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YOUNG GUNS These 50 rising stars share their thoughts about where the mortgage industry is going – and how they’re going to get it there
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YOUNG GUNS COVER STORY
Meet the 50 young stars who are helping to shepherd the Canadian mortgage industry into a new era
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CONTENTS
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UPFRONT 04 Editorial
The end of a self-regulation era in BC real estate
10 UPFRONT
NEWS ANALYSIS
FEATURES
44
How will changes to BC’s real estate industry affect its scorching property market?
PEOPLE
18
08 Head to head
The new Beacon 9.0 score: yay or nay?
12 Investment update
How Brexit might impact Canadian real estate
14 Broker update
What will make mortgage industry careers more attractive to millennials?
BROKER INSIGHT
The Mortgage Centre’s Eddy Cocciollo weighs in on the DLC acquisition, regulations and the threat of automation
Exploring the uneven terrain of Canada’s housing market
16 Opinion
50
INDUSTRY ICON
06 Statistics
One generation is currently dominating the cottage market
Brokers who write off clients with less-than-stellar credit scores are missing out on a potentially lucrative source of business
WHY IT PAYS TO HELP A CLIENT IN NEED
T
PEOPLE
Sarah Makhomet reveals how her Bay Street background has helped drive her success in the mortgage industry
PEOPLE 54 Career path
Dale Koeller mixes the personal and political in his job as a broker
56 Other life
Andrea Morris earns her racing stripes
52 FEATURES
HOW WINNING PARTNERSHIPS CREATE SUCCESS A new product from HomEquity Bank is expanding the options brokers have at their disposal
2
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UPFRONT
EDITORIAL
BC’s real estate industry in flux
A
fter months – nay, years – of complaints coming out of British Columbia regarding its real estate industry, changes finally seem afoot. Whether these changes will be good or bad remains to be seen, but many industry players admit the time had finally come. An independent panel appointed to review BC’s real estate industry released a report in late June replete with 28 recommendations aimed at protecting consumers. Those recommendations are expected to materially alter how the industry is regulated. “Alleged misconduct, combined with the perception that the Real Estate Council is unable or unwilling to take strong action to address it, has resulted in a loss of public trust,” the report said. A day after the report was released, Premier Christy Clark announced that the province’s real estate industry will no longer regulate itself. The Real
“The real estate sector has had 10 years to get it right on self-regulation, and they haven’t” Estate Council of BC’s regulatory powers will be transferred to a fledgling superintendent of real estate. “The real estate sector has had 10 years to get it right on self-regulation, and they haven’t,” Clark said at a Vancouver news conference in late June. “The point of regulation is to protect people, to protect consumers. Self-regulation is a privilege.” And it seems, at least according to the panel and Clark, that the Real Estate Council of BC abused that privilege. Meanwhile, industry professionals wait with bated breath to see what, if any, impact these changes will have on the red-hot market on the West Coast. The team at Canadian Mortgage Professional
www.mortgagebrokernews.ca ISSUE 11.07 EDITORIAL Editor Justin da Rosa Writers Joe Rosengarten Libby Macdonald Ephraim Vecina David Keelaghan Executive Editor – Special Features Ryan Smith Copy Editor Clare Alexander
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UPFRONT
STATISTICS
A tale of two extremes
STARTS STEADY COUNTRY-WIDE While the big picture shows a stable rate of housing starts across the nation, data gathered by CMHC for the period between January and May in 2015 and 2016 also reveals a sharp polarity between areas that are booming and those in retreat.
The numbers around sales, starts and vacancies paint a picture of a country sharply divided between soaring and plummeting markets
Alberta 2015
THE OVERALL picture of Canada’s market is one of stability, but that interpretation discounts the distorting effects of jagged extremes visible across the nation. Resource-dependent provinces – particularly Alberta, Saskatchewan and Newfoundland & Labrador – display persistently soft markets, congruent with the downturn in oil, which in turn is reflected in a precipitous drop-off in housing starts and a marked
increase in vacancy rates. The reversal of fortune experienced by these once-powerhouse provinces stands in stark contrast with the enduring red-hot market on the West Coast, which has posted extraordinary upticks in housing starts and near-zero vacancy rates. Ontario, meanwhile, is limited in at least some markets by the lack of supply – while demand remains strong, the dearth of supply is expected to act as a brake on sales activity.
