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ISSUE 10.8

CONTENTS

22 TOP

COMMERCIAL BROKERS 2015 COVER STORY

This year’s 10 best commercial brokers reveal what it takes to rise to the top in the commercial space

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DATE:

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ISSUE 10.8

CONNECT WITH US Got a story or suggestion, or just want to find out some more information?

CONTENTS

twitter.com/CMPmagazine plus.google.com/+MortgagebrokernewsCa facebook.com/MortgageBrokerNewsCA

UPFRONT 04 Editorial

Is recession on the horizon?

06 Statistics

Where brokers can gain additional market share

THE INDUSTRY’S LEADING TECHNOLOGY

10 News analysis

FEATURES

Find out which apps and software you need to succeed in today’s competitive mortgage market

PEOPLE

INDUSTRY ICON

Despite regulatory pressure and bank competition, veteran lender Paul Grewal remains optimistic about the future of the broker channel

Holding credit reporting agencies accountable for misinformation What’s driving the rash of rate buy-downs

12 Commercial update

On the commercial side, the GTA is still a deal

14 Alternative lending update How low interest rates are affecting the alternative space

READY FOR PRIME TIME

More borrowers are taking advantage of alternative lending – but moving them back to a prime lender should be a broker’s top priority

08 Head to head

16 Opinion

50 FEATURES

STRESS: THE SILENT ASSASSIN

Learn how to keep stress from taking over your life

The inherent pitfalls of interest-only mortgages

PEOPLE 44 Broker profile

Skye McLean doesn’t downplay her time at a Big Five bank – in fact, she credits it with her success as a broker

55 Career path

Susan Zanders’ dual passion for mortgages and black bears

56 Other life

Under the sea with DLC Forest City Funding’s Jason Hall

52 FEATURES

MAKING MOVIES 10 things you should avoid when making videos to connect with clients

MORTGAGEBROKERNEWS.CA CHECK IT OUT ONLINE

www.mortgagebrokernews.ca

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12/08/2015 8:24:14 AM

UPFRONT

EDITORIAL

www.mortgagebrokernews.ca ISSUE 10.8 EDITORIAL

What recession?

rime Minister Stephen Harper may have let the recessionary cat out of the bag in the first of several leadership debates for the 2015 election season. But the truth is, that feline has already been spotted all over Ottawa. In what political pundits are calling a rookie fumble, the PM appeared to admit the economy is indeed in recession. The admission of sorts came a whole month before the data release needed to confirm six consecutive months of economic stagnation or decline – in other words, a recession. While brokers had already sussed out the probability of a recession, most were hoping it would remain a thing of speculation until after the curtain came down on the summer’s blockbuster real estate market. Still, they needn’t have worried: Buyers show no signs of mounting a pullback from the recordbreaking shopping spree – recession or no recession.

Buyers show no signs of mounting a pullback from the record-breaking shopping spree – recession or no recession The latest numbers from the Toronto Real Estate Board are a perfect example, speaking directly to the market buoyancy still in play. Yet another record was set for home sales in July – an 8% increase compared to July 2014. “Homebuyers remain confident in the long-term benefits of owning a home,” Mark McLean, president of the Toronto Real Estate Board, said in a release. “Ownership demand has been driven not only by low borrowing costs, but also by the fact that the GTA economy has been performing quite well, with the unemployment rate lower compared to last year.” The fact that Canada’s economic growth has been nonexistent isn’t likely to faze the real estate market, say experts. They point to key drivers such as job growth (albeit anemic), low interest rates and increasingly available funds through the private lending channel. It’s that last one that has brokers most concerned – especially when they consider the R word. Should the Canadian economy fail to pull itself out of recession in the second half of the year, the very real threat of a spike in unemployment could see significant numbers of people unable to meet those monthly mortgage payments. That kind of scenario is one most brokers doubt will ever come to pass, regardless of who the next prime minister is. Vernon Clement Jones, editor

Editorial Director Vernon Clement Jones

SALES & MARKETING Associate Publisher Trevor Biggs

Senior Writer Justin da Rosa

General Manager, Sales John Mackenzie

Writers Olivia D’Orazio Donald Horne

Marketing and Communications Claudine Ting

Executive Editor – Special Features Ryan Smith Copy Editor Clare Alexander

CONTRIBUTORS Jake Abramowicz Steven Walters Timo Topp Geoff Anderson

ART & PRODUCTION Design Manager Daniel Williams Designers Loiza Caguiat Production Manager Alicia Salvati

Project Coordinator Jessica Duce

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

Traffic Manager Kay Valdez

EDITORIAL INQUIRIES

vernon.jones@kmimedia.ca

SUBSCRIPTION INQUIRIES

tel: 416 644 8740 • fax: 416 203 8940 subscriptions@kmimedia.ca

ADVERTISING INQUIRIES trevor.biggs@kmimedia.ca

KMI Media 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Sydney, Denver, Auckland, Manila CMCA AUDITED

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

MORTGAGE PROFESSIONAL AMERICA cathy.masek@keymedia.com T +1 720 316 0151

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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 the magazine can accept no responsibility for loss

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12/08/2015 7:21:14 AM

UPFRONT

STATISTICS

Mortgage brokers gain ground

MARKET SHARE FROM COAST TO COAST Market share among mortgage brokers varies across the country. Here’s the percentage of the mortgage market that brokers hold in each Canadian province or region Market share

Brokers have a ways to go in winning market share over banks, but they’re not taking that fight sitting down MOST HOMEBUYERS have only recently come to see mortgage brokers as a real alternative to heading straight for the banks. Broker inroads have been hard-won, and the channel has come a long way in gaining market share over the Big Five. Conversions and consultations among mortgage professionals, for instance, have increased by 2% each year since 2013. While the banks still take in more clients, brokers are

30%

Total broker market share in Canada

43%

Clients who consulted more than one mortgage professional

able to offer more products and better services, hence growing client satisfaction: Some 56% of broker clients said they were “very satisfied” with their experience, compared to just 46% of bank customers. It’s clear that mortgage brokers are becoming an increasingly viable financing option for the home-buying public – and that’s only going to gather momentum as more satisfied clients refer friends and families.

67%

Clients who said they went to a broker to get the best rate

Home sales (2014)

British Columbia

32% 84,049

34%

Clients who use an online calculator to find mortgage information Source: CAAMP, January 2015

BROKERS VERSUS BANKS

WHO SEEKS OUT BROKERS MOST?

Two factors determine market share: the number of client consultations and the number of consultations that convert to closed deals. While banks still have a lead in both categories, brokers are gaining ground

Mortgage brokers’ market share is strongest in certain client sub-groups. For instance, only 45% of all Canadians consulted a mortgage professional, but more than 60% of all first-time buyers did

Brokers Consultation

45% 67%

Conversion Total market share

61%

59%

First-time homebuyers

18- to 34-yearolds

54% Originations

30%

Banks Consultation Conversion Total market share

71% 77% 55%

Percentage of buyers consulting a broker Source: CAAMP, January 2015

Source: CAAMP, January 2015

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Atlantic

32% 20,574

Alberta

33% 71,773

Manitoba

22% 13,782

Quebec

27% 70,686

Saskatchewan

22% 13,868

Ontario

32% 205,972 Source: CAAMP, January 2015

CLIENT SATISFACTION According to a recent CAAMP report, mortgage brokers’ clients were more satisfied than those of bank reps in all 17 categories surveyed. Satisfaction among brokers’ clients rose as much as 9% above banks’ clients in some categories

+9%

+6%

+9%

Offering competitive rates

Ease of doing business

Offering ‘one-stop’ shopping

+8%

+7%

Providing information/advice to help make a decision

Frequency of contact during mortgage process

MARKET SHARE BY MORTGAGE TYPE Mortgage broker market share rose above the total national average for originations and for first-time buyers. Market share for renewals, meanwhile, increased to 28% from 25% just a year earlier

35%

Originations Source: CAAMP, January 2015

28%

Renewals

35%

First-timers Source: CAAMP, January 2015

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UPFRONT

HEAD TO HEAD

Who’s responsible for credit misinformation? Inaccurate credit bureau reports have some brokers calling for more accountable agencies

Tracy Luciani Price

Phil McDowell

Tina Francis

Owner DLC Price Team Mortgages

Mortgage broker Mortgage Alliance Mortgages Are Marvelous

Regional vice president of sales Broker Financial Group

“As with any kind of business, credit reporting agencies need to be responsible – and not just to the lender. There needs to be a responsibility to the consumer, which reporting agencies don’t have. Right now, all the power is with the credit agency, not the consumer. Credit agencies are extorting consumers because of the power they have, and the credit reporting agencies are doing nothing to stop it. The current system is broken and wrong and not fair. There needs to be a new system in Canada that allows people to quickly and easily fix errors in their credit reports.”

“To be quite honest, [credit agencies shouldn’t be held responsible for misinfor mation]. It’s like your bank account: Can errors be made on bank statements? Absolutely. Is it the bank’s job to doublecheck everything? If they did, there would be a bigger cost for banks. There would be a bigger cost for credit reporting agencies if they had to review creditors’ reports each and every time. I haven’t seen a high incidence of errors in reports. What’s more, consumers can review their credit reports and file a notice if they think something is inaccu rate; the credit bureau is mandated to go back to the creditor.“

“When reports are inaccurate, sometimes it could be that the creditors are not accurately reporting the information to the credit agency. Since it’s the credit reporting agency that is reporting the information to the lenders and consumers, they need to be the one accountable for the accuracy of the reports. Sometimes there are huge discrepancies in information between the two reporting credit agencies, and you have to ask why. The key may be proper communication and follow-up with the creditors. Still, I think they’re doing a good job updating a client’s report when they’ve been made aware of a discrepancy.”

POINTING THE FINGER Credit bureaus such as Equifax and TransUnion may be the sole source of credit reports for the Canadian public, but many mortgage brokers believe they run the risk of taking that responsibility too lightly. Some brokers have reported sluggish efforts to correct data and virtually no effort to corral and remove outdated information from credit bureaus. This carelessness, they argue, is especially problematic for clients looking to secure financing in a tight market where even split-second delays can kill a deal. Still, others argue credit reporting agencies aren’t mandated to curate the information – just report it – and the real responsibility rests with the creditors, who must act with greater haste.

8 www.mortgagebrokernews.ca

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UPFRONT

NEWS ANALYSIS

Buy-down binge It’s no longer just a question of how low a mortgage broker will go in buying down interest rates, but also how often AS FAR AS hot-button issues go, the broker buy-down has, quite frankly, begun to cool. Five years ago, industry veterans bristled at the mere suggestion they give up a portion of their commission in order to win a lower rate for a client. Today many make the sacrifice once or twice a year without a moment’s hesitation. The mellower approach has everything to do with the increasingly competitive nature of the business, say broker channel players, and that competition isn’t just coming from the banks. “There are so many mortgage brokers out there, and people are just fighting for business,” says Janice MacIver, a broker with Verico Premiere Mortgage Centre. “It’s competition.” Some mortgage professionals are suggesting as many as 80% to 90% of brokers are now prepared to sacrifice a portion of their

much closer to 25%. Once prepared to dismiss buy-downs as a last-ditch effort to retain customers, many brokerages are now proactively using them as the central support for their online leadgeneration efforts. For the most part, those strategic plans focus on dangling rockbottom rates in front of savvy shoppers scouring the web. Still, the more frequent if not yet regular use of buy-downs has ignited a fierce debate among mortgage professionals. “Whenever we’re at CAAMP or something like that, you seem to have two divided groups,” says Yves Cormier, a broker with Verico Cormier & Cormier Consultants. “I would say that people who tend to offer rate buy-downs are insecure in their position. The scary part about that is people in general will think we’re all in the same boat, which is totally false.”

“At the end of the day, no one wins ... I’d rather give excellent service and have the extra few dollars to be able to do that” Yves Cormier, Verico Cormier & Cormier Consultants commission in order to shave even 10 basis points off of a client’s interest rate. That’s despite the steep lender discounts on both the ARM and fixed fronts. In 2011, when MortgageBrokerNews.ca first began polling readers on the issue, that percentage stood

The often indiscriminate use of buy-downs has led to that perception, he argues, effectively placing pressure on all brokers to eat into their compensation as a sort of standard operating procedure. Several players confide they are buying

down as much as 10–15 basis points for as many as 40% of their deals. That climbs to as high as 75% for deals they’ve courted on the Internet and as low as 5% for business won through referrals. Whatever the source of those originations, the same concerns around a potential threat to broker value-add remain, says a frustrated Cormier. “We’re not doing anyone a favour by giving the rate away,” the New Brunswick broker says, pointing to the erosion of what differentiates the broker channel from the Big Five. “Customers are going to save maybe $400 or $500, and it’s going to cost you $400 or $500. At the end of the day, no one wins; it’s just a one-shot deal. I’d rather give excellent service and have the extra few dollars to be able to do that.” That’s something even rate-site brokers

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NOBODY PAYS RETAIL CAAMP’s latest report suggests that, based on homebuyer data collected since 2013, the average borrower enjoys a rate that’s more than two percentage points lower than the advertised rate. “In fact,” the organization said in a similar 2014 report, “only 8% of the mortgages had interest rates of 4% or higher.”

