AMBA Matters Spring 2013

Matters

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Spring 2013

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Matters

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Matters is a quarterly magazine which provides fundamental information to members of the provincial association, offering an opportunity for the industry members to be educated, updated and entertained.

Toll Free: 1.888.452.2652 Phone: 403.685.9652 Fax: 403.685.9682 Email: info@amba.ca Web: www.amba.ca Suite 200, 1940 9 Ave. SE Calgary, AB T2G 0V2 Photo credit for some photos used within this issue of AMBA Matters ©shutterstock.com

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contents

Membership Renewals it's not too late!

consumer report sheds light on perceptions

cloud compuTing and privacy

ask the expert: fraud protection tips member benefit: legal defense what's new for 2013: the affinity program

reca update: message from council

Download your amba member certificate

cover story: you deserve credit

amba curling bonspiel, that rocked! explore the private mortgage Lenders forum

Alt a symposium a grade 'a' success

social centre: what to do when the worst happens amba event breakdown why do you need that? amba education joint credit - good or bad?

OTHER FEATURES...

President’s Message 5 Manager’s Report 6 Industry News 26 Member Profile of David Mueller 34 AMBA Community Member Briefs 38 AMBA Calendar 39

Amba 2012 - 2013

Board of Directors President Ron McClenaghan Invis

Past President Paul Bojakli Quantus Financial

Treasurer Gord Appel TMG

Events Director Erica Fikkert Equitable Trust

Membership Director (North) Nadeem Jiwa MCAP Service Corporation

Communications Director Len Lane Verico Brokers for Life Inc.

Membership Director (South) Adil Mawji Invis

Consumers Awarness Director Cathy Sehn Verico Brokers for Life Inc.

RECA Relations Director Phil McDowell Mortgages Are Marvellous Education Director Ryan Spence D+H

Ethics Director Kevin Weeks Weeks Law

Professional Development Director James Kulus Canadiana Financial Corp.

Lionel Lewko Saskatchewan Director

Publication Manager and Editor - Stephanie Weidmann

Return undeliverable Canadian addresses to: Alberta Mortgage Brokers Association Suite 200, 1940 9 Ave. SE Calgary, AB T2G 0V2

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President’s Message Ron McClenaghan AMBA President

Whenever I attend mortgage industry functions, people ask how things are going and express concern that the industry Associations are not working together. What are we, as AMBA, doing to address this ongoing concern about duplication of activities? I would like to make sure our members understand the position we have taken and what the AMBA Board has been striving to achieve to address these concerns.

We would like to take this opportunity to clarify our vision to our members and to let you all know that all Board directors welcomes hearing your views and takes them seriously. The AMBA Board has for the last two years, and intensively in the last 12 months, worked diligently to dialogue with all parties about a collaborative solution. These have not been easy conversations as change does not always come easy. Working with the other provincial associations to share information as well as member services has begun and that collaboration is going well. We have a lot to share and learn from other provinces and collaboration is especially important in view of the newly formed Mortgage Broker Regulators’ Council of Canada (MBRCC).

AMBA is, and has been, solidly behind the concept of a unified group of associations working collaboratively for the common good of the industry. The AMBA Board believes there is an important role to be played by a national association working on national issues such as federal government relations, formulating market data research and providing important mortgage industry related news. However, we also believe in the need for strong provincial associations. Provincial associations are the local voice and touch point for members. At a local level we understand the regional character of the industry, work with the local regulator on an ongoing basis and are able to respond quickly to member needs, including delivery of education as well as professional development.

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The Associations cannot continue in competition with each other, duplicating efforts and diluting resources. Efforts between national and regional bodies can and should be coordinated. It is time for renewal and leadership at all levels with the goal of implementing a new structure and path forward that will provide a foundation for all of us. Getting this done will require a new governance model with a formal relationship between the national and provincial associations. This means having the provincial association’s board send representatives to be part of the national board rather than holding separate elections. This would create true integration.

With formal links between local and national bodies there would be representation without the duplication and a concrete mechanism to coordinate activities. This step would benefit everyone involved and move us towards the larger goal of better serving the industry.

A division of responsibilities, and recognition that we all have value and something to bring to the table, needs to take place. Nothing can be built without mutual respect and a real commitment to unification.

AMBA’s position is that there needs to be one organization of associations where the provincial body represents a common membership and holds elections. This electoral process creates real governance and a truly representative voice from the grass roots to the national body.

There is so much that could be accomplished from unification that would create value. The AMBA Board believes in unification for the industry and we know that the best way to do that is to fight for long term significant change, and that is what we have committed to do on behalf of our membership. You don’t get to your destination without a roadmap. AMBA has firmly stood behind the idea of collaborative change; our vision is to have all associations within one organization working on behalf of all members. In Alberta we believe in action not words and would welcome the governance dialogue with the all bodies, national and provincial, on how to make this happen. Nobody has all the answers but collectively we can find them.

CAAMP has embarked on a strategic dialogue; we hope these views and ideas will be part of that process and that the outcome will be a blueprint to build bridges and tear down fences. Unification of the associations won’t be simple or easy but we believe it is the change the industry membership both wants and needs for a progressive future.

Join us at our Prez Pubs The pubs are a great networking opportunity and a chance for you to share your industry thoughts.

Watch amba.ca for dates and times.

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MANAGER’S REPORT

SPRING 2013 Deborah Keshen AMBA General Manager

Recently you would have seen a member advisory regarding the AMBA submission to Real Estate Council of Alberta regarding their proposed changes to the Alberta Real Estate Act. This is a significant issue where having AMBA as your local association is extremely important and being able to voice your opinions as a member is essential.

The Real Estate Act is not opened frequently so it is not a stretch to say this is a golden opportunity to have the voice of the industry heard. AMBA set up a committee of members to begin to work through the more than 20 recommended changes. AMBA met with Kirk Bacon, Deputy Executive Director at RECA and Jean Flanagan, General Counsel which provided significant help in clarifying several areas within the RECA recommendations. It also afforded an opportunity for open dialogue on the areas of member concerns such as the shift from three to 10 years for document retention. In addition to these steps AMBA also solicited ideas and provided an avenue for discussion amongst our members through a survey. The results of that survey have been posted to the AMBA website so you can review and it will be updates as more results are received.

Although the first round of consultations with RECA is complete there may be a second and regardless, there is still the opportunity for AMBA to meet with the minister and to make our own submission.

This means you can still add your voice to the dialogue. If you did not have the time to complete the survey before, we would urge that you do so now. To access the survey visit https://www.surveymonkey. com/s/82MH9DT The RECA Consultation Paper and additional notes to supplement your understanding of the survey can be found in the President’s Blog section of the AMBA website.

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SPRING 2013

Why does it matter?

The industry has been pushing for an equal playing field with banks, treasury branches, credit unions, loan corporations, trust corporations or insurance corporations when they deal outside of their own product (i.e. when they “broker” a deal) for some time. This is not an easy fight, but it is one we have to tackle and show support and collaboration with the efforts being forward by our regulator to address the current inequity. Demonstrating that the industry thinks strongly about this issue can be done through the survey results. We have nearly 100 to date, let’s get to a 1,000. There are many issues within the RECA consultation document that the industry can support but there are others where we identified some concerns. For instance:

1

Moving from a requirement to retain documents to 10 years from three will have significant impact on businesses and liability. Approximately 93 per cent of survey respondents indicated they were not in favour of this change.

2

We recognize that service of documents is an issue but cannot be resolved in a manner that could leave honest members vulnerable to a situation where they are not aware that papers were served on them.

Only 42 per cent of respondents were supportive of removing the requirement for acknowledgement on service of documents. Members want to know that efforts will be made to ensure they are aware if they are even in this position.

3

Notification of investigation is still an essential requirement we believe despite the fact that in a small number of cases this may hamper an investigation.

96 per cent of survey respondents agreed that notification is important.

RECA has put a great deal of time and effort into their recommendations and are open to constructive discussions with industry to ensure they forward the idea of self-governance but do not overly burden the majority of honest brokers working in and with the province.

AMBA will continue our dialogue with RECA and keep our members informed as to our progress. The submission is a first step in a lengthy process of review.

Visit the member website and complete the survey. If you have any questions or additional remarks that you would like to make directly you can contact any member of your Board of Directors or call me at the AMBA offices (1-888-452-2652/403-685-9652).

There has never been a more important time to be part of AMBA and to provide input so we can represent you in the best way possible.

be hearD take the survey online

www.surveymonkey.com/s/82MH9DT

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renew your AMBA membership!

It’s not too late!

Spring may have sprung (not that you can always tell by the weather), but that doesn’t mean it’s too late to renew your AMBA Membership. Whether you renew in December or July, the benefits of being an AMBA Member never decrease in value.

“Whether it’s invitations to exclusive AMBA events, access to great discounts via our member benefits programs or just wanting a place to share your voice with other industry members, there are so many ways an AMBA membership is valuable to you and your business,” says Samantha Gill, AMBA Membership Coordinator.

When you join AMBA you gain accesses to programs and platforms that can help you save money and advance your career.

Every AMBA member receives:

follow this easy renewal process Renewing your membership is simple. Go to amba.ca and log in to the ‘Member Zone’, if you can’t remember your login information, contact Samantha Gill at sgill@amba.ca or 403-685-9652.