2016 Change
British Columbia 2015 2016
THE PROBLEMS PLAGUING VANCOUVER
Change
11,274 16,320 45%
Saskatoon 2015
4.8%
10,800
Non-occupancy rate of housing units in Vancouver
Number of units that have been empty for a year or more
90%
2016
1%
Percentage of empty units that were condos and apartments
14,923 8,545 -43%
Percentage of empty singlefamily and duplex properties
Change
1,628 1,355 -17%
Source: Vancouver Affordable Housing Agency, February 2016
NEW HOUSING REMAINS UNSOLD The nationwide figures for unabsorbed housing – that is, stock that is yet to be sold or rented after completion – are slowly decreasing, but up from the same time last year. NEW & UNABSORBED SINGLES AND SEMIS
4.6%
7,000
Soaring vacancy rates in the cities most impacted by the vagaries of a resource-backed economy stand in stark contrast to the ultra-tight vacancy rates clustered in the most in-demand markets. RENTAL VACANCY RATE 10%
October 2014 October 2015
8%
7,500
3.8%
A FULL SPECTRUM OF VACANCY RATES
6%
1.9% 4%
Source: Housing Now Tables, CMHC, June 2016
6
St. John’s
Halifax
Moncton
Quebec
Montréal
Windsor
Ottawa
Toronto
Winnipeg
Regina
Edmonton
Charlottetown
May 2016
Saint John
April 2016
Saskatoon
March 2016
Calgary
6,000
0%
Vancouver
Change from previous year
Victoria
2% 6,500
Source: Rental Market Statistics, CMHC, Fall 2015
www.mortgagebrokernews.ca
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Quebec 2015 2016 Change
Manitoba
9,749 11,172 15%
Newfoundland 2015 2016 Change
1,722 1,524 -11%
2015 2016 Change
348 269 -23%
Prince Edward Island 2015 2016 Change
Ontario 2015 2016 Change
New Brunswick
23,893 25,562 7%
2015 2016 Change
91 152 67%
Nova Scotia
215 338 57%
2015 2016 Change
1,066 822 -23%
METROPOLITAN AREAS
2015
2016
CHANGE
Victoria
845
1,109
31%
Vancouver
7,767
11,843
52%
Calgary
5,012
3,030
-40%
Edmonton
8,004
4,061
-49%
Saskatoon
948
730
-23%
Regina
515
417
-19%
Winnipeg
1,569
1,398
-11%
Toronto
16,505 15,433
-6%
OttawaGatineau
1,825
2,275
25%
Windsor
257
446
74%
Montreal
4,559
6,041
33%
Quebec
2029
1592
-22%
Saint John
23
43
87%
Moncton
124
118
-5%
Halifax
810
654
-19%
St. John’s
312
231
-26% Source: CMHC, June 2016
A RETURN TO MODERATION?
ONLY SO MANY HOUSES
While recent sales activity forecasts continue to paint a picture of markets both hot and cold, experts predict that things will begin to trend back toward the centre by the end of 2016.
Inventory levels continue to shrink across the country, most notably in BC and Ontario, where the number of units available for sale has dipped to multi-year lows.
ANNUAL % CHANGE
British Columbia Alberta Saskatchewan Manitoba Ontario Quebec New Brunswick Nova Scotia Prince Edward Island Newfoundland
2015 22% -21.30% -10.70% 1.70% 9.60% 5.00% 6.50% 3.10% 20.70% 3.70%
2016 20% -11.50% -4.00% 7.10% 5.20% 5.10% -0.50% 5.80% 15.90% -1.00% Source: Canadian Real Estate Association, June 2016
6.4 5.6
5.5
Jan. 2015
April 2015
July 2015
5.5
Oct. 2015
5.2
4.7
Jan. 2016
May 2016
NATIONAL MONTHS OF INVENTORY Source: CREA, June 2016
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UPFRONT
HEAD TO HEAD
Is Equifax’s new credit score good or bad? The inclusion of previously unused information in the newly released Beacon 9.0 score has proven to be a game-changer
Arash Fazelipour President and broker MyTerms.ca Financial
“What is needed and has been needed for quite some time is a shift in focus by all industry players in educating borrowers on sound credit utilization. Over the years, we have found that the common denominator among borrowers with weak credit scores and poor credit history has been a lack of knowledge and awareness about the factors and behaviours that have attributed to their situation. With tougher guidelines in place, it is crucial to educate clients about the importance of their credit rating. A commitment from the industry as a whole is necessary to make these changes a win-win for all.”
James Wood
Ron Butler
Mortgage professional Invis
Mortgage broker Butler Mortgage
“Overall, I believe Beacon 9.0 will be a good tool in the mortgage industry. Change is constant. Beacon 9.0 is here to stay; as brokers, we need to embrace the change. Many of the changes are improvements over the old system. Treating lines of credit differently than other credit instruments such as credit cards is a positive change. The enhanced de-duplication window, lengthened from 14 to 45 days, is fairer for consumers. Using telco trades helps those new to credit to generate scores. Predictions should be more reliable, and those with strong credit will have high scores.”
“The truth of Beacon 9.0 is that clients close to their trade line limits or creeping closer to their limits are negatively affected. Mortgage brokers are experiencing the new phenomenon of seeing Beacon scores of 825, 845, 890, but these high scores are pointless in the mortgage world. Once a Beacon score is over 760, no one cares except the client. Conversely, scores that previously were just over 700, where the consumer had high trade line utilization, dropped below 650. For mortgage brokers, who prefer the highest number of clients to get over a 680 Beacon score, this is not good news.”
CHANGING THE SCORE Beacon 9.0, Equifax’s newly released credit scoring system, brings with it a change in algorithm that incorporates mortgage data in the calculation for the first time. Also newly factored in are telco trades, in a move that appreciably expands what Equifax calls the ‘scorable population.’ This factor alone draws in new Canadians and those with thinner files. Beacon 9.0 also boasts a greater de-duplication window, so a cluster of credit checks accumulated by consumers shopping for big-ticket items such as cars or homes will be grouped within a 45-day window rather than a two-week one.