3.0%

Average mortgage rate reported by a survey group for the CAAMP report

5.01%

Average posted rate for five-year terms

2.01%

Average rate discount received by Canadian homebuyers

hold aloft as the ideal. But reality increasingly falls short of that, as A-plus clients become less and less willing to look beyond interest rate. That myopia means brokers are having to work harder to point out the potential pitfalls attached to those enticing bank offers – lower prepayment privileges, collateral charges and IRD calculations. Those client tutorials are really the best way to protect broker compensation, which has taken a beating with the buy-down strategy. Comp on a five-year fixed runs as low as 75-80 bps, said one broker, pointing to his rate-site deals. “That’s only sustainable for me because of the volume,” says the Burlington, Ont., veteran. “I’m not proud of that, but that is where the business is currently.” MacIver echoes Cormier in pointing to broker expertise and customer service stan-

“There are so many mortgage brokers out there, and people are just fighting for business. It’s competition” Janice MacIver, Verico Premiere Mortgage Centre dards as the best places to protect industry incomes. “I can’t tell you what [brokers who do a lot of buying down] are doing with their businesses,” MacIver says. “I don’t know if they’re following up with their clients or if they’re working their database, or if they’re just in it for the quantity and not the quality – that could be it as well. I’m not having issues with that because, again, I’m selling more on service.” The importance of that service is more

and more apparent for the growing number of Canadians struggling to get into homes as prices climb and financing in the prime space becomes harder and harder to obtain. The phenomenon is encouraging even dyed-in-the-wool A brokers to grow their Alt-A and B business as a way of safeguarding compensation against stiff competition. “That’s where the opportunity is,” says Toronto broker Shawn Allen, a specialist in the alternative space. “Rate isn’t as much of an issue there.”

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12/08/2015 7:30:20 AM

UPFRONT

COMMERCIAL UPDATE NEWS BRIEFS Joint valuation agreement to benefit commercial side

Two major real estate valuation organizations, AIC and RICS, announced the release of a joint Guidance Note for Canadian valuation professionals, a move praised for its potential to bolster the commercial segment. “As the commercial real estate market continues to grow in its significance as a global asset class, the imperative for standardization has never been greater,” said Colin Johnston, Canadian president of research, valuation and advisory for Altus Group.

Commercial boom expected in industrial sector When it comes to the industrial commercial sector, it’s a tale of two markets. “The Toronto industrial numbers were just fantastic,” Ross Moore, director of research for CBRE in Canada, told the Financial Post in response to his company’s second quarter analysis for 2015. “The only caution I would throw in there is if you look at the demand in leasing activity, is it not from manufacturing, it is from warehousing distribution.” The success of industrial real estate increasingly breaks down along regional lines, according to Moore; Central and Eastern Canada have 5.7 million square feet of space leased, compared to just 2.8 million in Western Canada.

Portfolio manager gives top REIT picks REITs are increasingly viewed as a bellwether for the health of commercial real estate. Derek Warren, portfolio manager at Morguard Financial, recently shared his top picks with Business News Network. “With REITs trading at discounts to NAV, we are focusing on those REITs with high-quality properties and low debt

levels,” he said. “We recommend that investors take advantage of the sector pullback to increase the quality of their portfolios while still generating steady income.” Warren recommended investing in the following REITs: CT REIT, which is composed mostly of Canadian Tire real estate holdings; InterRent REIT, a portfolio of apartments; and Pure Multi-Family REIT, Texas-based properties that are attractive due to the strong American dollar.

Commercial real estate services firm makes C-suite appointments

Avison Young has announced the appointment of principals Mark Fieder as COO for Canada and Keith Lipton as US COO. “Today’s strategic promotions to newly created senior executive positions acknowledge the outstanding contributions that Mark and Keith have made to Avison Young’s ongoing aggressive global expansion program,” said CEO Mark Rose. “Mark has helped Avison Young develop a well-established market share throughout Canada, and Keith has played a leading role in the execution of a US expansion strategy that has achieved exceptional growth in a short period of time.”

Lack of industrial space hurting major market As the industrial sector continues to boom east of the oil sands, one major market is still struggling in the wake of growing e-commerce. “Metro Vancouver’s impending industrial land supply crunch is being exacerbated by the greater demands for land [from] the growing scale of logistics and distribution facilities required by modern retailers,” Michael Farrell, a vice president at Avison Young, told Business in Vancouver. “The region’s industrial development is now more a reflection of the demands of retailers and e-commerce than it is from more traditional industrial uses.”

Not-sohidden gems In Canada’s largest city – and perhaps its wildest real estate market – one of the best-kept secrets of the commercial world stretches tall into the sky It could be a case of not seeing the forest for the trees: Many investors in the Canadian commercial sector are passing on lucrative opportunities for what appears to be an already tapped market. But investing in rental properties throughout the Greater Toronto Area remains a good option, says Rena Malkah, a commercialfocused mortgage broker in the GTA. “Toronto is probably the best city in North America because we have a lot of immigration ... and quite a lot of those people are coming in as entrepreneurs, so they open businesses and create jobs,” she says. “Plus, historically, the sales have been strong for several years; in the housing market, there is a shortage of supply, and quite often, sales are higher than list price.” The purchase price in Toronto might be higher than in other regions of Canada, but the city is still quite affordable compared to other world-class metropolises such as London, New York and Chicago. “Chicago being one of the more comparative cities to Toronto, if you look at the real estate prices at the ... commercial level, Toronto has not really hit that peak,” says Beatrice Pitocco, a GTA-based broker who also specializes in commercial properties. “We’re getting close, but there is still some room to grow.” The areas outside of Toronto proper especially are experiencing that rapid growth.

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As prices and rents continue to rise in Toronto’s downtown core, investors have been flocking to commercial opportunities just outside the city’s borders. “There are very good opportunities in smaller towns – from six units to 20 or 30 units,” Malkah says. “Rents are still pretty high there, but compared to Toronto, the expenses are lower, especially property taxes. Cap rates are higher, so you can buy the properties at lower prices and get good cash flow.” Other commercial properties in smaller areas – particularly in the centres of those towns – also can be lucrative.

“If you look at the real estate prices at the ... commercial level, Toronto has not really hit that peak” “I like those [mixed-use] types of properties in town centres, because they will grow into larger towns, so from a long-term perspective, [that’s a good investment],” Pitocco says. “I think those are neat properties to pick up in the outskirts of the GTA.”

Q&A

Steven Walters Vice president of business development FIRST SOURCE MORTGAGE CORPORATION

Years in the industry 30 Fast fact Walters is also a licenced real estate broker

Economic challenges in the commercial space Do you see any significant challenges for the commercial space, either now or in the months ahead? I’m cautiously optimistic. We have experienced an unusually high degree of strong economic activity for too long. This was fed by the low-interest-rate environment, which seems like it will remain as long as the economy continues to show weakness. Every day, I look for signs of a slowdown – but I just don’t see it in the near future. Having said that, developers, borrowers and investors must continue to abide by sound economic principles, because as we all know, what goes up will eventually come down. Interest rates will eventually rise. With that, some borrowers – and I hope not many – will find themselves overextended. As a result, some projects will likely be cancelled. Some lenders may be left with real estate security, such as land, partially leased properties or unfinished projects, that they could be forced to realize on. If lenders haven’t already, it’s time to take a real hard look at their books and ensure that the equity and secondary source of exit is real or that the asset can be sold in a timely fashion so as to avoid any loan losses. Do you see any opportunities for the commercial space in the months ahead? From a purchaser’s perspective, I believe cap rates have stabilized. It is unlikely that they will be going lower. If you can find that right property, and the market tells you that you can improve the income generated from it with little to no expense, now might be the time to grab it, given the low interest rates. And if it carries itself with debt service coverage, all the better. From a seller’s perspective, if you are going to sell, now is a good time. I believe prices have peaked. As buying and selling remains hot and supply dwindles, competition for good products and lending opportunities heats up. Lenders will cut fees and rates, as there is a lot of money chasing too few deals. I think the best way to take advantage of these opportunities is to keep the bar high and be a true professional. Professionalism, to me, means working with your borrower in the event of a hiccup, and being creative. It does not mean giving up fees and easily bending on rates. There is much to be said about professional service versus rate discounting. Are there any greater economic trends particularly affecting the space right now? I believe we are going to experience more mergers and acquisitions in the coming year. Large companies will buy large companies, resulting in decreased employment and layoffs due to greater efficiencies. This efficiency will no doubt reduce costs for the large companies as they rid themselves of excess real estate, shed non-economical assets and consolidate the most valuable assets. This can result in some good buying opportunities in the real estate market as nonessential property hits the market.

www.mortgagebrokernews.ca

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UPFRONT

ALTERNATIVE LENDING UPDATE

Alt clients benefitting from low rates Competition is ramping up in the alternative lending sector, and broker clients are reaping the rewards

native is the new prime, and private is the new alternative. “The alternative lenders like Home Trust have rates into the high 3% to 3.89%, which is unheard of,” Domville says. “It used to be the norm was 4.99% or greater, and now you can get in at a point off what the banks are offering. Those lenders are getting more aggressive; they want more business because they see the market is growing, and they’re dropping rates to get more business. “On the private side, it used to be 9% was a good rate for a first mortgage,” he continues,

“The trend for alternative financing is that it is constantly increasing as the A side gets tighter” The industry may be feeling the advantages of low rates in the prime space, but brokers are also mindful of the alternative sector and its own record-low rates. “Clients in the alternative market are benefitting; rates are dropping on the alternative side drastically,” says Greg Domville of Plan B Mortgage Services. “Private rates have dropped ridiculously low; they’re at the lowest I’ve seen them for 18 years.” As a finalist for Alternative Lender Broker of the Year at the CMAs, Domville has a great

NEWS BRIEFS

deal of experience in the alt-A mortgage segment – and he has watched it grow exponentially over the last few years. “The trend for alternative financing is that it is constantly increasing as the A side gets tighter and the government squeezes that market,” he says. “The alternative space as a whole is doing 10 times more marketing and training for the brokers, so there is a lot more comfort and public and broker awareness about the alternative side.” It’s almost gotten to the point where alter-

Leading alternative player talks down payments

Down payments are crucial in alternative lending, according to one leading broker in the space. That is especially true today, Christine Xu tells MortgageBroker News.ca, as low-money down payments are encouraging many to enter the housing market who will quickly find themselves mired in debt. “When the client has the down payment, I teach how to calculate a regular interest payment to show them if they are able to afford it,” she says. “If the client is unable to afford it, then I’m not doing [them] any favours.”

“and now they’re offering 5.99%, which is the old alternative lender rate.” While the prime side is benefitting from two Bank of Canada overnight rate cuts and a bond market that has driven fixed rates down, the alternative side is being rewarded by good old-fashioned economics, according to Domville. “The demand for alternative financing is getting bigger,” he says. “Economies of scale kick in; the higher the demand, the lower the rates because there is more competition. There are more lenders than before as well.”

Alternative lender forecasts threetiered market

Jason Provencher, manager of business-to-business solutions at Bridgewater Bank, sees the future of the mortgage industry as a three-tier lending market where people with bruised credit may start in the private space, later moving to the alternative space and eventually moving on to the prime space. “It is very competitive on the alt side,” he says, “and the rates really aren’t that bad – we’re talking 4% to 5% for those with bruised credit or who may have been in bankruptcy before.”

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Q&A

Matthew Robinson

Opportunities for brokers in alternative lending

CEO W.A. ROBINSON ASSET MANAGEMENT, PILLAR FINANCIAL

Are you seeing any emerging opportunities in the alternative lending space?

