26 per cent), household debt (23 per cent), falling house prices (22 per cent) and reduced revenue due to lower commissions (20 per cent) as being concerns not far behind economic worries.
Stay the same
Increase less than 50%
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43%
31%
15%
7%
4%
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Challenges from the banks are on brokers’ minds, as according to one-quarter of brokers who when asked “What will be the biggest change in the industry over the next year?” responded that competition from bank mobile mortgage specialists will change the mortgage landscape. Banks leaving the broker channel (19 per cent) and lenders moving towards efficiency bonuses and away from volume bonuses (16 per cent) were other changes brokers say are coming in 2011.
“My biggest concern is that the banks are not on a level playing field with brokers. They still do what they want and
0
5
10
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35
Economic conditions
Interest rates rising
House prices falling
Consumer/household debt
Fewer lenders working through the broker channel
Industry reputation damaged by rogue brokers
Reduced revenue due to lower commissions
Meeting the requirements of new licensing
Greater scrutiny from regulators
My brokerage failing
Other
33%
33%
22%
23%
26%
20%
20%
10%
8%
3%
11%
what are your biggest concerns over the next 12 months?(respondents were able to choose more than one answer.)
will you be hiring new staff over the next 12 months?
54% - yes
46% - no
if you answered no, will you be reducing staff?
2% - yes
82% - no
16% - only if market conditions worsen
“ my biggest concern is that
the banks are not on a level playing field with brokers
”
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0
5
10
15
20
25
A massive drop in overall broker numbers
Big bank remote sales teams competing more heavily with brokers
Brokerages to merge
Brokers as multi-product sellers
Brokers charging upfront fees
Lenders moving to e�ciency bonuses as opposed to volume bonuses
New commission structures
Remaining big banks dropping mortgage brokers
Other
5%
25%
7%
10%
4%
16%
10%
19%
3%
what do you think will be the biggest change in the industry over the next 12 months? (respondents were able to choose more than one answer.)
use tied selling to pull people in for a mortgage,” said a broker from Leamington, Ont.
There were some surprising positives compared to last year’s Broker Sentiment Poll that reflect the improved economy. One of the most surprising findings of last year’s survey was the response to the question, “Do you think you might be leaving the brokering industry in the next 12 months?” Last year, 49 per cent of respondents said yes – a sign that some brokers were still feeling the pinch of the economic downturn or re-thinking their choice to be an independent businessperson. This year, brokers did a complete about face, as 92 per cent said they have no intention of leaving the business. That outlook was also reflected when 54 per cent of brokers
do you think you might leave the broker industry in the next 12 months?
92% - no
8% - yes
“ this year, brokers did a complete about face, as 92 per cent said they have no intention of leaving the business ”
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RATE ONLY RANKS 6th in importance to Canadians when choosing a mortgage provider.
SOURCE: CAAMP Survey, 2010
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated.
...but you ONLY do rate!
For information on how you can do more than offer great rates contact Wane Davis, VP Marketing & Business Development
1-866-601-7632 · www.canadianfirst.com
0
5
10
15
20
ten
nine
eight
seven
six
�vie
four
three
Two
One
3%
1%
20%
26%
15%
18%
8%
2%
4%
3%
15%
8%
14%
15.5%
17%
10.5%
8%
9%
2%
1%
1 2 3 4 5 6 7 8 9 10 (ANSWERS)
on a level from 1 to 10 (1 being the lowest), how do you feel the federal government is handling the issue of mortgage regulations?
indicated they would be hiring staff this year and of those who won’t be hiring, 82 per cent said they won’t be reducing staff.
Mortgage rule changesAfter the government announced early in 2011 that it would be tightening mortgage qualification rules for the second year in a row, CMP wanted to hear from brokers about whether they think the Feds did the right thing and what effects the new rules may have. The three main changes made were a reduction in the amortization period from 35 to 30 years; the lowering of the refinance limit of a home’s value to 85 from 90 per cent; and the withdrawal of government insurance on home equity lines of credit.