Once you are logged in, you’ll see the ‘Member Zone’ homepage.

Scroll down the homepage until you see the ‘Renew Membership’ button. Please note that you will only have access to your 2013 Membership Certificate after your brokerage has paid their fees.

Select your membership type and follow the payment instructions to complete your renewal.

1. Representation Membership means having a voice that is powerful, being able to provide advice or input into regulatory changes and having an association that exists to champion your interests.

A collective voice is more powerful than any one individual company.

Once you’ve renewed your membership, make sure you take time to explore the ‘Member Zone’; it’s your one stop shop for industry news and events.

2. Networking AMBA brings the industry together under one roof to discuss matters of interest, exchange ideas, share best practices and learn from one another.

3. Education AMBA delivers a quality Mortgage Associates Program (MAP) that helps to ensure the levels of professionalism within the industry are safeguarded and promoted.

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4. Training AMBA hosts workshops, an annual conference symposiums that provide ongoing knowledge information on issues that are relevant to the industry.

and and

5. Best practices and Risk Management Our new Lender Disclosure Form, along with our Policies and Procedures Guidelines (new in 2013) are tools provided to members to ensure you mitigate your risks.

6. Consumer outreach Through consumer shows, advertising or social media, AMBA promotes using an AMBA Mortgage Professional to consumers.

www.awcapital.ca 1-888-554-9075

7. Access to Member insurance programs and group discounts SPRING 2013

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Consumer report sheds light on perceptions of industry Whether they believe that banks are more trustworthy than brokers, or that brokers always charge their clients fees, it’s clear that Albertan’s don’t have a clear picture of the mortgage broker industry. Those facts are confirmed by the AMBA consumer study conducted in June 2012.

The study surveyed hundreds of current and future property owners in order to help AMBA gain more insight into the perceptions of our industry amongst consumers.

However, consumer misperceptions about brokers and private lenders are holding industry members back from obtaining greater market share.

While some of the findings showed that we certainly have some work to do, others were more than a little encouraging.

Lack of knowledge about the mortgage industry, the role brokers play in it as well as misconceptions about the services available to mortgage seekers currently pose critical barriers that the industry needs to overcome.

The knowledge gap about what brokers actually do closes among consumers with household incomes of over $100,000, but a large portion of the young urban family demographic making between $60,000 and $120,000 a year are only somewhat aware of the services that brokers provide.

70 per cent of all current mortgages are held with banks, with consumers citing their trust of large banking institutions, and their familiarity with their products as the reason they don’t pursue alternate lending opportunities. The study also found that 45 per cent of respondents incorrectly believe that mortgage specialists employed by banks must be licensed.

A number of potential consumers also believe that mortgage brokers usually charge a fee to their clients and that mortgage brokering is not a regulated profession. However the study also shows that consumers are more likely to trust brokers who belong to professional organizations like AMBA . Great references and a proven track record of success can also help convince consumers to use a broker over a bank.

The good news?

Because Alberta consistently bucks national housing market trends, maintaining a robust market while other provinces struggle, there are ample opportunities for brokers to expand their client base and increase their business.

The study also found that younger urban families dominate the current market in Alberta. These families, primarily living in Calgary or Edmonton, looking for their first mortgage or seeking to renew show the greatest potential for new business.

10 SPRING 2013

Interestingly, the study showed a huge area for potential growth in our industry: mortgage renewals. Currently only 20 per cent of renewals are negotiated via a broker. There is a perception that brokers don’t benefit much from negotiating mortgage renewals, so consumers

are more likely to stick with the big banks. Survey respondents also cited their worry that changing lenders would be a hassle and a lack of education about brokers as their main reason for continuing to use traditional banks for mortgage renewals.

penalties and the variety of mortgage related products available to them. If brokers are able to position themselves as experts on these topics, it will go a long way towards swaying public opinion in our favour.

But the news isn’t all doom and gloom. 39 per cent of respondents (representing an estimated 700,000 Albertans) considered themselves “fence-sitters” when it came to using a mortgage broker. These fencesitters are people who require a little more convincing and education about the industry in order to choose a broker over a traditional bank.

Consumer education and the ability to dispel myths and misconceptions about Mortgage Brokers isn’t enough to turn the tide of consumers. The consumer study also showed that while professional advice and finding a mortgage to suit their lifestyle was important to Albertans, their number one concern is rates.

Consistent marketing and messaging that demonstrates Mortgage Brokers abilities to seek out the best rates and mortgage services for their clients will help differentiate our members from other mortgage providers, such as banks.

While mortgage consumers financial knowledge is average to moderate, their knowledge about mortgages is even lower. The study showed that most consumers needed more information about

LOG INTO THE AMBA MEMBER ZONE

To access the report and gain more information about the key findings of the Mortgage Consumer Study, log in the Member Zone at AMBA.ca and click the Other Resources button.

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Cloud Computing and Privacy How small businesses can safeguard their information in the Cloud Julia Lee, AMBA Privacy Officer In the last issue of AMBA Matters, we looked at what Cloud computing is and what it means to mortgage professionals as small business owners, and as keepers/collectors of clients' personal information. In this issue, we will discuss strategies to help small businesses ensure they stay compliant with privacy legislation, even way up there in the Cloud.

The great draw of Cloud computing is the accessibility; as long as you have access to the internet, you can get to your data any time, any place, anywhere. From a business point of view, this typically means hosting your database and other information on servers other than your own (here is where you also factor in the easy scalability benefit of the Cloud). From a privacy compliance point of view, this means a third-party is in control of sensitive information that you, the business owner contracting the third-party Cloud services, are ultimately responsible for.

The Government of Canada cautions: "... an organization that collects personal information from an individual is accountable for the personal information even when it is outsourced for processing to third-party providers" (Ref:www.priv.gc.ca/information/pub/gd_cc_201206_e.asp).

This means that handing over your database information to a Cloud service provider does not mean handing over accountability for its safekeeping. Is the Cloud provider responsible for the safekeeping of your clients' information? Yes. Are you still accountable at the end of the day for its safekeeping? A most definite 'yes'.

Managing the Managers of Cloud Information As with any sub-contracting of business, business owners must know what is covered and not covered in the terms of service. In the case of Cloud computing, know what your Cloud provider is doing with the information that you are giving them to manage. Ensure that the provider is treating information in "a manner consistent with its privacy obligations under relevant privacy legislation". Make sure you are comfortable with the provider's processes and policies with regards to information management, sharing, disclosure, storage and transference; if you are not, do not entrust them with information that has been entrusted to you.

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Here is a two-step strategy to help business owners ensure that their Cloud service providers are on the same privacy compliance page:

Step 1: Make sure the Cloud service provider works the way you want and need them to.

Ask the Cloud service provider what happens with the information, such as: Do you analyze data for your own purposes such as marketing, demographic or other studies? If so, how do you disclose, notify or obtain consent?

Do you sell data?

Which, if any, Cloud services do you sub-contract out?

How will my data be stored? Is it segregated or stored with data from your other clients?

If their answers are not acceptable to you, find a service provider whose answers are.

Ask for your clients' consent if there will be different uses of their information from what they originally agreed.

Will the Cloud service provider be using your clients' information in ways that you did not outline in your original consent with them? For example, when you collected the information from your borrowers, your consent agreement stated that you would use the information to arrange mortgage financing for them, and that you would be sharing their information with lenders, insurers, marketing managers and other parties involved in mortgage financing and database management. If your Cloud service provider proposes to also use the data to conduct demographic studies for service improvement, you will need to obtain a new, separate consent.

If your clients do not provide consent, neither you nor your Cloud provider will be permitted to utilize their information in any manner other than what was stated in the original consent.

Ask yourself how you would feel. Some additional uses of information are valid and can be helpful for companies to enhance their products and services, while other uses result in intrusions and annoyances.

If you were a client, how would you feel about the uses proposed by the Cloud provider?

Are the proposed additional uses reasonable and nonimpacting on your clients' lives?

If your answers reflect a discomfort with additional uses, chances are that your clients will feel the same way.

Step 2: Get in the driver's seat and make sure you do not lose control of your information.

Limit and restrict access to your information.

Set parameters in your service contract with the Cloud provider restricting access and use of your information to only what is necessary for operations and reflective of the degree of sensitivity of the information. Access to your information can be limited to relevant employees or departments of the Cloud company. Access should be traceable in audits through log-in procedures. Do not simply accept the general terms and conditions of a service contract. Review it carefully and amend until it reflects your privacy requirements.

Authenticate and encrypt.

Ensure the provider has the technological safeguarding infrastructure that you want. Find out what processes and technological controls that the provider utilizes to monitor and manage access rights to information in their keep. The Government of Canada suggests using multi-factor authentication, which is a stronger method of authentication. Do a little research into when and how your data is encrypted. If there are stages such as data in transit or data at rest, find out if and what the risks of being unencrypted are. Determine if the type and level of encryption is adequate. "Risks may be reduced if organization encrypt personal information before it is sent to the Cloud provider" (Ref: www.priv. gc.ca/information/pub/gd_cc_201206_e.asp).

Have backup plans. Find out what the Cloud provider's processes and procedures are in cases of privacy/data breaches or operational interruptions.