Years in the industry 15 Fast fact Robinson is the son of Wayne Robinson, who founded W.A. Robinson Asset Management in 1980; the company has managed mortgagebased investments since 1986

We’re watching what’s happening on lots of different fronts. This all goes back to 2008 – the whole world changed in our industry. A lot of things changed with the regulators and the overseers of the big banks. Canada got away with a close call because the US had different changes. The industry, in its wisdom, said, “Let’s be careful here so we don’t let the cart get away with the horse.” Out of that we’ve seen these different changes with the banks, who run the vast majority of any mortgage transactions. We’ve seen changes in their lending policies and their underwriting policies … so when the big banks make moves like, “We’re not doing business-for-self anymore,” that opens up a lot of space for the alternative lender. We’re seeing a lot of those changes trickle down. I think there’s an opportunity here with the people at the front end – meaning mortgage brokers – to really redefine their purpose. Instead of just being the guys who push the buttons for the A deal, they can provide value by knowing all the different options and the changes within the A world – how does that trickle down to someone who used to be or should be within that space? That’s where the real value is – for a person who can’t just go to the bank and say, “Hi, I’m a TD client. I’ve got perfect everything; will you

Alternative lending for bruised-credit buyers

As market share for alt lenders hits record levels (2.2%, according to CIBC World Markets), lenders are looking to brokers to up their game to ensure clients with bruised credit can secure mortgages. “Alternative lending gives brokers and their clients relief from the often stringent requirements of traditional lending institutions,” says Dimitri Kosturos, vice president of VWR Capital Corp. “Alternative lenders give clients another option to complete a purchase or reduce their monthly debt obligation.”

Lack of income growth hurting credit

lend to me?” Now that person is saying, “Well, I used to be until I went into business for myself. The house is fine, but now I can’t prove my stated income.” I think there’s a real opportunity in this space for all of us to redefine what purpose we have. How do we get capital from people who have it to people who need it? That’s ultimately the story here.

So caution on the part of the big banks means increased opportunities for brokers in the alternative space. Does that increased opportunity open up any risk? We’re seeing some people in this space run into capital problems. It’s suddenly, “Uh-oh, we had $5 million, but now it’s gone.” And that’s the day before closing. That’s a big risk – a reputational risk for a broker and the lender. We’ve got a bit of a different way of raising capital. We’ve got a network of portfolio managers across 30 platforms across Canada. We’ve got a great relationship with them. When we need capital, they provide it. And when someone’s looking for the right lender, it should be someone with stable capital. That’s overlooked a lot – even by the mortgage broker. It’s often just, “Well, they have the money today.” But what happens the day before closing if they don’t have the money because they’ve overfunded? We don’t talk about these things, but that’s often the reality.

Heavier debt loads are contributing to the greater numbers of Canadians with bruised debt who are looking to the alternative space. While dizzying home prices in the country’s urban centres are certainly part of the problem, one lender is pointing the finger elsewhere. “Incomes have not been keeping pace with the rising prices of homes – and the cost to operate those homes,” says Gino Tieri, VP of sales and marketing at Equity Financial Trust Company. “So the propensity for those people being challenged is potentially coming.”

Alternative lender announces expansion

Equitable Bank has expanded its operations into a new market and has increased commitment to the prime lending sector. The lender hopes this increased focus on prime mortgages will give brokers more options to better compete with the big banks. “From our perspective, it’s good when we’re given more options,” Jim Walker of Mortgage Intelligence told MortgageBroker News.ca. “Lenders had to adjust to B-20 and B-21, and it’s nice that a lender has changed its appetite [by offering more prime options], and hopefully more will follow.”

www.mortgagebrokernews.ca

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UPFRONT

OPINION

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

The issue with interest-only mortgages With the public increasingly calling for interest-only mortgage products in the A market, Jake Abramowicz is warning the industry: Don’t even go there!

I RECENTLY engaged in an online discussion about interest-only mortgages. I followed the topic with interest, only because I thought the idea was completely and utterly illogical. My contribution to the debate was that you would have to be out of your mind to offer this product. Of course, there were opponents, including an anonymous commenter offering input as to when an interest-only mortgage could serve a purpose, and I’ll get to that in just a moment. The problem is that interest-only mortgages would not serve any beneficial purpose in our current market. From my point of view as a Toronto-based mortgage agent, too many buyers are currently close to or at their limits, too many come back to refinance their homes, and too many live beyond their means. When submitting approvals, the majority of my clients are at the top with their GDS and TDS. Furthermore, the continued availability of 35-year amortization at 20% or more down, while allowing people to ‘afford’ a property, would stretch them thin should interest rates rise. Living beyond one’s means has become the norm in Toronto – and not because people do it willingly, but because house prices have caused this to become commonplace. Allowing people to buy homes that they otherwise couldn’t afford and then letting them just pay the interest on those homes is a house of cards

waiting to fall. The savings rate for Canadians is abysmal, and I wonder how much of these people’s stated wealth is tied to property. Let’s face the facts: Homeowners have won a tax-free financial lottery by investing in real estate over the last 10 years. Those who are doing very well have focused on either paying down debt

of this situation. Then there are the recent graduates who want to pay just the interest on their mortgages to focus on paying down their large student loans. But do those grads really need to buy property so soon? I hate to be so sarcastic, but the truth is that too many people have taken homeownership for granted. Offering interest-only mortgages would allow borrowers to save $810 per month on their payments (that is, for a typical $450,000 mortgage at 2.74%, five-year fixed versus interest-only). However, with rates being so low, those people are forgetting that the interest portion can only increase, but their principal will not decrease. I don’t believe many Canadians are financially prudent enough to handle these savings properly – not spend them on other things, such as cars or vacations, instead of paying down debt. Furthermore, if the market corrects and the principal balance stays the same, what will happen to the people already underwater? Did we learn nothing from the 2008 US crash? Finally, interest-only mortgages do exist: They’re called home equity lines of credit, and there’s a good reason the Canadian government reduced HELOC limits to 65% – it’s because

“Too many buyers are currently close to or at their limits, too many come back to refinance their homes, and too many live beyond their means” and/or investing in more real estate. I don’t hold much hope that, had the same people been offered interest-only mortgages, they would be doing just as well. But back to that commenter, who suggested a few reasons why an interest-only mortgage could work. One example is a self-employed individual who wants to invest in his business instead of paying down his mortgage. But what happens if that individual is not doing as well as he anticipated, and is instead seeing his amortization reversed? Or what about an unfortunate individual who has huge medical bills? There are other scenarios where this person could consider downsizing – or gasp! even renting – to get out

we’re addicted and, in some cases, oblivious to them. I had one client tell me he paid off his house. He said he has $100,000 left on his mortgage, plus $900,000 on his HELOC. When I told him he’s $1 million in the hole, he said the HELOC “can be paid off anytime.” This is the evidence I rely on when arguing against interest-only mortgages being offered in Canada – the naivety and lack of financial prudence amongst some borrowers.

Jake Abramowicz is a 12-year veteran of the mortgage industry; he’s currently an agent with Mortgage Edge. He specializes in working with first-time buyers in the GTA.

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PEOPLE

INDUSTRY ICON

FROM A LENDER’S PERSPECTIVE Brokers have certainly faced their fair share of challenges over the past couple of years, but lending-channel veteran Paul Grewal is bullish on their future stock with consumers

AS A LENDER, Paul Grewal, vice-chair of Street Capital Financial Corporation, has been on the frontlines of an industry grappling with regulatory change. As frustrating as those changes have been for lenders, he knows brokers have struggled just as much. “I think brokers are getting better at navigating the rule changes; as more and more brokers realize this is a way to attain faster approvals from lenders, they’re doing what they can to help the underwriter,” Grewal says. “A lot of underwriters are asking for more details – insurers certainly are – so brokers who take the additional time to do the write-ups are seeing success and are telling others.” It’s certainly been a challenge for brokers, but those who have adapted are the ones who are thriving, according to Grewal. “I think brokers who are providing details – providing a story – and thorough notes are going to obtain approvals much easier and faster than brokers who don’t take the time to provide the complete story, the complete picture, the complete analysis,” he says. “Brokers have to think like an underwriter, and they have to ask, ‘How can I make my underwriter’s job easier? Let me do a complete write-up on my deal so my underwriter understands why it’s a strong deal for the company.’”

State of the market Grewal’s passion for the mortgage industry has developed over more than two decades in the business, where he’s participated in everything from business development to production and servicing. And he is optimistic about the future for both brokers and lenders in today’s housing market.

and Vancouver – seems to get with each release of new numbers. Still, there are a number of challenges facing today’s brokers and lenders, and Grewal is keenly aware of them. “Margins are thin, especially in the prime sector,” he says. “It’s all about doing more and more volume. Some companies just

“Brokers who are providing details ... and thorough notes are going to obtain approvals much easier and faster than brokers who don’t take the time to provide the complete story ...” “The market conditions are balanced, and home prices are slightly overvalued, but are in line with economic factors at a national level – that’s important for us to note,” he says. “I believe we are going to see resale prices increase over the next few years and mortgage rates to remain at or close to current rates. I think we have a healthy market, and I don’t think there is any concern there.” That’s good news for brokers, especially considering the amount of negative press the housing market – particularly in Toronto

don’t have the resources to provide new agents proper training, and that represents an ongoing challenge. Another challenge that we face: What impact are declining oil prices going to have on our economy? Obviously it’s having an effect on Alberta, but that’s going to spread.” Another challenge Grewal sees is the lack of exposure brokers get – something that is on the minds of those at all levels of the industry, from network heads and association leaders to brokers on the street trying to demonstrate the value they can provide.

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PROFILE Name: Paul Grewal Company: Street Capital Financial Corporation Title: Vice chair Years in the industry: 22 Career highlight: Starting Street Capital in 2007. “There is nothing more satisfying than starting a company and seeing it become successful,” Grewal says. “We’ve become the third largest lender in the broker channel.” Career lowlight: Not starting Street Capital earlier. “The real estate market has done phenomenally well, brokers have done phenomenally well, and Street Capital could have contributed even more if it had been launched earlier.”

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PEOPLE

INDUSTRY ICON PAUL GREWAL’S CAREER TIMELINE

1993

“Customers, as a whole, are aware of what mortgage brokers do, but many go to the bank because there are more touch points,” Grewal says. “There are thousands of [bank] branches across Canada, and we don’t have 5,000 individual broker offices. We need more retail operations for mortgage brokers. There is a segment of brokers that does a lot

On the horizon As a lender, Grewal is also able to identify trends that will become more and more important in the future. One of those is the increased importance of cross-selling and diversified product offerings. He’s taken note of brokers who have excelled at cross-selling by offering various

“I don’t think we have enough competition in our industry. If you think about it, how often does a mortgage broker compete with another mortgage broker on an application? More often, brokers are competing with bank reps” of business online, and that is certainly a market segment, but I think there is a huge opportunity to expand retail distribution branches for mortgage brokers.” He also believes there is enough business to go around and that the industry could benefit from more competition. “I don’t think we have enough in our industry. If you think about it, how often does a mortgage broker compete with another broker on an application? It sometimes happens online, but more often, brokers are competing with bank reps.” Increasingly, though, those bank employees are taking a stab at entrepreneurship and making the transition to the broker side – a trend Grewal hopes continues. “I think we should be trying to encourage bank employees to come over to the broker side,” he says. “I think it’s already happening; I see a lot of new mortgage agents and brokerages start up that were former teams on the bank side. I think it’s a matter of creating awareness about the brokering industry and assisting mortgage specialists in that transition period, because it’s a shock.”

products in addition to mortgages, from insurance to credit cards. And he’s got an idea about the type of client who will provide good opportunities for brokers looking to make the most out of their businesses. “I think uninsured is going to become more prevalent. I think it’s still a hidden opportunity,” Grewal says. “Think of all the new immigrants or self-employed applicants or people who have credit challenges because of life events who have perhaps convinced themselves after going to a bank branch that they can’t get a mortgage. That is a huge opportunity for brokers.” And those clients are ripe for the broker taking. “I still think this is a huge opportunity because of new rules and guidelines that restrict borrowers with less than 20% down seeking amortizations greater than 25 years,” Grewal adds. “I think there is a lot of business out in the marketplace – clients who probably don’t believe they can attain a mortgage because when they go to their bank, they get turned down.”

Regional production manager, FirstLine Mortgages

1994

Senior regional business manager, Ontario region, FirstLine Mortgages

May 2000

National director of business development, FirstLine Mortgages

2001

December 2000 Vice president of production and servicing, FirstLine Mortgages

President, FirstLine Mortgages

2007

President, Street Capital Financial Corporation

2015

Vice chair, Street Capital Financial Corporation

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GET TO KNOW OUR PEOPLE ALBERT COLLU

MY FAVOURITE

Job Title

President

Song: Simple Man

Lives in

by Lynyrd Skynyrd

Bradford, ON A part of the industry for

Past-Time: Playing Golf

15 years

ADVICE TO MY YOUNGER SELF

Movie: Gladiator

Good things come to those who wait.

Meal: Linguine with Pesto

Focus on the results you drive today & the rewards of tomorrow will arrive sooner than you realize.

LAST BOOK I READ Crossing The Chasm by Geoffrey Moore

Vacation Spot: Italy

BIGGEST LIFE LESSON When faced with adversity take pause & remove the emotion from the challenge before you to formulate a rationale & responsible decision.