8 www.mortgagebrokernews.ca
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UPFRONT
NEWS ANALYSIS
Changes coming to BC real estate industry An independent panel has suggested major overhauls to the country’s hottest real estate market – and many industry professionals say it’s about time BRITISH COLUMBIA real estate has been making headlines for the past few years, due mostly to the seemingly endless price growth in its largest city, Vancouver. But it’s another – somewhat related – story that has caught the eyes of mortgage brokers and other industry professionals alike: A report from an independent panel charged with reviewing the province’s real estate industry has led to the end of the industry’s self-regulation.
group, which was tasked with restoring consumer confidence in the real estate industry. The group made 28 recommendations for doing so, including levying sizable fines for misconduct. According to Clark, the government plans to implement many of the report’s recommendations, in addition to replacing a majority of the members on the BC Real Estate Council with people from outside of the industry.
“Almost every Realtor in the province will be happy to see stronger penalties and enforcement for rule-breakers” Deanna Horn, BC Real Estate Association It’s a move that Premier Christy Clark said is aimed at protecting consumers. Clark has announced that the province will hire a new superintendent of real estate to take over the BC Real Estate Council’s rulemaking authority. Clark’s announcement was prompted by the report from the independent advisory
10
But how much of a difference will the changes really make? “I don’t really see any fundamental change, ultimately,” says Dustan Woodhouse, a BC-based mortgage broker. “Whether you’re self-regulated or regulated by an outside party, I think the challenge is the outside party sometimes has a more difficult time
putting their finger on issues. On the other side, when you’re self-regulated, the thought is you may not be doing enough. Will a government regulator take more action? Maybe – time will tell.” According to Woodhouse, self-regulation in other industries has resulted in greater disciplinary measures. He also argues this change will not have any major impact on housing prices, which continue to be one of the major concerns for those in Canada’s westernmost province. For its part, the British Columbia Real Estate Association says it welcomes the change. “The vast majority of the 20,000 Realtors in BC do the right thing, and we welcome a dedicated superintendent of real estate to improve consumer protection in real estate transactions,” says British Columbia Real Estate Association president Deanna Horn. “Our livelihoods depend on our reputations, and I know that almost every Realtor
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REGULATION BY PROVINCE SELF-REGULATED Alberta Saskatchewan Ontario Quebec Nova Scotia GOVERNMENT-REGULATED Manitoba PEI Newfoundland & Labrador Northwest Territories Yukon Nunavut CO-REGULATED (BOTH GOVERNMENT AND REAL ESTATE ASSOCIATION) New Brunswick CURRENTLY SELF-REGULATED, SOON TO BE GOVERNMENTREGULATED British Columbia in the province will be happy to see stronger penalties and enforcement for rule-breakers.” That’s an assessment Woodhouse agrees with. “I would also say the overwhelming majority of Realtors are all hard-working,
down on dual agency – or the practice of one agent representing both the buyer and the seller in a transaction. In Woodhouse’s view, that’s a positive and necessary change. “I say to clients all the time, this is like you
“There’s a certain proportion of bad apples in every barrel. It’s good they are trying to more aggressively weed them out” Dustan Woodhouse, Dominion Lending Centres Canadian Mortgage Experts honest people who want to do right by their clients,” he says. “Real estate is just like every other industry in our country. There’s a certain proportion of bad apples in every barrel. It’s good they are trying to more aggressively weed them out.” The one major change to come out of the independent review was the promise to crack
walking into a courtroom to do litigious battle with somebody, and you’re going to use their lawyer to represent you,” he says. “I would suggest a skilled buyer’s agent would negotiate either a better price or more favourable conditions or ask questions that the novice buyer will not even know to ask that will far outweigh the half a commission that a dual agency
commission might be kicked back to a buyer.” A dual-agency Realtor is beholden to the seller, he adds. “At the end of the day, that’s who’s paying the bill. The seller is the one who is paying the Realtor. And the Realtor can’t truly negotiate on a buyer’s behalf while simultaneously negotiating for the highest possible price. How can one person wear both those hats? It’s fundamentally not possible.” Still, despite the changes, Woodhouse believes agents will still be unfairly shouldered with some of the blame for what’s going on with prices in Vancouver. “I think the bigger challenge, right now, is it’s all about optics,” he says. “There seems to be the suggestion that Realtors have played a role in driving house prices up. How? The agents didn’t control the market rising. Real estate agents don’t have some dark magic that allows them to increase the price of homes; the market controls the value of property.”
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UPFRONT
INVESTMENT UPDATE NEWS BRIEFS Scotiabank teams up with Fintech startup Scotiabank and Atlanta-based Fintech startup Kabbage are collaborating to offer small business loans of up to $100,000 to consumers in Canada and Mexico. Kabbage’s platform uses data analytics to compile credit reports within minutes, thus allowing wouldbe borrowers to conduct transactions without the hassle of paperwork or a bank branch visit. “What we’ve found is that going to somebody who has already thought through the customer experience is a great way to get to market a lot faster,” said Scotiabank Digital Factory head Jeff Marshall.
