www.mortgagebrokernews.ca
July 2010, 5.7
Canada’s top
50 brokers PRESENTED BY
SPECIAL FOCUS Packaging the Commercial Deal
FEATURE How technology has changed the industry
PROFILED Michael Beckette Dedicated to the success of his brokers PUBLICATIONS MAIL AGREEMENT #41261516
48 a brave new world While many have begun to move with technology as it drives businesses forward with new innovations and devices, others have dug in their heels, holding on to a nostalgic idea of an industry that once was. Shane Buckingham looks at the latest toys
PR ESE N TE D BY
5. 07 issue
cover story
24 Third annual CMP Top 50 Brokers: the results In its third year, the CMP Top 50 survey received more submissions and saw higher volumes among respondents. CMPcrop uncovers and explores the results cut top on marks
Romspen keeps it simple.
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contents
NEWS 8
Mortgagebrokernews.ca: Letters and stats from CMP ’s website
74 Broker: Michael Beckette, president of Mortgage Alliance, doesn’t see it as a mortgage industry—he sees it as a people industry, helping others reach their life goals
12
Grow-ops, protecting against identity theft, affordable housing delayed, new national housing strategy, Wells Fargo closes office
77 Provider: Romspen has money to lend
PRODUCTS
BUSINESS
78 Guest Editorial: Kevin Boughen from Dominion Lending Centres examinees the implications of CMHC’s new mortgage rule for rental properties
64 There’s a lot more to becoming a mortgage expert than just being knowledgeable about the industry. Doren Aldana discusses what brokers need to know
NEWS ANALYSIS 67 Any press that puts the mortgage broker industry in a negative light has an impact on consumer confidence and that hits the bottom line for all mortgage brokers. Greg Viger explores the issue and what brokers can do about it 70 CMP’s sister publication in Australia looks at how you can learn to identify and deal positively with conflict
PROFILES 72 Insight: Ravi Punnia and his team at The Mortgage Practice are ready to grow… again
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61
regulars
commercial lending
23 International News
Taking the leap from residential to commercial brokering – are you ready?
79 CMP Service Directory
46 This time last year
Follow us on Twitter Twitter.com/CMPmagazine
We put you front and centre
in your local market.
When you join most superbrokers, you give up your local personality in favour of a faceless national brand. But at The Mortgage Centre®, we understand that your success is based on your relationship with your local market. Even though we maintain Canada’s longest-established national franchise network, we make sure all our programs and marketing tools spotlight you. To learn more about the exceptional independence we offer, contact sales@mortgagecentre.com The Mortgage Centre is a division of CIBC Mortgages Inc., a member of the CIBC group of companies. ® The Mortgage Centre is a registered trademark of CIBC Mortgages Inc.
Editor’s Letter
Top 50 Award’s glitch posed challenges It was bound to happen. We trust technology so much that we forget it is fallible, as was the case with our 2010 Top 50 Broker Awards. Many of you know that much of the data submitted by brokers through our online survey was lost. When we went to tally the results, we didn’t know who submitted what. So we did it the oldfashioned way, well we did use the Internet – that’s about as old-fashioned as we got. We sent an e-mail blast to our subscribers explaining the problem and requested they resend their info via e-mail. Then, we contacted the major brokerages and asked them to e-mail all their offices about the issue. I want to thank all who resubmitted their information. Our entire editorial team verified the data and we ended up with more submissions than we did last year. You can read about it along with the list of winners starting on page 24. For those we missed, I want to apologize – we did the best we could, given the circumstances. I also want to mention that two of the top five from last year’s awards chose not to participate this year for personal reasons. In any case, congratulations to all the winners! When I started out as a mortgage agent, I was told to that to be successful I had to become an expert in mortgages. What I found was that I needed to know how to market my expertise. So it came down to learning how to mine the population for potential prospects because if I didn’t make any money one month, and looked back, it was because I hadn’t kept up with my prospecting and didn’t have any deals in the works. We take a look at some ways to prospect starting on page 64. I started this note talking about technology and some of the glitches we had to overcome to produce this year’s Top 50 Awards. And I will end this letter talking about technology. It’s common in our daily lives to rely on our cellphones, our laptops, our iGadgets. The mortgage industry is no different. We rely on electronic submissions and CRM systems to help make us more efficient so we can, hopefully, generate higher volumes. We take a look at the role technology plays in our day-to-day business starting on page 48. I would like to take this opportunity to introduce our new staff writer Heather Li. You can send her any news you may have or appointment notices, or just to say hello. She can be reached at heather.li@kmimedia.ca. On another note: I have been talking to a lot of you in the industry who’ve been kind enough to e-mail or call me about some of the issues that CMP should be exploring. I welcome these suggestions and look forward to hearing from more of you.
‘Til next time Gina Monaco Editor Gina.monaco@kmimedia.ca
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5. 07 issue
“
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Street Capital is one of our lenders of choice because of their common sense approach to lending. The support staff are great to work with and the products they offer are fantastic. Brad Unrau Vancouver, BC, CEO Status
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At Street Capital they treat you like a part of their family and they care about the families we represent. Jason Singh Toronto, ON, CEO Status
Talk to your RVP for more details, including how to become a Street approved mortgage professional. Vince Agozzino
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Vice President, Western Canada Sales Jason.humeniuk@streetcapital.ca
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Quotables
“the thing I like the most is seeing someone who has never been a mortgage broker before come into this industry…and build their company into hundreds of millions of dollars a year.”
“I’ve noticed that small and mid-volume producers are protective of their strategies… top producers tend to share.”
- Michael Beckette, owner of Mortgage Alliance on why he loves the mortgage industry. Page 74
- Calum Ross from The Calum Ross Team, this year’s top 50 winner. Page 24
July 2010 Publications Mail Agreement #41261516 Postmaster: Return undeliverable addresses to KMI Publishing, 100 Adelaide Street West, Suite 300, Toronto, Ontario M5H 1S3
EDITOR
Gina Monaco
Staff WRITER
Heather Li
Staff WRITER
Shane Buckingham
NATIONAL SALES MANAGER
PRESIDENT CEO
Vivid Design Solution Tim Duce Mike Shipley
Trevor Biggs
Account Manager
Marni Parker
SUB-EDITOR
Rachel Naud Jacqui Alexander
Advertising enquiries trevor.biggs@kmimedia.ca
Editorial enquiries gina.monaco@kmimedia.ca Printed by Solisco imprimeurs-printers www.solisco.com
Andrew Davies
OFFICE MANAGER
DESIGN MANAGER
DESIGNER
Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as CMP magazine can accept no responsibility for loss
KMI Publishing 100 Adelaide Street West, Suite 300 Toronto, Ontario M5H1S3 mortgagebrokernews.ca
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12/21/2009 8:54:45 AM
Choices.
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Ask about our commission options. We’re on Your Side!
Call 1 877 462 3788 www.MacquarieFinancial.com
Macquarie Financial Ltd. (MFL) is not an authorized deposit taking institution for the purposes of the Banking Act (Cwth) 1959. MFL’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MFL, unless noted otherwise. MFL is not regulated as a bank or other financial institution or as a holding company thereof.
Readers Write Web comments
For past editor I wanted to pass on my thanks to Jesse KinosGoodin, for his support to the Canadian mortgage brokerage industry, while he was the editor of CMP over the past few years. Jesse’s leadership and forward thinking has helped our industry continue to grow and prosper in both good times and more challenging ones. Continued success Jesse. - Dale L. Bilton, Mortgage fraud in Las Vegas First, the slots, then the poker, now the house fraud; just another way to lose your money in Vegas. Honey, I’m home!! - Dan P. Mortgage for Vancouver Grow-Op This could be the case that appraisers want to argue for the use of real people rather than computerized jobs; although drive-bys are also done by real people. Perhaps this could have been uncovered if the property was fully appraised, although we would not want to see our appraisers come up against any personal security issues. Large mortgages should really get full appraisals,
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and the insurers should want that too. No money saving here. - Anon I’m very curious to know how the underwriter could have let this one slide. If he’s self-employed, he would need the appropriate documentation to prove that he’s making that income and also state a job title. I question the simple due diligence in this case on the part of the broker and the underwriter. Also, it would be curious to know what the condition of the house was before Mr. Le bought it and put mortgages down because if there was an appraisal made, it could have been done at the time of purchase, then the mortgage gotten simultaneously. At that point, they could move whatever equipment they would need and none the wiser. - Richard Beauchamp On the U.S. view of Canada’s superior mortgage market My first thought was that we were saved by just being slow to the subprime party. But hey, we do give creditors more recourse around here, which results in a less reckless housing market. - Layth Matthews CMP
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News
community
In the community Above Solidifi Inc. raises $100,000 for Holland Bloorview Kids Rehabilitation Hospital Foundation. Valerie McMurtry, Holland Bloorview president and CEO, at left, and Solidfi’s Jason Smith at right with various sponsors during the cheque presentation. Bottom Left Four Mortgage Alliance executives rode their motorcycles across Canada to raise money and awareness for breast cancer research. L-R: Nolia Jackson, Raymond Jackson, Judy Stanley, Yvonne Clunies, Michael Beckette, Donna Hart-Quinones. Bottom Right At the Mortgage Group’s Alberta Summer Event, in Calgary on June 5. L-R: Keynote speaker Don Bell, WestJet Airlines co-founder; Debbie Thomas, TMG partner; Grant Thomas, TMG partner.
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www.hometrust.ca
www.hometrust.ca
News Industry
Banks granted mortgages to Vancouver grow-op Two of Canada’s biggest banks have been accused of being “wilfully blind” in giving huge mortgages to a Vancouver man who allegedly used the property as a marijuana grow operation. In this civil case before the B.C. Supreme Court, the Victoria-based Civil Forfeiture Office (CFO) is asking for full or partial forfeit of Bank of Montreal’s and Royal Bank of Canada’s interest in the mortgages on the million-dollar Vancouver home. The writ filed by the CFO suggests the banks were aware that approving the mortgages would allow Hai Le to launder money through the property and their respective institutions. “All or part of Mr. Le’s income is derived from unauthorized production of cannabis marijuana,” the writ claims. “BMO and RBC...had actual knowledge, were recklessly indifferent towards, or were wilfully blind to the fact that the approval of funding of the BMO Mortgage and
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RBC Mortgage permitted the...property to be used as an instrument to launder the proceeds of crime.” In August 2009, according to the writ, two days after Vancouver police raided Le’s home and uncovered a massive marijuana grow-up, Le received a $70,000 mortgage from RBC for the property. Ten months prior to the raid, BMO refinanced Le’s mortgage for $976,000 after buying the house for $980,000. The writ claims that both times, Le couldn’t prove a legitimate means of income to make the mortgage payments. Both banks have filed statements denying all allegations, and the representing lawyers have refused to comment. CMP
News Industry
Calgary may avoid real estate disaster, as strong crude prices and growing attention to the oil sands drives more interest in commercial space than brokers expected in May. Several city brokerage firms feared vacancy rates would reach 20 per cent as early as this past spring, but Calgary’s vacancy rates actually fell during the first half of this year. “I wouldn’t paint a picture that it’s booming, but it’s nowhere near as negative as it was,” said Todd Throndson, managing director of Avison Young Commercial Real Estate’s Calgary office, to The Globe and Mail. “We’re thinking today that vacancy might get to around 15 per cent - but it’s not going to be the death knell that everybody thought it was going to be.” Calgary vacancy rates hit 14.5 per cent late last year and fell to 12.4 per cent by the end of May, according to numbers from Barclay Street Real Estate. This is partly due to energy companies, such as Statoil ASA, and engineering firms, such as Amec PLC, needing more space as oil sands expansion renews. Vacancy rates are expected to rise again over the next 18 months with the opening of two major new buildings, the million-square-foot Eighth Avenue Place, and the Bow, the new 1.8-million square foot home to Encana Corp. and Cenovus Energy Inc. CMP
Ontario’s affordable housing strategy delayed In Ontario, news plans for affordable housing won’t start till fall. Joe Kim, a spokesman for housing minister Jim Bradley, said the postponement is necessary to ensure the strategy’s effectiveness. “The ministry is going to be working full tilt through the summer to get this very important plan correct,” said Kim. Michael Shapcott, a representative of the Wellesley Institute, co-chair of the Housing Network of Ontario, was not impressed with the news. “By delaying this until fall the government is guaranteeing this is going to be a (2011 provincial) election issue and I think housing advocates are going to hold the government accountable for this,” he said. “Promises were made by the government and those promises need to be honoured.” In Ontario, the waiting list for affordable housing reached 142,000 households, a 9.6 per cent increase from last year. An estimated 580,000 tenant households in the province pay more than an affordable amount of their income on rent. CMP
Stoddart: Mortgage brokers need to improve customer security Several mortgage brokerages need to better secure their customers’ personal information from theft, Privacy Commissioner Jennifer Stoddart said in a report released at the beginning of June. Stoddart audited five brokerages in the Greater Toronto Area to see what privacy protection improvements had been made since incidents in 2008 left hundreds of their clients’ personal financial information vulnerable to theft. “The breaches prompted the brokerages to take some positive steps to better protect personal information,” said Stoddart. “However, our audit found that those changes did not go far enough.” A lack of access security in a web-based system that allows agents to download the credit reports of hundreds, including people
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who have never applied for a mortgage, was one of the concerns cited. Other problems included one brokerage storing private information in an unsecured parking garage, inadequate privacy training programs and one agent recycling the blank reverse side of used mortgage applications. Stoddart launched the investigation two years ago after the brokerages reported 14 suspicious breaches within a few months. “In each case, someone impersonating an experienced mortgage agent downloaded credit reports for people who hadn’t even applied for a mortgage,” she said. The brokerages, which were not named due to ongoing criminal investigations, have tightened hiring practices since the incidents. CMP
$10 million
Calgary commercial vacancy rates drop
How much was lost from ID theft last year as reported by the Canadian Anti-Fraud Centre
News
Industry
Ignatieff announces new national housing strategy Opposition leader Michael Ignatieff says the Liberals will create a new national housing strategy before the next federal election. ”We had a lot of excellent suggestions from municipal officials, from people who run co-op housing, from veterans in the field,” said Ignatieff, during a conference with reporters in Vancouver in late June. “We got out of affordable housing in 1993, which we shouldn’t have done.” He added the policy will be “fiscally responsible” and “get the job done.” Ignatieff didn’t provide any specifics on the housing plan, requesting more input on the issue first. He did, however, suggest Canada Mortgage and Housing Corporation needs to start prioritizing construction of affordable homes. “The other thing is to look at the tax code,” Ignatieff said. “Are there ways we can incentivize people who construct apartment dwellings, give them a capital gain rollover if they build more housing? That kind of thing. Those are the ideas that we are working on at the moment.” CMP
Wells Fargo closes Canadian outlets Wells Fargo & Co. closed its Canadian stores and ceased making customer loans in June. As one of the largest banks in the U.S., the company started withdrawing consumer lending from Canada in 2008, and last July, stopped offering residential mortgages and home equity loans in Canada. Wells Fargo, with 130 stores across the country, will continue with its existing real estate, auto and consumer loan accounts. “There will be no change to our customers’ existing account terms and conditions,” said Rick Valade, Wells Fargo Financial Corp. Canada president, to the Financial Post. “We still have more than 450 team members based in Canada available to support and service existing customers.” Prior to the financial crisis, Wells Fargo and other U.S. lenders, such as General Electric Co. flourished in Canada. The companies loaned money to consumers and homebuyers, including people who may not have qualified for Canadian bank loans. CMP
mortgagebrokernews.ca
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Advertorial
Expansion Program for Equitable’s Commercial Lending Division
Equitable Trusts Helps to Raise over $600,000 for Mount Sinai Hospital For 16 consecutive years, Equitable Trust has been the proud title sponsor of the Annual Mount Sinai Classic Golf Tournament that supports the highest level of patient care, teaching Supporting the event are brokers (left to and research at Mount right) Marg Green, Mortgage Architects (winner of closest to the pin); Ann Pope-Todd, Sinai Hospital and Assured Mortgages and Caryn Markman, VP, the Samuel Lunenfeld Residential Mortgages Equitable Trust. Research Institute. Together, they lead the medical community towards a cure for cancer. Equitable Trust has philanthropically supported the hospital’s efforts to the tune of $550,000 to date. Held on June 21 at the spectacular Coppinwood Golf Club in Uxbridge, the tournament raised a phenomenal sum of over $600,000 to add to the already $2.5 million generated by the Classic since its inception. Numerous members of the hospitality and business community generously donated to the live and silent auction in addition to give-a-ways at each of the 18 holes. The prizes ranged from dinner coupons, movie passes to luggage scales and food and beverage tastings to keep the foursomes gastronomically satisfied. The 144 players were greeted by volunteers from Mount Sinai and employees of Equitable Trust.
The Commercial Mortgage Program at Equitable Trust has now been expanded to Quebec. On May 18, Equitable Trust held an eno-gastronomic evening at the Viking Culinary Centre with more than 100 guests in attendance. Andrew Moor, President and CEO welcomed the crowd of real estate developers, lawyers, brokers as well as partners and appraisers to the launch party.