Nearly half (45 per cent) of brokers said a decrease in mortgage volume would be one effect of the new mortgage rules. An increase in consumer unsecured debt (36 per cent) was also chosen as was an increase in mortgage defaults (24 per cent.).
“It will be harder for first-time buyers (again), which will result in less people purchasing entry-level properties,” said one broker. Said a Victoria broker, “Consumers will be forced to carry high interest rate credit cards without the ability to utilize the equity in their homes, while the values of
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81% OF CANADIANSdon’t have a financial plan but think it is very important.
SOURCE: Maritz Research Canada, 2010
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated.
...but you DON’T do plans!
For information on how you can offer financial planning contact Wane Davis, VP Marketing & Business Development
1-866-601-7632 · www.canadianfirst.com
0-25%
26-50%
51-75%
76-100%
20%
39%
33%
8%
0-25%
26-50%
51-75%
76-100%
22%
42%
27%
9%
what percentage of your loans will come from:
existing clients
new clients
their homes continue to erode because of the changes.”
Not everyone agreed that the rules were uncalled for.
“People had to get their debt in line instead of using their home equity or spending over and above what they could afford for a home,” said one Edmonton broker. Others thought the rules will serve homeowners well when interest rates eventually rise. “It will force some people to live within their means and there will be less of a payment shock when their mortgages are renewed,” said a broker from Regina.
Business strategyWhen it comes to new business not much has changed during the past year. Last year 38 per cent of brokers said more than
0-25%
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39%
33%
8%
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26-50%
51-75%
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22%
42%
27%
9%
“ people had to get their debt in line instead of using their home equity or spending over and above what they could afford for a home ”
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0
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Residential
Commercial
HELOCs
Insurance
Reverse mortgages
Equipement Leasing
Referral
Realtors
Other
33%
33%
22%
23%
26%
20%
20%
10%
8%
what percentage of your business will come from: (respondents were able to choose more than one answer and answers reflect the average for each category.)
if an independent, would you consider joining a national brokerage this year?
56.5% - no
11% - yes
32.5% - if the right offer came along
rank in order of importance (1 being the most important, 10 being the least),each marketing strategy that you plan to capitalize on in 2011.
Email newsletters
Social networking
Direct mail
Blogging
Seminars
Community events/trade shows
Ads in print publications
Other
Ads on radio/TV
Yellow Pages
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
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0
5
10
15
20
Residential
HELOCs
Insurance
Commercial
Equipment Leasing
Reverse mortgages
Private Lending
Servicing
Private Mortgages
Development
Construction
33%
33%
22%
23%
26%
20%
20%
10%
8%
3%
11%
which services will you be looking to build over the next 12 months? (respondents were able to choose more than one answer.)
half their deals would be from new clients. This year, that percentage was 36 per cent. The biggest range was between 25 and 50 per cent, as that was the amount of business that 42 per cent of brokers said they would be new this year.
Residential mortgages are still the mainstay of the industry, as they account for on average 67 per cent of the business for the brokers who responded. As for where brokers will be looking for new business this year, there were several categories mentioned, including private mortgages (14 per cent), commercial mortgages (13 per cent) and HELOCs (10 per cent).
Most brokers also seem to be happy with their situation, whether it be as an independent or as part of a national broker network. Eighty-seven per cent of independent brokers and 81 per cent of national network brokers indicated that they had no plans to switch their status. As far as looking to amalgamate with other businesses in their area, this year’s results showed a majority of brokers (87 per cent) aren’t considering that option, up from last year when nearly half of the brokers said it was a solution they were thinking about to stay competitive.