Leading markets’ gains mask widespread slump
Continuous price growth in Canada’s most in-demand metropolitan markets is only obscuring the housing downturn in other cities, warns Real Estate Investment Network senior analyst Don Campbell. While Vancouver and Toronto home prices grew by more than 10% month-over-month in May, Campbell argued that the recent declines in Calgary, Edmonton, Halifax and Quebec City are more representative of the overall market, which is teetering on the edge between stability and meltdown due to floundering provincial economies. “[We] will see housing really start to slow down,” Campbell predicted.
Vancouver mayor pushes for vacant-home tax Vancouver mayor Gregor Robertson is planning to implement a new tax on vacant residential properties, treating them as business investments in an attempt to cool down out-of-control
price growth. Robertson said the city will craft its own regulatory regime governing empty investment houses – many of which are owned by foreign nationals – should the British Columbia government not provide any backing for the initiative. “We are going to make sure that those who treat housing as a business are treated and taxed accordingly for that use,” Robertson said.
Home construction outpaces price growth
A Statistics Canada report released late June revealed that condo construction investment in Vancouver grew by almost 49% year-over-year, while Toronto saw a 28% increase in the category over the same period. Detached property construction investment also rose by 17.2% in Vancouver and 37.3% in Toronto. The numbers significantly overtook yearover-year price growth in the two cities (around 30% in Vancouver and 15% in Toronto). The boom could be Canadian builders’ long-delayed response to inflamed demand, the report noted.
Brexit could stimulate investment activity
The UK’s departure from the EU would make real estate investments less volatile due to expected low rates postBrexit, according to Pierre Pequegnat of Mortgage Alliance. “As Brexit and economic concerns have heightened short- and long-term uncertainty, investors are now more likely to maintain above-average interest in North American markets,” Pequegnat said. “Coupled with low interest rates, opportunities will arise for financially agile deal-makers and investors who know how to properly analyze real estate opportunities based on lessee quality and community health factors.”
What does Brexit mean for Canada? Canadian real estate will not emerge unscathed from the post-Brexit turmoil, warns DLC’s chief economist What impact Britain’s decision to leave the EU will have on the Canadian real estate market is the industry question of the moment, and it’s one Dominion Lending Centres chief economist Dr. Sherry Cooper addressed on her blog shortly after the historic vote on June 23. In her post, Cooper said the most visible consequence will be prolonged uncertainty in global markets. “Stock markets around the world are reeling – the British pound has taken an unprecedented nosedive; commodity prices, with the exception of gold, are plunging; and interest rates are falling sharply,” Cooper wrote. “Banks and insurance companies are hardest hit, but businesses worldwide that do business in the UK or in Europe are faced with disturbing questions that could take months or years to answer. Moreover, hedge funds and other investors around the world that have been caught on the wrong side of this trade are scrambling, which likely portends a sell-off in risky [assets].” Cooper predicted that another immediate impact would be strong downward pressure on interest rates worldwide. “Not only will the Bank of England and the European Central Bank ease further, so will central banks in Switzerland and Japan,” she wrote. “The Fed, which was widely expected to hike interest rates once again in September, will likely remain on the sidelines.”
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Cooper lamented what she called “a vivid indication” of growing isolationism and ultra-nationalism, fuelled by demagogues worldwide. “The broad middle class in all countries have been squeezed by forces that have pushed production to cheap-labour emerging economies or have replaced their jobs by technology,” Cooper wrote, adding that the ensuing economic stagnation has fed into xenophobic scapegoating in a seemingly intractable cycle. While the political ramifications appear to be insoluble for the moment, investors
“While Brexit is not good for our economy, the negative impact will be relatively muted” should try their best to keep a cool head and avoid falling into the trap of panic selling, Cooper advised. “It is a buying opportunity for longer-term investors. At the same time, do not try to time markets. No one can pick the bottom, and market timing never works. Canadians who have some dry powder should consider buying their favourite stocks as they are sideswiped by the British vote. “While [Brexit] is not good for our economy, the negative impact will be relatively muted,” Cooper concluded. “Nevertheless, financial turmoil and uncertainty will continue for some time, which is never good for confidence, and therefore risk-taking and spending.”
Q&A
Calum Ross
Foreign money is “a really good sign”
Wealth planner and mortgage broker CALUM ROSS MORTGAGE
Years in the industry 15 Fast fact Ross has personally funded more than 6,000 mortgages totalling more than $2 billion
Based on your transactions with consumers who are eyeing high-end real estate in Toronto, how are domestic buyers dealing with competition from foreign nationals? Rich people generally understand global supply and demand and how it relates to real estate markets. Neither my rich clients, nor many other people, feel sorry for people who get outbid on multimillion-dollar homes. I have a high degree of confidence that the multi-millionaire market segment will be just fine. Don’t spend too much time worrying about them – they aren’t worried! In your view, to what degree is foreign money influencing the housing sector? There is not enough detailed and thorough data on this for anyone to answer with any real degree of intelligence. Anyone who comments on this is simply making too many improperly qualified assumptions, which won’t serve anyone well to spend time analyzing. What do you think the effects would be of extra taxation on foreign buyers – for instance, a business tax on unoccupied homes used as investment properties, as proposed by Vancouver? One thing that people tend to forget is that ‘he or she who has the gold makes the rules.’ When you tax the rich, you run the risk of making it less appealing for them to park their wealth in Canada’s real estate. Wealthy people have lots of options for their money, and I personally don’t think deterring investment into Canada is a prudent long-term idea. Cities such as London, New York and Miami have been dealing with foreign buyers bidding up prices for decades. This is not a new phenomenon – it’s a relatively new Canadian issue. The reality is that our cities being on the global radar is a compliment to our stable social, political and economic environment. Homeownership is not a right – it’s a privilege … and many simply won’t be able to afford big-city living, just like in many other global world class cities. I think people need to celebrate the victory in this instead of looking solely at the negative side. Last time I checked, the global elite wanting to own real estate here is a really good sign.