Equitable’s Commercial Lending Team at the Quebec launch (left to right) Vince Faustini, Thom Henderson, Director Commercial Underwriting; Andrew Moor; Kim Kukulowicz, Vice President, Mortgage Services and David Downie, AVP, Commercial Mortgage Origination.
As part of its growth strategy in Quebec, Mr. Moor introduced the Company’s key contact in Montreal, Vince Faustini. Mr. Faustini recently joined the Company as Regional Manager, Quebec. He is recognized for bringing nearly 25 years of authority in various debt structuring and new commercial mortgage origination in the commercial mortgage lending business.
Guests Sal Fratino, Rosdev; Mark Schneiderman, Shapiro Group and Joseph Broccolini, Broccolini Construction enjoying the selection of wines from ViniPassion.
The Company’s Commercial Mortgage Lending business encompasses a wide scope of programs now available in Quebec which include Mixed-Use (Storefront) and Multi-Residential Lending programs, purchase only programs for Retail, Office and Industrial Condominium mortgages.
The new office location in Montreal is located at 3333 Graham Boulevard, Ste. 604, Town of Mount Royal in Quebec. To reach Vince, call toll free at 1-866-407-0004 or the office number at 514-282-7099. (left) Brian Cohen,Co-Chair Classic Committee, presents Andrew Moor (second to left) an Appreciation Plaque alongside Steve Miller, Co-Chair and Susan Horvath, President of the Mount Sinai Hospital Foundation.
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Photos by The Square Foot | www.sqft.ca
Equitable. Say Yes! To More. More Success. You get more with Equitable Team Lending Working together, we look beyond the obvious to really understand each unique client circumstance. We focus on solutions, not challenges. And we work together to overcome obstacles, to get your deal done. For more than 40 years, Canadians have trusted Equitable for exceptional customer service in the delivery of innovative residential and commercial financing solutions. Want more? Call Equitable today, for service that says “Yes!� to your success. In Ontario call: 416.515.7000 1.866.407.0004
In Western Canada call: 403.440.1200 1.866.940.1201
www.equitabletrust.com
News Industry
New housing price index for April released The New Housing Price Index rose 0.3 per cent in April following an identical increase in March according to Statistics Canada. Between March and April, prices increased the most in St. John’s (+1.1 per cent), followed by Regina and Saskatoon (both by +0.9 per cent). Builders in these three areas said higher material and labour costs were key factors to the price increases. Charlottetown, Greater Sudbury and Thunder Bay had the largest monthly decreases in April, as both areas’ prices fell by 0.3 per cent. Builders from these two places reported they lowered prices to stay competitive. Vancouver registered the largest year-over-year increase by six per cent, followed by St. John’s with 5.9 per cent and Winnipeg at 4.9 per cent. CMP
CMHC’s May housing starts The seasonally adjusted annual rate of housing starts was reported as 189,100 units in May, according to Canada Mortgage and Housing Corporation, down from the revised 201,800 units in April. “Housing starts decreased in both the singles and the multiples segments in May,” said Bob Dugan, chief economist at CMHC’s market analysis centre. “The decrease in housing starts in May is consistent with our forecast that housing starts for 2010 will reach 182,000 units.” The seasonally adjusted annual rate for urban starts decreased by 9.5 per cent to 165,200 units in May. Housing starts were previously expected to come in at an annualized rate of 205,000 for May. But the revised number is more in line with Canada’s typical household-creation rate of 175,000 a year. CMP
Canadian household net worth reaches $6 trillion Canadian household net worth increased by 1.3 per cent to hit $6 trillion in the first quarter of 2010. This is the fourth consecutive quarterly improvement in household net worth, marking a 96 per cent recovery of net worth lost during the economic crash, according to David OnyettJeffries, economist with RBC Economics. Other numbers from RBC show a strong Canadian housing market. Non-financial assets, where real estate contributes 85.5 per cent, is up 0.8 per cent to $24.9 billion from the previous quarter. Mortgage debt increased by $16.4 billion in the first quarter, signalling continued growth in the real estate market. Overall, household liabilities rose by 1.5 per cent to $1.4 trillion. CMP
2.9% Canada’s average rental apartment vacancy in 35 major centres in April 2010
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Think reverse mortgages are expensive? Think again! With CHIP Home Income Plan’s new low rates, homeowners 60+ can now access up to 40% of their home equity at rates comparable to other home equity lending products. But unlike these other products, with the CHIP solution: • no payments are required, until homeowners choose to move or sell • no income, credit or medical qualifications are needed • funds can be received as a lump sum or over time, giving your clients the flexibility they need
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News
Appointments
Benesure hires new regional vice-president for Ontario and Atlantic Canada Benesure Canada Inc. is pleased to announce the appointment of Andrea Twizell as Mortgage Protection Plan’s Regional vice-president for Ontario and Atlantic Canada. Twizell will be responsible for both the account management and service teams operating in her region. “We think we’re pretty lucky to find one of the relatively few people in Canada who has experience with brokers, various aspects of mortgage lending and insurance,” said Steve Van Buskirk, Benesure’s viceAndrea Twizell president of distribution. “With expertise in all three of these key areas, Andrea offers a very valuable perspective on the day-to-day challenges and opportunities that our broker clients face.” Twizell has 25 years of experience working with some of Canada’s most prominent players in the mortgage business, including Nationwide Appraisal Services, Invis and CIBC Mortgages Inc. CMP
Solidifi wins York Technology Association Scale-Up Company of the Year award Solidifi was presented with the York Technology Association Scale-Up Company of the Year award on June 17. The accolade was received by Ryan Smith, Solidifi’s chief technology officer, during YTA’s awards ceremony at Le Parc Banquet and Convention Centre in Markham, Ont., a suburb above Toronto’s north border. The award recognizes an organization that has demonstrated excellence in innovation and a commitment to the knowledge-based sector in the York and Greater Toronto regions, while consistently reaching new customers or delivering new services within an existing customer, increasing revenues, adding employees, encouraging community involvement and embracing sound business fundamentals. Smith also participated in a panel discussion that night to speak about what helped create Solidifi’s success. He shared his insights on how the company maintains its competitive edge as other organizations seek to replicate its achievements. Finally, Ryan discussed how Solidifi is dealing with the challenges of being a tech company leader today. CMP
New president of HLC Home Loans Canada welcomes its new president Mark Moreau. Working for more than 28 years within Canada’s financial services industry, Moreau has held a range of senior positions, including president of Mortgage Intelligence. During his tenure at MI, Moreau provided leadership to guide the company to being the largest national brokerage by volume, and oversaw MI’s eventual sale. Prior to MI, Moreau was the national director of sales for GMAC Residential Funding of Canada, and is the former director of lending solutions at Filogix, where he led operational software sales into the Canadian institutional lending market. CMP
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appointments Axiom Mortgage Partners adds five new brokers to its network: Gordon Wintrup, Axiom Bayfield Mortgage Professionals, Langley, B.C. Eva Neufeld, Axiom Tailored Mortgage, Edmonton, Alta. Leonard McAuliffe, Axiom That Mortgage Guy, Winnipeg, Man. Jason Dornstauder, Axiom Focus Mortgage Solutions, Regina, Sask. Abe Toews, Axiom StoneCreek Mortgage Brokers, Regina, Sask.
Meanwhile at Equitable Trust, Luke Harvey joins the company as the regional business manager of southwestern Ontario.
Recently, Stan Falkowski has been promoted to lead sales efforts in eastern Canada at Invis and Mortgage Intelligence, and Jim Rawson was appointed sales leader for Invis Ontario.
Ray Buela
Brian Leland
Canada Housing Trust sells billions in bonds The Canada Housing Trust sold $5.5 billion worth of bonds in June, following a two-day marketing campaign. The capital will be used to purchase home loans from various financial institutions. TD Securities, Bank of America Merrill Lynch, RBC and National Bank Financial led the offering as underwriters sold the bonds with a 3.15 per cent interest rate, a premium of 42.5 base points. The bonds mature in June 2015. CMP
News
mortgages in the press
Industry
Mortgage Centre opens new franchise office Mortgage interest cost index drops The mortgage interest cost index dropped 5.4 per cent in May, an 11.5 per cent decrease since March, said a Statistics Canada release in late June. The index measures the change in the interest portion of payments on outstanding mortgage debt. The report also said consumers paid almost one per cent more for household operations, furnishings and equipment in the past year. The Bank of Canada forecasts that, over the next year, inflation will be slightly higher than its two per cent target. Governor Mark Carney added that the European debt crisis could potentially reduce inflation and that the bank needs to raise lending rates over the next one or two years to normalize policy. CMP
Nova Scotia companies launch job loss mortgage insurance Canadian homebuyers can opt for a little peace of mind with the introduction of job loss insurance coverage on mortgages by the Nova Scotia companies Fraser & Hoyt Benefits and Propel Insure. “This product takes away the worry many homeowners face in the event of involuntary unemployment,” said David Young, Propel Insure president and marketing consultant to Fraser & Hoyt Benefits. “With job loss insurance in place, their mortgage payments will be covered for a period of time that enables them to find new employment.” Currently, job loss insurance is not carried by most financial institutions and banks. With this insurance, mortgage payments will be covered for up to six months for as much as $4,000 each month. The new product was officially announced at the Canadian Association of Accredited Mortgage Professionals Regional Symposium in Halifax in June. CMP
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Earlier this year, The Mortgage Centre, a division of Hale l Beach & Associates, opened a new office in Burlington, Ont. owned by Bob Beach. “I decided last year to get back into my local roots,” says Beach, “lending in Burlington directly with consumers to help them with their mortgage needs and working with my Realtor friends.” The Mortgage Centre’s head office is located in Hamilton, owned and operated by Bruce Hale, Adam Hale, Laura Hale and Joe Grifa, with the Burlington franchise operated by Bob Beach. “It’s great to be associated with Bruce and his family,” adds Beach. “We’ve been friends for 25 years and we work well together. We exchange ideas, bounce deals back and forth and share our resources and our mutual knowledge.” With 25 years in the mortgage lending business, Beach has worked at Canada Trust as a branch manager, and as a mortgage rep for Royal Trust and later TD Canada Trust. He then went into senior management in 1998 where he managed the TD Canada Trust mortgage sales force in Ontario. “I love being in my own business,” says Beach. “I love working with consumers again and I love this industry.” CMP
20%
how much single-family home sales decreased in Calgary from May 2009 to May 2010
TD Financing Services sponsors the 2009 Top 50 Brokers list CMP is proud to announce TD Financing Services is sponsoring the Top 50 Mortgage Brokers list this year. “TD Financing Services is pleased to sponsor the CMP Top 50 Brokers,” says Anne Albani-Dolson, national sales director of TDFS, a provider of specialty mortgage lending solutions. “In addition to attaining high volumes, these brokers are dedicated to developing their business through hard work and innovation. Acknowledging broker achievements and sharing success stories helps contribute to the growth of our industry.” In its third annual year, our Top 50 residential brokers list is compiled according to individual brokers’ funded volumes for the 2009 financial year. All figures are supplied by the broker or agent and then we confirm the numbers’ accuracy through the various lenders. We thank TD Financing Services for supporting the list, which can be found in this issue on page 24. CMP
News
International
u.s. In U.S., 500 arrested for mortgage fraud Nearly 500 people have been arrested in a U.S.wide crackdown on mortgage fraud since the operation began March 1. Federal officials found that Las Vegas was one of the major centres where scams were situated to falsely inflate house prices. “I heard this many times,” said Scott Hunter, a Las Vegas FBI agent who has interviewed hundreds of people lured into buying homes by crooked real estate agents, brokers and loan officers, to the Associated Press. “They said, ‘Don’t let your good credit go to waste. You can purchase these properties. This is how you acquire wealth.’ And when the party stopped and they were not able to keep inflating the prices on these houses, the whole thing collapsed.” Daniel Bogden, Nevada’s U.S. attorney, said 123 defendants were charged, convicted or sentenced within his state since the crackdown, named Operation Stolen Dreams, began. Bogden estimated the losses in Nevada at almost $250 million. CMP
U.S. could learn from Canada’s mortgage market, blogs WSJ The superior practices of Canada’s mortgage market should be imitated by the U.S., blogged Wall Street Journal mortgage and real estate reporter James R. Hagerty. At a U.S. housing policy conference in June, Bank of Canada researcher Virginie Tract received “one of the biggest rounds of applause” by simply describing how the Canadian mortgage market works. She, however, declined to say if Canada does have a better system than the U.S, wrote Hagerty. On the WSJ’s “Developments” blog, Hagerty heralded the following points as outlined by Tract: • Canadian lenders are closely regulated and conservative, with subprime loans never accounting for more than five per cent of the market. • All Canadian mortgage loans give the lender recourse to the borrower’s other assets, such as cars or savings, if the loan defaults. • In Canada, when a mortgage loan is more than 80 per cent of the property value, the borrower must buy mortgage insurance. Hagerty, after comparing these standards to U.S. practices, pointed out that “as of March, 0.44 per cent of Canadian mortgage borrowers were three months or more past due on their loans. In the U.S., the rate was 9.5 per cent.” CMP
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Cover Top 50
In its third year, the CMP Top 50 survey received more submissions and saw higher volumes amongst respondents. CMP uncovers and explores the results
W
hile volume is by no means the only mark of success in the mortgage brokering industry, it’s a measurement that shows someone’s ability to bring in business – a key trait to a thriving mortgage professional. A high volume and a large number of deals can indicate that you are doing something right to stand out from the crowd, be it launching a clever marketing campaign, tapping into new referral sources, building a list of “niche” clients or simply
providing top-notch customer service. It also, in many cases, speaks to a mortgage professional’s hard work over his or her years in the industry. This brings us to the results of our second annual CMP Top 50 Brokers list, a ranking of mortgage professionals from across Canada who sent us their total funded volume and number of deals in 2009. The rules for submitting were P R ES E N T E D BY straightforward: you must be employed as a mortgage professional able to write loans and the deals must have been personally originated by you (back-office support in processing the loans is acceptable, but no other parties have been paid commissions on the deals). We went to great lengths to confirm figures (see editor’s letter) submitted by everyone with brokerage head offices and lender underwriters. We recognize that although numbers are paramount, when it comes to ranked lists there are complexities to any survey and reasons behind every ranking. We were happy to receive a higher number of respondents to this year’s survey despite glitches in the survey process, and saw the overall volume on the list grow. We also talked to a few of the Top 50 finalists who jumped the most from last year’s rankings. We’ve also included a story. CMP congratulates all the mortgage professionals who took part in this year’s list and would like to thank TD Financial Services for being an official partner to the CMP Top 50 Brokers for 2009.
TD Financial Services: Official partner of the CMP Top 50 Brokers TD Financing Services, exclusive sponsor to this year’s CMP Top 50 Brokers, is pleased to congratulate each of the winners. To be recognized among your peers for your achievements and commitment to your business and customers is an impressive accomplishment. As a lender that works directly with brokers to help make home ownership a reality for many customers, TD Financing Services understands the dedication required to achieve these exceptional volumes. The industry leaders acknowledged here should also be commended for developing their business through service excellence, team work, innovation, and advanced network of industry relationships. At TD Financing Services, our team of professional mortgage, credit, and sales specialists are pleased to be forging relationships with brokers like these across Canada. TD Financing Services works with brokers to help them increase potential gains by offering a program that is designed for customers who do not meet traditional mortgage or outside insurer requirements. We assess applications on an individual basis with no beacon score requirement, providing customers specialty mortgage lending solutions. Our participation in the CMP Top 50 Brokers is a reflection of our commitment to supporting broker partners and their customers. Sharing their success stories and recognizing individual achievements helps to share best practices that contribute to the growth of our industry.
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C
M
Y
CM
MY
CY
CMY
K
Together, we can make home ownership a reality for your customers. We have mortgage lending solutions for your customers. Our team of professional mortgage and credit specialists are dedicated to providing mortgage brokers with unparalleled service. We’ll work with you to assess applications on an individual basis, providing your customers with specialty mortgage lending solutions.
Consistent. Reliable. Responsive.
Toll Free: 1-877-273-7498 Website: www.tdfinancingservices.com TD Financing Services Home Inc. Licence #11286
Cover Top 50
Rank Name
Company
City/Province
Funded Volume
Funded Deals
Support Staff Who Write Loans
Support Staff Who Do Not Write Loans
Years As Broker
1 Calum Ross 2 Jim Tourloukis
The Mortgage Centre (a division of CIBC)
Toronto, ON
$147,841,291 498
1
3
10
Advent Mortgages
Unionville, ON
$127,000,000 355
0
2
4
3
Paul Gazzola
Mortgage Architects
Guelph, ON
$119,268,000 574
3
2
25
4
Michelle Beet
Mortgage Alliance Meridian Mortgage Services Inc.