0-25%
26-50%
51-75%
76-100%
48%
26%
14.5%
11.5%
0-25%
26-50%
51-75%
76-100%
23%
28%
24%
25%
0-25%
26-50%
51-75%
76-100%
48%
26%
14.5%
11.5%
0-25%
26-50%
51-75%
76-100%
23%
28%
24%
25%
what percentage of your loans will be put through:Banks
non-Banks
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YOU NEED TO DO MORE!Financial Planning, Insurance, Investments, Wealth Management, and MUCH MORE!
...we DO!
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated.
For information on how you can do more for your customers contact Wane Davis, VP Marketing & Business Development
1-866-601-7632 · www.canadianfirst.com
if part of a national network, would you consider a return to being an independent broker this year?
81% - no
19% - if the right offer came along
0
5
10
15
20
25
30
35
Blogging
Never
Other
45%
36%
4%
16%
24%
9%
do you use any of the following social networking programs?(respondents were able to choose more than one answer category.)
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DON’T CHANGE YOUR BRAND,change how much you do for your customers!
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated.
...want to do more, CALL TODAY!
For information on how you can add Canadian First to your brand and offer more contact Wane Davis, VP Marketing & Business Development
1-866-601-7632 · www.canadianfirst.com
are you looking at amalgamating your business with another from your area?
87% - no
13% - if the right offer came along
The better economic outlook for 2011 also seems to be having an affect on how brokers are spending money on marketing efforts. A majority of brokers (89 per cent) said that they will allocate the same amount or more for their 2011 marketing budget.
As the year progresses, it will be interesting to see how the feelings and thoughts of brokers may change as economic and mortgage industry conditions fluctuate depending on things such as interest rates, the continued effects of mortgage rule changes and most definitely the outcome of the federal election.
And as the year progresses, don’t forget that CMP likes to hear your comments and concerns anytime, so let us know if you think there’s an issue we’re missing out on or should be covering more in depth. We’re happy to hear from you. CMP
“ a majority of brokers (89 per cent) said that they will allocate the same amount or more for their 2011 marketing budget ”
COULD YOU BE CANADA’S NO 1 MORTGAGE BROKER?COMMENCING MAY 1, CMP WILL BE COLLECTING SUBMISSIONS FOR ITS TOP 50 BROKERS LIST FOR THE FINANCIAL YEAR FOR 2010
DON’T MISS YOUR CHANCE TO BE RECOGNIZED AS ONE OF THE INDUSTRY’S TOP PERFORMING BROKERS!
ENTER ONLINE AT WWW.MORTGAGEBROKERNEWS.CA
SUBMISSIONS CLOSE FRIDAY JUNE 3, 2011
PRESENTED BYPRESENTED BY
CMPTop50Advert2011_FP.indd 1 4/13/2011 11:19:45 AM
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communication st.
Paul Grewal
After hearing from brokers across the country, Street Capital took that feedback and enhanced its product offerings
street Capital continues to forge ahead with new products and services – the direct result
of feedback from brokers.“The genesis for all of our enhancements and
product advancements has been and continues to be feedback that has come to us through formal feedback sessions with mortgage brokers across Canada, but also the hundreds of informal discussions we’ve had with brokers,” said Street Capital President Paul Grewal.
The last four months have seen a rapid succession of product and enhancement launches -- from the lender’s online client portal, MyStreetMortgage.ca, to its D+H Express Upgrade 4.3 for brokers. Introduction of the Street Equity product line has also answered client requests by reducing income requirements to help more Canadians. For brokers themselves, Street’s new loyalty program has extended the option of renewal trailer fees.
D+H express upgrade 4.3Launched in December 2010, this upgrade affords brokers real-time access to deal and condition status updates on their applications.
“Many brokers had been asking for Street to develop its own portal,” said Grewal, “but this goes one better in that it is integrated into Filogix’s Expert system, which eliminates the need to log in separately.”
The option is something only a handful of lenders currently offer. Street’s D+H Express attempts to streamline the stewardship process by piggybacking on the system most brokers stay logged into to build and complete client applications.