THE BEST PART ABOUT MY JOB

Working daily with a group of brokers & staff that I view as second to none.

TV Show: Seinfeld

THREE THINGS I CAN’T LIVE WITHOUT 1 My Family

2 My Friends

3 My Guitar

Get to know more about Albert & MA by visiting

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FEATURES

COVER STORY: TOP 10 COMMERCIAL BROKERS

In its fourth year, CMP’s top commercial brokers list features a number of familiar faces – and a few new ones you’ll want to keep an eye on

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TO MAKE it as a commercial broker, you have to have a lot of drive, determination and patience. Commercial brokers go over their deals with a fine-toothed comb, putting months of effort into closing each one. And even the most stringent effort is no guarantee of success; often, commercial deals collapse at the eleventh hour. Nonetheless, the perseverance displayed by these 10 brokers has paid off; they’ve built books of business and reputations to be envied. This year’s top 10 reported a combined $1.16 billion in deals funded in

Rank

Name

2014. That’s a spike of more than $344 million year-over-year. And the number-one broker reported a staggering personal year-over-year jump of more than $102 million. Those are impressive numbers, but they don’t capture how many dollars were lost on deals that fell through at the last minute, or long hours of work put in to get clients the best value possible. On the bright side, the volumes also don’t immediately convey the size of the reward for commercial specialists. Still, if you asked any of our top 10 brokers, they’d say that all the effort is worth it.

TOP COMMERCIAL BROKERS: THE STATS

Total funded volume

$1,161,853,611 Average funded volume per broker

$116,185,361

Company Total number of years in the business

More than $150 million 1

Mike Chiu

Capital West Mortgage

Rena Malkah

CYR Funding

David Beckingham

Dominion Lending Centres Commercial Capital

$150 million -$90 million 4

Sally Kwan

TMG The Mortgage Group

Omid Jalili

OMJ Mortgage Capital

Andrew C. Bennett

Nexus Investment Corporation

Under $90 million

176

Average number of years in the business

17.6

Total number of deals

258

Average number of deals

Brennan Wood

Foundry Mortgage Capital

Harry Tyson

Dominion Lending Centres Innovative Mortgage Solutions

Neil Shopsowitz

Dominion Lending Centres Commercial Capital

Praful Lakhani

Verico Northwood Mortgage

25.8

Average deal size

$4,503,308 www.mortgagebrokernews.ca

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FEATURES

COVER STORY: TOP 10 COMMERCIAL BROKERS CMP: What factors made you choose to enter the commercial space? I started with residential mortgages. But with residential mortgages, sometimes you’ll get the mortgage commitment and suddenly they go to the bank, and they would match it or go a little better, and the client would call me and say, “We’ll just go with the bank.” So I said, “This isn’t good.” At the time, I was attending mortgage seminars, and I met a very nice gentleman named Keith Walters. I had a commercial deal and said to him, “Can I co-broker this with you?” We got along so well that he said, “Why don’t you join my brokerage?” He taught me the basics of the commercial mortgage space. There are really no courses for commercial mortgages, so that’s where I learned the ropes of the commercial business.

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CMP: What advice would you give to brokers who are thinking of entering the commercial space? Bring commercial deals and work with a commercial broker who’s willing to show you the basics. But you need to bring commercial deals. I get brokers in my office who say, “Can you teach me?” Teach you what? Bring in a commercial deal, and then we can sit with the client so you can see how I talk, what documents I collect, and then we can put together a commercial proposal. That’s how I learned. I brought my deal to a commercial broker, and for a year almost, I was his student and he was my guru. So the only way to get into the commercial business is to bring in commercial deals and work with a commercial broker. But it takes a long time. My experience has been that many

residential mortgage specialists don’t have the patience, because it can take eight weeks to do a commercial deal, whereas residential deals you can sometimes do in 24 hours. And also, you can work on a commercial deal, and suddenly it falls apart after four weeks. So you need a lot of patience.

CMP: How can commercial brokerages continue to thrive in today’s market? Networking, networking, networking. Let’s say you get a commercial deal. The client can only go to his bank, whereas we deal with all the banks, plus pension funds, life insurance funds, etc. So based on the deal, I should know who to go to who’ll want to take the deal. Everybody picks and chooses what they want to finance. So it’s important to network and keep touch with sources where you can get

those commercial deals. I also get some deals from the banks, when they’ve turned it down for some reason.

CMP: What’s the most important thing a commercial broker can do to grow his or her business? Again, networking, marketing, possibly advertising in industry-specific magazines. And also knowing your market. Say you’re trying to finance a gas station. Well, only two banks in Canada finance gas stations, so you’ve got to know who the players are. You need to know the account managers specializing in commercial mortgages at the banks. The key is marketing and keeping your face out there. Keep yourself in front of your database because you never know when a deal is coming in.

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FEATURES

COVER STORY: TOP 10 COMMERCIAL BROKERS NEIL SHOPSOWITZ Carve out a niche Years as a commercial broker

9 Loans closed in 2014

33 10

CMP: How did you get into the commercial space? When I started out about 10 years ago, I was trying to do both residential and commercial. It’s very hard to differentiate yourself in residential, because everybody can get basically the same rates. There are a lot of people out there chasing the business, and if you’re not really wellnetworked, it’s hard. But commercial – there weren’t a lot of people in that space. There still really aren’t. And there aren’t a lot of people who are competent at it. So I think it’s easier to differentiate yourself and carve out a niche. I also have the advantage of having a business background. I started out life as a commercial and real estate lawyer, so I understand how to put deals together. That was a big advantage in getting into the commercial area. CMP: How do you bring in new business? It’s just really networking without being offensive. You want to make sure people know what you do, but you don’t want to be so aggressive that people cross the street when they see you. And then it’s just constantly networking, staying in touch with people you’ve done work for and following up with your referral base. If you get lazy, business dries up.

Location

Vancouver CMP: Is the commercial mortgage space a good fit for any broker? I think it’s hard. You’ve got to really know your stuff. Similar to residential, the deals don’t close themselves. Getting a commitment from a lender is only half the work. You’ve got to really stay on top of things to make sure the deals close, and you’ve got to be organized – really wellorganized.

Certain deals are hard to do, but we know where to go, whereas the clients may not. A lot of it is helping to match up the right deal and the right lender for the clients.

CMP: What’s the secret to building a successful business? Everything’s referrals. First of all, I’m very fortunate to have ended up with David Beckingham. He’s a pretty confident, experienced guy, so learning from him – learning how to package deals properly – was very helpful. If you don’t put the stuff together properly, you’re not getting anywhere with the lenders. And you need to network and constantly work on your referral base. Within the Dominion Lending Centres group, there aren’t a lot of commercial offices. But once we moved over to Dominion, they were really supportive in helping us establish ourselves as a commercial office – and a resource to all the residential brokers in the network. CMP: What trends have you noticed in the commercial space this year? Certain markets are challenging right now. Lenders are cautious in markets like Alberta. But the other side of it is that we’re still in a really low-interest-rate

“Deals don’t close themselves. Getting a commitment from a lender is only half the work. You’ve got to really stay on top of things to make sure the deals close” CMP: As a commercial broker, how do you make yourself attractive to clients? A lot of clients have the ability to go out and get loans on their own. What you can do as a commercial broker to really make the client’s life better and easier is maximize the loan amounts. We can certainly help them get the best rates, the best terms. We can make sure they get the money when they need it and offload the pressure of having to deal with lenders.

environment. People want to do stuff while we’re in this environment. They want to buy things; they want to get those rates and lock them in for as long as they can.

CMP: What’s the most important thing a commercial broker can do to grow business? Get good results for your existing clients. Because again, everything is referrals and repeat business.

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cap rates, which has increased values but not cash flow. One has to figure out how to maximize a loan within those parameters.

HARRY TYSON

CMP: What’s the secret to building a successful business? Having the ability to figure out the weak nesses of the deal, and mitigate the risk via a loan structure that will satisfy both the borrower’s needs and the lender’s risk parameters.

A long process, not a quick-buck career Years as a commercial broker

CMP: What advice would you give brokers thinking of entering the commercial space? It is a long process, not a quick-buck career. You’re often dealing with people’s business – and, as such, their livelihood – so you have to be knowledgeable to ensure they are not over-leveraging.

Loans closed in 2014

33 10

Location

Coquitlam, BC CMP: How did you get into the commercial mortgage game? I entered the commercial mortgage business straight out of university in 1986, where I analyzed high-ratio commercial mortgage transactions.

“You are often only as good as your last deal, so make sure you always make every deal count”

CMP: How can commercial brokerages

appraisers to environmental consultants, Realtors, etc.

continue to thrive in today’s market? Knowing the product types and the lenders, and having good relationships with all parties involved in the transaction – from

CMP: What’s the biggest thing going on in the commercial space right now? Lower interest rates have compressed the

CMP: What would you say to a new broker trying to build business? You are often only as good as your last deal, so make sure you always make every deal count. Then word of mouth will assist you in growing your business.

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FEATURES

COVER STORY: TOP 10 COMMERCIAL BROKERS BRENNAN WOOD A business is only as good as its people Years as a commercial broker

5 Loans closed in 2014

9 Location

Toronto

CMP: How did you end up in the commercial mortgage business? Serendipity, really. Once I decided to leave law practice, I had an opportunity to work at one of the large brokerages, helping residential agents fund commercial mortgages. I was very successful in my role there and ended up opening my own brokerage with some other top producers this year. CMP: How can commercial brokerages succeed in today’s market?

The commercial market continues to be robust. However, the complications surrounding borrowing money are many. Lenders have loan limits for borrowers, disclosure documents are miles long, and the conditions on a commitment can be crazy. Brokerages can thrive by providing sensible solutions to both borrowers and lenders.

CMP: What’s the secret to building a successful business? Working with intelligent and honest people. We have been fortunate to bring together

some very educated, dedicated and energetic partners. We all have different perspectives on how a project can or should be funded. When we discuss funding structures internally, some really creative strategies flow out from there – which allows us to add value to borrowers and lenders.

CMP: What’s your strategy for generating new business? My clients have been my largest referral source. When you do a good job, people hear about it. CMP: What’s the most important thing a new commercial broker can do to grow his or her business? Understand the market and focus on delivering results for clients. CMP: What advice would you give to a broker thinking of entering the space? Do your homework. It is a very complicated – and sometimes long – process to fund a deal. The borrowers are generally sophisticated, the lenders are intelligent, no two deals are the same, and lender appetites ebb and flow. I am always looking for trends and changes in underwriting criteria from lenders to make sure the borrower gets the best terms and conditions possible in the market. If a broker is looking to enter the market, find a good commercial broker to work for and learn from them. You won’t find the answers in a book.

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News

InternatIonaL

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u.s. COVER STORY: TOP 10 COMMERCIAL 90.6%BROKERS