Port Moody, BC
$111,400,000 376
0
2
7
5
Nicole Drummond
Dominion Lending Centres
Ottawa, ON
$96,525,372
445
0
2
15
6
Bill Macklem
Dominion Macklem Mortgages
Surrey, BC
$94,070,446
318
2
4
23
7
Christopher Bisson
The Mortgage Centre
Guelph, ON
$91,009,752
412
2
2
11
8
Scott Travelbea
Dominion Lending Centres
Victoria, BC
$89,662,923
274
3
0
6
9
Laurie Furness
The Mortgage Centre
Oakville, ON
$84,826,735
256
0
3
15
10
Claire Ducharme
Dominion Lending Centres
Victoria, BC
$73,510,748
238
0
1
7
11
Frank Napolitano
Mortgage Brokers Ottawa
Ottawa, ON
$71,300,000
282
1
1
5
12
Gary Tagg
Centum Mortgage Lending Centre
Calgary, AB
$70,473,855
245
1
1
7
13
Morris Briglio
The Mortgage Advantage
North Vancouver, BC $68,200,000
159
2
2
18
14
Lisa Theriault
Mortgage Brokers Ottawa
Manotick, ON
$60,455,503
209
1
2
5
15
Debbie Belair
Mortgage Architects
Ottawa, ON
$64,471,661
281
0
2
23
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INVIS AND MORTGAGE INTELLIGENCE
Celebrating 10 Years of Industry Leadership
What our brokers have to say 2010 marks the 10th anniversary of both Invis and Mortgage Intelligence. Here’s what our mortgage professionals have to say about partnering with Canada’s top brokerages: I’m proud to say that I’m one of the original Invisians and remain so because Invis has allowed me to determine my own destiny as a mortgage broker and business person. I’m provided with branded mortgage and insurance products and the marketing materials to promote them. I’m provided with competitive compensation, group benefits, and accurate and timely payroll. I also enjoy the team spirit demonstrated by my colleagues as we share ideas and varied paths to success. All of this under the umbrella of a reputable and award-winning national broker firm. Bill MacDonald, Halifax, NS, Invisian since 2000
10 01 NUMBER
With 35 years in the mortgage brokerage business, I have seen it all, good times and tough times. The best move I ever made was to join Norlite in 1996 which eventually became MI. With the support I received from MI, and our great compensation package, I have had my most profitable years in the business. MI has been great for me, and I will never consider a change. Bryan Guertin, Mississauga, ON, With Norlite (which became MI) since 1996
Y E A RS
The support from MI such as regional manager support, idesk intranet, cutting-edge CRM program, etc. allows me to not have to worry about day-to-day administration and lets me concentrate on what I do best... assisting Canadians with their mortgage needs. It’s great to be part of such a special group of people. Randy Winger, Stevensville, ON, with MI since 2002
I chose Invis back when Dave Nichol was still CEO because it had a good balance between full-service corporate structure while still maintaining an entrepreneurial spirit. That culture is still evident today and is even more relevant in today’s marketplace. Arlene Demars, Red Deer, AB, Invisian since 2001
Let’s talk
These days, our industry is changing fast. Invis gives me the very latest info, tools and tips to help me improve my game. And they keep me up-to-date with regulatory changes. Mario Sita, Burlington, ON, Invisian since 2000
I recommend joining a team of professionals who not only are forward thinkers, but have the power of two very strong companies to assist you when competing for business. John Parato, Burlington, ON, with MI since 2006
Learn more about joining our broker teams at www.invis.ca & www.bettersupportcanbeyours.com Head Office: 5770 Hurontario Street, Mississauga, ON L5R 3G5. Invis FSCO 10801 | MI FSCO 10428.
Cover Top 50
Rank Name
Company
City/Province
Funded Volume
Funded Deals
Support Staff Who Write Loans
Support Staff Who Do Not Write Loans
Years As Broker
16
Dan Heon
The Mortgage Centre
Calgary, AB
$64,300,000
251
0
2
8
17
Gordon McCallum
First Foundation Residential Mortgages
Edmonton, AB
$61,962,010
223
3
0
7
18
Greg Martel
Dominion Lending Centres
Victoria, BC
$60,000,000
120
0
3
4
19
Mark Goode
Mortgage Architects
Orillia, ON
$59,414,059
349
1
3
9
20
Steven Brouwer
Dominion Lending Centres Entrust Mortgage Services
Chilliwack, BC
$56,231,218
220
5
1
5
21
Gemma Riley-Laurin
The Laurin Team, Dominion Lending Centres
Ottawa, ON
$55,000,000
208
1
1
6
22
Vittorio Oliverio
Centum Professional Mortgage Group Inc.
Lethbridge, AB
$53,985,566
199
0
3
11
23
Murray Groen
Mortgage Brokers Ottawa
Orleans, ON
$52,725,504
223
1
1
4
24
Hal Tagg
Centum Mortgageflex Ltd.
Edmonton, AB
$51,722,720
193
2
1
5
25
Deb White
White House Mortgages Dominion Lending Centres
Vernon, BC
$50,792,088
222
0
1
10
26
Bill Rainbow
Meridian Mortgage Solutions Mortgage Alliance
Invermere, BC
$50,195,943
167
3
0
9
27
Shaddy Estephan
Dominion Lending Centres Elite
Edmonton, AB
$49,971,984
183
1
1
7
28
Sabeena Bubber
Verico by Integré Mortgage Partners Inc.
North Vancouver, BC $49,778,951
135
0
1
5
29
Sharnjit Gill
Verico Superior Mortgage
Surrey, BC
$48,825,800
141
1
0
9
30
Dwight Trafford
Mountain Mortgage The Mortgage Centre
Orangeville, ON
$47,204,860
243
0
2
21
31
Nick Kaaki
Dominion Lending Centres The Mortgage Source
Ottawa, ON
$47,038,000
187
1
0
6
32
Rudy Dedic
DLC Casa Mortgage Inc.
Vancouver, BC
$46,500,000
158
0
0
5
33
Billie Burke
Dominion Lending Centres Alliance
Sault Ste. Marie, ON $45,315,000
330
5
3
5
34
Don Estrada
DLC Absolute Rate Mortgages Inc.
Surrey, BC
$44,722,000
141
2
2
10
35
David Griffin
Re/Max Eastern Realty Inc.
Peterborough, ON
$42,103,600
227
0
1
7
36
Raymond Crampton
Dominion Lending Centres The Mortgage Source
Ottawa, ON
$42,233,244
193
0
2
15
37
Jeff Attwooll
Dominion Lending Centres Your Mortgage Partner
Cambridge, ON
$42,012,665
203
0
1
10
38
James Smythe
Dominion Lending Centres Central
Mississauga, ON
$40,808,000
207
2
2
6
39
Reed Harris
Verico Manifest Mortgage Corp.
Vancouver, BC
$40,311,054
116
1
0
4
40
Jeff Cody
Mortgage Brokers Ottawa
Ottawa, ON
$39,395,652
181
1
1
23
41
Gillian Falk
Dominion Lending Centres Peter Kinch Mortgage Team
Port Moody, BC
$37,493,240
143
0
1
9
42
Jack Oyhenart
Dominion Lending Centres Aegis Mortgage Services
Richmond, BC
$36,584,921
114
0
0
8
43
Fern Brunet
Dominion Lending Centres Mortgage Connection
Toronto, ON
$34,954,750
118
0
1
13
44
Donna Mullen
Your Mortgage Store Inc.
Wasaga Beach, ON
$34,924,495
163
2
2
20
45
Carolyn Callero
Verico Premiere Mortgage Centre
Georgetown, ON
$34,644,478 135
0
1
12
46
Garth Lyon
Verico Canadian Mortgage Lender Inc.
Canmore, AB
$34,260,000
125
0
1
12
47
Dan Sauve
Verico Mortgage Corp. Financial Services Inc.
North Bay, ON
$31,626,711
199
0
2
18
48
JoAnne Purcell
Dominion Lending Centres Mortgage Services Inc.
Calgary, AB
$30,825,817
107
1
0
7
49
David So
The Mortgage Centre
Mississauga, ON
$30,585,373
107
2
0
21
50
Yves Cormier
Verico Cormier & Cormier
Edmundston, NB
$30,438,559
311
1
1
7
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mortgagebrokernews.ca
Product Guru. Amazing! Dedicated! Fantastic!
Incredibly knowledgeable! Best resource in the industry!
Product Guru! That’s how Suzanna Stefanec’s brokers talk about her. And we think that all those superlatives are well-deserved because Suzanna’s commitment to her brokers is simply the best. That’s why we’re thrilled to announce that we’ll be sharing Suzanna’s talents from coast-to-coast. In her new role as National Director of Products for Mortgage Architects, Suzanna will be product guru for our brokers across Canada. Suzanna has earned the respect, loyalty and admiration of brokers, lenders and insurers all across the province in her role as Regional Vice-President for Ontario. New brokers and experienced veterans alike look to Suzanna for advice and guidance. Suzanna’s brokers are the best of the best – and she helps keep them up to date on lender attributes, product features, niche products, lender/insurer guidelines, market updates, and on and on. Her information – packaged just the way you like it – has helped to propel our brokers in Ontario to stellar business results. And now our planners from every corner of Canada will have a chance to build their businesses with Suzanna’s help. We invite you to share our warm congratulations when you see Suzanna next.
May the superlatives continue. When you get the chance to work with Suzanna, you’ll see what we mean.
Suzanna Stefanec National Director of Products
suzanna.stefanec@mtgarc.ca 647.291.5121
www.mortgagearchitects.ca © Copyright 2010, Mortgage Architects, all rights reserved.
The power of value.
Cover Top 50
Brokers making the biggest leaps In an even more competitive market, Dave Griffin, Greg Martel and Frank Napolitano have met new challenges with creative ideas and excellent customer service, allowing them to increase their personaldeal volume by millions of dollars. Below each broker discusses his personal strategy for success and why he’s been able to make such a significant jump up the CMP Top 50 Brokers’ rankings
Dave Griffin
For Dave Griffin, the customer always comes first, no matter what. “I just always put the client’s interest before my own and do what’s right for them. I think by doing that I’ve earned the trust of my clientele,” he says. Griffin attributes his climb up the CMP Top 50 Brokers’ rankings from 42nd in 2008 to 35th in 2009 to this philosophy, which he has applied to every aspect of his work as a broker at Peterborough Mortgages. “When I first got into the industry, I got into it with the long-term goal of wanting to be known as the guy to call no matter what. If I can get my clients the best deal, I will. If I can’t, I suggest the place to go to find it.” By using this strategy, Griffin has been able to get the majority of his business from “word-of-mouth referrals,” whether it’s from past clients or real estate agents. And his plan has been bearing fruit. He has increased his deal volume steadily during his seven years working in the industry, making $35.9 million in 2008 and $42 million in 2009. Even though there’s more on the go now, he’s still prioritizing his relationships with his clients by trying to meet with them as much as possible and by sending out cards and followup letters.
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Greg Martel
Greg Martel believes his job is more than just finding one customer a mortgage and moving on to the next. It’s about building relationships with his clients, so he can continue to help them with their mortgage concerns throughout their lives. “My main niche is basically planning people’s mortgages for life. It’s not just putting them into a five-year or a variable rate. I want to touch base with them on a regular basis,” he says. With that always in mind, Martel was able to move up the CMP Top 50 Brokers’ rankings from 32nd in 2008, when he made $45 million, to 19th in 2009, when he made $60 million. And he’s on track to beat his previous record this year. Martel attributes his success primarily to his commitment to his clients needs and to his efforts to always stay in contact with them. He sends out correspondence about four times a month, whether it’s an e-mail, monthly newsletter or a card for a special occasion.
Frank Napolitano
When the interest rate fell to 0.25 per cent in April 2009, it helped a lot of mortgage brokers increase business. But understanding that economic environment and meeting it with “aggressive marketing” are two factors that gave Frank Napolitano an edge over other brokers. Napolitano, a managing partner and mortgage agent at Mortgage Brokers Ottawa, has moved up the CMP Top 50 Brokers’ rankings from 19th in 2008, when he made $52 million, to 11th in 2009, when he made $71 million. And he’s not stopping there. In June, he says he was already 47 per cent ahead of his sales at that time last year and is on pace to do $90 million for 2010. Part of his marketing campaign consists of his show Open House: The Real Estate and Mortgage Show on 580 CFRA News Talk Radio every Saturday morning from 10 a.m. to 11 a.m. and his appearances on A Channel Morning News every second Tuesday at 6:50 a.m. On the air, he frequently likes to remind listeners that it’s up to them to find what the best deal is even if they’re working with a broker or their bank. “I’ll often say on the radio show, ‘Hey go see your existing mortgage broker or your bank and hold them accountable. Make sure that they understand that you want the best possible deal for what is the biggest debt you’re ever going to carry.”
NEW! Forum Network LIVE with industry professionals by listing topics that interest you
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OF THE HERD
ONTARIO’S With Ontario’s new mortgage brokering legislation now in effect, not even two thirds of the province’s mortgage professionals were registered with the Financial Services Commission of Ontario (FSCO) by the July 1 deadline
26
A
s of the Canada Day deadline, almost 3,300 mortgage agents from across Ontario found themselves in contravention of the new provincial act, putting themselves at risk for reprimand by the provincial regulator. With an estimated 9,000+ agents in Ontario, this translates into approximately 37% who failed to hold approved licences by the deadline. Ontario’s mortgage agents were bombarded with stern notifications CAAMP, IMBA and FSCO in June, enforcing the fact that, after July 1, mortgage agents not registered under the new Mortgage Brokerages, Lenders and Administrators Act 2006 are forbidden to practice in Ontario. The low number was a surprise to some. After all, the act was designed to improve the mortgage brokering profession by implementing educational requirements, mandatory errors and omissions insurance, and introduce a whole slew of other factors to ensure the safety of consumers and, consequently, improve customer confidence.
www.canadianmortgageprofessional.com
The fact that such a low number of agents took the steps to proactively stand behind it led some to believe that a large percentage of Ontario’s mortgage agent population didn’t care about the best interests of the industry. Others said there were a number of factors at play.
Agents being agents Up until a week before the deadline, Jeff Atlin, vice president and chair of government relations for IMBA, had only received a handful of queries regarding the new act. That number escalated in the week leading up to the mandatory changes – signifying that many mortgage agents weren’t apathetic, they were merely disorganized. “It seems mortgage professionals tend to do things last minute – so, in many ways, it doesn’t surprise me,” he said. “On the other hand, I am surprised that there isn’t a stronger sense of urgency.” While the lack of urgency might be disturbing, Phil McDowell, president of AMBA, said it’s not uncommon. Alberta
Cover Top 50
a generous man B.C. mortgage broker and franchise owner Jack Oyhenart was beloved in the industry. Making CMP’s Top 50 Brokers list, he died suddenly in late May. Heather Li explores the family man’s path from banking to mortgage broker
I
n the back of his mind, becoming a mortgage broker was something Jack Oyhenart always wanted to do as he spent 31 years in banking. “He always enjoyed the mortgage aspect of banking,” says Kevyn, Oyhenart’s 33-year-old son, also a mortgage broker. “He worked with Royal Bank for 31 years, and in his 31st year, they came to a mutual separation and decided to part ways. He took three months to himself and started up his own mortgage company back in 2002.” Oyhenart was drawn to the mortgage business because he loved helping people, and eventually, through tireless networking, he established himself as an admirable and generous force within the industry. His eight years in brokering came to a sudden end, when he unexpectedly passed away on May 31, 2010, in Richmond, B.C. where he lived and worked. The 56-year-old Oyhenart was hospitalized on May 25 for a persistent cough and died unexpectedly from a stroke. Doctors later concluded his cough was caused by double pneumonia in his lungs. “I think what’s going to be remembered most about Dad,” begins Chad, Oyhenart’s 28-year-old son, also a practising mortgage professional, “is that he was never too busy to help anyone, to offer an opinion and he was never above anybody in that capacity. He was always ready to jump in and help
whether it was a client or a broker, or whoever. That’s going to be what’s missed about him.” This selfless attitude was part of Oyhenart’s character even as a teenager. When he was 16, he kicked over a rock while playing ball hockey with a friend and found $900, which had been dropped following a robbery at the local Royal Bank branch. He returned the money to the bank. As a reward, Oyhenart received $150 and the promise that they would hire him when he was ready to get a job. In 1971, he accepted Royal Bank’s offer and worked his way through the system in various roles, including branch manager at several locations. In October 2002, Oyhenart moved into mortgage brokering with MCI Mortgage Consultants and, admits his wife of 35 years, Grace, “It was scary at first.” In his first year, Oyhenart earned $14,000 from nine deals, but in his second year, he brought in $153,000. “That first year, Dad was out meeting people, giving out business cards, talking to people and following up,” says Chad. “He never chased anyone for business but he made sure every influential relationship he had in life knew that he was now a mortgage broker.” From Oyhenart’s simple tactic of making himself known as a mortgage broker, his business exploded in one year through referrals and word of mouth. In December 2008, Oyhenart started his own mortgage franchise with Dominion Lending
We have specialty mortgage lending solutions for your customers. Contact us today at 1-877-273-7498.
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We Listened! Starting this summer...