Whether the data loss was accidental, deliberate or there was unauthorized or disclosure of personal information, make sure the service control clearly states when and how the Cloud provider will notify you of a security breach. PIPA (Personal Information Protection Act) requires privacy breaches to be reported to the Office of the Privacy Commissioner. Therefore, it is important for you to be clear on when to expect notification and information regarding security breaches so that you, as the business owner, can meet your legal obligations in adherence to PIPA. Apart from security breaches, find out what your provider has in place to maintain smooth business operations in the case of technological or other disruptions.

Have an exit strategy. As mortgage brokers, we understand the important of having a thought-out exit plan. The same principle applies with any contracted relationships and may have heightened importance when it comes to the transference of sensitive information.

Make sure the service agreement states clearly what happens with the information at the termination of the contract. Does the provider keep it? What are their processes for deleting the information? What do they provide as verification?

Final words on staying compliant and safe in the Cloud: "Outsourcing the handling of personal information to a cloud provider means that the cloud provider will have custody of the personal information. As such, an organization needs to be cautious that it does not lose control of the personal information transferred to the cloud provider. Maintaining control means that data ownership is clearly defined in the contract and includes statements about what the provider can do with the personal information and what will happen to the personal information if the provider ceases to operate" (Ref: www.priv.gc.ca/information/pub/gd_cc_201206_e.asp).

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ask the expert:

Fraud Prevention Month:

Valuable Fraud Prevention Tips This Issue’s Expert CMHC

Mortgage fraud is an industry-wide problem requiring an industry-wide response. As a partner in fraud prevention, CMHC is proud to support Fraud Prevention Month, an annual education and awareness campaign organized by a Fraud Prevention Forum comprised of a group of private sector firms, consumer and volunteer groups, government agencies and law enforcement organizations who are committed to fighting fraud.

1. What is mortgage fraud?

Mortgage fraud occurs when someone deliberately misrepresents information in order to obtain mortgage financing that would not have been granted if the truth had been known. This can include:

Misstating one’s position or inflating one’s income or length of service at their job; Misstating employment status (i.e. salaried/ full time versus contract, part time, hourly or commission-based or self-employed); Misrepresenting the amount and/or source of the down payment; Purchasing a rental property and misrepresenting it as owner-occupied; Not disclosing existing mortgage and/or debt obligations; Misrepresenting property details or omitting information in order to Inflate the property value; Adding co-borrowers who will not be residing in the home and do not intend to take responsibility for the mortgage.

Another common form of fraud is when a con artist convinces someone with good credit to act as a “straw buyer.” A straw buyer is someone who agrees to put his or her name on a mortgage

14 SPRING 2013

application on behalf of another person. In return for their participation, straw buyers may be offered cash or promised high returns when the property is sold. Often, straw buyers are deceived in to believing that they will not be responsible for the mortgage payments.

2. What are the consequences if a borrower commits mortgage fraud?

Borrowers who misrepresent information and straw buyers who allow a property to be purchased in their name are committing mortgage fraud and will be responsible for any financial shortfall in the event of default. They may also be held criminally responsible for their misrepresentation.

3. What can consumers do to protect themselves?

Be an informed consumer! Be wary of anyone who approaches you with an offer to make “easy money” in real estate. Remember: if a deal sounds too good to be true, it probably is.

Protect yourself and your family from becoming victims of, or accomplices to mortgage fraud. This means:

Never deliberately misrepresent when applying for a mortgage.

information

Never accept money, guarantee a loan or add your name to a mortgage unless you fully intend to purchase the property. If you allow your personal information to be used for a mortgage you could be held responsible for the entire debt if the mortgage defaults.

Always know who you are doing business with and never sign anything without understanding exactly what you are signing.

Use licensed or accredited mortgage and real estate professionals.

Get independent legal advice from your own lawyer/notary and talk to them about title insurance and other methods of protection.

Contact the local provincial land titles office to obtain the sales history of any property you are thinking about buying and consider having it inspected and appraised. An accredited appraiser will provide the property sales and MLS history.

Find out from your lawyer if anyone other than the seller has a financial interest in the home or if there are any outstanding liens or tax arrears.

If a deposit is required, make sure the funds are payable to and held “in trust” by the vendor’s realty company or by a lawyer/notary.

You can also help to protect yourself by inspecting your credit report at least annually by contacting Canada’s two credit-reporting agencies: Equifax Canada at www.equifax.ca and TransUnion Canada at www.transunion.ca.

4. As a mortgage professional, what can I tell my clients if they suspect they or someone they know has been the victim of mortgage fraud?

If you suspect that you or someone you know has been the victim of mortgage fraud, please contact your local police department or The Canadian Anti-Fraud Centre.

The Canadian Anti-Fraud Centre On-line: www.antifraudcentre-centreantifraude.ca Toll Free: 1-888-495-8501 Toll Free Fax: 1-888-654-9426 Email: info@antifraudcentre.ca

5. Is there anything I can do as a mortgage professional to help my clients avoid becoming victims of mortgage fraud?

CMHC offers tools and resources to educate consumers and assist mortgage professionals to prevent mortgage fraud. CMHC provides valuable fraud prevention tips for homebuyers and homeowners, including newcomers to Canada, in eight languages.

Mortgage professionals can easily access and share these valuable mortgage fraud prevention tips with clients by accessing the RESOURCE articles on www.EverythingYouNeed.ca. Users of the RESOURCE have the option to personalize the article with their contact information, photo, and logo before sending to their clients.

CMHC also offers comprehensive mortgage fraud awareness training and information to assist mortgage professionals in preventing mortgage fraud and raising their value as trusted advisors to their clients. Mortgage professionals are encouraged to contact their regional CMHC Business Development Representative to set up training.

If false or misleading information has been provided or is suspected in relation to a CMHCinsured mortgage application, even when there is no intention to approve or proceed with the loan, please report it to fraud@cmhc.ca.

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Join us throughout the year as we celebrate th our 25 anniversary “We can’t think of a better way to say thank you than by making mortgage brokers the focal point of our celebrations.

Stay tuned for details.”

- Scott McKenzie, Vice President, Residential Mortgages

Thank you mortgage brokers for 25 years of shared success

member benefit: legal defense Would you rather pay $60-75 a year for legal defense or $500 an hour?

While no company wants to plan for being investigated by RECA, audited by Canada Revenue Agency or running into legal issues such as landlord-tenant disputes or a speeding ticket, the reality is these things happen every day. Any good risk management plan needs a contingency to deal with these circumstances and starting April 2013 AMBA in partnership with LMS Prolink will offer a unique program that will provide just that.

How are members protected?

Legal Protection for Associates The Legal Expense Insurance policy for Associates has been customized to include legal defence for driving infractions. Members will have their legal costs covered to defend their legal rights when being prosecuted for a highway traffic or motor vehicle offence. Examples of how legal expense insurance can protect members for operation or ownership of an automobile include: 1. Challenging speeding tickets or reckless driving;

LMS PROLINK will offer two programs, one program will be available for Broker-owners and one program will be available for Associates.

The programs will offer similar protection; however, they have been customized to address the unique needs of principal brokers and associates.

2. Contract disputes related to the purchase or lease of a vehicle.

Every AMBA Legal Expense Insurance Policy will include the following coverage:

Affordable Justice for AMBA Members The approximate average hourly rate for lawyers across Canada exceeds $360. This rate is actually much higher in Calgary and Edmonton. Good legal advice is expensive, unless you are an AMBA member. Legal Expense Insurance will be available as an exclusive member benefit effective April 1 at a very low cost.

RECA Compliance Representation Brokerages and Associates will receive legal defence if they are the subject of a RECA investigation due to a complaint. The insurer provides the experienced lawyers and covers the legal costs to defend the member who is subject to an investigation or hearing from RECA. Tax Protection for Canada Revenue Agency (CRA) Brokerages and Associates will receive legal defence if they are the subject of a tax audit from CRA or if they are appealing a tax audit. The insurer provides the experienced tax lawyers and covers the legal costs to defend the member.

Unlimited telephone legal advice A toll-free 800 number will be set-up for AMBA members, so they can call and speak with a lawyer on any legal matter. The insurer will connect you with a lawyer who has experience in the area of law in which you are inquiring. This service is of particular value because it can prevent members from making poor, uninformed decisions simply because they do not want to pay for legal advice.

Additional Legal Protection for Broker-Owners The Legal Expense Insurance policy for brokerage principals has been customized to include legal defense of any corporate matter with the exception of employment disputes. Allegations of professional negligence against the brokerage are already covered by your Errors & Omissions (E&O) Liability policy. However, there are many other criminal proceedings or business disputes that could impact a brokerage. Examples would include landlord-tenant issues, property rights, privacy complaints and by-law issues with the municipality.

3. Driver’s License suspensions and the member needs to drive to earn a living as a mortgage professional; 4. Filing to get accident benefits coverage due to an injury sustained in an automobile accident.

Brokerage Coverage: any member brokerage that purchases E&O insurance through the AMBA E&O program will be eligible to buy the Legal Expense Insurance. The premiums will start at only $150 per year for brokerages with less than 10 associates.

Associate Coverage: $60 per year for an associate member IF their brokerage buys a Legal Expense Insurance policy. $75 per year for an associate member IF their brokerage does NOT buy a Legal Expense Insurance policy.