inspectors have found problems; appraisals showed a home was worth less than the bid; a buyer lost a job before the closing. U.S. housing market worse than thought More than two years after the recession The number of Americans who bought previously officially ended, many people can’t qualify for occupied homes rose in October. But the National meet higher paymentdifferently. There Association of Realtors says it overstated more than CMP: What advice would you give to loans orproperties are down underwritten requirements. Even those with excellent credit three million sales during and after the Great Recession, residential brokers who want to switch? are all these different factors, so the best thing and stable jobs are holding off because they fear showing the housing market was weaker than They have to do a lot of homework. One to do is come to the realization that one size Percentage of that home prices will keep falling. Sales are also previously thought. of the reasons homeownership we’re successful is that being we hurt doesn’t all. in first-time buyers, who by afitdecline The private trade group says sales rose four per costs, work withincluding our investor clients. are critical to reviving the housing market. cent in October to a seasonally adjusted annual rate of very closely mortgage payments, CMP: building business? The relationships we have with them are Sales haveHow fallenabout in four of the finew ve years 4.42 million. That’s below the roughly six million homes utilities and property since the went bust in 2006. a year that economists say are consistent with a healthy Wehousing get a boom tremendous amount of referrals multifaceted, and that’s only because they’ve taxes that take up a Declining prices and record-low mortgage housing market. But it’s ahead of 2008’s revised sales, from other clients, because we try rates to take an developed over the length of time that they typical household’s haven’tapproach been enough now considered the worst in 13 years. with to theboost clientsales. similar to the one we have. We do the complete underwriting. monthly pre-tax At the same time, home construction has The trade group revised its sales from 2007 to 2010 We do all ofincome their annual reviews for each take with the investor – being something a in Vancouver begun a gradual comeback and should add to the down 14 perYears cent, more than asfrom a commercial broker20.6 million to nearly bit more justthe giving mortgage. loan that we broker. We handle all of economy’s the littlegrowth and Toronto, in than 2011 for firstyou yeara since 17.7 million. Among the reasons for the lower figures, respectively (RBC Anyone can give youina2007. mortgage, and it will renewals; we handle all of the assumptions. the Great Recession began Last month, the Realtors group says: changes in the way the Census Economics Housing your conditions now. But it of has to work there’s a problem with the loan, be it a builders fire meet broke ground on an annual rate Bureau collects data, population shifts and some If sales Trends and Loans closed in 2014 685,000 government recently. being counted twice. forhomes, you in athe year, five years, said whatever. You have insurance renewal or a delinquency problem, Affordability Report) That was 9.3 per centgoing jump on from October and The Realtors consulted with government and they call us first. to aknow what’s with their company. the fastest pace intention since Aprilover 2010.the next few years private housing experts, including the Federal Reserve, Is their Most economists say home prices will keep the Department of Housing and Urban 10 Development, Location CMP: What’s the secret to building a to acquire similar properties? If so, maybe falling, by at least five per cent, through 2012. the Mortgage Bankers Association, the National successful business? you want to go for a shorter term so they can Many forecasts don’t foresee a rebound in prices Association of Home Builders, mortgage giants Fannie You have to really pay attention to what’s going until at refinance least 2013.and pull some equity out of that Mae and Freddie Mac and CoreLogic, a California-based on out there. A lot of people try to come into Theproperty more. Youhas have to really get high ratetoofbuy foreclosures made data firm that first raised doubts about the annual the commercial space and are not successful at homes inside your client’s head understand what resold cheaper than newand ones. The numbers earlier this year. medianthat price of a new home is roughly 30 per CoreLogic has estimated thatcommercial the Realtors group CMP: How did you get into the it because they look at the commercial space transaction’s about. cent overstated sales in 2010 by at least 15 per cent. in the same style of underwriting as they do space? a above the price of one that’s been occupied before twiceWhat’s the normal markup. Investors are a The changing numbers could affect how economists the most important thing I’ve always been in the commercial space. residential transaction. It’s all about cash flow –CMP: taking advantage of the discounts. view the trade group’s data. It could also affect companies commercial broker can do to grow his or Years ago when I was working in financial when it comes to commercial properties. So it’s The housing market is struggling even that use the figures for hiring and expansion plans. her business? institutions, was in the when commercial about paying attention to what is really going as the broader economy has improved in Sales areI measured buyersspace. close As on homes. Be professional. There’s a tremendous a result of deals company mergers and such,that I didn’t recent months. But many are collapsing before point. on and understanding what your investor people there are so particularly the direction new lenders are looking from. Commercial business Theamount economyofgrew at anout annual pacewho of two One-third oflike Realtors said theythe had at merged least one contract pera centfocused in the July-September quarter. Manyof them scuttled October, 18 per cent in September. on the transaction in front companyinwas going,up sofrom a friend of mine and I is different, from an apartment building to economists expect slightly better growth the are being cancelled for several reasons: – going through hoops and tryinginanything. wentContracts off and started Nexus. shopping centre to a warehouse. All of those October-December quarter. CMP Banks have declined mortgage applications; home

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You have to take the professional point of view of the bigger picture. Yes, you want to do the transaction … but be prepared to throw in the towel if you have to. You’re managing the expectations of a lot of people – the borrower, your investor. You’re managing your own expectations and those of the staff of the office. So you have a lot of competing forces pulling on you, and you have to make sure they’re all pulling in the same direction.

has handed you and stick it on a letterhead and say, “Here’s the deal, what do you think of it?” You need to know what each of your investors’ underwriting criteria is. Some have a loan ceiling of $4 million. We also have investors who don’t even want to look at a loan unless it’s $10 million and up. We spend

CMP: What trends have you noticed this year? Have you had to adapt your strategies to market conditions? We’re an approved correspondent for [the Canada Mortgage and Housing Corpo ration]. In the commercial business, their underwriting is becoming very stringent.

“You have to become more than just a broker. You have to become a full-service operation”

CMP: How can commercial brokerages a lot of time with our investor clients. Because continue to thrive in today’s market? their needs change throughout the fiscal You have to become more than just a broker. year, we spend a lot of time with them going You have to become a full-service operation. back and forth to have a clear understanding If you don’t do that, what are you doing? You of what they’re actually looking for. And as a have to bring value. You cannot become, for result of that, our kill ratio is in the high 90s. lack of a better description, a courier in a Usually when I present a deal to an investor, suit. You can’t just take the raw data someone it gets approved. CMP Print June2015 FNL.pdf 1 2015-06-09 2:48 PM

We’ve had cases where loans we did with CMHC three years ago, we couldn’t do now. Their policies have tightened that much. That’s probably the biggest single thing, and that obviously only affects multifamily. Lenders are generally becoming a little more conservative, but that’s primarily because interest rates are so low.

CMY

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FEATURES

COVER STORY: TOP 10 COMMERCIAL BROKERS commercial space? Be prepared to work on a file for one or two years before getting paid. For example, I have a client I did a land purchase for. It was over two years before we finished the project development and I got paid. There were many hours of unpaid meetings and extra work helping them to build things up and get prepared before putting together the construction financing. Residential mortgages can be much faster. You do a deal and get paid. Commercial mortgages can drag for one year, two years, three years – and they may or may not come to fruition.

SALLY KWAN Persistence and patience are key Years as a commercial broker

18 Loans closed in 2014

13 Location

Vancouver

CMP: How did you become a commercial broker? I started as a residential broker 23 years ago. It was less complicated – most mortgage brokers enter the business as residential mortgage brokers. As I built up my business, some clients who had invested in residential mortgages began to think about investing in commercial, so they’d come back to me.

thing is to earn the trust of clients. I spend the time to really understand their needs, both long-term and short-term. Then you work toward their benefit, not just short-term gain for yourself. Clients these days are really smart. If you really work for them, they will appreciate that you’re working for them wholeheartedly. And of course, follow through and keep clients informed all the way. Give them a strategy – kind of a map of the entire process.

CMP: What’s the secret to building a successful business? There’s no secret. I think the most important

CMP: What advice would you give to brokers who are just entering the

CMP: What’s the most important thing a commercial broker can do to grow his or her business? I think as a broker, we’re like a bridge between clients and lenders. So as I said before, understand the client’s needs – longterm and short-term – so you don’t waste the client’s time or the lender’s time. Find a good match, and over time you’ll establish trust with lenders and clients. Then the rest will come. And be honest – for instance, I have a client who bought a multifamily building for $10 million. It’s quite old, and the income is OK, but you have to tell them that over time, they may have to put in more money to fix it. We told them right away, because it’s an older building, you may be looking at putting in extra money for maintenance. The client agreed, and he understood and appreciated it.

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DAVID BECKINGHAM Work on your business rather than in your business Years as a commercial broker

30 Loans closed in 2014

22 10

Location

Vancouver CMP: When did you first get into the commercial mortgage business? I entered the commercial mortgage brokering space in 1988 after graduating from university with a business degree. I joined a local brokerage house specializing in only commercial loans. At that time, I was fortunate to have three job offers – to be the assistant to a stock broker, a commercial Realtor or a commercial mortgage broker. In my view, and in acknowledging a need to balance a desire to be successful with a need to minimize risk along the way, a commercial broker’s income was more stable than that of the other two careers. It seemed to me that the others would be more likely to fall prey to prevailing economic conditions. CMP: How does someone just entering the space learn the ropes? My advice to anyone entering the commercial mortgage industry is to team up with a commercial mortgage broker and learn the tools of the trade while under the mentorship of an expert. During this time, I also advise new brokers to start a savings plan so you can survive the periods of drought in the early years – which could be as long as two years. Finally, having an educational background in finance and/or law is a definite leg up. One of

the best commercial mortgage brokers in my office is a lawyer who transitioned easily to this field due to a strong understanding of the laws that underlie the mortgage process.

faction. However, establishing a long-term focus on marketing the business is what has, in my view, resulted in success. I started off with a handful of really good people who put their trust in me. To earn their loyalty, I understood I had to deliver – and to do so, I had to work very hard. By and large, these relationships have been sustained over my career. In fact, I am still doing deals with the very first client I had 27 years ago. This is the byproduct of a focus on people as the foundation of the business and is undoubtedly the most satisfying part of my career.

CMP: How do you drum up new business? On a daily basis, I focus on marketing the business in good times and in bad. What I mean by this is an ongoing process of paying close attention to the relationships that sustain the business – lenders as well as clients. As I mentioned earlier, the loyalty I have enjoyed throughout my career is the direct result of my ability to effectively deliver the mortgage requirements of my clients. If you do not perform on requests from lenders

“I started off with a handful of really good people who put their trust in me. To earn their loyalty, I understood I had to deliver” CMP: What’s the secret to building a

or clients, you will not survive in this industry.

successful business? The short answer is achieving longev ity. However, the more complete answer is about finding creative ways to withstand long periods of time without any income. In my experience, this is where many commercial mortgage brokers fall by the wayside. The process involves building a referral network that spans across the country, aligning yourself with developers, commercial property owners and residential mortgage brokers. It takes a great deal of time, effort and commitment to working on your business rather than working in your business. I can’t underscore this distinction enough. Most brokers spend the majority of their time working on deals in the business because it is the deals that bring immediate financial satis-

CMP: As an industry veteran, what do you think is the most important thing happening in the space right now? The most important trends I have noticed this year are the downturn of the price of oil and the deflation in the value of the Canadian dollar. These two trends will affect the Canadian economy in profound ways, and I believe many changes are yet to come. Western Canada will be impacted by this change in a greater way than Eastern Canada because the economies in the West are more reliant on natural resources. Depending on where you live, adapting a business strategy that capitalizes on this change will be the most prudent action a commercial mortgage broker can take.

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FEATURES

COVER STORY: TOP 10 COMMERCIAL BROKERS RENA MALKAH The harder you work, the luckier you get Years as a commercial broker

42 Loans closed in 2014

57 10

Location

Thornhill, Ont.

market? It’s sort of the same thing. It’s all about getting business, which is a numbers game. The harder you work, the luckier you get. If you put in the work and contact more people, you’re going to get more business. Have good relationships with the lenders, be they institutional or private. Make sure you understand their policies and what kind of deals they’re looking for, so when you get a deal you know which lenders to target. Put together proper packages. I get business from a lot of other mortgage brokers, and it’s quite appalling, actually, the amount of misinformation they send. You should have a checklist of documentation that’s required on a deal and make sure you get all of it.

CMP: What’s the most important thing CMP: Why did you get into the

I think it’s important to introduce yourself to new business all the time to keep business rolling in, even though you have your existing repeat business and referrals. Keep good communication. Have a database, and send communication so the clients feel like they get to know you.

a commercial broker can do to grow his or her business? You’ve got to get the business in, and you’ve got to get it approved. Think of all the obstacles you may have to overcome, and see if you already have answers to overcome the objections before they arrive.

CMP: And how do you find new

CMP: Are today’s market conditions

CMP: What would you say to a

business? Basically, it’s calling, emailing, meeting in person. Just contact with potential

a boon for the commercial space or a challenge? We have found that we’re busier, actually.

residential broker trying to break into the commercial side? The most important thing is getting in the business. And of course, as a broker, you have to be reliable and know what you’re doing. If you don’t – if you’re new in the business – find a more experienced broker who can teach you the ropes.

“I believe in the human touch. Still, after 42 years, I call builders and developers and Realtors – everybody who’s related to real estate – and introduce myself ”

commercial mortgage space? It was more challenging and more lucrative. It was also more interesting, because there are so many different types of deals. Special purpose, condos, funeral homes – every deal is different. Clients are different than residential clients; they’re more sophisticated. It’s just a more interesting market to be in. And it’s more profitable.

CMP: What’s the secret to building a successful business? Your marketing plan. I believe in the human touch. Still, after 42 years, I call builders and developers and Realtors – everybody who’s related to real estate – and introduce myself. On each file, after I’ve done a deal, I’ll call all the people related to the client – lawyers, accountants and such.

borrowers or people who can refer potential borrowers. And keeping in touch with people is very important. I call it the ‘Chinese torture method’ – like a drop of water going over and over until they get it into their brain!

CMP: How can commercial brokerages stand out from the pack in today’s

Year over year, the last three years were busier each year. Because we’re in Toronto, there’s been a lot of development. Toronto is a good, expanding city. We do business all over Ontario, and the market conditions, I think, are strong. Values are continuing to rise, and rates are continuing to drop, so things are better than ever.