Lower Premiums
&No Policy Fees Jack Oyhenart with his wife Grace of 35 years
Centres. “Jack epitomized loyalty, integrity and professionalism,” says Gary Mauris, DLC president. “His huge smile, sincere personality and genuine interest in others have left an indelible impression on DLC and our entire industry.” Oyhenart extended that impression outside his professional career as well. Even as he was working, Oyhenart donated his time to coaching a bantam boys’ baseball team, which he led to two national championships in 1996 and 2000, and sat on many boards of directors for charitable foundations, including the Michael J. Fox Foundation for Parkinson’s Research and the B.C. Special Olympics Hart to Heart Croquet Tournament. Family was also very important to Oyhenart. In addition to Kevyn and Chad, he and his wife also had a 31-year-old son, Jayme, and 41-year-old daughter,Alana, who was a teacher for a long time and became a licensed mortgage broker earlier this year. Oyhenart was undoubtedly a man of many capabilities, but he was always humble about his accomplishments. “Even though he’s in the top 50 brokers of Canada, well-respected by his peers and thought very highly of,” says Kevyn, “Dad would never flaunt his position in life, his company. Even though Dad was the main earner for this family and this brokerage, he would always introduce us as the superstars in the office, that he didn’t really do anything.” A short while ago, Scotia Lending had a get-together at the University of British Columbia, and in attendance was Oyhenart, along with his newly minted mortgage broker daughter. “Alana had just started, she’d done one deal,” says Kevyn, “and Dad was introducing her to everyone as, ‘This is my new superstar broker, she’s going to be amazing,’ and that was him to a T. He always wanted the accolades and everything to everybody else as opposed to him.” To Jack Oyhenart, we respectfully applaud a truly generous spirit in the mortgage industry and in life. CMP
Now offer Mortgage Protection Plan with more confidence than ever before.
t’ W ha
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1 (866) 454-3631
Cover Top 50
Nicole Drummond makes her first appearance in the top five of the CMP Top 50 Brokers, and has done so the old-fashioned way: by gaining her clients’ trust. “I’m a down-to-earth kind of gal,” says Drummond. “First I must gain your trust, and then I have the knowledge and confidence in my ability to provide the most thorough service.” That confidence has been earned through experience, as Drummond has worked for chartered banks and trust companies for 23 years (with the Royal Bank of Canada for five years; Scotiabank for 11 years and as a regional manager for FirstLine Trust for seven years). Since 1996, Drummond has been cultivating a healthy niche, specializing in government relocation, which serves Canadian Forces, RCMP and Government of Canada personnel who are relocating anywhere across Canada. “You could say I am very well versed in military postings, mortgages and relocation programs,” says Drummond. “I take a comprehensive approach to my work, which means serving first-time buyers, educating them, helping reduce their debt.” Often, Drummond’s advice resonates with customers to the point where they’ll return to her for advice on financial matters that extend well beyond mortgage matters. “I still get calls from customers I first helped in 1996,” she says. “They are looking for advice on a wide range of questions, like financing a new car.” Now that’s thorough. When she’s not helping Canada’s military personnel seamlessly move around the country --or fielding a variety of general financial queries --Drummond can be found combining two of her passions: travel and gourmet food. Even better,
#05 34
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STATS + Company: Dominion Lending Centre, The Mortgage Source + City/Province: Ottawa, Ont. + 2009 ranking: — + Support staff who write loans: 1 + Support staff who do not write loans: 0 + Years as a broker: 14.5
her husband, recently retired from the Canadian Forces, shares her love of travel and dovetails her epicurean bent as a budding sommelier. The couple has recently added Antigua, Cote d’Azur and Arizona to their long list of choice destinations visited. And a trip to California with their two grown sons will complete a perfect year of travelling adventure. Looking ahead, Drummond is intent on communicating even more effectively with her client base through social networking, and using her advertising dollars more wisely. “I’d like to continue to grow my business, and work more with repeat clients, but I will always do this one client at a time,” she says. In light of this outlook, one strategy she’s poised to employ is the addition of a new team member. “My goal is to add a position that I’m calling, ‘Customer Care, ’ which should start this fall.” The role, she says, will focus exclusively on what the title suggests. The successful applicant had better be aware of the precedent the boss has already set.
Nicole
Drummond
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Cover Top 50
STATS + Company: Mortgage Alliance Meridian Mortgage Services + City/Province: Port Moody, B.C. + 2009 ranking: 5 + Support staff who write loans: 1 + Support staff who do not write loans: 0 + Years as a broker: 7
Michelle Beet’s philosophy of putting the customer front and centre continues to drive her success and underlines her impressive showing among her competitors in the CMP Top 50 Brokers list. She has now placed within the top six in each of the past three years, landing sixth in 2008, jumping one place in 2009 and nailing down fourth place this year. How does this B.C. broker stand out each year? By standing behind her customers. Being the oldest of six siblings in an entrepreneurial family helped her appreciate the true essence of “the customer comes first.” “Growing up in my family definitely helped me to understand how important it is to appreciate my client’s business,” she says. “I try to let my clients know how important they are to me. And because they know and believe I am on their side they tend to reciprocate my loyalty.” Beet, who began her career with Royal LePage in the relocations service department before becoming an underwriter for HSBC, made the leap to the brokering industry in 2003 and knew immediately that she’d made the right call. She claims her desire to find a fit for people is an instinctive characteristic. Beet, whose company, Meridian Mortgage Services, joined Mortgage Alliance two years ago, maintains a comprehensive approach to customer relations, claiming that she ardently seeks, “not just the best mortgage rate, but the best terms and conditions, as well as a type of mortgage that best suits each individual customer.” Jumping one spot this year to become one of top three is a mere byproduct of that singular determination to place the customer first. For her, an uncertain economic climate in the past year or
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so meant taking precautions, notably taking the time to instill confidence and assurance among her clients. “I normally work pretty hard and fairly long hours,” she says. “But this year, knowing how uncertain people were, I chose to spend more time helping my clients with questions and concerns. And I think that really paid off in terms of an increase in volume.” Fully aware that the brokerage industry can take its toll in terms of strain and pressure, she’s keen to balance those long hours with her life outside the office. “This occupation can be stressful so I try to balance my time between working, going to the gym, walking my dog and spending time with friends and family.” Can a jump up the rankings be just around the corner for Beet? It seems likely since her philosophy continues with no signs of wavering. “Looking ahead, I just want to continue my belief that service never goes out of style, and stay focused on putting my clients first,” she says. “The rest takes care of itself.” The future looks good, indeed.
Michelle
Beet
Cover Top 50
STATS + Company: Mortgage Architects + City/Province: Guelph, Ont. + 2009 ranking: 2 + Support staff who write loans: 3 + Support staff who do not write loans: 2 + Years as a broker: 24
Paul Gazzola is becoming a familiar face among the elite of CMP’s Top 50 Brokers with this, his third appearance in as many years in the top five. The vastly experienced broker who works out of Guelph maintains his ongoing success is largely attributable to the people who work around him. “My team is very important to me,” says the 24-year broker. “These are the people who cover, arrange and schedule—essentially the entire back end of the business—is just so crucial.” This past year, together with his highly regarded team, Gazzola has positioned The Mortgage Architects as an invaluable economic forecasting resource for its customer base, becoming increasingly aware of the emergence of trends and advising wisely on them. “We’ve noticed a trend as far as what the rates were doing,” he says in a notably understated fashion. The philosophy is based on the notion that there’s no such thing as being too educated on any matter. And this extends to the client base. “We always recommend that people get educated as much as possible,” says Gazzola. “You can never have enough education.”
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Gazzola, who moved his office four years ago to one of the busiest intersections in Guelph to capitalize on walk-in traffic, is ever keen to bolster his already formidable customer service approach. His comprehensive website, which offers mortgage rate updates, mortgage reports and a monthly e-newsletter. In the past year Gazzola seems to have an equally busy bandwidth outside the office, as well. In addition to various family-based team sports endeavours, Gazzola is putting the finishing touches on his new cottage near Southampton, which he has built by contracting it himself. The somewhat protracted process has offered him some eye-opening lessons that, being a former homebuilder, will surely allow him to savour the property even more keenly upon the project’s completion. No less absorbing is his horserace ownership—he currently has four horses, two of which are racing in the New York Sire Stakes this year and one he’s in the process of breeding. As for the coming year in the mortgage industry, Gazzola sees a tightening of lenders lists and the impact of the HST as the hottest topics. “I do see lenders making a short list of people they will deal with so that their efficiency will come up, getting the score card with a better cancelled versus closed ratio, “ he says. “I think we’ll see consolidation brokerages. There’s a need for us to be tighter on our top line in order to impact our bottom line.” “Of course there’s a huge push to get things done by July 1 because many people didn’t fully understand the implications of the HST,” he says. “But after the pain and the suffering, I believe it will be a relatively normal market.”
Paul
Gazzola
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INVIS AND MORTGAGE INTELLIGENCE
Celebrating 10 Years of Industry Leadership
Saying You’re #1 Is Easy… Being #1 Takes Effort. At Invis and Mortgage Intelligence we lead the Canadian mortgage brokerage industry in volume, volume per agent and income per agent, as noted by Filogix. While it’s great to be #1, we’re working hard to stay #1. Whether they’ve been with us 10 months or 10 years, our brokers receive unparalleled backing – efficient weekly payroll, the industry’s best compliance, expert deal support, free customized marketing, competitive compensation, a great corporate culture, the list goes on and on… In short, we’re all about real support from real people. We really enjoy what we do – helping our brokers achieve greater success. Now that’s something to celebrate!
Learn more about joining our broker teams at www.invis.ca & www.bettersupportcanbeyours.com Head Office: 5770 Hurontario Street, Mississauga, ON L5R 3G5. Invis FSCO 10801 | MI FSCO 10428.
ADVERTORIAL
A decade of Broker Excellence 2010 marks the 10th anniversary of both Invis and Mortgage Intelligence. The celebrations come as Invis and MI lead the Canadian mortgage brokerage industry in production volume, as noted by Filogix.
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mong major brokerages, Invis and MI are not only number one in total mortgage volume, they also lead the pack when it comes to volume per broker. “These results confirm our status as the preferred home for Canada’s most professional, dedicated mortgage brokers,” says Gord Dahlen, President and CEO of Invis and MI. Invis and MI have distinguished themselves with a full value offering to brokers. “Whether they’ve been with us 10 months or 10 years, our brokers receive a line-up of support services that add up to solid value for today’s time-stressed mortgage professional wanting to take their business to the next level,” observes Bryan Devries, EVP of Sales and Operations. “Real support from real people” is how Dahlen sums it up, noting that brokers can literally pick up the phone and talk to the company’s in-house team to get assistance quickly. “The support we offer is more than a self-serve arrangement with a third party – we invest in our brokers to equip them to be the best, which benefits our brokers, our company and our industry,” asserts Dahlen.
Some of the faces of Invis and MI through the years (clockwise from top left): Gord Dahlen, Rich Oenema, Rob Hafer, Andrew Moor, Liz Hynes; Art Trojan; Ilona Bronson; Annie and Dieter Peschman; Patrick Mulhern; Paula Roberts and Kelvin Seepersad.
Real Support from Real People
A Proud Heritage
“While it’s great to be #1,” says Dahlen, “we’re working hard to stay #1.” Here’s a sampling of the benefits that Invis and MI deliver, to stay at the forefront of the industry: Efficient Weekly Payroll – Prompt and accurate payroll via weekly direct deposit, a real time saver for busy brokers. Experienced Regional Managers – Full time professionals who offer knowledgeable advice on tough deals, business planning, and reaching out to clients and referrals. Free Customized Marketing – Hundreds of templates, professional graphic designers and copywriters, and expert marketing advice. Effective CRM Programs – State-of-the-art CRM programs to keep in touch with clients: professionally, automatically, and with zero effort. Compliance Support – “We offer the industry’s best compliance support, to protect our brokers’ reputations in our communities and our industry,” notes Dahlen. Exclusive In-House Offerings – Great commissions, and ongoing trailers as an option, on private label mortgages, leasing and insurance products. Prompt I.T. Support – Knowledgeable and friendly I.T. experts to keep core systems up and running. Submission Desks – Easy, preferred access to a range of key lenders; enjoy top-tier compensation on every deal. Competitive Compensation – Earn top dollar on every file: highly competitive finders fees and volume bonuses our lenders offer, even on the first deal. A Clear-Cut Contract – No restrictive contracts, like ones that lock a broker in for a multi-year term, contain non-solicitation clauses, or even charge high monthly fees for advertising.
“In many ways, our continued success is the fulfilment of the vision of our early founding entrepreneurs including Art Trojan at Norlite and MI, and Dave Nichol at Invis,” comments Stan Falkowski, SVP, who has been with MI since the beginning. “Fast forward to ten years later, and many of our Whether they’ve been with brokers have remained with us 10 months or 10 years, our us from the start. It’s a loybrokers receive a line-up of alty that speaks volumes.”
Mortgage Brokering: It’s a Team Sport
support services that add up to solid value. . .
Invis and MI have lively company cultures that celebrate excellence. Brokers have a strong voice, and feel part of a cohesive group of professionals who share ideas and information. “We work for the broker,” asserts Dahlen. “We believe in them. We worry about them, we care about them. No one else in our industry holds the broker in such high regard. These are values that permeate the cultures at Invis and MI.” At a variety of team-building and social events for the rest of 2010, Invis and MI brokers will celebrate a job well done for the last 10 years. They’ll also look forward to another great decade as they work hard to grow their businesses with Invis and MI, and have a good time together while doing it.
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STATS + Company: Advent Mortgage Services + City/Province: Unionville, Ont. + 2009 ranking: 4 + Support staff who write loans: 0 + Support staff who do not write loans: 2 + Years as a broker: 4
Jim Tourloukis has reached No. 2 in CMP’s Top 50 Brokers, his second appearance in the top five in consecutive years, despite the fact that this is only his fourth year as a mortgage broker. He credits his success not only to possessing strong discipline and work ethic but also to recognizing the paramount importance of customer service. “For us it’s all about meeting and exceeding customer expectations,” says Tourloukis. “Going beyond the call of duty; that’s how we ensure we’re going to get people coming back in the door.” Tourloukis began his career in the finance department of FirstLine Mortgages before moving to a mutual fund company where he eventually worked his way to the position of chief financial officer. In 2006 he decided to return to his “mortgage roots” by opening Advent Mortgage Services in Unionville. Today, Tourloukis’ business is primarily a niche area – referrals from financial planners and relocation clients who are referred to him by large companies relocating their employees and helping them find the right mortgages. He has also benefited from maintaining a relatively high profile, having made televised appearances on CBC and CityTV and with positive newspaper coverage in The Globe and Mail. The nature of Tourloukis’ niche business and his supreme focus on delivering the ultimate customer service have paid dividends, even in the lean year that has just passed. While many brokers experienced a downward trend, Tourloukis’ company enjoyed even more success. “It was a much slower year in 2009, the market was down 20 per cent; but our market was actually up by that amount.” One key strategy that’s led to sustained success has long been the ongoing education of his clients.
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His belief is that education is a value proposition that should be on offer at all times. When he’s not edifying his clients, Tourloukis finds the right work/lifestyle balance by taking some well-deserved time off when he can: his penchant for travel is sated by six vacations each year. Of course, reaching the top five twice in as many years isn’t enough for Tourloukis, who has already begun to cultivate the behind-the-scenes hard work that was logged throughout 2009. “The past year has been a good building year,” says Tourloukis. “We took a great deal of time developing new relationships and contracts, and are already reaping the fruit this year. We’ve already done as much business in 2010 as we had in all of last year. If we should hit $300 million…that comes close to tripling what we did last year.”
Jim
Tourloukis
K
TD Financing Services Congratulates the CMP Top 50 Brokers for their Outstanding Achievement.
We are proud to sponsor the CMP’s Top 50 Brokers.