“It provides brokers who deal with Street Capital unsurpassed convenience and functionality,” said Grewal, suggesting the system’s real-time updates also save time on followup phone calls and emails.
There are other benefits to Street’s D+H Express Upgrade 4.3:
Expert will interact with Street Capital to update • outstanding mortgage conditions automaticallyThe “Conditions” link on the left-hand side • navigation bar will display responses from Street CapitalEmail alerts notify agents about changes • pertaining to a file
mystreetmortgage.caA portal of a different kind, MyStreetMortgage is all about providing the client a one-stop shop to connect online with their Street Capital mortgage. Most of the lender’s clients will have access to MyStreetMortgage.ca, providing them the freedom
to check balances and taking advantage of prepayment options. Secured access means clients can safely access annual statements, change your payment dates, lock in on a variable rate and change payment frequency. They can also schedule lump-sum pre-payments in advance.
street equity The program, launched on January 2011, is another example of Street Capital responding to broker feedback – in this case, those looking for a way to better serve a growing segment of the workforce.
“We kept hearing about the need for an equity product, said Grewal. Street Equity is our response. As a low-documentation mortgage for self-employed, salaried or commission-income applicants, it reduces income requirements in consideration of an applicant’s equity in the property.”
The program, which can be applied to new • purchases, refinances or transfers, has specific guidelines for borrowers: Up to 65% LTV• Owner-occupied properties• Minimum 650 credit score• Up to a maximum loan amount of $1,000,000• Self-employed, salaried or commission income• NOA and Appraisal required• Fixed rate terms only•
street loyalty program Broker concerns about long-term security and their continuing call for commission choices drove the creation of the Street Loyalty Program, launched in February. It introduces renewal trailer fees as an option for Street’s broker partners.
“Brokers had told us that they wanted a way that they could build future value in their businesses,” Grewal told CMP. “The Loyalty program fosters that.”
Street Loyalty complements Street Capital’s traditional compensation program by giving brokers a deal-by-deal choice between the lender’s traditional upfront compensation and trailer fees. In some cases, that new option may better suit the long-term needs of broker and clients.
“We continue to see significant movement toward that option as brokers migrate to trailer fees,” said Grewal.
There’s another tangible indication the lender’s emphasis on listening to brokers is paying off: Street Capital moved up to sixth position on the Davis + Henderson Lender Insights – Market Share Report for Q4 2010.
“For us, we see that as a validation that our brokers want to partner with us as a preferred lender,” said Grewal. CMP
CONGRATULATIONS TO ALL THE FINALISTS!
April 29, 2011Liberty Grand, Toronto
CANADIAN MORTGAGE
AWARDS 2011
Canadiana Financial Corp
Broker Team
Another event organised by
Post-Party Sponsor
Cocktail Sponsor
Visit us at www.canadianmortgageawards.com or call 416 644 8740Award Sponsors
Platinum SponsorPlatinum Sponsor
CMA_FullPgAd_CMP_APR11.indd 1 4/14/2011 12:52:37 PM
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for brokers thinking about opening their own brokerage, but are hesitant because of the
costs associated with running an office, there is now another option.
Verico The Mortgage Practice (VTMP) is now offering licensed brokers in Ontario the freedom of having a fully supported back office.
According to The Mortgage Practice President and CEO, Ravi Punnia, the program – “YOUR MORTGAGE BACKOFFICE” – is being launched for brokers who want to become a brokerage but do not want the operational headache of all the back office support required to support their agents.
“These brokers will be able to have their own brokerage under VTMP for a small fee and they will not have the headache of managing their own payroll, compliance, HR, training. They will also have access to all VTMP products and policies and procedures,” says Ravi.
“By removing the overhead/operational costs they can concentrate on their own sales and
recruiting their own people.”Punnia says this program is very exclusive
and will only be offered to selected brokers. The goal with this program is to give
brokers the freedom to run their own brokerage focusing on recruitment of
agents and sales.“TMP has always managed to
exceed their targets, now this is the next step,” says Punnia.