About the Insurer AMBA and LMS PROLINK have developed a Legal Expense Insurance (“LEI”) Program exclusively for members. The LEI insurer, DAS Canada, is a subsidiary of the renowned German Insurer DAS Group. While fairly new in Canada; LEI is very popular in Europe where almost $10 billion is written in LEI premium each year. The Independent Mortgage Brokers Association of Ontario launched a similar program for their members in May 2012.

To Learn More: Contact LMS PROLINK Ltd. to find out how you can obtain access to affordable legal protection through the AMBA Legal Expense Insurance Program.

1-800-663-6828 amba@lms.ca www.LMS.CA/AMBA SPRING 2013

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What sfor ’ New

Member Benefits introducing the

affinity program It’s no secret that AMBA Members enjoy many benefits, from discounts on important services such as insurance and human resources, to the assurance that comes from aligning with an association that has a strong voice in the industry.

Now you can enjoy even more benefits of being an AMBA member. The AMBA Affinity Program launched at the beginning of 2013, providing our members with great discounts on services they use every day.

“Our members are so supportive of the work we do at AMBA, and we really want to give something back to them,” says Samantha Gill, AMBA Membership Coordinator. “The Affinity Program appealed to us because the benefits were so tangible, discounts on things like gas and office supplies can end up paying for a one year AMBA membership just by doing the things you do everyday.”

For instance, with the Affinity Program, AMBA members receive 2.6 cents on every liter of gas at Esso stations nationwide. The average car holds 50 liters of fuel and gas has been hovering at around $1.07, if you are filling up twice a week for work, your AMBA membership will be fully paid off within a year.

Other benefits of the Affinity Program include: 75 per cent off office supplies at Grand & Toy, including steep discounts on paper delivery

20 – 30 per cent off highly focused e-marketing products and services from Constant Contact, including the Constant Contact Messaging Program

Great discounts on exclusive individual phone plans from Telus

Rewards for AMBA members don’t end with the Affinity Program, when you renew your membership you’ll also be eligible to receive: Errors and Omissions insurance from LMS PROLINK. This program is a customized, industry-leading E & O Liability Insurance program that meets the Real Estate Council of Alberta’s specific requirements for mortgage brokerages.

The AMBA Insurance Program is the most comprehensive insurance plan available to mortgage brokers.

The Personal Insurance Company is the exclusive provider of home and auto group insurance for AMBA members.

The advantages of the Personal include preferred rates, special discounts and exceptional service. AMBA members, their spouses and dependants are all eligible for this new program. The Personal provides home and auto insurance products to suit a variety of needs. They also insure mobile homes, cottages, swimming pools, personal watercraft, motorcycles, ATVs and more. Auto insurance customers can enjoy additional savings with the winter tire discount and student rates, and offers the $0 deductible option. iToolPro offers comprehensive online marketing and website services to Mortgage professionals. iToolPro offers extensive mortgage-specific website packages which are designed to offer limitless growth options.

Award-winning websites are professional, attractive, easy to use and can be launched instantly!

The top closing gift program in North America is now available in Alberta. Instead of giving gifts that are either eaten or spent, give a closing or referral gift that your clients will appreciate and use every day for the rest of their lives. Cutco engraves the brokerage logo, name and contact info on forever-guaranteed, high-end cutlery, elegantly and effectively branding you forever in your clients' homes.

“We really hope that our members use these discounts to their fullest. These benefits don’t only save you money, some of them could potentially save your business,” says Gill.

To find out about more about these benefits and more, log in to the Member Zone at AMBA.ca and click on Discounts for AMBA Members.

18 SPRING 2013

reca update

Message from Council Bill Buterman, RECA Chair

“Do your homework well, analyze things carefully, assess the options but eventually trust your judgment and have the courage of your convictions – even if they are unpopular.”

I have started this message with that quote because I think it is particularly important as we are living in an ever-changing world and it appears to be changing at an increasingly fast pace.

The Real Estate Council of Alberta (RECA) and Council itself are currently experiencing a time of many projects, issues and consultations – most recently this has included consultation into amendments to the Real Estate Act and an upcoming amendment to Rule 43 pertaining to written service agreements.

We want you to know your Council and RECA are committed to transparency and has communicated the various issues while constantly seeking and receiving advice from all sectors and from all possible sources.

It is from your valued responses that we are continually analyzing the input we receive to all the questions we are asking and the proposals for change. If you have not yet provided feedback, I encourage you to do so, it is only by way of YOU being involved WE create a better environment in which we all benefit.

Being a leader of change is never easy and it takes a combination of traits, including balance, courage, conviction, the ability to listen and filter the information received, and flexibility. Perhaps the most challenging for us at times is having YOU, the individual practitioner, interested in providing feedback and getting involved.

We have seen a number of new business models in the past decade, we have seen changes brought about by technology and we have seen increasing competition from sources that had not been previously identified.

Through your personal input, through your member organization’s input and involvement, your Council has listened and we believe the industry as a whole and the public has benefited from the “US” (you and Council) in this complex equation of serving the public in a professional and competent manner.

– Michael Moritz, Chairman of Sequoia Capital You may have noticed that Council has an open-door policy. Not only do we receive extensive input through our Industry Advisory Committees, we also want to hear from individual industry professionals as much as possible – even outside of formalized consultation processes underway.

The coffee is on, your council is listening, and you only have to call. I know that your Council members will make themselves available to attend your industry events, lunches and meetings for presentations about Council activities.

On behalf of RECA and the Council, I personally wish to thank you for being professional in your business activities and setting a standard of business practice we (“US” ) can be proud of.

IT IS THE

"

"

US

THAT MAKES

our industry stronger, more professional and better for the public and consumer protection

It is the “US” that makes OUR industry stronger, more professional and better for the public and consumer protection.

SPRING 2013

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How to download your 2013 AMBA Member Certificate Congratulations, you’ve renewed your AMBA membership for 2013 and you are ready to start accessing all of your member benefits. But first, you’ll want to download your 2013 AMBA Membership Certificate.

The AMBA Consumer Survey found that consumers were more likely to trust brokers and lenders who are a part of a professional organization, so aside from just being a nifty office accessory, your certificate lets your clients know that you hold yourself, and your business to the highest standards.

3

Downloading your certificate is simple

1

Navigate to amba.ca and click the login button to sign into the ‘Member Zone’. If you are having trouble signing in, or can’t remember your log in details, contact Samantha Gill at 403-685-9652 Ext. 112

2

expected.

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

We strive to do right by our broker partners in a way that simply makes sense, like our new Advantage and Edge programs. We’re Bridgewater Bank, and that’s just how we do things.

Bwballstarportal.ca

20 SPRING 2013

Save your membership certificate to your documents folder and be sure to print a copy for your office.

Once you are logged in, scroll down the page until you see the “View/Print Member Certificate’ Button

Un

Share this helpful article with your clients PDF OF THIS ARTICLE IS AVAILABLE IN THE MEMBER ZONE UNDER MEMBER RESOURCES

Article Sponsored by Jody Robbins, Special to AMBA Matters

Forget the big game; your credit rating is the only score you should be paying attention to. If you plan on doing any borrowing in the future, your credit score is what helps lenders determine if you qualify for home, business or car financing. When it’s low, the cost of borrowing is significantly higher. Consequently, the higher your score, the better your interest rate and the lower your fees will be. Here’s what you need to know to become a savvy borrower.

What’s a Credit Score?

Consider your credit score a first impression, the higher your score, the better impression you’ll make on banks and other lenders. Your score tells the lender about your character. It’s a reflection of your ability to manage debt, your credit repayment history and if you have any room left for further credit.

Scores represent your financial viability and range from 300-850. An established score is what the banks and lenders are looking for, says Richard Moxley, author of the book, The Nine Rules Of Credit.

“Your score speaks to your level of responsibility. It shows whether you take lending seriously and if you follow through on what you say you’re going to do,” says Gord McCallum, President of First Foundation, an Edmonton-based mortgage brokerage firm.

“You can have a high score and be declined or a low score and be approved. The scoring method is just an algorithm. You can score over 800, but if you have only one credit card with a $500 limit, you won’t be taken seriously,” he warns.

Where do you score?

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Where Do You Score?

Think you know your score? Think again. In reality, most folks have no clue what their credit score is, confirms Moxley.

think you have a good credit rating, but someone may have set up a credit account in your name. In fact, ex-spouses have been known to open up accounts and rack up the credit, resulting in collection reporting agencies calling. Arguing with these agencies is not only bothersome, but time consuming.

“People think they either have good credit or bad credit, and often they’re not correct,” he says.

“It can take two to three years to get bad credit off your rating,” warns Moxley.

When going through the borrowing process, mortgage brokers can give you an idea of whether or not your credit is in good health (and if it’s not, how to improve it).

Unfortunately, they can’t reveal your credit score to you as the credit recording agencies prevent them from sharing this information. But that doesn’t mean you can’t find out for yourself exactly what your score is.

There are two major credit reporting agencies in Canada, TransUnion Canada (transunion.ca) and Equifax (equifax.ca). You can order a free credit report from both agencies or for small fee can get your actual score within minutes.

Do You Need to Know?

You want all the leverage you can get when looking for financing and knowing your credit score is the first step in that process. The banks won’t disclose what your score is - they want you to think they’re doing you a favour by lending you money. If you know where you rank, you’re in a much better position to negotiate your rates instead of meekly accepting what’s been offered.