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FEATURES

COVER STORY: TOP 10 COMMERCIAL BROKERS MIKE CHIU Exceed the client’s expectations Years as a commercial broker

16 Loans closed in 2014

16 Location

Vancouver Amount funded in 2014

$224,663,000

CMP: When did you first get into commercial mortgages? I started in commercial mortgage brokerage in 1999, straight out of university. I had a few friends who were active in this space, and I liked the opportunity to work hard and get ahead in the business world. Additionally, the complexity and constant challenge of projects in the commercial space has provided for a challenging and interesting career. The first three years were a real grind until I finally got some traction in the industry.

other brokers, but you are competing against banks, credit unions, life companies, pension funds and private lenders who are aggressively seeking direct lending business. Beyond that, most lenders do not pay your fee, so you need to justify getting paid directly by the client. It all comes down to client relationships, structuring the deal properly and attracting the best sources of capital. If you can demonstrate the savings to the client while streamlining their access to capital, you can count on continued business from that client.

CMP: How can commercial brokers excel

CMP: What’s the most important thing

in today’s market? Commercial brokerage is a very competitive industry. Not only are you competing against

when it comes to building a successful business? I view client satisfaction as my main goal,

not closing deals or getting paid. If you can exceed the client’s expectations and establish a relationship, the deal flow will follow. The majority of my business is repeat customers, and this is based on client satisfaction and building a relationship. I also add a tremendous amount of value for my clients beyond sourcing debt. I can produce cash-flow models for construction and lease-up, review and develop construction budgets, and proofread income and expense models, to name a few. These are valueadded services at no additional cost to the client, which also protect the client from potential financial hardship with overly aggressive pro forma budgets.

CMP: How do you bring in new business? I am very specialized in seniors’ housing, and many industry-related professionals refer business to me based on my success in this sector. I regularly speak at two annual industry conferences on the topic of financing seniors’ housing. These public engagements have always proven successful in garnering new business and industry exposure. I have also co-brokered with other brokers who have clients looking to finance

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a seniors’ property. With nearly a quarter billion funded last year, this allows the client the best access to capital, and everybody wins.

CMP: What’s the most important thing a commercial broker can do to grow his or her business? You have to be comfortable with coldcalling. No matter how busy I get, I always take time out of the week to get in front of new potential clients and ask for their business. Many of my clients have grown to a significant size over the years and have retired and sold their portfolios. It’s important to continue to build a pipeline of new business, while fostering the growth of your existing clients.

CMP: What trends have you noticed this year? Have you had to adapt your strategies to market conditions? There is a lot of passive equity flowing up from the US, which has been driving values of properties in the seniors’ housing sector. With so much competition for stabilized properties, I suspect we will continue to see downward pressure on cap rates in the last two quarters of 2015. Lenders continue to have significant amounts of liquidity, and we have seen tremendous competition for AAA deals, with new benchmarks in spreads. With the yield curve being as flat as it is, I have noticed clients looking for longer-term deals, and have funded term loans of 10 to 20 years. Just last week, I locked in a 2.70% rate for 10 years.

CMP: What advice would you give to brokers who are thinking of entering the commercial space? In my opinion, commercial mortgage brokerage is not an industry that can be dabbled in if you want to excel. If this is the direction you want to take your business, you need to focus on understanding the detailed underwriting of commercial assets, and work with a team that has a very good network of commercial lenders. I came to this industry with a master’s in health services administration, which I used as a springboard to focusing on seniors’ housing. I would suggest specializing in a market or product type, and become an expert in that industry. If you can be the best in your specific field, whether it’s apartments or shopping centres, the clients and deals will come to you.

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13/08/2015 9:45:04 PM

SPECIAL PROMOTIONAL FEATURE

COMMERCIAL LENDING

Risk versus reward A private lender offers insight into the many factors that determine whether a commercial mortgage gets funded RISK/REWARD IS a common term in financial vernacular, but what does it mean? Simply put, investing money into any market has risk. The amount of money you stand to gain is the reward, but you also risk losing some or all of your investment. It really depends on the quality of the investment, which can be measured in performance and ratios, as well as the value of the hard assets within the investment, among other measurements. A commercial mortgage offers its own set of risks; however, unlike publicly traded shares, the mortgage is secured by real estate. As my economics professor would say, land is a scarce commodity, as they simply aren’t making any more of it. Security in land can be further enhanced by building on that land and earning lease income from the building. This makes commercial real estate a tangible asset that can be graded, qualified, securitized or monetized – often easier than, say, an investment in a new app for your phone or computer. It’s easy to see which investment carries more risk. A typical scenario of a lender weighing his risk/reward goes something like this: A loan opportunity comes to you via a phone call from a mortgage broker you know and trust. The point is to gather as much information as you can on this initial call by asking a few relevant questions, hoping the broker can bestow some meaningful insight and knowledge about the deal. You thank him for the opportunity and, assuming you have key decision-making information, let

him know you’ll get back to him quickly. If you’re a savvy, hard-working lender who places an emphasis on providing top-rate service, the next hour is crucial. While the deal is fresh in the lender’s mind, he or she should be quickly assessing a number of items: Who is this borrower? Does the borrower have the ability to make the interest payments if the property cannot or does not generate the necessary revenue? Is there debt service coverage, or will there be, to facilitate an exit? Is there enough debt yield to satisfy the debt service coverage ratio? (Debt yield is defined as the net operating income of a property divided by the yearly mortgage payment.) Who is guaranteeing the loan? What makes up the guarantee, or is it a pure equity or non-recourse loan? Is the asset marketable? Is the location in a major or tertiary market? Will the asset value improve over the length of the loan, or will it degrade?

Commercial real estate is a tangible asset that can be graded, qualified, securitized or monetized – often easier than, say, an investment in a new app for your phone ... That’s just the first set of questions the lender has to ask. The next ones are more internal queries. Is this asset attractive enough to be syndicated? Is the borrower’s story sensible?

Does the lender want this loan on the books, and who will take the lender out with term financing once the asset is stabilized (in the case of a bridge loan)? These questions – and many more – are

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We all know the rate can make or break the deal, but in measuring the risk, the terms are just as important. Is the loan to be closed for a period of time, then open or closed for the term? Is there a notice and/or bonus provision? What are the prepayment provisions? Is there prepaid interest? Is the term six months or five years? Are there renewal options? Is there

We all know the rate can make or break the deal, but in measuring the risk, the terms are just as important

paramount in weighing the risk versus reward scenario in a commercial mortgage investment. On a macroeconomic level, the lender assesses the global picture. Is the sky going to fall, is China going to continue to prop up the Hang Seng index, is Greece going to be bailed out â&#x20AC;Ś again? And closer to home, are the American and Canadian low interest rates sustainable? On a microeconomic level, what deals are already in the pipeline? Are they better than this one? Are there ample monies to fund

this as well as the others? Based on this information, the lender can decide whether the deal is worth pursuing. If the answer is yes, then more digging is required. This generally starts with the borrower. What is their history? How have they performed before? Can they sustain a downturn in the economy? Are there other assets that can be cross-collateralized? Google is an amazing tool. One can find out a great deal of information and history by doing a quick search on the borrower, the guarantors and any related companies.

an exit fee? In fact, the terms seem endless and are put into commitments to reduce exposure to lender risk. The next thing to consider is the asset. Is the property in a major or tertiary market? Is the asset maturing or growing in value? In the event something goes wrong, can the lender get out, given the marketplace? Is the loan to value ratio reasonable given this information? Is the loan amount reasonable given these details? In measuring these risks versus reward in a commercial mortgage investment, the above considerations are paramount to properly underwriting a loan in relation to the risks that need to be considered. The reward is obviously the rate of return, which is established individually by each lender but is based on the above considerations, as well as competitive factors. Analyzing a loan request is not as simple as implementing a set of formulas or ratios. In consideration of the risk/reward trade-off, a prudent lender asks the above questions and many more to determine if a lending opportunity justifies the risk they are being asked to take. Steven â&#x20AC;&#x153;Skipâ&#x20AC;? Walters is the vice president of business development for First Source Mortgage Corporation.

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SPECIAL PROMOTIONAL FEATURE

BRUISED CREDIT

Ready for prime time Brokers and clients with bruised credit go hand in hand – but the true value of a broker lies in transitioning that client into the prime lending space, writes Donald Horne

THOSE CLIENTS who have bruised credit will eventually want to move into the prime space. And that transition is best facilitated by a mortgage broker, acting in the role of true financial advisor. “Clients need to understand where they fit and why to get to where they want to be – which is in the prime space,” says Danielle Cawley of Neighborhood Dominion Lending Centres in Barrie, Ont. By taking the time to educate and coach the client, you build loyalty, which can usually lead to repeat and referral business, she says. “If you coach them through the process, moving them from private money to B lending to prime lenders, you will earn their trust and their loyalty forever.” Having the broker understand the complete picture is an absolute necessity, says Gleb Ioussoufovitch, director of sales and marketing for XCEED Mortgage Corp. “Brokers need to understand the story behind bruised credit – most of the time it is a result of an unfortunate life event; however, sometimes people just get carried away by excessive spending,” Ioussoufovitch says. “In either scenario, alt lending can be a solution and the shortest way to repair and/or rebuild bruised credit; brokers just need to know the details of the situation and clearly convey them to lenders in the deal notes.” Completely understanding the client is the essential first step to creating a plan, adds

Dimitri Kosturos, vice president at VWR Capital Corp. “Brokers need to get a clear understanding of where the client has been, where they are and where they want to go,” he says. “The broker will need to create a plan that gets their clients moving in the right direction.” For Tylor Volk, lead planner with Mortgage Architects, planning and walking the client through the steps of a transition is key. “I do a plan for all my clients who have to go to a higher rate of financing,” he says. “I tell them: ‘This is the problem with your credit, and this is why you have to go to a higher rate, and this what we can do to get out of it.’ Perhaps it is getting a couple of secure credit cards and having the client’s collections paid off right away. But I do impress upon the client that we need at least one year – but more often two years – of established good credit history to get them back into that A lender rate.” “Financial planning is the cornerstone of such solutions,” Ioussoufovitch adds. “There should be a clear plan to repair bruised credit within a specific time frame, with the ultimate goal to move such clients back into prime rate environment. Solutions can differ by term – most of them gravitate toward shorter terms of one and two years – features, pricing, etc., but in any case, the clean and healthy credit profile of the borrower is the ultimate destination.”

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PEOPLES TRUST® SECURED MASTERCARD® – TAKING THE BRUISES OUT OF CREDIT Mortgage brokers know that it’s easier to obtain a low rate mortgage for clients with a good credit history. While there are mortgage options available for those with bruised credit (Peoples Trust has several), mortgage brokers can add value to the services they provide to their clients by helping them rebuild their credit profile. This sets them up for the possibility of a low-rate mortgage when their loan comes up for renewal. The Peoples Trust Secured MasterCard has the lowest secured card rate in Canada, and can help your client build good credit while strengthening your client relationship and your bottom line. HERE’S HOW: • As a Peoples Trust referring agent, you are provided with an agent code, which you provide to your client. Your client completes the application using that code and provides a deposit, which is returned when the account closes. The amount deposited becomes their new credit limit and protects them from going into debt by ensuring they never spend more than they initially put in. You receive a commission for each card that is approved. • Your client then uses their secured credit card just like any other credit card, with the same advantages. • We report their payment information to both credit bureaus, and assuming they pay at least the minimum payment by the due date, their credit score improves. Upon renewal, you will be able to get them a better mortgage rate based on their improved credit score. Help your client get the credit they deserve.

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SPECIAL PROMOTIONAL FEATURE

BRUISED CREDIT ADVICE FROM BROKERS “What we’re saying is, ‘Work with your broker, heed their advice, and let’s try to fix this situation.’” –Jason Provencher “It is important for the broker to take an active role in coaching clients, and to follow up on a regular basis.” –Tylor Volk “If I were a new mortgage broker in search of a niche, [bruised-credit buyers] would definitely be on my agenda.” – Harry Singh “If you walk them through the process, you will have a client’s business forever.” –Danielle Cawley “Brokers need to get a clear understanding of where the client has been, where they are and where they want to go.” –Dimitri Kosturos “As homes appreciate, people believe they have access to more funds. But you don’t see incomes increasing.” –Gino Tieri

Volk says he sees a lot of brokers just put the deal together and walk away – they don’t bother going through the effort to coach their clients. “That is one of the most important things when you are looking to transition the client,” says Volk, who has found proper coaching and explanation the best way to ensure the client “is coming back to us and we are taking them to an A lender.”