This program originated from Punnia’s challenges as an agent—broker—and now president and CEO of VTMP.
“I saw the need for this type of liberty for brokers in the marketplace and now I
am delivering.”At the core of his own success
is Punnia’s strong management team, which includes his partner,
Minnie Punnia who acts as executive director, and recently appointed vice
president Gurjot Sandhu, who
the eVolUtion of the mortgage brokerageInnovation continues to drive The Mortgage Practice to new heights, as the company founded by Ravi Punnia branches out by offering a new model for licensed brokers
manages VTMP’s operations. As value-added to VTMP’s support team, they have recently taken on a dedicated agent support personnel and dedicated centralized underwriter.
Another hallmark of Punnia’s success has come from his continuous extensive training methods. Through monthly, internal training programs, TMP agents are educated about FSCO rules, Equifax reports, underwriting and marketing strategies, to name a few. New agents are required to attend the monthly sessions and are assigned a senior consultant to help them reach their first $5 million in volume. Punnia also conducts his own one-on-one multi-hour training session with all new VTMP recruits.
“I provide practical mortgage training to all agents who join VTMP. This training educates agents about the real-world mortgage industry versus theory-based training that they have already received from completing the FSU 101/Introduction Canadian Mortgages course. I provide training on simple scenarios that agents may encounter when meeting potential clients. For example, when you come across to a potential client, how do you market yourself by providing them with basic information on what mortgage amount can they possibly qualify for, without referring to computer or any application or going back their office to provide such information.”
According to Punnia, education and training are key components of a successful workforce. On this very principal TMP has expanded from 0 agents in 2007 to almost 100 to date.
Agents/brokers appreciate the professionalism, education and training VTMP provides and in turn always refers TMP as their choice of brokerage to other reputable agents and brokers. Punnia says “competitors always ask me how we grew so quickly, and I always tell them, if you keep one agent happy he or she will refer you to another agent/broker, and so your number of agents grow. Our goal as a brokerage is not just be one of the highest producing brokerages but also to be the most reputable brokerage.”
Punnia is expecting over 100 per cent increase in revenue this year thanks to these factors and the bolstering of their workforce.
Seven years removed from giving out mortgage advice at a flea market, Ravi Punnia is poised to be an established top player in Ontario’s mortgage industry for a long time thanks to his thorough training, strong supporting players and good reputation and the support of his management team. CMP
76 mortgagebrokernews.ca
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BREAKING NEWS
Where the industry comes to meet
CMP11_EditorialAd_FullPageAPR.indd 1 4/14/2011 12:59:47 PM
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proFileFavourIte thIngs
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Sandra Lastovic
+ Mortgage Centre Canada+ Guelph, Ont.