Knowing your credit score is also a valuable self management tool. If you’re surprised to see that your rating is lower than expected, you’ll know to step it up when it comes to paying your bills on time. It’s also an effective way to check for mistakes, identify fraud and theft, says McCallum.

“Somebody who manages their credit well with a good record of paying their bills on time and doesn’t have too many lines of credit outstanding will be able to spot fraud and mistakes when checking their score,” he says.

Credit fraud is one of the fastest growing crimes in Canada. You may

the five

How to Protect Your Credit It’s wise to check your credit report annually to make sure there’s been no fraud or ID theft.

“A good time to remember to check your credit score is when you’re doing your taxes. Just make it part of that routine,” recommends McCallum.

Paying your bills on time and keeping balances low or well under its limit are also ways to protect your credit. Also be sure that you don’t make too many inquires. When people apply for store credit on a consistent basis, it looks like you’re a credit seeker to the credit reporting agencies.

“That’s a warning sign you’re in a tight spot,” says McCallum.

Each reporting agency has its own program for monitoring fraud. For a nominal fee, they’ll watch your score for you, and their system will alert you automatically if anything unusual happens.

So You Score Low, What’s the Big Deal?

Basically, the lower your score, the more your ability to borrow is compromised. Credit scores are reflective of your income generation and ability to pay bills, says Frank Hickey, President, Concord Mortgage Group Ltd. “The lower the score, the more difficult it will be to get credit,” he warns.

Many institutions and consumer service providers (like insurance companies), are checking your score and offer rewards to those who have high scores. There’s a higher instance of fraud with those who have low credit scores. Even the cell phone kiosk at the mall will check

When someone is considering lending you money, they want to know your capacity for paying back the loan. While each is weighted differently, it’s wise to keep these elements in mind when seeking financing:

Character: is the client willing and do they have a history of repaying loans on time?

's

Capacity: does the client have the financial means to repay the loan?

Collateral: what amount is the equity portion of the financing i.e. the down payment?

Capital: what kind of reserve fund savings (or other credit lines) does the client have that can be used if necessary as a safety valve?

Credit: what’s the accumulated experience of the client’s habits in repaying credit?

of credit

22 SPRING 2013

For additional information, read The Nine Rules of Credit, (theaveragejoebook.com) available on Amazon.

your score to ensure you can make payments.

“A low score can impact what you do and the price you pay. You won’t be eligible for those discounts with a low score and you’re going to pay more,” confirms McCallum.

Defaulting on a loan or declaring bankruptcy can also impact your professional activities. If you can’t manage your own credit you’ll find it difficult to be licensed in certain industries like accounting.

Improving Your Credit Score It takes dedication and consistency, but improving your credit rating is relatively easy. After finding out your score, your first order of business is to identify if there are any problem areas.

If you’re paying your bills too late, setting up notifications in your calendar can ensure you don’t get stung. After you’ve made a regular habit of paying your bills on time, call your creditor and ask that they remove your past late payments from your record.

If you have several unnecessary credit accounts - like store cards you neither need nor use - you’ll want to close down those lines. But be careful, the further back your credit history, the better you’ll score.

You won’t want to cancel your oldest credit card no matter how many bonus air miles the new card is offering.

“When a card is cancelled, it’s considered old. Credit scores only take into account new and current information,” warns Moxley.

Know your limitations; realize that the closer your credit lines are to the limit, the harder it is on your credit score. Try to use less than 30 per cent of your limit. Maxing out credit lines (even if you pay them off in full each month) won’t do you any favours. And being over your limit on any credit account is a big no-no. Attack your debt and pay it down as quickly as you can.

Be sure to settle any accounts you have in dispute. For example, if you have a dispute with your cell phone carrier and refuse to pay certain charges. If you don’t pay the charge, your name may get reported to the credit bureau without your knowledge. It’s often best to simply pay the fee and move forward. Think about it - the cost of that fee will almost certainly be less then what you’ll end up paying with a lower credit score in the long run. Working with a mortgage broker is also an effective way to spot these kind of misunderstandings.

“At the end of the day, if you don’t pay your debts, the only one who loses is you, as your credit score is what takes the hit,” says McCallum.

tips for maintaining good credit 1. Be Choosy with your credit cards.

Reporting agencies might view a Sears card in the same light as a MasterCard, but generally speaking, banks and underwriters don’t look as favorably upon department store cards for establishing credit.

2. Ensure your bills get paid on time, every time.

When there’s a dispute over finances during divorce proceedings, occasionally neither party will pay a credit card bill (sometimes on the advice of their lawyers). While this may be a clever play in court, it’s not with financial agencies. “Both parties would be irrefutably damaged by that. Mortgage lenders treat a series of collections or repayment issues the same as they would a bankruptcy,” admits McCallum.

3. Almost worse than having low credit, is having none to speak of.

If you have a joint credit card in your spouse’s name, that credit history is not being reported under your name. Though you’re able to use the card, you won’t build up any credit reputation.

To build your credit history, you need a major credit card in your name that you use (and pay off) on a regular basis.

4. Keep enough cash in reserve for a rainy day.

“If you have cash and credit card debt, you’re still a worthy credit person,” confirms Hickey.

5. If there’s been a collection or a bankruptcy, those stay on your record for seven years.

But when that time is up, you still won’t have a clean slate.

“People need to request for the collection or bankruptcy to be removed from their record, it doesn’t magically disappear.” advises McCallum.

After that you’ll need to reestablish good credit, which doesn’t happen overnight. Estimate two years of good behaviour to get yourself back on track.

6. If you get into trouble, seek credit counselling or call your creditors well in advance.

“We can save people’s credit if they’re upfront with us,” says Hickey.

At the end of the day, it’s wise for everyone, no matter what their income or borrowing ability, to know what’s on their credit report. The higher the score, the less you’ll pay with lower fees and more attractive interest rates. And when it comes to financing, who doesn’t want to be in the driver’s seat?

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that rocked!

Thank you for supporting the 2013 AMBA Curling Bonspiel!

From the first rock to the last end, the 2013 AMBA Curling Bonspiel was a rousing success. Our curlers took to the ice looking like pro’s , even though a few of them had never set foot on a sheet before.

Through it all, a great deal of fun was had, and a great deal of money was raised in support of KidsSport, a local charity that helps children from low income families get off the sidelines and into the game. Thank you to everyone who bought 50/50 tickets to help raise funds for this very worthy organization.

After a full day of rousing competition one team emerged victorious, congratulations to Ron Manson, Mary Poburan, Diana Lee and Gerri Vaughan of Team Invis!

AMBA and the Board of Directors want to thank each and every sponsor and curler for supporting the 2013 Curling Bonspiel.

Your generosity and enthusiasm are what made this event truly fantastic. We’d also like to extend a special thank you to each company and individual who donated door prizes to the event, helping us to make sure that even more curlers went home feeling like winners!

Watch the Member Zone at AMBA.ca for a full gallery of curling photos.

See you next year!

24 SPRING 2013

1st Place: Team Invis - Diana Lee, Mary Poburan, Ron Manson, and Gerri Vaugh (not pictured).

3rd Place: Invis Rocks - Gary Siegle, Linda Verot, Cathy Duncanson, and Kevin Suddaby.

the final standings

Honorable Mentions:

1st Place:

B Winner:

Team Invis

Bridgewater Icecaps

Ron Manson, Invis Inc. Mary Poburan, Invis Inc. Diana Lee, Invis Inc. Gerri Vaugh, Invis Inc.

Jason Provencher, Bridgewater Bank Larry Perko, Bridgewater Bank Colleen Lindsay, Bridgewater Bank Collin Card, Bridgewater Bank

2nd Place:

C Winner:

Street Capital West

Team 19

Cheryl Murtagh, Street Capital Financial Corporation Barbara Hale, Canada Guaranty Mortgage Insurance Company Bob Alexander, Verico Maximum Mortgage Jason Dodd, Verico Maximum Mortgage

Sam Samadi, First National Financial LP Gordon Appel, TMG Ed Arnone, Equitable Trust Company

E Winner: 3rd Place:

Invis Rocks Gary Siegle, Invis Inc. Linda Verot, Invis Inc. Kevin Suddaby, Invis Inc. Cathy Duncanson, Invis Inc.

Team 18 Eden McNichol, First National LP Alicia Deloughery, CML Canadian Mortgage Lender William Charlton, Calvert Home Mortgage Investment Corporation Scott Taylor, SD Taylor & Associates

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Industry News Gen 'Y' pessimistic about financing for home

Canadian home prices up in most markets in early 2013

Canadians born between 1980 and 1994 are concerned that they’ll never be able to afford a home.

The first quarter of 2013 has seen average housing prices rise for the three most common types of dwellings in Canada.

According to a survey conducted for Royal LePage, Gen Yer’s are worried that rising home costs will severely hamper their dreams of home ownership, with more than 72 per cent feeling pessimistic about their chances.

According to Royal LePage, prices for a standard two-storey detached home were up 2.2 per cent from January to March.

Detached bungalows rose 2.4 per cent and the average price of a condominium rose 1.2 per cent from the first quarter of 2012.

The survey cites new, stricter mortgage rules announced last summer that have made it difficult for first time homebuyers to borrow money to buy a home. Currently, most younger Canadians are renters, but the study showed that most of them don’t feel it’s a good long-term solution for housing.