“Wealthy people have lots of options for their money, and I personally don’t think deterring investment into Canada is a prudent long-term idea” www.mortgagebrokernews.ca
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14/07/2016 12:51:58 PM
UPFRONT
BROKER UPDATE
Gen Xers buying more cottages Generation X is snapping up cottages at a rate more than twice that of other generations
despite the trends observed in residential real estate markets, foreign nationals comprise a relatively minute fraction of deals in the recreational segment in Canada – only 10% or fewer of cottage purchases. The report revealed that most of the overseas buyers hail from the US. “We Canadians enjoy a wonderful recreational real estate reciprocity with our American cousins,” Soper said. “Like flocks of happy geese, we fly south in the winter, and in return, Americans head to the beautiful north country when summer arrives. Canadians have been, for years, the principal foreign buyers
“This cohort is making recreational property purchases ... as a key strategy for retirement”
A recent survey by Royal LePage found that members of Generation X – those between the ages of 36 and 51 – are the most active buyers of recreational real estate in Canada, exceeding the number of transactions made by all other segments by at least two times over. The real estate franchise said in its June 23 statement that, according to recreational property experts across the country, Gen X buyers are purchasing twice as many Canadian cottages as the next most active group, Baby Boomers. Retirement plans and vacations are the most frequently cited reasons for the
NEWS BRIEFS
purchases, Royal LePage said. “This cohort, having reached a place of stability, and often owners of primary residences in the country’s city centres, is making recreational property purchases for family enjoyment in the near-term and as a key strategy for retirement,” said Royal LePage president and CEO Phil Soper. Soper said the profile of the typical Gen X buyer is a couple with offspring who are looking for a place to settle down as the children begin their education. The Royal LePage survey also revealed that,
First-time buyers worst off in down payment hike
The proposed increase of 5% to 10% in the minimum down payment for government-insured mortgages would only make things harder for first-time buyers, according to Canada Guaranty president Andrew Charles. Charles argued that a hike would not be appropriate in the current economic climate, where 30% of consumers are first-time buyers already wrestling with the cost of living. “Further penalizing the first-time home buyer does zero or has minimal impact on price valuations in [Vancouver and Toronto],” Charles said.
of sunbelt property in states like Florida and Arizona, while a lower Canadian dollar has encouraged a new wave of US buyers here.” Among Canada’s most enticing features for foreign buyers are its quality of life, its geography and the generous exchange rate, all of which are major factors for cottage buyers. “Canada’s extended low-interest-rate environment has clearly provided buyers with the confidence they need to invest in a cottage or cabin,” Soper said. “Buying a property on a lakefront or mountainside is much less about interest rates and more about enhancing lifestyle. Cash savings trump mortgage financing when it comes to how people are acquiring recreational property.”
Foreigners already staying put before buying
Instead of purchasing from a distance, foreign buyers are already residing in Canada’s most in-demand housing markets, Ontario-based Realtor Huang Yu told The Globe and Mail. Yu noted that many of the foreign nationals he deals with are mainly buying homes to ensure continuity in their children’s education. He cited one of his recently completed deals, where Chinese buyers paid nearly $1 million more than the asking price of a Richmond Hill home; the buyers plan to send their children to the renowned Bayview Secondary School.
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Q&A
Phil McDowell
Calgary mortgage segment in focus
Mortgage broker MORTGAGE ALLIANCE/ MORTGAGES ARE MARVELLOUS
Fast fact McDowell is a director and treasurer of the AMBA, as well as a subject matter expert for AMBA/AREA/RECA
Based on your recent transactions, how are buyers in Calgary dealing with the costs of living, considering the economic effects of weak oil prices on Alberta? As Calgary brokers, we all have anecdotal evidence of files dying because of job loss or recent income reduction, applicants’ belief that prices will decline and so they won’t yet buy, and applicants who are not able to refinance because home prices have not risen sufficiently to make their home a source of low-cost, long amortized debt. However, in 2016, the average loan is $359,931, compared to $336,417 in 2014, and primary and co-applicant income average is $105,998 versus $110,398 in 2014. Our average applicants have had a slight drop of income of just over 2% per annum, but this has not deterred them from seeking mortgage debt. Meanwhile, Calgary MLS sales year-to-date are lower than same period last year, but average/ median prices are holding value. There are fewer buyers willing to make a buying decision, and sellers in the price ranges our average applicants seek are not discounting home values. It’s a stand-off in many cases. This has allowed refinances and conventional switches to proceed in most cases.