Cover Top 50
STATS + Company: The Mortgage Centre + City/Province: Toronto, Ont. + 2009 ranking: — + Support staff who write loans: 1 + Support staff who do not write loans: 3 + Years as a broker: 10
Spend even a few minutes speaking with Calum Ross, this year’s No. 1 broker in CMP’s Top 50 Brokers, and you’ll discover a positivity that’s as sincere and genuine as it is infectious. “When you wake up in the morning, you can decide whether you want to be happy or not, despite all the challenges and frustrations in your life,” says Ross, who claims he surrounds himself with like-minded, good-natured people. “I decide to be happy. Every day.” He has reason to be. Ross has been at the top of his game since he began his brokerage adventure nearly a decade ago. Oddly, he actually didn’t intend to become a leading originator, embarking instead on a corporate career while completing his commerce degree at the London School of Economics. He was working with an international retail and investment bank determining the feasibility of large-scale senior debt positions --numbers that seldom fell below eight figures. After leaving England, Ross completed the management training program of a big five bank while finishing his MBA in finance in Toronto. He decided to enter the mortgage industry buoyed by a desire to work with people and longing to use his financial knowledge to ensure people received good advice. Even after failing to secure a position as an assistant broker --“I was told I had unrealistic expectations because I said I wanted to be a $20 million producer,” -- he was not deterred. Was his perseverance worth it? Well, he did $26.7 million in volume his first year in the business, $50 million his second year and $87 million his third year. Yet modesty, a sense of perspective and even humour prevail as he reflects
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on these early successes. “My benchmark was a guy from my high school football team who became a broker and, I think, maybe put together 10 deals in his life,” says Ross. “But I thought that was great!” Aware that his people play a huge part in his success, Ross’ team operates under the motto, “Perfection is our goal. Excellence is tolerated.” They know that everything they do today can and will be done better in the future, and that includes Ross himself. “But I still have a ton to learn,” he says. In building his team, Ross has hired people who embrace this attitude and are committed to being their absolute best. “You have to invest in your intellectual capital,” he adds. One key strategy is staying focused on his high-payoff activities: his team is aware of the negative impact of involving Ross in any activity that is less than a $500 per hour income-producing activity. He has discovered that when he focuses exclusively on building relationships with his clients and strategic partners, his volume and revenue increases. Ross, an avid martial artist and fitness buff, is active on the speakers’ circuit, and likes to tell his audiences that the mortgage industry is a profit maximization business and knowing your numbers is crucial to maximizing your time. “If you don’t know your numbers, you don’t have the ability to gauge your daily actions or guide your team’s efforts.” He openly shares his strategies. It’s a kernel of his overall philosophy of making others feel good, and good about themselves—that’s the infectious part of his positivity. It’s also a reflection of what he’s observed in his peers. “I’ve noticed that small and mid-volume producers are protective of their strategies,” he says. “Top producers tend to share.” Looking ahead, Ross sees the industry maintaining a healthy stance, but perhaps within a somewhat more even-keeled landscape. His focus, in addition to being the best dad he can possibly be to his two young girls who he says are his most valuable assets, he will continue treating every client like gold. “Because they deserve the best.” If they’re clients of Ross’, they likely know they’re getting just that. CMP
Callum
Ross
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ISSUE 4.7
are not very flexible
actually appear to want my business
human element approach squeeze the broker community
his knowledge is
Brokers on Lenders 2009 trying to kill the broker channel
pathetic at turnaround
get out of the mortgage business if they are not interested in closing deals
slow as molasses
MARKETING HOW TO DESIGN A USER-FRIENDLY WEBPAGE
fulfillment are a bunch of monkeys
BUSINESS GOING PAPERLESS SAVING MONEY
PROFILED BEV BRANDL BRINGS DOWN UNDER, UP NORTH
2009
this time last year
seems to want to work with the brokers
the banks can run up to five days behind
Combination mortgages on the rise Hybrid mortgages (mortgages which allow borrowers to divide loans into fixed and variable rates) were becoming an increasingly popular product choice. According to Invis regional manager Gary Siegle, it was because Canadians had experienced a lot of economic uncertainty and very few people were comfortable about future trends. He added combination mortgages allow you to hedge your bets. At the time of the story, the most recent example of a combination product was Merix Financial’s 50/50 Wise Mortgage, which allowed borrowers to put half their mortgage into a five-year, fixed-rate plan and the other half into a five-year, variable-rate plan with the option to lock in at any time. A study by CAAMP found five per cent of Canadian mortgage holders had combination mortgages compared to 28 per cent with variable rate and 68 per cent with fixed rate. CMP One year later, According to Invis regional manager Gary Siegle, hybrid mortgages get a fair amount of attention and are still relatively popular. “When you look at today’s mortgage market you see that the gap between the rates that you would get on a variable versus the rate you get on a fixed rate mortgage is larger than normal,” he said. Siegle says a number of Bank of Canada rate increases will have to occur before the advantage is eroded. If the differential continues to shrink, hybrid mortgages will drop in popularity and people will go for the more certain fixed rate. “I want some comfort of a fixed but I also want the cost savings, well what do you know, there’s a hybrid out there I can get both. That, to me, is why the hybrid mortgage has remained a popular item. They’re definitely not for everyone but there’s no question they have their place in the market.” CMP Alberta arrears continue to grow Last year, Alberta was seeing an increase in unemployment and a greater number of mortgage delinquencies. At the time, it was the highest in the country according to the Canadian Bankers Association.
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Albertans had fallen three or more months behind on more than 2,500 mortgage payments putting the province’s delinquency rate at 0.54 per cent of all big-bank mortgages. “In the last two years, there has been a softening of the market…that ability [for people] to sell their homes and get out of that debt they incurred might really not be an option for them, Mortgage Alliance representative Phil McDowell said. Lenders began foreclosure proceedings against 3,497 Calgary-area homeowners between April 2008 and February 2009, yet delinquency rates were still lower than those recorded in the mid1990s, according to McDowell. One year later, According to Mortgage Alliance representative Phil McDowell, Alberta’s major centres are the ones that seem to have been hit hardest. Calgary’s unemployment has gone up from 6.8 per cent in May of last year to 7.6 per cent in May of this year. In Edmonton, the year-over-year comparison is 7.4 per cent now versus six per cent last year. However, unemployment in all of Alberta has dropped almost one per cent since last year. “We saw some statistics where there was an increase in employment in the production of goods, especially in Alberta…It’s not a remarkable number, but it’s nice and steady, strong enough that there’s some confidence building. But it’s still going to be a while before we see five per cent unemployment as opposed to the six and sevens,” he said. When it comes to delinquencies, McDowell predicts, with steady employment, that Alberta’s delinquency factor will eventually fall under 0.5. Alberta arrears were recorded at 0.72 in March compared to a 0.44 national average, an increase of 0.22 since last year. The difference from a year ago, he says, has been more intervention between insurers and customers when it comes to payment problems. “[Insurers] will sit down on a one-on-one basis, take a look at their situation and see if there’s something that can be done to keep people in their home. There has been more of an attempt by the default insurers to keep people in their homes than I’ve ever seen in the past.” CMP
Feature Technology
a brave
new world
how technology is changing the industry
While many have begun to move with technology as it drives businesses forward with new innovations and devices, others have dug in their heels, holding on to a nostalgic idea of an industry that once was. Shane Buckingham takes a look at how using the latest tools and technology has changed the industry
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any mortgage brokers seemingly try to keep on top of a million things at once. Whether it’s answering their BlackBerry, visiting clients, checking e-mails, processing applications or setting up new marketing campaigns, brokers always have to be ready to attend to whatever may come their way in order to keep up with all the demands of the industry. However, as brokerages continue to take on more business and competition in the industry grows even fiercer, many are beginning to find the profession that much more challenging, especially those neglecting technology. Those who use technology at their brokerages, however, generally have been able to cope with the current demands, and actually exceed them. While paper piles up in the offices of brokers who are unable or unwilling to take advantage of current innovations, mortgage agents who are well-versed in today’s technology have been able to free up more time,
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“ we do business in the way the company wants to, rather than telling them here’s how you’re going to work, and here’s the screen you’re going to use, and here’s the process you’re going to follow ” make their businesses run more efficiently and, most importantly, they’ve been able to attract and retain a large clientele base. As more brokers catch on to this trend, the industry as a whole continues to move closer to becoming almost completely electronic, leaving the old days of paper applications and fax machines to fade into oblivion. Ten years ago, mortgage brokers could still get away with overlooking technological advancements
Feature
Technology
and doing business the old way, says Jim Black, mortgage expert and owner of Dominion Lending Centres Mortgage Excellence in Lethbridge, Alta. But in an industry in which nearly all mortgage applications are submitted online by using web-based mortgage-origination software platforms, Black says individual brokers are finding that they need to catch up to today’s innovations. “If you’re missing the computer or technology train, you’re missing out,” he says. “But if you get up to speed on some of the basic technologies ... it’s proven it’s only going to help you.” Having a company with an effective website and database, or a Customer Relationship Management (CRM) tool, integrated with either Filogix Expert or Marlborough Stirling Canada’s MorWEB, is just the standard for any new brokerage to get started nowadays, he says. All of these tools free up time in a variety of different ways. For example, when consumers fill out applications directly on
Black’s website, which is integrated with Expert, he’ll automatically receive an e-mail on his BlackBerry alerting him that an application has been started. He then reviews the forms and if all the information needed is included, he e-mails his client a PDF file to get their signature for the application, which they can then print out, sign, scan and e-mail back to him. Finally, he can go to his Expert account, where the application created on his website was automatically sent, approve it and send it directly to a lender. Before Expert was around and he had a website, he said he would have had to do that whole process by fax, which more than doubles the time. Jessi Johnson, chief executive officer and president of Jessi Johnson Mortgage Team based in Langley B.C., says when he started his company a year ago, he was intent on using technology in a way that would maximize his business. Today, 95 per cent of all of his clients’ mortgage applications are filled out online and
Enhancing the client experience through
Innovation
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nearly all of his files are stored electronically. “I can probably do two to three times the volume than someone using paper applications and standard fax machines,” he explains. “This isn’t bragging, but simple numbers. It takes our office zero seconds to collect an application and only a few minutes to have it ready for submission. You can’t beat that,” Johnson adds. Mortgage-origination software Mortgage-origination software is another area where Johnson has seen a big development. After using Filogix Expert for more than three years, Johnson says he switched to MorWEB, because it is a client-based system, whereas Expert is a deal-based system. Brokers using Expert must resubmit their clients’ information if they need a new mortgage, since the application does not keep client records. To manage that data, brokers should find a CRM that can be integrated with Expert, such as inContact’s CRM NEXA. Johnson says this area of technology in the industry is one that needs more competition in order to spur further innovations and developments to make doing business even more convenient for brokers. “The Filogix versus MorWEB situation reminds me of Microsoft versus Mac. If Morweb keeps its head up, it will be very interesting to see how much market share they will have in five years.”
“ I knew if we opened the doors and created an organization that was just like every other brokerage we would have been dead in the water before we even started ” But there is another player emerging in the market for mortgage-origination software: Axcess Canada. Malcolm Collett, director of marketing at The Mortgage Group Canada Inc. in B.C., says Axcess Canada could really end up giving the other companies in this sector “a run for their money.” The two-year-old company, partnered with Axcess Consulting Pty Ltd. in Australia, and Axcess Americas in the U.S., offers a web-based CRM called the Axcess Relationship Manager (ARM) that takes care of mortgages from
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origination through to completion, says Tim Shkolnik, vice-president of solutions and development at Axcess Canada Inc. Ontario. “We don’t hand off the mortgage after it’s been originated. We’re managing arrears, collection, monthly interest accrual, payment management, collection and servicing – everything right through to discharge,” Shkolnik adds. What makes Axcess Canada stand out from the competition, he says, is the amount of control brokers have to customize their ARM account. “We do business in the way the company wants to, rather than telling them here’s how you’re going to work ,and here’s the screen you’re going to use, and here’s the process you’re going to follow. We go the opposite way by asking the company how they want to do things.” Do you need a CRM While using one of these service providers to connect to lenders is pretty much a necessity in today’s industry, brokers that use Expert and MorWEB still have the option of choosing to use a CRM. Some brokers, however, just prefer to make their own database. Black, for instance, made his by using Microsoft Access. To those who may think that creating database would be extremely taxing, Black says that’s not the case. “It’s simple enough for people to go to Chapters and buy Access for Dummies and they could do a really basic database on their own … I’ll never say it’s simple, but anyone could do it, given a little time and effort.” To do his mail-outs, he then imports his client lists from his database into Sendoutcards.com to forward thank-you cards, birthday cards and other notifications to clients. For those who don’t necessarily want to create their own database, there are a number of different companies that offer CRMs. Software Developer Shane Lemon, owner of Shane Lemon Software Consulting Inc., for instance provides a CRM called Coconut that allows brokers to track their brokerage’s and their own commissions, as well as client information, whether it’s by deal and contact details. The system can import files downloaded from Filogix Expert and when users send a newsletter through Coconut, the system can distinguish between referral sources and clients, sending different messages to different groups. Lemon says he got into the business because he wanted to give brokers a better way to manage their clients’ information and track
Top: Mike Averbach Middle: Jessi Johnson Middle: Jim Black Bottom: Shane Lemon
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Feature Technology
their commissions, rather than relying on a simple spreadsheet. “I realize it’s hard to change something that you think is working, but Coconut is a much more effective tool than stand-alone spreadsheets and whiteboards. Coconut replaces your whiteboard with an online dashboard, complete with all your current clients and automated reminders based on your current and past deal life cycle and spreadsheets are replaced by easy-to-use forms and comprehensive reporting.” While CRMs are great for brokerages that are just starting out, they’re not necessarily the best bet for companies that have the capital to create their own, says Albert Collu, CEO and president of Argentum Mortgage and Finance Group, and vice-president of the Independent Mortgage Brokers Association of Ontario. “In my opinion, I think we have far too much technology out there,” he says. “I think all these pieces of technology and software platforms do a good job in themselves, but they’re all over the map. The irony is they were supposed to create efficiencies and help you with your business, but many of them have become so bloody cumbersome that no one actually uses them anymore.” When he started his company a year ago he knew right from the start that he would need a CRM that could be used as a central point to store and manage data. So he produced his own software application called The Stream. “I knew if we opened the doors and created an organization that was just like every other brokerage we would have been dead in the water before we even started,” adds Collu, who’s been a mortgage broker for more than 10 years. Argentum uses The Stream to create mortgage applications, interact with clients and manage documents for compliance and recordkeeping. The CRM is fully integrated with his website, document management systems and is connected to an online mortgage-origination software platform for application submission. “You’re just taking the data and dropping it in a central portal and pushing it out to all the relevant areas. It puts everything on autopilot so to speak.” The Stream has given his agents a greater ability to understand the company database, develop relationships with clients and find new business. But most importantly, it’s allowed Argentum to gain more business. “Most agents spend almost half their time on administrative functions rather than developing their business, whereas our system has diminished that to maybe five or 10 per cent.”
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Jessi Johnson is another broker who hasn’t found a CRM he’s totally comfortable with. Until he finds something that can work for his business, he’ll continue using Microsoft Excel to manage his client data. “Don’t get me wrong, I am sure they work for a basic broker, but unfortunately I have a very complicated setup.”
the outlook on Office 2010: useful features for brokers Microsoft’s newly released software suite Office 2010 has a few new features that are worth taking note of. First are the company’s updates to its e-mail application Outlook, starting with the Outlook Social Connector. This feature links social media profiles and accounts, such as Facebook.com or Linkedin.com, with users’ Outlook e-mail accounts, displaying profile updates and conversations at the bottom of e-mail messages. “What that allows is for the user to have all of that information come into that one consistent interface called Outlook without having to go out and navigate to a whole bunch of sites and tools,” says Jason Brommet, senior product manager at Microsoft Canada. The Connector is especially important for brokers because it gives them the ability to manage information more effectively as they become more engaged in using social networking websites to initiate sales. Outlook also includes a feature that allows users to group e-mails dealing with the same conversation into one consistent thread. “As an individual, and thinking about your personal productivity, having to go through all those e-mails isn’t exactly the best use of your time,” Brommet says. “This is a super powerful way to manage lots of e-mails in cases when they’ve started to get out of control.” Some more new features include Microsoft Web Applications, which are “light-weight versions” of Word, Excel, OneNote and PowerPoint available online by visiting Windows Live. After users have saved and stored their documents on Windows Live, they can then share them with others. “Whether they’re at home, or ... at work – or they could even be in an Internet café somewhere around the globe – that mortgage broker can share that information directly with their client, and they don’t necessarily need to have Office installed on that PC,” Brommet adds. Next, there’s Office Mobile 2010, which includes primary Office applications in a “slightly reduced functionality version designed to run exclusively on a mobile phone,” Brommet says. These applications may not be ideal for doing large projects, but they are good for making small changes inside documents for users working on a smartphone or iPhone. Finally, Excel has a new feature called Sparklines, which allows users to display data in an information graphic within a single cell of a spreadsheet directly beside data they refer to. The software package was released June 15 after Microsoft conducted its most successful beta program ever developed, which had the input of more than 10 million test users.
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Online marketing Johnson’s focus, however, is less on what application he uses for client-data management and more on how he markets his company. Johnson, who teaches marketing at seminars hosted by the Mortgage Brokers Association of British Columbia, built his business by using technology. His colleague Mike Averbach, president of TMG Averbach Mortgages Ltd., says he can remember when other people in the industry would say that “mortgage brokers shouldn’t try re-inventing the wheel without learning the fundamentals first, but Jessi came in and re-invented the wheel.” Johnson admits when he first started out he was only focused on clients who understood current technology. After a short while of working with that in mind, he realized he could build a successful business targeting only those consumers. “I don’t really want a client who doesn’t use e-mail or the Internet. Those files take 10 times as long to complete and those clients are literally a dying breed. We prefer to focus on the younger clientele and teach them cool new tricks to be more financially savvy.” He says he’s used social media websites not to sell his products but to educate people with quality information. By doing that he was able to increase his business’s exposure and give consumers an incentive to call him when they need a mortgage. By using Twitter.com, he says he’s been able to give his business a “personal touch,” which seems to be harder to establish these days, since brokers have less face-to-face interaction with their clients.” Johnson currently has more than 10,000 followers on his twitter account, giving him a reach into a market that others cannot access. However, before brokers even worry themselves with social media, they need to develop and maintain a decent website, Collu says. “There is going to be more and more demand for brokers to have robust websites that have ample information that capture audiences or visitors and entice further interaction,” And even though there’s a growing demand for well-developed websites, he’s seen a lot of reluctance among brokers to fill what he calls “a very big void” in the industry. “It doesn’t matter what you want as a broker or agent, the only thing that matters is what the consumer demands. Over 80 per cent of consumers right now will visit the Internet for mortgage and home advice before even contacting a human being. If that’s not a kick in the rear-end to change habits, I don’t what is!”