Return of a controversial mortgage rate 2.99 per cent on five-year fixed-rate mortgages? When BMO first introduced the rate in 2012, it sparked something of a mortgage price war. Now the bank is once again cutting their rates to 2.99 from 3.09, effective immediately.

“You should be cautious about your lending practices, because this is the type of practice that led to a mortgage crisis in the United States several years ago,” said Finance Minister Jim Flaherty, urging caution during the mortgage price war, “So my expectation is that you will not compete to the bottom on interest rates, which is the direction they were going.”

The 2.99 per cent rate will only be offered on mortgages with a length of 25 years or less.

Canada bracing for trade shortage, higher home prices Within 10 years, Canada will see a shortage of 800,000 skilled workers, at least that’s the news coming out of an event for employers and potential construction employees in Ottawa.

A combination of large – scale retirement of existing trades people and encouraging young people to pursue high tech fields as opposed to trades will leave the country short on skilled workers.

Even a government plan to increase the number of skilled tradespeople entering the country will do little to offset the shortage.

The shortage in skilled workers is expected to lead to increased home prices due to longer build times for new homes and higher salaries demanded by trades-people, with carpenters and drywallers being in the highest demand.

26 SPRING 2013

2 per cent rate increase would hamper many Canadian home owners 20 per cent of Canadian households may be unable to afford their homes if interest rates rose by just 2 percentage points.

A new survey by Bank of Montreal tested Canadian Households financial preparedness for an interest rate hike and found that while more than half said they could make ends meet in the event of a rate increase, 20 per cent said they wouldn’t be able to and another 23 per cent were unsure.

Alberta households scored strongest on the stress test with 74 per cent saying they would be able to easily afford their mortgage if rates increased. Manitoba and Saskatchewan tied for second place at 69 per cent of households saying an increase wouldn’t be a problem.

With some of the most expensive homes in the country in Vancouver, it may not be a surprise that British Columbia came in last place in the survey. Only 48 per cent of respondents would be able to afford their home if interest rates climbed two percentage points.

Brokers, experts clash on CMHC Privatization The spectre of a privatized CMHC has once again reared its head.

Industry experts are calling for the privatization as a means of levelling the lending playing field for mortgage insurance, citing a lack of benefits for consumers, denying them full competition by giving CMHC an unfair advantage over private firms. However, others are arguing that privatizing the company would actually lead to loosened government control of the mortgage industry.

The CMHC is currently very near or at the $600-billion cap set by Ottawa last year on mortgages it insures. CMHC, which controls about three quarters of the mortgage insurance market, is 100 per cent backed by the federal government. Two private insurers, Canada Guaranty and Genworth Financial, control the rest of the market and are 90 per cent backed by Ottawa. Their limit is $350-billion each.

The Private Mortgage Lenders Forum

A unified voice and vision for our industry What is the Private Mortgage Lenders Forum?

What does the PMLF do?

By now you’ve probably heard about the Private Mortgage Lenders Forum (PMLF), but you may not know what it’s all about. It’s no secret that ours is an ever-changing industry, it’s more important than ever for everyone involved to be as informed as possible about the shifting landscape.

The PMLF has already been active in 2013, planning the ALT-A Symposium, which invited brokers, lenders and students to educate themselves about private lending during a full day of informative speakers, panel discussions and a tradeshow where valuable industry contacts were formed.

The PMLF is made up of a collection of Alberta Private Mortgage Lenders, including mortgage investment corporations (MIC), mutual trust funds and syndicators. Over the past three years, the group has met to discuss industry related issues, including compliance, professionalism and advocacy. As more and more people and companies became invested in these conversations, it became clear that a unified voice was necessary to ensure our industry is being well represented in Alberta.

With over 22 companies currently participating, the Private Mortgage Lenders Forum was created to be the collective voice of the private mortgage lending industry, providing leadership in the areas of compliance, standards of excellence, information and networking.

The PMLF also seeks to promote ethical and professional industry practices to ensure the health and sustainability for the benefit of all industry stakeholders.

Going forward, the objectives of the PMLF are clear:

1 2

3 4 5

Create a forum that will allow industry members to openly discuss industry related issues and to develop best practices for the industry.

To work with provincial and federal regulators to develop legislation, rules and regulations that will:

a b c

Protect Canadian investors, consumers and borrowers from unfair, improper and fraudulent practices; Promote best practices for transparent and reliable disclosure; Ensure the health and vitality of the private mortgage lending industry for the benefit of all Canadians.

To assist members in understanding and meeting the regulatory requirements of registration in their particular situation and jurisdiction.

To communicate to politicians, consumers and other industries practitioners, information about the private mortgage lending industry, promoting the benefits and value provided to Canadians, the economy and the real estate industry.

To advocate on behalf of industries to ensure the health and vitality of the industry and Canadian economy.

How can you get involved?

Private lending can be one of the most powerful tools in a mortgage broker’s arsenal, but it is also one that can be neglected. Private lending products can be useful in solving time-sensitive closings, unconventional properties or zoning issues, construction financing challenges, bruised-credit clients, bridge financing, equity takeouts or self-employment qualifications.

Traditional banks simply can’t meet the needs of many clients. As a mortgage broker, developing great relationships with a professional private lender infinitely expands the options you can present to your clients.

For more information about the PMLF please contact AMBA at info@amba.ca.

The PMLF encourages all AMBA members to learn more about their private lender options and the services they can offer you and your clients.

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RMG mortgages The Right Partner Makes All the Difference.

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Contact your Business Development Manager for details!

Aaron Rainville

Ann-Marie Cunningham

Shawn Thompson

403.473.3507 aaron.rainville@RMGmortgages.ca

403.880.3447 ann-marie.cunningham@RMGmortgages.ca

866.411.3065 shawn.thompson@RMGmortgages.ca

South Alberta

South Alberta

Prairies & Alberta North

*conventional deals only February 2013 RMG Mortgages is a division of MCAP Financial Corporation Ontario Mortgage Broker licence no 10600 & 10515 Ontario Mortgage Administrator licence no 11692 & 11790

amba PRESENTS

S y m p osi u m

First ALT A Symposium is a Grade 'A' Success AMBA’s first ever ALT-A Symposium was a fantastic success; on March 17, a full ballroom of brokers, lenders and students gathered to take in and participate in an informative day of speakers and panel discussions.

From Michael Wolfe’s fascinating presentation on what exactly B20 is and how it will effect individuals and brokerages, to Greg Domville’s presentation on getting deals done in the ALT-A Market, the day was filled with information that will help attendees succeed in the market.

Panel 1

Katherine White, Chief Economist for the Government of Alberta and the Executive Director of the Economics, Demography, and Public Finance branch of Economics at Treasury Board and Finance, was on hand to give an economic forecast that gave attendees a broader perspective on Alberta’s prospects and the effect it might have on the housing market in 2013.

She was followed by an incredibly engaging panel discussion on the ALT-A Market featuring Tim Wachter, Mike Forshee, Les Shore moderated by Hali Strandlund.

The panel covered topics such as defining what the ALT-A client looks like today, why they would choose to go the ALT-A Route and the criteria that lenders need to consider when looking at a prospective new client.

Panel 2

Breaks were an opportunity for attendees to make contacts with our generous sponsors at the symposium trade show. Over and over, our speakers stressed the importance of generating good relationships between lenders and brokers as an element crucial to the success in the industry.

The final panel of the day was moderated by Gary Seigle and featured Dean Koeller, Dave McKitrick, Jesse Bobrowski, Larry Frondall and Brian Menges. The panel helped attendees better understand the private lenders forum, why it was founded and the benefits of being a member. They also addressed issues such as how a broker would recommend a private lender to clients and the key considerations a private lender must take into account to ensure the viability of an application.

From start to finish, the ALT-A Symposium was thought provoking, educational and, most importantly, a great opportunity to touch base with a vital part of our industry.

AMBA, the board of Directors and the Private Lenders Forum want to extend a huge thank you to the attendees, sponsors, speakers and panellists who contributed so much to making this event the success it was.

Katherine White

eaker’s f the sp Copies o available tions are ta a n e s pre u’d like rm, if yo to in PDF fo e send an email s a . le a p ; .c y a co p @a m b ic ations co m m u n

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Social Centre:

What to do when the worst happens What happens when you Google your name? What happens when you Google the name of your company? These days, anyone with a smart phone and a good data plan has more than enough tools to seriously damage your brand online.

More than ever, managing your online reputation, both personally and professionally, is vitally important.

But what happens when it’s already too late? How should you react when you come across a website or social media page that disparages you or your work?

Many companies shy away from getting involved in social media, fearing just this kind of reputation damage. What they don’t realize, is that by not engaging, they aren’t avoiding these issues, they are just ensuring that they aren’t a part of the conversation.

So, what can you do once you find yourself at the centre of an online maelstrom?

Here are a few steps you can take to help you save yourself from social media slander.

Don’t Shy Away: Ignoring the problem won’t make it go away; sometimes it will even cause it to escalate. Acknowledge the issue openly and honestly in order to get ahead of the story.

Share Your Story: Everyone knows that there are two sides to every story, if you aren’t sharing yours; you are allowing your online detractors to control the message. More often than not, when something spirals out of control on the internet, it’s because people don’t have all the information. Sharing your side of the story and shedding more light on the facts of the situation can instantly quell an angry mob.