What are the unique challenges that mortgage brokers in Calgary face? The biggest challenge for a Calgary broker is there are fewer real estate buyers now, and any applicant who remotely relies on oil & gas for employment will require
Canadian mortgage industry could lose $12 billion
According to a recent analysis by Moody’s Investors Service in the Financial Post, the “systemic vulnerabilities” inherent in the Canadian mortgage system would induce strong downward pressure on prices that would lead to nearly $12 billion in losses should the country plunge into a US-style financial crisis. The vulnerabilities stem from the fact that nearly 90% of the country’s mortgages originated from banks or co-operatives, and that Canada’s six biggest banks currently hold around 75% of outstanding mortgage debt.
more due diligence for income. Reviewing declines, the three highest categories of job types representing declines in 2016 are professionals at 44%, trades at 19% and self-employed at 18% (compared to 2014, which was professionals at 36%, trades at 19% and self-employed at 16%). The professionals decline ratio is to be expected for a city that is known as a head office centre for the oil & gas industry.
Recent numbers from Statistics Canada showed steady population growth in Alberta. Based on your transactions, has this development influenced the type of buyers you’re working with? The type of buyers we work with in Calgary has not changed, especially seeing the split of owner-occupied to rental staying the same for 2016 as it was for 2014 (at 86% and 14%, respectively), regardless of the purpose of the mortgage. A focus on finding the first-time buyer is still highly valuable, but it doesn’t have potential for growth. Keeping in touch with your mortgage database and seeking external refinance and switch opportunities has been our growth opportunity. For 2016, brokerage closed volume is composed of purchase financing at 65%, refinance at 27% and straight switch at 8%, averaging $359,931. On the other hand, pre-oil price collapse in 2014, the ratio was purchase at 85%, refinance at 16.5% and switch at 2%, averaging $336,417.
Recession not stopping Alberta population growth
Alberta’s population growth remains the fastest in the country, despite its second year of economic slowdown, according to Statistics Canada. The province posted 0.4% population growth in the first quarter of 2016, ahead of Manitoba, Saskatchewan and Ontario. “There are a lot of things working in Alberta’s favour,” said University of Calgary economist Trevor Tombe, adding that a relatively active economy (apart from the energy sector) and generous weekly wages continue to entice people to stay in the province.
Taxing foreign investors will not solve supply issue
Extra taxes on foreign investors would not be enough to solve the supply problem in Canada’s red-hot housing markets, according to CIBC’s Benjamin Tal. Tal argued that discussions on foreign ownership ignore the fact that the most in-demand Canadian cities are suffering from a scarcity of listings. He added, however, that “properly designed” taxes would be a good starting point. “[You] cannot deal with the supply, but you can deal with speculative aspect that the supply issues create,” Tal said.
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UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email mortgagebrokernews@kmimedia.ca
Reaching the next generation Attracting new entrants to the mortgage industry means rethinking the traditional path many of today’s brokers have followed, writes Scott Musselman GIVEN THE increases in our market share and a continuing presence in most forms of media, mortgage brokers are doing a pretty good job spreading the word to consumers about our value. But where are we when it comes to attracting new talent into the industry? Most of the career stories I hear from longterm, successful mortgage brokers usually start with them working at a bank or trust company, where they often ‘fell’ into the profession. All of them agree that these early careers were a great start because the training was well established, and the assembly line of transactions provided them with a variety of real-life case studies to cut their teeth on. The impetus to move into being a mortgage broker generally came from a corporate reorganization of some kind, or by word of mouth from someone they knew who had successfully made the transition. But can we rely on word of mouth to shepherd in the next generation of mortgage brokers? Many of our long-standing volume producers came to be mortgage brokers at a time when consulting with a mortgage broker might have been considered a last resort, or in an environment of high interest rates or a poor economy, when mortgages were consuming the average Canadian’s pay cheque. We owe a lot to this group, but we have to be prepared for the future. These ‘traditional’ means of becoming a mortgage broker are still valid, but to ensure a robust and growing industry, we need to attract new faces and embrace their new ideas. It costs money to develop new talent. Continuing to attract existing brokers to move from one firm/network to another by offering
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higher splits only serves to erode margins, making the training and mentoring process more difficult to execute. New entrants to the industry are coming into a much different landscape than their predecessors. We need to attract college and university students by demonstrating to them
you the medal. The lending landscape is complex, and we’re not doing a service to our industry with casual, secondary or part-time participation. It’s a full-time effort to get inside the nuances of the industry and to be ever present everywhere for your customers. Whether new entrants choose the highly automated, deep-discount model or the hightouch, full-service model, they will undoubtedly attract a majority of their customers using social media and technology. Yet many customers are coming to get their mortgage armed with lots of ‘internet information’ and a feeling that they can do it themselves. It’s this nuance of today’s environment that separates today’s young brokers from their predecessors. The good news is that we continue to see first-time buyers wanting help to navigate their way through their mortgage; however, new brokers are going to have a tougher time building their own brand and creating customer loyalty.