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close your deals without even leaving the office Vanguard Law Group has taken a significant step towards redefining the way law services are provided in Ontario by offering to do purchase closings via video conferencing, says Stephane Presseault, the firm’s national relationship director. “We want to offer the ultimate in convenience, and we don’t even want you to have to come into the office anymore.” The Mississauga firm has been able to close more than 20 deals in Ontario since February using a wireless video and data link between a laptop computer, brought to a homebuyer’s property by a commissioned-signing representative, and the computer of one of the firm’s lawyers. Vanguard, which opened earlier this year, was already doing mortgage refinances using video conferencing, and wanted to extend that service to home-buying and purchasing, Presseault says. But before the firm began conducting video closings, it got a legal opinion on whether or not it could perform them in Ontario without a lawyer physically present. Presseault says video conferencing has been used for some time already in the provincial courts for bail hearings, so the Government of Ontario gave the firm the go ahead on the project. Vanguard also received special permission to have up to 10 commissioned-signing representatives for every lawyer, who can visit the homes of its clients and stamp, seal and witness the signing of the documents. While doing a closing via video conferencing, the client is able to view the lawyer and the documents on the laptop screen. The lawyer can then highlight certain parts of the documents to provide a visual aide for the client as he or she explains the legal process of purchasing or buying a home. After the lawyer and the client have finished going through the documents, the representative has the client sign the paper documents, which are then signed and brought back to the firm’s office to be filed. By using this technological innovation, he says Vanguard now has the ability to do more deals in a day and to reach clients in a “way that was never possible before.” While the service, which can be provided from 7 a.m. to 11 p.m. seven days a week, is only offered in Ontario at this point, Presseault says his firm hopes to extend its service to other areas of Canada.
Even though having a superior website with great information and tools is crucial for success, it’s all for nothing if no one sees it, says Averbach. So the next step brokers should take, if they have the budget for it, is to hire a search-engine-optimization specialist to make their websites rank higher on search engines. Averbach says this is particularly important because most people looking for a mortgage, between the ages of 25 and 45, start by using search engines, and they usually end up selecting with what’s closest to the top. CMP
Feature
Tech Directory
what’s out there?
technologies to assist mortgage brokerages What GoMax offers: GoMax offers a web-based customer-relationship-management (CRM) application that gives mortgage professionals the capability to foster existing client relationships and the marketing tools to find new business opportunities, says GoMax Co-owner Bruce Schoenne. The company’s InTouch application can be used to add, edit and maintain customer information, to e-mail targeted group of clients, to submit applications directly to Filogix or Morweb and to create action plans that, when attached to a client’s record, will automatically send reminders, e-mails and print materials. All information held in GoMax’s online database is protected with 256-bit AES encryption and daily website and data backups. And for those who are out of the office quite a bit, GoMax offers real-time web-based BlackBerry and iPhone access. If brokers don’t currently have an online presence, GoMax provides and hosts websites that can be integrated with InTouch, Schoenne says. All brokers have to do is pick a domain name and GoMax takes care of the website’s maintenance and updates. What’s new? Today, the company has two full-time programmers “who do nothing other than update” their website and software, Schoenne says. “We’re only going to stay in business as long as we keep providing what the brokers want. So we are developing the system, not to what we think it should be as programmers, but rather to what the brokers want it to be.”
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What has this technology done for the business: Schoenne says his company’s technology has given brokers the ability to retain customers and work more efficiently. Back when the market was really busy a couple of years ago, he says many brokers were not too concerned about their existing clientele because there was such a large number of new customers purchasing homes. He says his business significantly increased once the market started to cool and brokers began to realize their existing clients were going to make up a larger part of their business. What inContact offers: inContact has recently revamped its tools on its CRM application NEXA, as it continues to expand its business beyond just a customer management and marketing application to include lead generation, report and pipeline notification, compliance and commission management, data mining and cross promotion tools, and secure referral source and client visibility to mortgages details, while giving users the capability to export and import information from Filogix Expert. “We are not a marketing CRM tool only any longer. We have filled in our product line to assist mortgage originators and companies with all aspects of their business other than lender submission,” says Rich Spence, vice-president of operations. Brokers can use NEXA in combination with inContact’s website to utilize online marketing and search engine optimization for their business. And to stay completely up-to-date with the business, inContact’s notification tool links users’ e-mail accounts with Filogix Expert. What’s new? inContact has unveiled a designed payroll and commission-management tool that allows users to track everything from different agents, lenders, date ranges, lender payments, agents’ splits, expenses per deal, expenses per agent and extract files for integration with Filogix. What has inContact done for the business: Most importantly, for Spence, inContact has served to increase operational efficiencies for brokers by integrating a web lead-generating system with mortgage origination -- providing a “level reporting that was unattainable” before inContact develop NEXA -- and by opening up markets and alliances between mortgage brokers and third-party vendors, all while raising consumer awareness of mortgages brokers and providing an increased level of protection of consumer data. “The root of efficiency for us is meaningful data accuracy coupled with tools that allow our users to produce precise results in reporting, marketing, compliance, lead management and commission management,” says Spence. What Nexsys offers: Centralized Underwriting and Fulfilment is not a new concept, however NEXSYS Financial Inc. Has a software system that offers some unique features for the industry. “At the core of our system is a powerful software system that gives agents, brokers and lenders access to deals and all associated documents”, says NEXSYS President Mark Pooley. “When we launched our service in the spring of 2009, we understood that technology was going to be the key differentiator and the mechanism to scale our offering to the entire industry.” The NEXSYS site is a private portal accessible through the web. Once a brokerage and subsequently agents are registered, they receive a unique login and can access the site wherever they have an internet connection. Agents access the site to submit their deals and immediately they receive e-mail acknowledgement letting them know what pre-submission documents they require. As these documents are collected, they are uploaded, emailed or faxed to the NEXSYS site, each automatically becoming electronic documents. Agents and brokers can track the progress of each deal through to funding. The end result is a lender-complete electronic file that the broker can use as the core of their provincially compliant file. All documents submitted to the NEXSYS site can be quickly downloaded by the brokerage at any time. What’s new: Roland Mechler, Director of Operations, joined Mark Pooley at the outset to develop the technology’s back end. Prior to joining NEXSYS, Mechler led a software division for Pitney Bowes and in previous positions partnered with companies such as Hewlett Packard in developing world-class public portals. “The key to developing useful software is developing software that is intuitive and scalable. If you can develop software that is powerful, reliable and secure, yet to the user simple to use, then you’ve got a powerful product. I believe we’ve achieved that”, Mechler said.
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What has this technology done for the business: NEXSYS is far more than software though, because there is a real team of professionals behind each transaction. “While we recognized that technology was key, without outstanding people behind each mortgage transaction, our cause would be lost” added Pooley. We have pods of seasoned underwriters, fulfilment specialists, document verifiers and validators who meticulously scrutinize deals and submit them to the appropriate lenders. By preparing all documents for signing, arranging appraisals, following up with solicitors and much more, the NEXSYS team brings great value to the Broker/Agent. What Marlborough Stirling offers Marlborough Stirling Canada offers a complete range of software applications to assist mortgage professionals from the initial customer inquiry to the final loan discharge, says Tim Brown, general manager, MorWEB. The company’s suite of products starts with MorWEB, which is an online tool for brokers to create and submit mortgage applications to major banks and lenders. Its functionality includes management of client data (including credit and personal information), unlimited document generation and storage (including the ability to send and receive to and from lenders), as well as the ability to track client files, and request appraisals. It has its own built-in suite of financial calculators and can be easily integrated with CRM applications or broker websites. MorWEB can be used individually or in tandem with Omiga, an application used by lenders to process loan applications received from a variety of sources, and Optimus, which is Marlborough Stirling’s mortgage administration system. “This system supports the full end-to-end chain of the mortgage application process and it’s done completely over the Internet ... It can truly provide you with the paperless office,” Brown says. What’s new? On March 3, Marlborough Stirling Canada announced that MorWEB provides exclusive access to ScoreMaker, a credit-score analysis application that gives brokers a “detailed, step-by-step action plan” to help their clients achieve their target credit score in the shortest time possible.” In April, Marlborough Stirling Canada added a feature to MorWEB to give users direct access to CommunityLend, Canada’s only online peer-to-peer lending service. “Now, brokers using MorWEB can seamlessly refer clients directly to CommunityLend to arrange unsecured loans from private investors,” Brown adds. What has this technology done for the business? Brown says Marlborough Stirling Canada has provided greater technological efficiencies, reduced costs for those who use the full paperless office system, greater security, compliance and audit controls and a software system that gives brokers “a lot more control” to customize their MorWEB account. While the company continues to grow, having about 30 to 40 per cent of all residential mortgages in Canada processed through its Optimus platform, Brown says the company provides one more crucial component to the mortgage business: competition. “Competition and choice are important for the industry. They continue to spur innovation and make improvements that are available for brokers and lenders.”
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Tech Directory
What Filogix offers Filogix Expert is the most robust mortgage-origination software in the industry and is used by more than 19,000 mortgage brokers across Canada to connect to more than 75 major lenders, says Steve Malone, vice-president, Broker Services at Filogix, a division of Davis + Henderson. The web-based origination software platform allows brokers to create mortgage applications and submit them directly to creditors and lenders, while providing them with variety of compliance, marketing, reporting and task management tools. Brokers can also use the application to track their commissions and obtain all the documents they need to present to their clients. While Expert will handle the life cycle of the mortgage application, vice-president of Technology Paul Lewis says it does not handle the life cycle of the broker-client relationship. He suggests that brokers get a good CRM to integrate with Expert, so they can better manage their client’s information, adding that brokers who use inContact’s application NEXA get direct access to Expert. What’s new? Filogix now gives brokers and agents access to BizAssist® and soon IDefence®. Developed by Davis + Henderson, BizAssist is an online community and marketplace for small business owners and the self-employed to connect to one another and IDefence provides an array of services that protect against identity theft. IDefence features include: a credit scoring utility, credit bureau monitoring, SecureVault for secure online document storage, restoration services for individuals who have become victims of identity theft and card monitoring to alert individuals if their credit or debit cards have been compromised. What has this technology done for the business? Lewis says Filogix has created a virtual desktop that brokers across Canada use to make hundreds of billions of dollars of deals with lenders. “Over time, in partnership with brokers and lenders, we’ve provided the technology infrastructure for this lending marketplace... And over the last 15 years, we’ve evolved the functionality to fully support deal origination and application submission” says Lewis. “Because Filogix technology matured and evolved in step with the broker market, Canada is now one of the few countries in the world where almost 100 per cent of broker traffic is electronic.”
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What Vanguard offers: Vanguard Law Group LLP is a real estate law firm with offices in Vancouver, B.C., and Mississauga, Ont., that uses cutting-edge technology to provide a level of convenience to its clients that has not been achieved before, says Stephane Presseault, the firm’s national relationship director. “The name of the firm was chosen very specifically. When you look at the dictionary definition of vanguard, it’s at the forefront. And that name was chosen because that’s what the mission of this law firm is,” Presseault adds. The company started when Vanguard Managing Partner Soni Sonjay approached some of his colleagues with an idea to start a law firm that would have a business-oriented approach and the goal of making dealings with the firm “more convenient for the customer than the lawyer” by using technological innovations. What’s new? Vanguard conducts paperless mortgage-refinance signings by having its clients sign all the needed legal documents on a computer tablet. “Instead of showing up with 150 pieces of paper … what we do is we take a PDF document and upload it into the tablet. A customer then signs their signature on the tablet, and we leave the customer with their fully executed documents on a USB stick,” he says. “So what we’ve done then is saved 150 pieces of paper on a single signing.” Once the documents have been signed and saved in an unalterable format, they are then uploaded to the firm’s server and stored on a USB drive that is filed at the firm’s office. Presseault says the firm did obtain a legal opinion on whether or not mortgage-refinance signings could be done completely in an electronic format in Ontario, which said “an electronic signature is a valid signature if it appears on a mortgage document.” What Vanguard has done for the business: By using technology, Presseault says Vanguard hopes to push other law firms forward to find even more innovations to improve the practice of law as a whole. “Our goal is to change the industry. In fact, our slogan for our law firm is legal services redefined … Our goal is to say this is the way law firms should operate and offer their services and those that can do it should come along for the ride,” Presseault says. CMP
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SPECIAL FOCUS
Commercial Lending
industry faces challenging 2011 CMP magazine sat down with the Dale Klein, president and CEO of Canada ICI Capital Corporation to gain some valuable insight on the constantly changing commercial mortgage market and requirements for today’s lenders.
After a few years of working in residential mortgages, many brokers start to eye commercial deals and wonder how they can break into this market. CMP takes a quick look at commercial lending and offers some tips to make the transition
leap taking the
from residential to commercial brokering
M
aking the move from funding smaller commercial deals – in the $200,000 range – to multi-million dollar deals can be difficult. Not only do you have to understand the differences between residential and commercial clients, but you also need the confidence and know-how to win over even the most financially savvy borrowers. The one thing that all newcomers to
CMP: As a direct lender in Dale Klein today’s commercial mortgage market, what would you say is the biggest challenge for brokers in the industry today? DK: Finding reliable capital is the biggest challenge in today’s market. As a result of the fallout from the credit crunch in 2009, an inverse relationship between the supply and demand for commercial mortgage capital was created where demand has out-paced supply for the last two years. This has inadvertently created a situation where lenders have become more selective with the types of mortgage investments they choose to participate in. With the number of great mortgage opportunities for lenders in the market, brokers today need to be on top of their game to ensure their deal gets the attention and time it deserves. Brokers should look to establish a strong rapport with lenders who are reliable and consistent in their credit decisions. At the end of the day brokers want to deal with a reliable lender who will be there come funding day.
CMP: What type of loans are you looking for today? DK: We generally look for good, quality commercial and multi-residential loans. We are flexible in terms of duration and asset classes, but one thing that remains consistent in our approach is that we want to be sure that an exit strategy is always clearly defined. We have been fortunate to provide in-house mortgage servicing on behalf of several institutional capital partners. This has given us the latitude to fund a wide range of loans from $1 million to $20 million and to competitively price deals on the quality of the loan as opposed to internal yield requirements. We are currently offering the following commercial loan products: continues on page 63
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SPECIAL FOCUS Commercial Lending
“ the one thing that all newcomers to commercial lending should know is to forget what they know about residential lending – it’s a brand new ball game with different rules ” commercial lending should know is to forget what they know about residential lending – it’s a brand new ball game with different rules. While most commercial lenders are happy to help newbies, it’s probably best to find a mentor who can guide you through the process. Here are some tips to get started. Understand your client Is the client an individual a partnership a corporation or a newly formed company? If it’s a corporation, it’s important to know who the shareholders are and who makes the decisions.
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Lenders want to hear a borrower’s “story” and many lenders want to meet the borrower. Also, determine if the loan will be used to complete a purchase or a refinance and equity take-out for other investments. Also, gets a personal profile of the operating principals outlining their experience in the industry. A business plan is beneficial to understand and present the loan request to the lender. Understand the asset being purchased It’s important to ask about the property and make sure it exists. If it’s a rental property, lenders will want to see the rent roll. Other documents you should have are copies of the purchase agreement, copies of leases, an environmental report, a building inspection report and an appraisal no longer than six months old. Get the financial documents Most lenders want to see the most recent financial statements -- at least two year’s worth – some require three years. They want to see how the loan will get paid and on the case of a default what security the borrower has to offer.
SPECIAL FOCUS
Commercial Lending
Discuss the timing It sometimes takes a month or more to get an appraisal and other reports. You will need time to analyze the data, prepare and present your loan submission, have the intended lender issue a discussion paper for the client’s acceptance and then finalize the loan commitment. This can be a lengthy process. In many cases, the prospect thinks a formal answer can be had in a few days, similar to the quick residential process. Discuss broker fees These fees should be payable once you have arranged a satisfactory loan commitment in accordance with the request. Normally, the fees are payable on or before funding but, in many cases, the fees are paid from the initial advance on a draw-type mortgage. The amount of fees will obviously vary, depending on the complexity of the transaction. A discussion of your expected fees and other related costs will often impact the amount of financing the prospect needs to borrow. It’s better to find out early if the prospect is not prepared to pay reasonable broker and lender fees.
continued from page 61
CMP: What have you been doing to attract quality loans? DK: We’ve stuck to our fundamentals of being consistent and concise with a quick yes or a quick no on deals that don’t fit our program. We’ve funded commercial mortgages inside of five business days from the date it was originally brought to us. I feel that our ability to make quick funding decisions is one of our biggest strengths.