Phone A Friend, Or Two, Or Three: You’ve spent years building up your reputation and you probably have a long list of happy clients and business partners who would be more than happy to vouch for you. Quietly ask a few of your biggest fans and advocates to post messages of support, these can go a long way toward turning the tide of public opinion.

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Prepare to Engage: This strategy is high risk, but high reward. Often, if you are willing to engage those who have complaints about you via social media, you can turn a detractor into a new advocate. When people are venting online, usually all they want is for someone to acknowledge that their complaints are both legitimate and being heard. You may or may not be able to fix a situation, but by acting with empathy and compassion you can probably diffuse the situation.

Now, Look Over Here: Even once a situation has been handled, the internet can take a while to forget about it – if it ever does. Now is a great time to highlight all the great things you’ve been doing in and around your community. Make a donation or a show of public support to a local group that could use some exposure, it (sort of) worked for Mark Zuckerberg after The Social Network came out. It’s important that you use this strategy in concert with some of the others we’ve mentioned, this isn’t a whitewash, but it will help for you to be making headlines for doing good.

Don’t Feed The Trolls: Engaging with people who have legitimate complaints is one thing, engaging in an all out flame war is another. It’s okay to fight back if an online trouble maker has crossed a legal boundary, but usually, fighting fire with fire will only attract more interest in a potentially damaging situation while being an exhausting drain on your time and resources.

Come To Terms: Most social media services have very strict terms of service that govern what users can and cannot say on their sites. If you are experiencing threats or harassment on Facebook, Twitter or any other social site, a note to the service provider can have the trouble maker barred from the service.

How do you monitor your online reputation?

Be Proactive:

Set Google Alerts for your name, your company name and any other keywords associated with your business. A quick scan of these headlines while you drink your morning coffee can keep you ahead of the game.

The best way to manage your reputation online is to anticipate problems and fix them before they start. If you or your company is experiencing difficulty providing your services, a quick note on your social networks can alert your fans and followers to the problem and stop complaints in their tracks.

Use free social media monitoring tools like HootSuite or Klout to manage updates and track what people are saying about you

Using even just two or three of the techniques outlined above can help you develop a comprehensive social media crisis plan that will get you through even the worst online storms.

If you have tried everything but your social persecution persists, it may be time to speak to your lawyers about what can be done to remedy the situation.

Ask your friends, satisfied clients and advocates to contribute words of support to your social media outposts.

Check your Google Analytics Social Report every month to see how your social media networks are directly impacting your conversations and to direct you to where your time is best spent online.

Remember, while you will never be able to please everyone, reacting appropriately to online criticism can turn complaints in to compliments.

EXPERTS talk to the experts in private lending

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Expect nothing less than dedicated customer service, experienced and creative residential and commercial underwriters, competitive products and flexible lending guidelines from Fisgard.

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Amba event breakdown Mark your calendars now for all the fantastic AMBA Events coming up in 2013. Check out amba.ca every week for news about upcoming events and how you can register.

have questions about something, they have the opportunity to get an answer. At the end of the day, everyone walks away happy – feeling the day has been a worthwhile learning experience.

Stampede Party Shine up your boots, dust off your Stetson and join us at the Ironwood Stage and Grill (1229 9 Ave SE, Calgary) on July 9th for AMBA’s annual Stampede Party. All cowboys and cowgirls alike are welcome to join us for a great afternoon of fun, featuring excellent food, live music and more.

The inaugural RE BarCamp YYC was a huge success in 2012. More than 100 industry professionals attended and engaged in high-energy discussions about technology, advertising and the future of the real estate and mortgage industries.

Interested in sponsoring this event? Contact Samantha Gill at sgill@amba.ca for information on sponsorship packages.

RE BarCamp YYC RECA, the Alberta Mortgage Brokers Association, the Alberta Real Estate Association and the Calgary Real Estate Board are teaming up to present the second annual RE BarCamp YYC on May 1, 2013 at the Wainwright Hotel at Heritage Park in Calgary.

For those that don’t know, a RE BarCamp (or “real estate bar camp”) is an “unconference conference.” It’s an ad-hoc gathering of real estate and mortgage professionals through which attendees can share and learn in an open environment. It is an intense event with discussions, demos, and interaction from attendees.

Attendees have the chance to learn what they want to learn and if they

Get your clients back on level ground.

Extraordinary clients need an extraordinary lender.

Negotiating a mortgage for clients who don’t fit the mold can sometimes be an uphill battle. At Paradigm, our multifaceted team works together with brokers, utilizing a myriad of tools and finance options to find unique solutions for your clients’ non-conventional financing needs. The depth of our experienced team is enhanced by our in-house law firm and our focus is building genuine long-term relationships in order to get your clients back on level ground.

Let’s talk solutions.

Find out how Paradigm can help find alternative lending solutions for your clients Call 1-800-979-2911 or visit paradigmmortgage.ca

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You can register for RE BarCamp on our blog http://rebarcampyyc. wordpress.com or follow the event on twitter @REBarCampYYC for more information.

Annual Conference AMBA is pleased to present our annual conference and tradeshow from September 11 -12, 2013 at the Marriott River Cree Resort (300 East Lapotac Blvd, Edmonton). Tee up for action on Sept 11 for our Golf Tournament at the Links at Spruce Grove followed by our welcome reception.

The following day will feature our conference and tradeshow, a day jam packed with opportunities to make new connections and learn more about our industry. Check your inboxes for more announcements including when you can sign up to attend this marquee event.

If you are interested in hosting a booth at the tradeshow, or sponsoring the event, please contact Samantha Gill at sgill@amba.ca for information on available sponsorship opportunities.

Why do you need that?

Jared Morrison, Alta West Mortgages

Private lenders, equity lenders, whatever you call them, they are becoming more important in today’s world. Understanding how they work and why they ask what they do will help you close more business.

One of the main questions we are asked is “I thought you were an equity lender, why do you need that? “ Remembering that by and large with equity lenders, equity is the key to the deal and that conditions will vary substantially from lender to lender and deal to deal. Here is a quick look at common requirements from equity lenders including the reason why we typically ask for them.

Property Inspections/ Walk Through Inspections The more quality information we obtain about the property the easier it is to make a decision.

For that reason it’s not unusual for a private lender to request an inspection - either drive by or walk through- in addition to the appraisal. Some private lenders rely on their inspection along with property data to assess the value rather than request an appraisal.

Appraisal When you rely on the equity available in a property to make your lending decision, that assessment of value has to be accurate. For this reason private lenders tend to be very particular both when choosing an appraiser and reviewing appraisals. Given that none of us can predict the future value of a property, the best we can do is have accurate starting data.

Income Documentation

Mortgage Statements

Many equity deals won’t include income documentation requirements; many deals are done on stated income. However it’s not unusual, particularly at either higher LTV’s or higher dollar amounts for lenders to request income information. Beyond the fiduciary care responsibilities, when it comes to riskier deals, it just makes sense to look for an indication of what the client can afford to pay. The difference is, typically an equity lender is prepared to take a more liberal view of what is acceptable “income verification”.

Often, bank statements, copies of invoices, company accounts, sale agreements, anything that shows reasonability of cash flow is likely acceptable.

Many equity deals are second mortgages. With the wide range of first mortgages available (Step, Heloc, Collateral) it’s not only important to see the clients payment history but also the details of the structure of the first mortgage and of course the balance. If you are going to lend in second position, it’s important to know what you are sitting behind.

Exit Strategy Lending the money is the easy part, getting it back is not always so easy.

I can’t stress enough, particularly on a tougher deal, the importance of mapping out the exit strategy.

This helps us understand what the client is attempting to do and how we can help.

The Full Story Tell the full story. Although we usually underwrite on the equity, the details make a difference.

Remember we are used to dealing with clients who have poor credit, income difficulties or are doing things outside the norm, that’s why they require our services. So tell the full story, hold nothing back and let us put the deal together for you.

As we take a different view of the world to traditional lenders, often things considered detrimental to a traditional deal may in fact help an equity deal.

I trust this information helps you inclosing your next private deal.

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Industry talk with

David Mueller Meet David Mueller from Western Mortgage Services Inc.

Tell us a bit about yourself ‌ I am 38 years old and I am married to my beautiful wife Susanne.

There are 7 children in our combined family: Scott who is 23, Shyanne 17, Austen 15, Chris 12, Robyn & Matthew 10, and Hailey 8.

I also have my journeyman ticket in transport refrigeration.

Where are you from?

I was born in Calgary, raised in the foothills south of Calgary in High River and Okotoks.

What are a few of your hobbies?

When I’m not at work, I really enjoy getting out of doors for fly fishing, camping, boating, and hunting for big game

Anything else you would like to share?

I look forward to the flexible structure of a mortgage associate to be able to participate in extracurricular activities with our children. Two of our boys play lacrosse and our girls dance, it will be nice to play a bigger role than that of the occasional spectator.

How did you get started in the business? What drew you to it?

I became acquainted with a broker through an old friend of mine, I had been self employed for 10 years and had been considering a change in careers for some time due to future foreseeable health and personal reasons.

As I researched what was involved it just seemed to fit, so I signed up for the courses online and proceeded. The flexibility of working hours helps me to work around our kids schedules too, so I can help Susanne (my beautiful wife) with that.