“The next generation of mortgage brokers ... will need to be ready with the best mortgage advice for their client, right at the moment their client wants it” the high-success professionalism brokers have achieved and the power of the value proposition only they can provide. The next generation of mortgage brokers will be surrounded by impatient consumers and instantaneous commerce, and therefore they will need to be ready with the best mortgage advice for their client, right at the moment their client wants it, and then to provide ongoing value. They are their brand, but it’s not all on them. When they join us with a sense of belonging to something bigger than themselves, we all reap the rewards. And being a newcomer to the industry is not the exclusive domain of millennials – it’s anyone who finds the profession compelling enough to enter it. These newcomers need great mentors to help them learn the ropes, and mentors need to embrace their ideas. Education is great for understanding credit and regulations, but it’s winning on the mortgage battlefield that gets
All the industry associations have developed consumer awareness campaigns and have promotional material available to their members. We need to encourage our people to use this material in addition to what our firms provide. That awareness helps to spread the ‘mortgage broker as a career’ message and lets the next generation know we’re as attractive as we think we already are. If we all bring in new talent, it’s a win-winwin-win. Successful brokers can have rewarding careers, brokerages can grow and expand their offerings, lenders will enjoy sustainable growth, and our clients will get the best possible mortgage. Scott Musselman is vice president of operations of Invis/Mortgage Intelligence, where he oversees all operational areas for the company and develops relationships with key strategic partners, insurance providers, vendors and lenders.
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PEOPLE
INDUSTRY ICON
SPHERE OF INFLUENCE His company may have been bought out, but The Mortgage Centre’s Eddy Cocciollo still has as much autonomy as ever – and he’s using it to help grow his network’s reach
LIKE MANY in the industry, Eddy Cocciollo, president of The Mortgage Centre, got his start on the banking side before pursuing a career in mortgages. “I was a teller for years while going through school and became a loan officer,” he says. “That’s where my interest starting piquing in terms of lending and mortgages. It seemed to be a sexy product; it’s a big number, and you’re helping people. I was drawn to mortgages as my career progressed.” After working for Canada Trust, Cocciollo jumped to CIBC, where he was hired as a mortgage specialist. “After that, I ended up at CMHC for five years – along the same lines, still in mortgages, and then decided that it was time to move on,” he says. “I was hired out of CMHC by CLN Highlander, which was a technology business, but it was mortgage-related in terms of documentation and delivery systems. You’d sell this technology to banks to connect with legal, the lenders. I left and decided to do mortgage brokering.”
Changing times Cocciollo became a broker with Assured Mortgages, where he worked for nearly
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three years before GE Money hired him to help launch its mortgage business in 2005. But then the global financial crisis hit, and things went sideways. “I helped them launch that, became the VP of sales, and then 2008 happened, which was the biggest mortgage blunder of our lives,” Cocciollo says. “That caused GE to step out of the business. I was then hired
Cocciollo has been with the company through a number of changes, including its purchase by Dominion Lending Centres in 2013, which included 160 broker storefronts, more than 1,000 individual mortgage professionals and nearly $7 billion in yearly originations. That purchase helped DLC become the largest network in Canada. But despite the
“There will be further rule changes; there will be further interruption by government in our industry, and how we navigate that will play a big part on our future” into CIBC to run their B business, but they got caught up in that as well.” Out of a job and unsure what to do next – or whether he’d still be able to work in the mortgage industry – Cocciollo describes that as his career low point. “You put everything you have into a career, and it just halted in 24 to 48 hours,” he says. Eventually, though, he was hired as president at The Mortgage Centre, where he still hangs his hat.
acquisition, Cocciollo remains as autonomous as ever. “If you’ve ever worked for a big corporation like CIBC,” he says, “your decisions are limited, and you run the business via a hierarchy; that hierarchy usually includes legal and others who depict your ways of running it. The biggest change is I’m given full autonomy, and I make the decisions about how the business is run. “That’s a better way for me,” he adds.
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PROFILE Name: Eddy Cocciollo Title: President Company: The Mortgage Centre Career highlight: “Working at GE was an incredible experience. I got to travel the world, and they really rewarded you as an employee for your success. Coming from a big company, I saw that as humongous.”
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PEOPLE
INDUSTRY ICON EDDY COCCIOLLO’S ROAD TO THE TOP “My shareholders, Gary and Chris, are fantastic partners because they see the value of me running the business. They leave me alone.”
The road ahead That level of trust speaks to Cocciollo’s success and expertise. So it’s no surprise he has some respected thoughts when it comes to the future of the industry – and that includes policy changes that will impact all brokers. “With rules, I think it all comes down to additional policy,” he says. “The [recently implemented] rules have affected our industry, if you look at how the policies have impacted our industry since the crash.
concern,” he says. “But I’m a firm believer that for the biggest transaction of your life, you’ll need some hand-holding. The automated world will take some of our business, but not all of it. It’s just like ATMs – bankers thought it was the end of tellers, but have you been to a bank on payday? It’s going to affect this industry a little bit, but I think there’s a tremendous opportunity to be a financial consultant. There is always going to be that role.” And of course, economic concerns will continue to be on the minds of industry professionals across the country. “If we look at Alberta and the effect of oil, we’re down 20%,” Cocciollo says. “Yes, Ontario and BC are the kings, but they can
“The automated world will take some of our business, but not all of it. It’s just like ATMs – bankers thought it was the end of tellers, but have you been to a bank on payday? It’s going to affect this industry a little bit, but I think there’s a tremendous opportunity to be a financial consultant” Every broker has to spend more time on a deal, and every lender has to be cognizant of Big Brother. That will probably continue. There will be further rule changes; there will be further interruption by government in our industry, and how we navigate that will play a big part on our future.” Another concern Cocciollo has is automation, which will inevitably put pressure on mortgage brokers, as it has for professionals in many other industries. “Eliminating the mortgage broker is a concern – I’d be lying if I said it wasn’t a
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be the goats with a little bit of change. With employment, manufacturing, the dollar – all these economic factors are going to play a part in this industry’s success, and you never know. It can change very quickly.” However, if there’s anyone in the industry who proves the channel can get through hardship, it’s Cocciollo, who made it through the last recession to become the long-standing head of one of the industry’s biggest networks – despite fears that the broker channel would never be the same again.