CMP: What do you expect from mortgage brokers in the presentation of their loans? DK: We want brokers to put themselves in the shoes of the lender. As I had previously mentioned, a clear exit strategy is our No. 1 underwriting parameter. An accurate and realistic loan presentation will go a long way in saving everyone’s time and money. Some key elements we look for in loan presentations are rent rolls, operating statements, construction budgets (if applicable), sales price list (if applicable) and up-to-date borrower financials and personal net worth statements
CMP: Where do you see opportunities for brokers in 2010 and into 2011 DK: We are still operating in a market where there is a competition for capital, and where demand still outweighs supply. Given the considerable amount of uncertainty in the financial markets across the globe, the amount of reliable capital will continually be a challenge for borrowers throughout this year. A good mortgage broker is one who understands how to manage the expectations of borrowers and lenders – it is crucial to be realistic with timing, loan amounts, and deal structure. CMP
License #11127
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Business Marketing
There’s a lot more to becoming a mortgage expert than just being knowledgeable about the industry. Doren Aldana discusses what brokers need to know to be more successful
the difference
between
“experts”and “marketers” I
f you’ve ever attended an industry training event, chances are you’ve heard all about the importance of becoming a mortgage expert. Sound familiar? While that’s true, it’s only one part of the success puzzle. Over the years, I’ve come to realize there’s a lot more to it than that. You see, you could be the most knowledgeable mortgage guru in your city, with a long string of credentials behind your name, and that still doesn’t guarantee people are going to be banging on your door for business. In other words, it doesn’t matter how great your technical skills are or how groundbreaking your loan products are, your business will wither away and die if you can’t market and sell your services. I got thinking about this distinction between “experts” and “marketers” the other day when an e-mail arrived in my inbox from my colleague, Dave Hershman, who is a well-known mortgage trainer located in Maryland, United States. He was curious to see a sample of my Done4U Client Newsletter, so he went to my website, checked it out and then sent me the following unsolicited critique: “First of all, we have some very different marketing philosophies. You are a “Dan Kennedy” type guy and I don’t like that type of marketing. I tend toward the expert approach - I want my customers to be experts and to sound like an expert. It is not only the response you get, but the type of response you get. That does not mean that he is not effective - or blending the two is not. I think when you look at my newsletter, and then yours, you can see the difference. I don’t want my loan officers peddling recipes. Not that I don’t like
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brownies (love them) - but does your CPA or stockbroker send recipes? On the other hand, you do a great job with the special report response mechanisms. It does not help if people don’t call. Second, I think that the print newsletter is a dinosaur – because snail mail is. Doesn’t mean I don’t provide them – I do. But 99 per cent of my loan officers don’t use the print –they want to send out the HTML. It is cheaper.” As you can see, Dave has no shortage of opinions, the question is, “is he accurate?” What I’m about to say in response may ruffle a few feathers but hear I go anyway. There are four ways experts think differently than marketers. 1. Experts place high value on opinions. Marketers place high value on results. Dave’s comment about not liking “that type of marketing” is a great example of how experts tend to pre-judge and discredit a marketing approach entirely based on personal opinion, without actually putting it to the test. They assume their clients think the same way they do – at their own peril. At the end of the day, the only true votes that count are the ones cast by people who put cash in your wallet – your clients. That’s why serious marketers routinely test multiple approaches to determine the highest performer, while experts, on the other hand, tend to do things simply because that’s what all the other experts do.
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Total Incentive
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Rate Discount
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Term Base Incentive Preferred Broker Incentive
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toll-free (866) 809-5800 April 2010
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Business Marketing
This reminds me of the story about a guy driving in dense fog on a dangerous road, who is relieved to come upon the tail lights of a car. He then followed that car when it suddenly slammed to a stop, causing him to rear-end it. He leaps out hollering, “You idiot, couldn’t you see me following you? How dare you slam to such an abrupt stop without warning? This crash is YOUR fault!” To which the poor guy just rear-ended sheepishly says, “But I’m parked in my garage.” Moral of the story: Be careful who you follow.
According to Payscale.com, the average mortgage broker earns $36,000 to $61,000 per year. If you’re happy with that, go ahead and follow the herd. If not, I would suggest modeling the top five per cent income earners. Success leaves clues. If you’ll make a study of it, as I have for the past five years, you’ll find that top producers are more likely to be using a mix of both e-mail and direct mail in their followup marketing campaigns. Why would they bother spending their money on direct mail when e-mail is cheaper? Simply put, it pays better.
“ it doesn’t matter how great your technical skills are or how groundbreaking your loan products are, your business will wither away and die if you can’t market and sell your services ”
4. Experts expect prospects to seek them out. Marketers expect prospects won’t seek them out unless given sufficient motivation. Research tells us that the average consumer is exposed to more than 300 advertising messages a day in one form or another. With all the marketing clutter you’re competing against, it’s delusional to assume your prospects are going to automatically seek you out, read your e-mail or respond to your newsletter just because you, the “expert,” sent it. It’s not going to happen, unless you engineer your message to STAND OUT from the clutter and induce a response. That’s why I purposefully include involvement devices in my Done4U Newsletter, such as the quiz of the month, free report offers, response forms, etc. So, starting today, make the commitment to become a powerful marketer. Move beyond the myopic confines of your own perspective and get inside the mind of your ideal client. Find out what they want and how they want it and then deliver. In doing so, you’ll bolster your “expert” status and become irresistibly magnetic all at the same time.
2. Experts place high value in their knowledge or experience. Marketers place high value in the perception of the prospect or client. For example, Dave says he doesn’t want his loan officers “peddling recipes.” I agree, recipes in and of themselves are not going to get the phone ringing with hot mortgage deals. However, the question is not whether you should be peddling recipes, the question is: Does having recipes included in your monthly newsletter add to its perceived value. If so, will that increase the likelihood it will be read and responded to? Notice my emphasis on the key words perceived value. The bottom line is if your client values and appreciates the monthly recipes, thereby making you more top of mind and top of heart, that’s all the matters. Yes, it’s important to provide expert financial advice, but if you’re a marketer, you understand that it’s all about response and return on investment (ROI), not opinion. 3. Experts focus on cost. The marketers focus on ROI. I agree with Dave’s assertion that, “99 per cent of my loan officers don’t use the print –they want to send out the HTML. It is cheaper.” Especially in this economic climate, many brokers and agents want cheap which, by the way, is a good indicator what NOT to do. If you follow the mediocre majority, you’re going to get mediocre results!
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“ with all the marketing clutter you’re competing against, it’s delusional to assume your prospects are going to automatically seek you out ” Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach. Since 2005, he has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions. CMP
News
Analysis
Protect your future business income from identity theft Any press that puts the mortgage broker industry in a negative light has an impact on consumer confidence and that hits the bottom line for all mortgage brokers. Greg Viger explores the issue and what brokers can do about it
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or years I have been concerned that the irresponsible handling of confidential information, be it intentional, by ignorance or just complacency, would hurt our business. Recent comments I made in response to the Privacy Commission’s damaging report on the Privacy Act breaches by industry members (See mortagebrokernews.ca) were referred to by some as fear mongering. Three days later I hear of laptops being stolen from a broker’s office. The broker had to notify his clients of this. The RCMP shared the company’s name with the press and encouraged them to disclose what kind of info was on the laptop – which they declined to say. BMO’s credibility took a hit when it was reported that one of its laptops with confidential information was stolen from someone’s car. While the broker industry isn’t the only industry that keeps highly valuable information, it is our industry that is currently under scrutiny and getting press. And we depend on this industry for our livelihood. Anyone who takes lightly our
Criminals can use the stolen or reproduced personal or financial information to: • access bank accounts • open new bank accounts • transfer bank balances • apply for loans, credit cards and other goods and services • make purchases • hide their criminal activities • obtain passports or receive government benefits Using identity theft to facilitate organized criminal and terrorist activities also appears to be a growing trend. A clean identity theft, where the person responsible for the information, such as a broker, is unaware of the breach provides the most profitable opportunity for a criminal. In our confidential files we hold all the checks and balances that most banks and credit card companies use to validate who a client is as well as other valuable documents. The only thing our files are missing is a client’s mother’s maiden name. A bit of creative social engineering and in many cases that could be determined fairly easily. Identity theft is a major concern for consumers. Most people seem to have been a victim at some point in time. Any news stories that have identity theft and a mortgage broker in the same article is very bad for our business. If we are going to hold on to the market share we currently have, we have to build consumer confidence in the benefits of dealing with us. Industry attention, practices and education on the care and handling of confidential information both in physical and electronic form has to be a high priority. We must view the necessary investment of time and energy for what it is, the protection of our future business income from identity theft.
responsibilities as key holders of significantly large amounts of identity information is being foolish. This bad press does nothing but hurt our industry.
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News Analysis
While the report talked a lot about poor physical file management, it is a topic every broker understands and can fairly easily do something about. However the average broker is using technology they don’t understand enough about and it is in this area that Greg Viger brokers could benefit from further education. Brokers are not computer experts and therefore do not understand where the weaknesses are in their daily practices. While there is no published information about identify theft professionals targeting brokers, it’s just a matter of time before they get the idea. But in reality, the thing each of us should be most concerned with is having to tell our client database that their data MIGHT have been compromised. Confidence and credibility are quickly and easily lost. While you might get lucky and not have your name flashed across the local paper, your referral base and future business will certainly take a major hit. Based on statistics from PhoneBusters.com, the Canadian Anti-Fraud Call Centre, a joint effort of the
RCMP, OPP and the competition bureau, identity theft continues to be a major issue. More than 11,000 people were identified as victims of identity theft and reported a combined loss of $10,882,279 to PhoneBusters in 2009. (See phonebusters.com/ english/aboutus.html) Reporting identity theft In a 2008 McMaster University study only 13 per cent of identity theft is reported to police; six per cent to credit reporting agencies and 0.5 per cent to PhoneBusters. An estimation of the real costs to credit card holders and issuers is as much as $500 million a year. It was reported that only about four per cent of lost funds, or $2 million, were a result of a criminal applying for a credit card using an individual’s personal information. The study goes on to say that in 2008, 1.7 million people were victims of some kind of identity fraud. They spent 12 million hours and more than $110 million of their own money to resolve the resulting problems. (See merc-mcmaster.ca/ working-papers/measuring-identity-theft-incanada-2008-consumer-survey/). I would think that a fraudulent credit card application would be one of the most difficult frauds to prove and thus timeconsuming to fight. CMP
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The RCMP website identifies the following as information identity thieves are looking for: • full name • date of birth • social insurance numbers • full address • mother’s maiden name • username and password for online services • driver’s licence number • personal identification numbers (PIN) • credit card information (numbers, expiry dates and the last three digits printed on the signature panel) • bank account numbers • signature • passport number
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CMHC/Conventional Financing Brian Kennedy 604-331-2211 Jonathan Wong 604-331-2218
CMHC/Conventional Financing Dennis Aitken 403-205-8203 Doug Eveneshen 403-205-8202
Single Family Financing Tom Wollner 604-331-2210 James Pell 877-855-9750
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Best Practices Workplace Conflict
managing
office conflict Most principals know that interaction between people in the workplace can often lead to conflict. However, many automatically associate conflict with a negative outcome and avoid it. CMP’s sister publication in Australia looks at how you can learn to identify and deal positively with conflict
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lthough teamwork and collaboration are essential in today’s business climate, the consequence of increased interaction between employees and their managers is conflict. With an estimated 65 per cent of performance problem resulting from strained relationships, what can you do to ensure that your business remains healthy and does not fall into a destructive spiral of inter-staff conflict? Conflict management techniques Michael w. Blum, a professor at Truman State University in the U.S., studied the techniques used by managers and the conflicts handled by businesses. According to his research, most conflicts involved operational issues, discipline, interpersonal relationships, workflow issues, sexual harassment and compensation. Yet not only did the heads of brokerages proactively handle conflicts, they reported successfully handling 71 per cent of the disputes that arose. Although there is not one correct way to handle a dispute, those managers surveyed found themselves frequently using two techniques for conflict resolution. The first technique used involved meeting separately with the disputants before consulting with a third party. After the consultation, the manager would suggest concessions and specific resolutions for the conflict. The second method was to meet with both parties, along with a mediator. Managers would determine the causes of the conflict and then have a
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followup, this time quoting policy and providing objective information to help facilitate a resolution. Although managers actively assist with conflict management, they admit lacking objectivity when it comes to conflicts between employees and the business. In the case of employee/company conflict, broker principals found it useful to use third parties to facilitate conflict resolution. In their search for an objective and third party, principals look for someone assertive who can resolve the situation before it escalates. The best candidate is someone who can gather enough information to be informed, and who is flexible enough to modify their approach to fit the situation. Training for conflict management According to the UK’s Centre for Effective Dispute Resolution (CEDR), only 37 per cent of the managers polled felt qualified to cope with business conflicts. CEDR chief executive Karl Mackie says, “Conflict is part of working life, but it’s how we deal with it that’s important. Effective management of conflict can reduce the amount of time and money spent on trying to sort out a problem, reduce the damage it could cause to those involved and enable decisionmakers to make smarter choices earlier on.” Giving employees the tools they need to deal with office conflict means that principals must determine what issues need to be addressed and then provide employees with the appropriate educational training. One of the advantages of technology is that this training can occur in the privacy of an employee’s home instead of through in-group workshops.
Best Practices
Workplace Conflict
One U.S. company, Conflict Coaching Consulting, offers an online program that allows employees to receive assessments and training in different conflict styles, emotional competence, communication skills and negotiation skills. According to president Carlos Todd, “we know that many people struggle with conflicts. Our training imparts skills necessary to live life with less conflict.”
six ways to avoid conflict 1. Speak your mind. Managers need to be clear in what their expectations are and employees need to have a safe avenue to express their concerns. 2. Active listening. Managers and employees need to learn to actively listen. Rephrase what you hear to avoid miscommunication.