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spring 2013 member profile

What advice would you give people trying to enter the mortgage business?

Please tell us a little about the company you work for.

I work for is Western Mortgage Services Inc. in High River. Yousra Jomha is the owner/Broker. It is a small firm based in my home town of High River with associates also based in Calgary and Red Deer. The office is small town cozy, not big city flash, I like it a lot! We all work together as a team and I am very grateful for the support I receive from all of the members. (Thank you Yousra, Brenda, Donna, Janice!)

How long have you been working in the business?

Read and study! Not just the course, but every aspect of the business.

Marketing, Lenders Products, Magazines, etc. If they know anyone in the industry already that can coach them or answer questions along the way I strongly recommend it. And always ask questions, no matter how trivial they may seem. I am so lucky to have Yousra; she really knows her stuff and has been such a great inspiration and leader!

What is your vision for the mortgage industry?

I have a strong vision of success for the industry. I feel that as long as a continued stress on fraud, ethics, and professionalism is practiced and encouraged, the industry should remain solid and vibrant. The success of any industry in total will be measured by the performance of its individuals. I think that if self regulation remains respected and honored in Alberta, it will be the firm foundation needed to hold the rest of the structure together firmly.

I started the courses at the end of November and I have been working in the business since February 19, 2013.

What is your experience with AMBA? Why did you join AMBA, why do you feel AMBA is an important organization for brokers who are new to the business?

My experience with AMBA has been very pleasant so far. I went to the curling bonspiel for lunch and plan to fully participate next year for sure! It was a great experience meeting so many people at one venue in such a fun atmosphere.

While researching the industry and courses I found AMBA was referenced a lot and after checking out the website and talking with others in the industry I found AMBA to be an essential tool for any associate/broker in Alberta. With access to so many products, events, and contacts, AMBA has structured a very professional and fun association, it would be foolish not to join or participate!

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spring 2013 member profile In such a competitive market, how do you stay ahead of your competitors and remain successful?

Desire! Always thinking of new ways to market and network. I have learned so much from all the people I have met and worked with. Although it is a competitive market, it is also a very large one. Continuously developing new plans and most importantly following through will be the key to anyone’s success.

What aspects of the mortgage industry do you find most challenging?

Startup is difficult. It is very hard to enter any profession where commission is the only income. A person definitely needs to prepare some savings or secure a second source of income before committing to this whole heartedly. Another aspect is remembering names. I have met so many people in such a short period of time that it is very difficult to lock all the names in.

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Paula Hutton

Donna Adams

Hugh Doggett

Trevor Bowie

Business Development Manager British Columbia

Business Development Manager Alberta South

Business Development Manager Alberta North

Business Development Manager Ontario

Business Development Manager Atlantic Provinces

Phone: 604 | 329.6067 Fax: 877 | 670.4070 Toll Free: 800 | 625.7747 gkakuno@capitaldirect.ca

Phone: 403 | 278.6200 Fax: 403 | 278.6296 Toll Free: 800 | 959.9290 phutton@capitaldirect.ca

Phone: 780 | 686.2911 Fax: 877 | 926.2122 Toll Free: 800 | 959.9260 dadams@capitaldirect.ca

Phone: 905 | 299.6951 Fax: 905 | 824.7095 Toll Free: 80 0 | 814.2578 hdoggett@capitaldirect.ca

Phone: 902 | 894.7700 Fax: 902 | 894.7736 Toll Free: 866 | 830.7734 tbowie@capitaldirect.ca

Greg Kakuno

36 582904_Capital.indd SPRING 20131

4/16/12 4:17:22 PM

Joint Credit – Good or Bad? Richard Moxley, Average Joe Education Author of The Nine Rules Credit – How to Start, Rebuild, and Always Maintain Great Credit, available on Amazon.com Credit agencies, both Equifax and TransUnion, have never looked negatively on one’s credit just because the Average Joe has joint accounts; you just have to understand how to use joint credit properly.

In order to do this, you need to know how each account is registered.

The absolute only way of knowing how an account is reporting is by verifying it yourself. As knowledgeable as family, friends, and even some sales reps are, you need to see it for yourself. This is Rule Six of the Nine Rules of Credit.

Pros of Joint Credit Joint credit works great in credit repair situations. Generally, if you have had bad credit in the past you will need a secured credit card to help in your credit repair. If you apply for your new credit in both partners name, that one account will rebuild both applicants credit at the same time. If you have one partner that is more active in utilizing credit and paying the bills this will help keep both applicant’s active and established.

› Overall Service Levels › Broker Support › Underwriter Support › Satisfaction with Credit Policy

› BDM Support › Turnaround Time

Cons of Joint Credit It doesn’t matter who spent the money. If both partner’s names are registered on the credit account, you are, individually, held 100 per cent responsible for paying it off and making sure the minimum payment is taken care of. That means you need to trust the person your are sharing the account with or it could be disastrous to your credit. Co-signing for the purposes of credit repair or just because a family member can’t qualify, comes with the exact same risks.

Another reason to be cautious with joint credit is just in case the nature of your relationship changes. For example, when a marriage ends in divorce. I know this never happens now-adays but in the slight chance that it does; what happens to that Joint Credit account? Most likely, it will be canceled and if you don’t have any other credit accounts you are back to square one, when it comes to re-starting or repairing your credit.

It is also very common, when a couple separates or divorces, that one or both parties discontinue making payments on their debt. Some stop making the minimum payment because they feel it isn’t their responsibility anymore and others because their lawyers have told them to forego further payments. Even if you are officially divorced, you can’t cancel or take your name off the account until either it is paid down to zero, or unless ordered so by the courts. I have found that divorce is the most common reason for Canadians to be in need or Credit repair or have bad credit.

To sum up there is nothing wrong with joint credit however it does come with some risks. The best way to protect you from these credit risks is to limit the amount of joint credit you have or go without if possible. The next key is to make sure you have individual credit that is current and established. That way if you need to cancel an account for whatever reason, you won’t be left with bad credit.

› Commission Structure › Interest Rates

We are proud of our achievements we have created together, we will continue to work hard to provide or iginators with tools they need to succeed. www.merixfinancial.com

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AMBA BRIEFS Sponsorship opportunities for the 2013 Conference Want to advertise your business and support AMBA at the same time?

Consider sponsoring our annual conference. There are multiple opportunities to sponsor the conference, tradeshow, golf and poker tournaments. Your logo will appear on promotional materials, conference signage, and some sponsorship levels will even be given the opportunity to speak during the conference. For more information about sponsorship packages, or to arrange an a la carte package, please contact Samantha Gill at sgill@amba.ca.

Support the AMBA Stampede Party Summer is just around the corner and that means it’s time to gear up for the Calgary Stampede. AMBA will be hosting a Stampede party on July 9, featuring food, music and a rootin’ tootin’ good time. Don’t miss your chance to sponsor this fantastic and very popular event.

Contact Samantha Gill at sgill@amba.ca for more information.

Keep up with the President’s Blog AMBA President Ron Maclenaghan keeps you up to date on news, events and issues that impact our entire industry. Check out President’s Blog at amba.ca for the latest scoop.

HEADLINES Your solution to get information out...QUICK!

Call for submissions Want to be featured in our Member Profile? Submit your name, the company you work for and a brief paragraph about your vision for our industry to Stephanie Weidmann at sweidmann@amba.ca for your chance to be featured in an upcoming edition of AMBA Matters.

Meeting Space Available In the AMBA Office Have a big meeting but finding yourself a little tight on space? AMBA has the solution. We have one large board room for 30 people and a meeting room for 15-18 people available for rent at a price that can’t be beat.

If you are interested in booking our space, contact Samantha Gill at 403-685-9652 ext. 112

There’s Still Time to Renew Your AMBA Membership To access all the benefits of being an AMBA Member simply visit amba.ca and click the “Mortgage Industry” link in the sidebar. Once there, click the “Become a member button”.

This year’s fees are:

Individual Active and Corporate Active $115 Brokerage and Corporate $360

President's

BLOG

AMBA offers its members this service to help get announcements and job postings to a mass audience, quickly and cost-effectively.

Headlines, job postings and other classified advertisements are posted on the Industry Members Main Page and the AMBA Members Main Page for a cost of $25 (+GST) / week. Respondents can notify the posting brokerage directly

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scan the QR code with your smart phone or visit www.amba.ca/blog

amba calendar july 2013

september 2013

Stampede Party

Annual Conference Golf Tournament, Welcome Reception and Poker Tournament September 11th, 2013 Links at Spruce Grove and Marriott River Cree Resort Edmonton, Alberta

July 9th, 2013 Ironwood Stage and Grill Calgary, Alberta Contact sgill@amba.ca for sponsorship

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Conference and Tradeshow September 12th, 2013 Marriott River Cree Resort Edmonton, Alberta

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rates and nominal lender fees , Manitoba and Ontario

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olution” RICHARD EARLES

richard@vwrcapital.com

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EASIER to GET ALONG WITH THAN YOUR PROFESSORS from SCHOOL Keep track and check the status of your MCAP deals. With easy document uploading and quick access to product, rate and guideline information, MCAP’s Professor is the smart way to do business!

Not using Professor?

Contact your Regional Account Manager and get started.

mcap.com/brokers MCAP Service Corporation Ontario Mortgage Brokerage #10515 Ontario Mortgage Administrator #11692