Favourite things
BOOk The Adventures of Sherlock Holmes
sPOrt Hiking
MOvie The Big Labowski
CeleBrity Johnny Depp
PlACe tO Be Home
MUsiC/BANdRed Hot Chili Peppers (Alternative Rock)
vACAtiON sPOt Sedona, Arizona
driNk Margarita on the rocks (no umbrellas)
FOOd Croatian Cabbage Soup (Homemade)
HOBBy Reading
79
service directory
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Capital Directwww.capitaldirect.caPh: 780 868-0550Page 12
HomEquity Bankwww.homequitybank.caPh: 1 866 522 2447Page 23
Non-Bank Lenders
Home Trustwww.hometrust.caPh: 1 877 903 2133Page 25
Broker Networks
Equitable Trust Companywww.equitabletrust.comPh: 1 866 407 0004Page 27
Merix Financialwww.merixfinancial.comPh: 1 877 637 4911Page 9
FirstLine Mortgageswww.firstline.comPh: 1 800 387 2020 ext. 6044Inside Back Cover
Fisgard Capital Corporationwww.fisgardmortgage.comPh: 1 866 382 9255Page 17
Centum Financial Group Inc.www.centum.caPh: 1 604 257 3940Page 11
Canada Guaranty Mortgage Insurance Companywww.canadaguaranty.caPh: 1 866 414 9109Page 39
Street Capitalwww.streetcapital.ca
Ph: 877 416 7873 Page 5
Canadian Mortgages Inc.www.canadianmortgagesinc.caPh: 1 877 385 7005Page 8
National Bankwww.nbc.caPh: 1 888 483 5628Page 59
Banks
Bridgewater Bankwww.bridgewaterbank.caPh: 1 888 837 2326Pages 42 & 43
Insurance
Genworth Financial Canadawww.genworth.caPh: 1 800 511 8888Outside Back Cover
Argentum Mortgage and Finance Corpwww.argentummortgages.caPh: 1 888 402 7436Page 60
The Money Sourcewww.mymoneysource.ca
Ph: 416 699 2274 Page 61
Peoples Trustwww.peoplestrust.comPh: 1 800 663 0324Page 15
Optimum MortgageA Division of Canadian Western Trustwww.OptimumMortgage.caPh: 866 441 3775 Page 51
Resmor Trust Companywww.resmor.comPh: 866 809 5800Page 55
ICICI Bank Canadawww.icicibank.caPh: 1 800 ICICI CA or (1 888 424 2422)Page 7
Equity Financial Trust Companywww.equityfinancialtrust.comPh: 1 866 393 4891Page 37
Dominion Lending Centreswww.DominionLending.caPh: 1 888 806 8080Pages 28 & 29
Home Loans Canadawww.hlcmortgages.caPh: 1 866 452 1821Inside Front Cover H o m e L o a n s C a n a d a ®
MORCAN Financial Incwww.morcanfinancial.caPh: 1 877 732 2801Page 41
80
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Real Estate
Canadian National Association of Real Estate Appraiserswww.cnarea.caPh: 1 888 399 3366Page 30
Services
Best Points Travelwww.bestpointstravel.comPh: 1 800 551 8786Page 48
Advance Commission Company of Canadawww.advance-commissions.ca • Ph: 1 866 933 2277
Page 19
Technology/Software
ROMSPEN investment corporationwww.romspen.comPh: 1 800 494 0389Page 1
Verico The Mortgage Practice [email protected]: 905 458 4222Pages 52 & 53
VERICOwww.verico.caPh: 1 866 983 7426Page 13
Commercial Lenders
For service directory listing please contact Trevor Biggs:[email protected]
Your news is our news! Do you have news to share? Have you held a recent event or made a new appointment? If so, CMP WANTS to hear from you.
Send us your newsworthy submissions and photos, and you may find your story printed in a future issue of CMP.
Send your news to: [email protected]
v y u d v d w pp ,CMP WWANWW TS to hear frff om you.
YourYY nnews is our news! Do you havaa e news to share?rr
Havaa e you held a o recent event or made a new appointment? If so,
Got news?
Real Estate Institute of Canadawww.reic.caPh: 1 800 542 7342Page 20
Canadian First Financial Centreswww.canadianfirst.comPh: 1 866 601 7632Pages 64,67,68,71 and 72
The Mortgage Groupwww.mortgagegrp.comPh: 877 899 1024Page 36
D+H Limited Partnershipwww.dhltd.com
Ph: 1 866 345 6449Page 2
RMAI Financial Groupwww.rmaifinancial.comPh: 1 866 955 7624Page 33
Mortgage Architectswww.mortgagearchitects.ca • Ph: 1 877 802 9100Page 31
MortgageBrokers.comwww.mortgagebrokers.comPh: 647 680 9384Page 21
The Mortgage Centre Canadawww.mortgagecentre.comPh: 1 800 423 0107Page 3
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smart homeownership choices. Our promise is to help them
with homebuying basics such as down payment options,
maintaining good credit and staying on budget.
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