Credit crunch It doesn’t look like the pool of bruised-credit clients is going to evaporate anytime soon.

just look for the lowest rate – and that is the extent of their loyalty. But this segment does offer a lot more for a mortgage broker to do.” “It is important to us, because we dedicate 100% of our effort and time to alt lending,” adds Jason Provencher, manager of businessto-business solutions with Bridgewater Bank. “So for clients with bruised credit, we see it as an opportunity, a growing market, as a lot of people have been pushed into this market – and it is more challenging to get them into the prime market.” For those just starting out as brokers in the segment, it offers a perfect opportunity

“The biggest advantage to helping someone with bruised credit into the prime space is lifelong loyalty. You are there from the beginning during their time of need” “Bruised credit is definitely growing in this country,” says Gino Tieri, vice president of sales and marketing at Equity Financial Trust Company. “People are stretching themselves financially; we see it.” Contributing to the problem is the perception that consumers can borrow more as their home equity increases, Tieri says. “People are buying on their equity – whether it is for the right or the wrong reasons, that is a personal judgment call that you make individually,” he says. “As homes appreciate, people believe they have access to more funds. But you don’t see incomes increasing.” Harry Singh, the national director of sales for Equitable Bank, agrees that there will always be a segment of clients with bruised credit looking for a mortgage – and that it’s a segment brokers should become well-versed in. “It will always be there – the biggest advantage to helping someone with bruised credit into the prime space is lifelong loyalty,” Singh says. “You are there from the beginning during their time of need. There are a lot of clients in the prime space who

to build a book of loyal clients. “If I were a new mortgage broker in search of a niche,” Singh says, “that would definitely be on my agenda.” While the number of those with bruised credit seems to be exploding, in reality, there are several different factors contributing to the uptick of clients in the alternative lending space. “Ten years ago, we had 10 people in the alternative bucket,” Singh says. “Let’s say five of them had bruised credit; the other ones would have income challenges or other challenges outside of their credit. Now that pool has 50. So you still have the same number of credit-challenged people, but the other 40 people who have joined the alternative bucket are those who are businessfor-self.” While banks would have done business with BFS individuals prior to B-20 and B-21, the introduction of those regulations and the resulting tightening of loan restrictions on lenders has increased the pool. “The number of credit-challenged people continues to be the same – but those numbers are shrinking in relation to the size of the overall pool,” Singh says.

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Opening up the books One obstacle to correcting bruised credit issues is the clients themselves, who may be reluctant or too ashamed to share the details of a less-than-stellar credit history. “Clients with bruised credit will need some coaching,” Kosturos says. “It is important for the broker to take an active role in coaching clients and follow up on a regular basis. “Education is key for both the broker and the client,” he continues. “The broker has to know how to come up with a game plan, and the client has to understand what that means for his or her situation.” And for a broker, it can ultimately hurt their reputation with lenders, too, if deals are being rejected for a lack of accuracy. “Some clients try to hide things, and they

don’t realize that when they are working with a broker, we’re here to help them – not work against them,” Kosturos says. “We need to know the full picture ahead of time.” If not, it looks bad on the broker and the clients, and the bank could red-flag the deal. “In cases of alimony or support, brokers can often still get the deal done – but there needs to be full disclosure,” Kosturos says. “The banks keep track, and if you are not disclosing things, they are not going to do business with you. And that doesn’t help you as a broker, as that is one less lender that is available.” The message brokers need to send to clients is to rehabilitate their credit, Provencher says, a message that Bridgewater reinforces in its lending policies.

“For that reason we do not offer long-term alt-lending programs,” he says. “We offer one- to three-year terms, and for the most part, our focus is on that one- to two-year time horizon. By working with the broker and client, we try to determine that optimal time horizon. Typically one to two years should fix the credit.” Provencher says that because Bridgewater doesn’t offer prime lending products, they want the client “to move on to better.” “We want them to improve their situation and improve their rate,” he says. “What we’re saying is, ‘Work with your broker, heed their advice, and let’s try to fix this situation,’ and a year or two down the road, the broker will be able to offer more options with some prime lenders.”

www.mortgagebrokernews.ca

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PEOPLE

BROKER PROFILE

The journey from banker to broker Bank reps are often derided by brokers, but as Skye McLean explains, her early start at a Big Five player gave her the foundation to best serve her broker-channel clients

MORTGAGE SPECIALISTS at the banks often don’t have the best reputation in the broker channel. That’s a bit ironic considering just how many brokers got their start under the umbrella of a big bank. But Skye McLean, a mortgage associate with Axiom Mortgage Solutions in Calgary, is outspoken in acknowledging and celebrating her banking roots. In fact, that experience not only drew her to mortgages, but also provided her with the foundation of knowledge she now relies on to serve her clients. “The bank provided the base,” she says. “That was a good experience of working at the bank, and the longer I worked in the bank, the more experienced I got with credit.” While McLean says she always intended to get into the banking world, mortgages were hardly her end game. After studying finance at the Southern Alberta Institute of Technology, she found a job at TD Bank, intending to work her way to the investment side of the industry. “I liked the stock market, and I was interested in it,” McLean says of her mindset during her college years. “But I have no control of the stock market – you’re just buying stocks, and it goes up or down. With credit, you’re helping people – maybe first-time homebuyers – to purchase their own home.”

It’s easier as well, she adds. “With investments, you’re asking people for money, but with lending, people are asking you to source funds for them.” McLean had a knack for selling – she was the number-one sales rep at TD Bank in Calgary – and several of her colleagues encouraged her to pursue mortgages, particularly via TD’s internal mortgage team. But after watching several of her colleagues leave the bank to become mortgage brokers, McLean ultimately decided to become an independent broker. After all, what better time than the present? “I just decided that before I had kids, I wanted to make a move, and I had tons of credit at the bank, so I thought I’d give it a try,” she says. “If it didn’t work, I could always go back to the bank.” Her Plan B – returning to the bank – turned out to be an unnecessary precaution. She joined Atlantic Financial as a team lead at the company’s Calgary branch. However, she was confronted with a new challenge: building up her own client base. It took a lot of hard work, but finding prospective buyers and new clients wasn’t difficult. Between McLean’s strong foundational knowledge, strengthened during her time at TD Bank, and the relationships she fostered while there, she has been able to thrive in her business as a mortgage broker.

“With investments, you’re asking people for money, but with lending, people are asking you to source funds for them”

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OFF THE CLOCK When she’s not helping clients get the best mortgage available, McLean enjoys escaping from her desk to take in the beautiful Calgary landscape. “I like to do a lot of outdoor things, like traveling, skiing, going biking,” she says. McLean is also mom to two young children – five-year-old Caden and two-year-old Keira – so she often finds it tough to take time for her own hobbies. “On the weekends, my time is occupied with them and their activities,” she says.

“All the relationships in this industry are important,” she says. “Without those relationships, it’s hard to get sales and clients.” Now, when a former banking colleague has a client who doesn’t qualify for a conventional mortgage, they’ll send that client to McLean. Likewise, when McLean finds a prospective buyer whose needs will be best served by a traditional lender, she’ll often send them to her old friends at the bank. That strong client base certainly came in handy when Atlantic opted to close its Cowtown office. McLean interviewed several brokerages – the DLCs and the Vericos of Calgary – but a former business partner invited her to tour Axiom Mortgage Solutions, and it was there that she felt most at home. “If nothing had changed at Atlantic, I would have stayed there,” McLean says. “But I find the system is definitely better with Axiom than the smaller brokerages.” At Axiom, McLean is also able to revel in working with her clients over a longer period of time. She enjoys the opportunity to help clients with poor credit and little to no down payment realize their dreams of homeownership – albeit likely years down the line. “At the bank, we were kind of stuck – if we can’t get it done, we can’t get it done,” she says. “[As a broker], I work out a plan with them, and hopefully they build up their credit and save more down payment. If they can’t get a mortgage now, hopefully you can get if for them three or four years down the road.”

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FEATURES

TECHNOLOGY

Connecting to the industry’s leading technology Want to reach new customers? Then you need the right technology. From loan servicing software to mobile apps, here are the must-haves for today’s marketplace

IT’S EVOLVE or die in any industry, and the Canadian mortgage market is no different. In this case, evolution requires that professionals keep up-to-date with the latest technology that can help them originate deals as efficiently as possible. That’s especially true in a market that will soon depend in large part on Generation Y. But with so many tech offerings flooding the market, how is a broker supposed to navigate an increasingly confusing terrain?

Loan servicing software Jerry Delgado, CEO of Applied Business Software – which created the Mortgage Office – recently published a white paper on choosing the right loan servicing software – an important tool in any broker’s belt. According to Delgado, outdated software runs the risk of being legally outdated, lacking tech support and being prone to interruptions and database crashes.

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And when looking to implement new loan servicing software into your business practice, Delgado argues there are certain things that should be placed on every broker’s checklist.

“We’re helping the brokers to compete with larger organizations who pour millions of dollars into tech. We actually make it affordable” Ben Salami, Bendigi Technologies Effective loan servicing software should help brokers move toward a paperless office, not only to ultimately eliminate the need for hard-copy statements and notices, but also to facilitate electronic document storage, Delgado argues. It also should help manage growth and increase profitability. “[The technology should] present professional detailed report statements, charts for income, expenses, delinquencies. [It also should] run more efficiently and service more loans,” Delgado writes in his white paper, entitled “A Guide to Choosing the Right Loan Servicing Software.” Compliance is at the heart of any financial services business, and brokers, like all industry players, must ensure they work within the parameters set out by regulators. That can be difficult, considering compliance rules are constantly evolving. “With mounting regulations, getting audited is never fun,” Delgado writes. “Have loan servicing software that allows you to have all of your records at your fingertips for accuracy.” It also should stay up-to-date with compliance needs, and allow brokers to stay on top of ever-expanding regulations with the click of a button, Delgado says. The software also should make your job easier by cutting down on paperwork by seamlessly migrating and converting all your past data, while also integrating

Mortgage Administration and MIC Software Powerful, Flexible, and Easy to Use Increase productivity and accuracy Administer loans in any Province Service syndicated loans Manage MICs Support GST/HST Issue T5s, T3s, and GICs Attract more investors Enhanced reporting and forecasting Used by most lenders in Canada

800 . 833 . 3343 the mortgageoffice.com www.mortgagebrokernews.ca

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FEATURES

TECHNOLOGY

CANADIAN MORTGAGE APP FEATURES Total monthly home cost Canadian mortgage payment (variable or fixed) Various payment frequencies Canada Mortgage and Housing Corporation premium Purchase closing costs All Canadian provincial land transfer fees

Jerry Delgado, Applied Business Software

Includes first-time buyer rebates

lender payments effortlessly in seconds while improving security and safety,” he writes. The ideal loan servicing software will also make training new agents a breeze. “[It should come with] complete and up-to-date online help and documentation. Your investment should be further protected with on-site, off-site, classroom or web-based training,” Delgado writes. “A knowledgeable support team accessible via telephone, fax or e-mail is a requirement for success.”

Max loan with good or excellent credit scores Extra annual payments to save time and interest Advanced GDS / TDS calculator for professionals Languages: French, Chinese and Spanish Allows for roommate income entry Insurance premium estimation Allows slider and keyboard input Request for help from within the app Local experts with map Full amortization schedule to show you totals Share calculations via email Import calculations from email Beautiful graphs

crunch numbers instantly and has sophisticated cost analysis. It also has helped brokers earn leads. “Brokers and Realtors can list themselves on the app – it’s sort of like lead generation, but we connect clients directly to them,” Salami says.

“With mounting regulations, getting audited is never fun. Have loan servicing software that allows you to have all of your records at your fingertips for accuracy”

Municipal land transfer fees (65+ regions) New, innovative affordability calculator

QuickBooks to avoid unnecessary and errorprone double entry, according to Delgado. “[Your software should also] have electronic collection of borrower payments, direct deposit of funds to lenders and automated notifications sent via email – and process thousands of borrower and

Mobile apps While there are several invaluable pieces of technology in the broker marketplace, one company has founded its business on ready-made and custom apps for brokers. “The Canadian Mortgage App is the number-one-ranked mortgage app in Canada, and it’s ranked within the top 25 business apps,” says Ben Salami, CEO and founder of Bendigi Technologies, which developed the app. “It’s a consumer-facing app, and we have about 5,000 brokers using it right now.” That app has found success on IOS and Android and was recently launched on the BlackBerry platform. It helps brokers

Bendigi Technologies is a boutique software development firm based in Toronto and is primarily focused on mobile applications development for the financial services industry. Founded in 2013, Bendigi currently operates 25 apps for businesses of all sizes in the mortgage, real estate and insurance sectors. The company was recently featured on MortgageBrokerNews.ca for its custommade offerings. “We see the need for mortgage brokers to market their own custom mortgage apps to their existing and new clients, especially Gen Y,” Salami told MBN, “and we have addressed this need.” The app is part of a concerted effort “to further evolve finance with technology,” according to Salami. “We’re helping the brokers to compete with larger organizations who pour millions of dollars into tech. We actually make it affordable.” Bendigi has built apps for highly regarded brokers such as Colin Bruce of Dominion Lending Centres, Ron Butler of Butler Mortgage, Greg Martel of DLC, James Loewen of Loewen Group, as well as the Mortgage Intelligence LA Mortgage Team.

www.mortgagebrokernews.ca

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FEATURES

WORK/LIFE BALANCE

Stress: the silent assassin You work long hours and are often tired, stressed and overwhelmed. You just don’t have time to look after yourself. Sound familiar? Timo Topp provides some tips on work/life balance STRESS IS like a silent assassin. You don’t see it coming or know that it’s there, but it has you in a headlock, and before you know it, you’re on the mat. It has been stated that stress is the cause of 90% of illnesses. Your body tells you how well you are doing. You just need to be more aware of the signals it is sending you. They start off as minor warning signs, but if left unchecked or ignored, they progress to more serious health issues and ultimately life-threatening problems. You can manage your stress to feel and perform at your best with simple strategies performed on a daily, weekly and monthly basis.