Cost of conflict 3. Strong feelings appropriately. Strong emotions are a reflex response. Both Eighty per cent of conflicts affect the smooth employees and managers should work towards having a responsive instead operation of a company and can lead to the damaging of reactive response to conflict. of company reputations, damage business relationships, lose customers, increase staff turnover, 4. Remain rational. Managers and employees try and remain analytical when and make businesses fail to meet their targets and it comes to conflict. Rely on facts not emotions miss business opportunities. 5. Be flexible. The conflict may be resolved by compromise. Make sure you’re Not only is conflict expensive to the bottom line, thinking of the business’ best interest and not your own. it also wastes time. Hwee Koon, artistic director for Asia Art Centre, says, “I work in Beijing and find 6. Avoid destructive statement. Think twice before making statements myself spending quite a bit of time trying to make about employees or managers. Once a statement is made, it will remain my employees get along with each other. It takes up with you and in the memory of the business for a long time. my time during the day and I find myself still having to do my regular work.” According to CEDR, managers spend up to 3.2 working years dealing with conflict, which is a organizational interest. It’s helpful if principals substantial distraction from their main job. create an environment of communication and make people think from others’ viewpoint.” Being responsive instead of reactive Heads of brokerages can facilitate the process by The majority of principals dislike having to deal with promoting open communication with staff, and conflicts, but avoiding conflict has been shown to ensuring transparency in the conflict resolution make the situation worse. process. Providing employees with a platform to voice One reason that conflict may be distasteful is issues and advising those in charge on the correct the way we respond to it. When a dispute arises, way to handle conflict will also help. the people involved may respond to the situation Businesses can also utilize their conflict by taking responsibility for their role in it and, by management strategies to promote their branding. understanding their actions, thoughts and According to the CEDR survey, “how business feelings, an understanding of the bigger picture manages conflict can be a building block for can be achieved. Other employees may just react reputations development. All too often, management to the conflict. They are assuming the role of separates it from their strategic thinking, thus it victim and get carried away by feelings of anger, becomes a legal issue.” fear or grief. Everyone has an unconscious system To reduce the possibility of conflict, principals of responding to conflict that looks for revenge, need to implement policies that are fair and justice or acknowledgement. transparent. Managers need to be clear as to each According to mediator John Ford, it is not easy to employee’s role and the expectations for each shift our attitude from being reactive to responsive. position. There needs to be a way for employees to ‘Knowing this at an intellectual level is one thing. communicate freely within the business about any Being able to shift our physical and emotional issues they are facing, whether it is sexual behavior from reaction to responsive choice when discrimination or dissatisfaction with their salary. we’re actually triggered is another.” Managers need to ensure counseling is provided It is difficult to make the shift because our for employees who are having issues with conflict reactions are habits developed through our lifetime management, and they are providing proactive and once triggered, puts us in survival mode. conflict management. In addition to training, heads of brokerages need Workplace justice to encourage interaction, both professionally and One of the ways that managers can actively assists a personally, between all staff. business is to ensure that there are policies in place Although conflict is never able to be removed to deal with conflict. Although employees need to be when individuals work together, having the proper trained on how to respond to conflict, managers need procedures in place, plus adequate training provided to be able to identify conflict before it has escalated. to all staff and third-party mediators, will go a long According to China employment consultant way to help promote and add to the workplace Victor Guo, “most of the conflicts are caused by either culture, and ensure that conflict resolution remains information imbalance, or difference in an achievable business goal. CMP
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Profile Insight
Ravi Punnia and his team are ready to grow…again From offering mortgages out of a booth at a local flea market to founding of The Mortgage Practice, Ravi Punnia is driven to succeed. He attributes his strong management team and his extensive training methods as reasons why his company has grown so rapidly over the past seven years
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Ravi Punnia
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avi Punnia has only been in Canada for seven years, but in that short timeframe he’s worked his way up from offering free mortgage advice out of a flea market booth to running a brokerage with dozens of agents. “I didn’t have any direct referral sources in the country and still managed to do $21 million in volume in my first year,” said Punnia, founder of The Mortgage Practice (TMP). At the core of his success is Punnia’s strong management team, which includes his partner, Minnie Punnia who acts as executive director and handles financial matters such as commissions and prompt pay to agents, along with co-ordinating TMP’s preferred charity donations to Lupus Ontario Canada for which TMP matches all donations on a annual basis. Other members of Punnia’s team include managing director Gurjot Sandhu, who manages the day-to-day running of the business in particular hiring of new agents, and compliance manager Kunaal Bhalla who makes sure the company is in compliance with the governing bodies they report to. A new addition to the group is TMP’s centralized underwriter who submits deals on the agents’ behalf if that agent can’t produce the minimum funding requirements with certain lenders. The backbone of the Mortgage Practice’s trading, however, is VERICO Canada. VERICO is a federally incorporated management company that manages their own brokers and lenders networks. The networks are independently owned and operated broker firms that can benefit from the large pool of other brokers and lenders. “VERICO plays a very key part in our business because they provide all our agents with up-to-date trading tools and materials,” Punnia said. The Mortgage Practice joined VERICO 2007; its head office is in Mississauga, with a number of agent offices throughout Ontario. Another hallmark of Punnia’s success has come from his extensive training methods. Through monthly, internal training programs, TMP agents are educated about FSCO rules, Equifax reports, underwriting and marketing strategies, to name a
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few. New agents are required to attend the monthly sessions and are assigned a senior consultant to help them reach their first $5 million in volume. Punnia also conducts his own one-on-one multi-hour training session when TMP hires a new agent. “In that training what I do is teach the reality of mortgages out in the field with the consumer as opposed to textbook style. Hands-on training is important because what agents learn from textbooks compared to what actually happens in reality is different.” According to Punnia, instruction is a key component to breeding good agents and the company gets good feedback about the training from their agents. TMP is now close to 80 agents with another nine pending; Punnia has expanded from zero agents in 2007 to almost 100. Referrals, word of mouth and reputation are also components to the business TMP generates. Punnia is expecting over 100 per cent increase in revenue this year thanks to these factors and the bolstering of their workforce. “The existing agents in the declining market had a bit of a slowdown but since we made sure to recruit more agents, our overall figures have been quite high.” The company plans to continue recruitment and break their 100-agent goal by 25 bodies. “With our recruitment plan, we anticipate recruiting up to 125 agents. It was previously 100, but with the [future] downtime [we expect], we thought: if we’re going to get a 25 per cent decrease in business and revenue the only way to increase it is to hire another 25 per cent in agents.” The anticipated slowdown in the marketplace doesn’t worry Punnia at all. TMP has become preferred partners with lenders in the industry who offer preferred rates that other mortgage brokerage companies don’t have access to. Seven years removed from giving out mortgage advice at a flea market, Ravi Punnia is poised to be an established player in Ontario’s mortgage industry for a long time thanks to his thorough training, strong supporting players and good reputation and the support of his management team. CMP
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Profile Brokers
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Profile Brokers
Michael Beckette, president of Mortgage Alliance, doesn’t see it as a mortgage industry—he sees it as a people industry, helping others reach their life goals. Heather Li explores Beckette as a visionary, whose challenges include raising brokers’ brands to riding his motorcycle across Canada for breast cancer research
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hen you meet Michael Beckette for the first time, you can’t help but instantly like him. It’s a Monday afternoon, and at the Mortgage Alliance head office in a bustling suburb of Toronto, Beckette is sporting a baseball cap and casual wear rather than the typical business suit you’d expect from a mortgage broker, let alone the president of one of Canada’s largest brokerages. His presence is warm and congenial and, at the same time, he possesses authority and confidence. You are eager to please and he is eager to encourage. “You want me to tell you the thing that I like most?” he asks, as we settle around the coffee table in his office, and he talks to me about creating and building the Mortgage Alliance business for over 10 years. “The thing I like the
most is seeing someone who has never been a mortgage broker before come into this industry, learn how to be a broker, become one of our franchise owners and build their company into hundreds of millions of dollars a year. The gratification I get now is the success of other people.” Beckette began his own success in the real estate industry. Prior to starting Mortgage Alliance in September 1998, he was the vicepresident of operations at Coldwell Banker Canada for seven years. “I started as a young man in the real estate business,” says Beckette, who earned his bachelor of business at the University of Michigan and returned to Toronto shortly after completing his degree. “I had a real job for four
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Profile Brokers
months and ever since then, I was an entrepreneur.” This intrinsic entrepreneurial spirit and keen business acumen is what led Beckette to enter the mortgage business, which he saw was underserviced at the time. At that time, a large brokerage was made up of 100 or 200 people, says Melissa Rizzi, vicepresident of operations at Mortgage Alliance, who has known Beckette for 12 years and worked with him for 10. “So back then Mike was talking to various lenders about having 1,000 brokers and they laughed at him,” she says, “but he is a brave, innovative thinker.” Mortgage Alliance now has approximately 1,900 brokers within its multiple networks across the country, and was the first super-brokerage to be licensed in every province. The company’s mission has always been to provide the best environment for mortgage professionals, whether it’s someone completely new who requires daily hands-on training and support, or an experienced professional who wants to plug into resources that would otherwise be too expensive to recreate on one’s own. Beckette believes this is the greatest service he can offer to help grow others into success. “It’s very important brokers recognize they’re not in the mortgage industry,” says Beckette. “Mortgages is what you do but you’re in the industry of helping people achieve what they want. Nobody wants a mortgage. What they want is the lifestyle, the home ownership, the opportunities a mortgage creates for them.” Beckette excels at creating opportunities for Mortgage Alliance brokers and his senior team to help them achieve their goals and live their dreams. One of the team members is Joe Pinheiro, vice-president of sales. “I am the luckiest person in the world because I get to talk to Mike every day,” says Pinheiro. “He brings the best out of everybody. He’s the kind of person you really want to work hard for and he inspires you to think in new ways.” The Mortgage Alliance senior management team, which includes Pinheiro, Rizzi and Laura MacLennan, vice-president of business development, have all been working with Beckette at the company for 10 years—a testament to Beckette who says what he loves about his job is the people he works with. “When I first met Mike, what struck me about him was his passion, his vision, his willingness to take risks,” says MacLennan, who’s personally known Beckette for more than 25 years. “He’s very focused and results-oriented and knows how to execute.” One of Beckette’s long-standing focuses since entering the business is to establish mortgage brokers, and particularly Mortgage Alliance, as a recognizable consumer brand. When he started, mortgage brokers had an eight per cent share in Canada’s market of financing mortgages. It has
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“ nobody wants a mortgage. What they want is the lifestyle, the home ownership, the opportunities a mortgage creates for them ” grown to nearly 30 per cent but has been stalled there for a few years now. “In Quebec, Multi-Prêts has 45 per cent market share. It’s a recognized brand,” says Beckette, referring to Mortgage Alliance’s sister company based in the francophone province. “People in Quebec, they say if you want a mortgage, you have to go to a bank or you have to go to Multi-Prêts. It’s that level of trust we need to build in the rest of Canada.” It requires a lot of money to build that level of trust, and brokerages don’t have nearly as many advertising dollars as the big banks do. Currently, Mortgage Alliance spends $2.5 to $3 million each year across Canada, but Beckette says it needs to double that spending. In the meantime, as Beckette and the Mortgage Alliance team work toward brand trust, they’re also planning a motorcycle ride across Canada, called the Mac Rally of Hope, to raise money for breast cancer research. In 2008, Beckette, a motorcycle rider himself, and three others from Mortgage Alliance travelled from Vancouver to Halifax on their bikes over 10 days and raised more than $77,000. This year (they couldn’t attempt it again in 2009 because they were too sore, laughs Beckette), they are riding from Vancouver to St. John’s, Nfld. in segments over 16 days and anyone can participate, as long as they raise some money. “My favourite experience had nothing to do with riding a motorcycle,” says Beckette, echoing his sentiments about what it means to be a mortgage broker. “It was the people we met across the country. Everybody we ran into had an inspirational story about breast cancer or breast cancer survivors in their family.” The reason Mortgage Alliance chose to support this particular cause is because the mother of one of the senior management team was inflicted with breast cancer. In a rush to get to downtown Toronto, Beckette interrupts me but not without first attributing Mortgage Alliance’s success to his senior team. “It’s not about me,” he says, as I notice his baseball cap reads the Mac Rally of Hope, “it’s about them.” Even as he’s out the door in an obvious hurry, he introduces me to his management team in a flourish and offers up his office for me to talk to them. I watch him give one last hug and smile to another employee, and understand quite thoroughly what Michael Beckette enjoys most about working in mortgages is helping people achieve their dreams. CMP
profile
PROVIDER
With more than 40 years in the mortgage lending business, Romspen has established its reputation of making deals happen that banks often can’t… and fast
Romspen has money to lend A
s a non-conventional boutique lending company, Romspen has run the gamut on mortgage investments from golf courses to development projects, from churches to racetracks all across Canada. “We do the deals where we fit the square peg into the round hole,” says Blake Cassidy, managing partner and vice-president of business development at Romspen. It’s this flexible approach to examining prospective ventures that makes the company one of the largest non-bank commercial and industrial mortgage lenders in Canada. But it didn’t start that way. Romspen began in the 1950s as a side business to the Toronto real estate law firm Spencer Romberg. In 1966, the mortgage lending business was formally organized as Romspen and eventually outperformed its law practices, allowing the partners to focus solely on mortgage investments. In the past 10 years, Romspen has provided over $1 billion for more than 600 mortgages. Currently, the company holds $600 million in its mortgage pool. It specializes in deals from $2 million to $60 million with typical transactions ranging from $5 to $15 million and lasting one to two years. Romspen has maintained its steady growth by focusing on three key investment objectives: capital preservation, absolute cash yields to investors of 10 per cent, and consistency. “We have a commonsense lending approach,” says Cassidy. Compared to conventional banks, Romspen has a can-do approach to commercial mortgage investments that other banks may not want to be involved in because they don’t fit the exact rigid lending criteria. “Banks are typically happy to finance things such as strip malls where there is a stable cash flow,” says Cassidy. Romspen, on the other hand, doesn’t shy away from unusual
properties. “If an investment has good equity value as we perceive it, the deal will likely happen and quickly too.” Since Romspen is small in contrast to banks and other conventional lenders, it has a rapid turnaround for assessing and processing mortgage deals. Sometimes, a simple phone call is all that’s needed to determine whether an investment is viable. Aside from its size, Romspen also makes fast decisions and proceeds with mortgage deals more promptly because money is readily available in its coffers. At this time, Romspen has $100 million to move around. “We actually have the money so we have a time-sensitivity advantage,” says Cassidy. The time-sensitivity advantage speaks to Romspen’s competition in the non-conventional lending market. “Relatively few of our competitors can lend on a $30-million deal,” says Cassidy. “In this specialized market any mortgage lending of $20 million and higher becomes nearly impossible for our competition to fund because they simply lack the liquidity.” Few others offer a national lending program as Romspen does. Romspen’s national reach is also part of why it has dealt with such a unique range of mortgage properties including private schools, hotels and car dealerships. Further, its prudent management and diverse portfolio has contributed to its solid performance during the credit crisis. “Unlike conventional lenders, Romspen remained quite insulated and liquid,” adds Cassidy. “Right now we have $100 million to move, and are actively looking for deals for the next few months. We have money to lend.” So in an unpredictable niche market, Romspen has attuned its lending practices to easily and consistently fit square pegs into round holes. CMP
Quick Stats + Consistently earns average annual return of 10 per cent + Loan-to-value ratios less than 65 per cent + Over the past 120 consecutive months, Romspen has had no negative return months + In 2006, the Romspen Mortgage Investment Fund was formed
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Guest Column
When CMHC’s new mortgage rule for rental properties came into effect on April 19th, it pretty much ensured that no one would get investment property mortgage insurance. Kevin Boughen examinees the implications
CMHC’s non-existent rental program W
hile Genworth came right out and said it would no longer be playing in the rental property market a while back, CMHC essentially bowed out by implementing new rules that did not benefit investors with rental properties. Who knows – maybe CMHC didn’t exit this niche completely in order to make a comeback later on. Only time will tell. Under the new rules, CMHC now requires a minimum down payment for non-owneroccupied properties of 20 per cent, up from the previous five per cent, and the treatment of rental income has moved from an 80 per cent offset to a 50 per cent add-back calculation. With an 80 per cent offset calculation, CMHC was effectively looking for 80 per cent of the rent to cover 100 per cent of the rental properties’ carrying costs. This was a good fit for investors buying positive cash flow properties, but the 50 per cent add-back calculation is very different – 50 per cent of the rent is added to the investors’ income while 100 per cent of the carrying costs are added to the investors’ liabilities before the total debt service (TDS) ratio is calculated. This effectively requires 20 per cent of the rent to cover 100 per cent of the properties’ expenses in order to have a positive impact on a 40 per cent TDS. Fortunately for investors, there are many lenders who continue to be investor-friendly and allow rental offsets to be used by avoiding CMHC with a 20 per cent down payment. Before the new rule, even if real estate investors had 20 per cent down and could go the conventional mortgage route, there were benefits to insuring the mortgage through
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CMHC. These benefits included easier qualification with higher TDS ratios allowed and more rent utilization, with the 80 per cent offset. But now there is absolutely no value to the client in insuring their rental property through CMHC. Not only do the new rules make it more difficult to qualify, but the clients would also have to pay an insurance fee for a service that no longer provides any benefits. Being required to put more money down and being able to use less potential rental income for qualifying purposes makes it even more important for new real estate investors to carefully plan their investment financing. The new reality means that with 20 per cent down, most rental property applications will be approved within conventional guidelines, so the deals now ultimately come down to lenders’ policies. Thankfully, the lenders seem to be adapting to the rental property niche that currently exists where it’s useless for the client to insure the mortgage and, as a result, are picking up some of the slack created by CMHC. While the lenders used to be the conservative players in the investment property world, after April 19th, the tables turned and CMHC became the conservative one. Still, although the financing pendulum has swung back to a more conservative time for investors, those willing to adjust continue to excel in the current environment. Kevin Boughen is a mortgage broker with Dominion Lending Centres AC Mortgage Services and works with real estate investors across the GTA. CMP
Kevin Boughen
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Bridgewater Bank www.bridgewaterbank.ca Ph: 1 888 837 2326 Page 9
FirstLine Mortgages www.firstline.com Ph: 1 800 387 2020 ext. 6044 Inside Back Cover
Broker Plus Insurance Services Ltd www.brokerplusinsurance.com Ph: 1 877 242 8820 Page 23
HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 19
Fisgard Capital Corporation www.fisgardmortgage.com Ph: 1 866 382 9255 Page 6
Canada Guaranty Mortgage Insurance Company www.canadaguaranty.ca Ph: 1 866 414 9109 Page 39
Home Loans Canada www.hlcmortgages.ca Ph: 1 866 452 1821 Inside Front Cover
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ING Direct www.ingdirectbrokerteam.ca Ph: 1-800-574-5629 Page 73
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TD www.tdfinancingservices.com Ph: 866 694 4392 Pages 25, 32 & 43
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Canada ICI Capital Corporation www.canadaicimtl.com Ph: 780 990 1144 Page 62
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Equitable Trust Company www.equitabletrust.com Ph: 1 866 407 0004 Page 16 & 17
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Resmor Trust Company www.resmor.com Ph: 866 809 5800 Page 65
Street Capital www.streetcapital.ca Ph: 877 416 7873 Page 5
The Money Source www.mymoneysource.ca Ph: 416 699 2274 Page 63
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Mortgage Intelligence www.mortgageintelligence.ca Ph: 1 877 667 5483 Pages 40 & 41
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Verico The Mortgage Practice Inc careers@vtmp.ca Ph: 905 458 4222 Page 12
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Canadian National Association of Real Estate Appraisers www.cnarea.ca Ph: 1 888 399 3366 Page 18
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ROMSPEN investment corporation www.romspen.com Ph: 1 800 494 0389 Page 1
Nexsys Financial www.nexsysfinancial.com Ph: 1 877 901 4997 Page 49
Eprintagent.com info@eprintAgent.com Ph: 1 888 907 5550 Page 55
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