Daily Daily strategies to minimize stress simply mean following the basics of health: • Drink plenty of water and limit coffee to two cups • Be more conscious of better breathing and breathe deeply into the abdomen, not just the upper chest • Eat healthy, fresh food instead of processed, quick, convenience food • Keep active – walk more and move more throughout the day

•

Weekly Invest a small amount of time in nurturing

• •

STRESS WARNING SIGNS

•

MINOR

MEDIUM

MAJOR

•

Headaches

Moodiness

Anxiety or depression

•

Muscle aches

Short temper

Feeling isolated, unsocial

Forgetfulness

Digestive problems

Behavioural issues

Poor concentration

Frequent ill health

Insomnia

Poor sleep patterns

Ongoing worry

No sex drive

Irritability

Drinking more alcohol

Racing heart rate

yourself and prioritizing some downtime: Exercise three to four times per week for 30-40 minutes Make a commitment to turn off your phone and emails at a set time each day Have one complete work-free day, e.g. Saturday Make time for friends and family, and make it equally as important as a work meeting Have a laugh – watch a funny movie or TV show Get outside into a local park for sunshine and fresh air

Monthly and beyond • Once a month, get a massage/bodywork treatment • Pursue a pastime that is purely for fun as opposed to achieving or attaining something • Once a month, get out into nature for a day to walk on the beach or hike in the woods

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PROACTIVE STEPS A new study reveals that stressed and micromanaged employees are more likely to call in sick. The study, which examined more than 7,000 middle-aged healthy people in Norway, found that those who work in stressful environments and are micromanaged by their bosses are more likely to take extended sick leave – defined as more than 16 days off in a row. Additionally, they are also more likely to experience chest pain, nausea and shortness of breath. According to the research results, one in every 15 cases of extended sick leave could be avoided if employers took steps to make their workplaces less stressful. Examples include: LOOSEN THE REINS Introduce small measures that give employees some control over their work, such as when they can take their breaks, or even just empower them so they can speak up about great ideas. A fresh perspective, or even taking suggestions from frontline employees, can result in more efficient and effective processes – resulting in less stress for everyone. • Every 90 days, get out of town for a long weekend • Once a year, take a vacation for two weeks or more

Schedule your ‘me plan’ The key to managing yourself and handling stress is to prioritize ‘you’ by developing a ‘me plan.’ This is a plan that includes a selection of the strategies mentioned above. Don’t just leave it to chance; book the strategies into your schedule like any other important appointment. If something comes up, reschedule it. Isn’t that a worthy investment for a significant return?

SLEEP YOUR WAY TO SUCCESS Develop a sleep routine. Go to bed at a similar time each night One hour before bed, avoid work, computers and TV Dim lights and/or use candles Write down thoughts so they aren’t in your head Sleep in a completely dark room with a window slightly open for fresh air Do some deep, meditative breathing

Timo Topp is founder of Well for Work, which helps busy professionals feel better and work more productively with simple and feasible strategies they can do at their desks. Visit wellforwork.com.

If you cannot sleep, get up, read a book for 15 minutes in a different room and return to bed

PROVIDE SOME DOWNTIME Setting a time for employees to put down work and interact with each other not only gives them an opportunity to de-stress, it helps develop workplace relationships. For example, when Anthony Merlin, managing director of architectural firm i2C, converted an old pub into his firm’s office, he included breakout areas in the renovations. EDUCATE MANAGEMENT Provide team leaders with basic training in identifying the signs of stress. Law firm Holding Redlich is one example of an employer that has positioned employee well-being at the heart of its EVP. The company promotes health and wellbeing programs for all employees, and hosts regular mental health, stress and burnout presentations.

www.mortgagebrokernews.ca

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FEATURES

MARKETING

Making movies: 10 things to avoid Video can be a great way to engage customers, and these days it costs very little. Video expert Geoff Anderson points out some mistakes to avoid VIDEO IS one of the most powerful and accessible tools we have in business today. When it is done well, it builds community, creates rapport and enhances your brand. However, when it is done poorly, it can turn away followers and customers and create brand damage. Here are 10 mistakes to avoid when making videos for your business.

No clear audience

As with any marketing activity, it is critical to be clear on who your audience is. Don’t try to be everything to all people. If you do this, your message will get lost and have little meaning. By being clear on your audience, you can target your message in a way that truly resonates. If you struggle with your target audience, think about who you would like to be writing a loan for after seeing the video. If you have a niche for your brokerage, then be clear about it.

An unfocused message

The clearer you can be about why you are making the video, the easier it will be to

focus your message. What is the action or message you want the viewer to take away after watching your video? Keep coming back to this as you draft your scripts and think, “Is this relevant or helpful for my intended audience?”

Too much information

The days of getting 10 or 15 minutes of your audience’s time to watch your video have passed. The key now is to keep the content concise and valuable, which goes back to the purpose of your video. For example, if the purpose is to encourage people to visit your booth at the next industry event or call you to discuss their mortgage requirements, then find ways to get to that point quickly and clearly. Sometimes too much information ends up turning people away, or worse – boring them.

Facts instead of emotion

You might be offering the best rates or customer service, but how can you make this information resonate with your audience? Does it mean they can have less stress on their repayments and be able to move into their new home knowing they can afford

it? Focus on the emotional needs of your audience and how you can satisfy them. Keep asking yourself – why does this feature matter to my customer? You can connect with people at an emotional level when you focus on how they will feel and benefit as a result of using your services. Leave the weighty details on your website for those who really need to know.

Too much emphasis on you

Keep the focus of your video on the viewer and how your work can help them rather than focusing on yourself. If you find yourself talking about we and I, stop and think about how you can shift it to ‘how you will benefit from these rates.’ If you focus more on what’s important for your customer, you are more likely to keep them engaged.

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sure you hold the camera in landscape mode. If you shoot in portrait aspect, you will end up with a thin image with black bars on either side. Also avoid using the zoom; this will just reduce the quality of the recording – instead, stand closer to the device to fill the frame.

Uninteresting or distracting background

Be aware of what is in the background of the shot, as this will form part of the story you are telling. Avoid filming people up against walls, which creates shadows and looks uninteresting and flat. The more depth you can have in the picture, the better, and a background provides an opportunity to show some additional information that can enhance the character of the presenter or the information you’re sharing.

As with any marketing activity, it is critical to be clear on who your audience is. Don’t try to be everything to all people 6

Poor audio

Viewers will put up with rough visuals, but they won’t forgive poor sound. No matter what camera you are using, make sure you connect a suitable microphone to it. Ideally, you want to have a camera that allows you to monitor the sound as it is being recorded. That way you can check if there are any rubbing noises or buzzing that could be affecting the quality of the audio. If you can’t plug in headphones while you record, then do a test recording first and listen back to check the quality. Even if you’re shooting on a smartphone, there are plenty of microphones you can get to ensure the audio sounds right. These include a shotgun, lapel or a handheld microphone.

Badly framed

When filming people, make sure you put the top of their head at the top of the frame. Many newbies look through the camera and put the face in the middle of the screen. This results in empty space above the head. Learn to look through the viewfinder as if it is a framed picture on the wall. Generally, if someone is talking directly to camera, make sure they are centred in the frame. The only time you might play with this is if you want to use the space on the side to add extra information, such as text points. If you are interviewing someone on camera, ensure you give a little space for ‘talking room.’ If you are using your smartphone for filming, then please, please, please make

Wobbly cam

Using cheap technology to impress

A tripod is a must for newbies to avoid shaky hands and wobbly video. You can even get holders for mobile phones that will ensure your shot is steady. Unexplained camera movement distracts the viewer and dilutes the impact of your message.

Cheap and easily accessible devices such as mobile phones are a way to stay connected with your community. However, I wouldn’t recommend trying anything too tricky or impressive using a phone camera, such as a promotional video or green screen effects. Better-quality lenses, image sensors and audio will give you a better result for that sort of stuff. Talk to the professionals. Keep the DIY content for maintaining rapport with existing customers. If you are looking to use video to attract new customers, then spend the time and money to work with professionals. Geoff Anderson is a video producer and owner of Sonic Sight, a corporate video production company. He is also the author of the Amazon bestseller Shoot Me Now: Making Videos to Boost Business. Visit www.sonicsight.com.au.

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Trevor Biggs, Associate Publisher KMI 416 644 8740 x 236 trevor.biggs@kmimedia.ca 12/08/2015 8:19:55 AM

PEOPLE

CAREER PATH

INTO THE WILD Real estate, mortgages – and bears? Susan Zanders has dedicated her career to helping homebuyers and black bears alike 2013

2011

BECOMES A RADIO HOST

BEGINS OFFERING CRITTER CARE MORTGAGES

Zanders was invited to host a radio show with Allan Krueger, called Port Moody Radio New Home Show, where they chat about green homes, mortgages – and yes, even bears. She initially wasn’t sure if she wanted to participate, but she’s glad she took the leap

Moving to Port Moody put Zanders in close contact with the bear population there, and she soon became impassioned about helping the furry critters – she even has a bear awareness section on her website. In 2011, Zanders began offering Critter Care mortgages – $100 from each mortgage goes to the Critter Care Wildlife Society in Langley

2006

INCORPORATES VERICO ZANDERS Zanders began shopping around at different offices. She met with a range of brokerages and decided Verico was the best fit for her. She incorporated her business, and Verico Zanders was born “The appeal was control of my business. I’m ultimately my own boss; I’m responsible for whether my business succeeds or fails. I like taking ownership of it”

1998

JOINS CIBC AS A MORTGAGE BROKER Zanders got her first taste of mortgage brokering while working at project sales centres, where she pre-qualified interested parties. The experience eventually spurred her to become a mortgage broker at CIBC “I was getting to the end of the sales cycle. I was looking for a new challenge” . Zanders was working in a hair salon and spa when she decided to attend the University of British Columbia. In 1993, she earned her real estate and mortgage brokering licences from the Real Estate Council of British Columbia and joined Re/Max shortly thereafter

“It’s all the things I have a passion for, including mortgages. You have to love what you do and have a passion for it, and tie it together” 2000

MOVES TO PORT MOODY, BC Zanders was still working at CIBC when she moved from Coquitlam to Port Moody with her husband and daughter. Frustrated that she couldn’t offer her clients the best service with the limited bank products available, Zanders decided to join Invis. After six years in that role, she made another key change

1996

BEGINS WORKING AS A PROJECT SALESPERSON

1993

BECOMES A REAL ESTATE SALES REP WITH RE/MAX

After three years with Re/Max, Zanders decided to try her hand at project sales for some of the region’s top developers. With five offers on the table, Zanders chose to work with Polygon on a project in Coquitlam. A year later, she joined Fifth Avenue Marketing at their project in Whiterock

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PEOPLE

OTHER LIFE

SINK OR SWIM Jason Hall reflects on the need for taking calculated risks – on land and under the sea

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

RISK IS inherent in scuba diving: You’re jumping into unknown waters with just your training and your experience to support you. And as Jason Hall, a mortgage agent with DLC Forest City Funding in Toronto, points out, the risk of jumping into the unknown is also intrinsic in business, though the waters are more metaphorical. “It’s never easy to work for yourself,” Hall says, pointing to the need for continuing education. “It’s a long

Width, in feet, of the sea turtle Hall once encountered

upward battle, and you continue to push yourself. And with scuba diving, you have to train in the off season to make sure you’re in shape to go during the [diving] season.” Hall began scuba diving about eight years ago, two years after joining the mortgage industry. He tries to find his way down south to dive twice a year, usually in the fall or winter, and uses his time underwater to reflect on his business. “It’s a bit of a balance – a therapeutic way to relieve stress.”

Deepest dive, in metres, Hall has completed

Longest dive, in minutes, Hall has completed

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