2005 Hired by GE Money as regional vice president of sales to help launch its mortgage business “[GE has] this word called meritocracy – as you run a business, or you’re an employee, they really value what you put into your job. As you grow and as you become successful in your role, they reward you.”
2008 Moves to CIBC Mortgages as VP of sales, where he ultimately falls victim to the global financial crisis
2009 Is tapped to become president of The Mortgage Centre
2013 The Mortgage Centre is purchased by Dominion Lending Centres, making DLC the largest broker network in Canada “Since the acquisition of DLC, I’ve felt even more passion for The Mortgage Centre, and I just love what I do.”
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GET TO KNOW OUR PEOPLE MEINI ICKERT
MY FAVOURITE
Job Title
V.P. of Western Canada
Song: Yesterday
Lives in
by The Beatles
Surrey, BC A part of the industry for
15+ years
Past-Time: Music
IF I COULD BE ANY SUPER HERO
MY MANTRA
Movie: Doctor Zhivago
I’d choose SUPERMAN. Champion for truth and justice.
Integrity is everything.
Meal: German Rouladen
WHAT I LOVE BEST ABOUT OUR NETWORK
That we genuinely like and care for each other. It’s all about being part of the ‘MA Family’!
ADVICE TO MY YOUNGER SELF
Don’t sweat the small stuff. (easier said than done)
Vacation Spot: Tropical sun & sand locations
TV Show: House of Cards
SOMETHING NO ONE WOULD EXPECT I am able to write in mirror-image using my non-dominant hand.
Get to know more about Meini & MA by visiting © 2016, Mortgage Architects Inc. All rights reserved.
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14/07/2016 11:19:22 AM
FEATURES
COVER STORY: YOUNG GUNS
YOUNG GUNS 2016
YOUNG GUNS 2016 22
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The Canadian mortgage industry’s 50 brightest young stars offer their thoughts on how the business needs to evolve to meet the needs of today’s buyers ONCE AGAIN, CMP’s annual Young Guns list offers an insightful glimpse into the industry as it stands today and what it may be in the future. While everyone featured on this list is under the age of 35, that doesn’t mean they’re lacking in experience – or, indeed, wisdom. Many of the brokers on this list have more than a decade in the mortgage business under their belts. As such, they have strong opinions on where the industry is headed and what changes need to be made to ensure the continued credibility and legitimacy of the mortgage business. Many of this year’s Young Guns work in the intense markets of Vancouver and Toronto, which continue to dominate the conversation about real estate in Canada. Some believe talk of a bubble is economist scaremongering – and that it’s growing tiresome – while others take the view that the current growth cannot go on forever,
NAME Albinati, Matthew Baker, Bryan Beemer, Rachael Calla, Angela Charania, Alim Conconi, Alex D'Haese, Jordan Davison, Sarah De Vuyst, James Dennahower, Ryan Eyjolfson, Daryl Ghazi, Reza Gregory, Rachelle Harrison, James Harrison, Steve Hawryluk, Adam Henneberry, D'Arcy Hennig, Cole Hill, Danielle Huynh, Kevin Immel, Bernard Iskin, Raymond James, Dustin Laird, James Lecki, Roman
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COMPANY TMG The Mortgage Group Invis SmartCap Verico My Better Mortgage Dominion Lending Centres DLC Regional Mortgage Group Lendesk Jayman Financial Quantus Mortgage Solutions Verico Xeva Mortgage Bespoke Mortgage Group DLC White House Mortgages GreenFlow Financial Paradigm Quest DLC Home Capital Solutions DLC Home Capital Solutions DLC Canadian Mortgage Experts MortgagePal DLC Plan B Mortgage Services Neighbourhood Dominion Lending Centres Mortgage Financial DLC Canadian Mortgage Experts DLC Streamline Mortgages DLC Premier Financial Group CanWise Financial Concierge Mortgage Group
so contingencies should be put in place. Another major talking point among this year’s selection was how important technology has become, particularly in regard to the different expectations of Baby Boomers, Gen Xers and millennials. The consensus is that being able to adapt is crucial to success in 2016, and harnessing the many tools of the digital era is what will separate those at the top of the industry from the rest. That said, the days of the face-to-face meeting and personal phone call aren’t quite over yet, and our Young Guns agree that these forms of communication are still necessary for developing solid relationships with clients. If the young shall inherit the earth, and these young mortgage professionals shall inherit this particular business, then the industry is clearly in the best of hands.
NAME Lee, Diana Lefebvre, Ron Lemay, Megan Levine, Steven Loewen, James Mahmood, Farhan Mawji, Adil McLaughlin, Emily Molder, Christopher Mullen, Jordon Nazareth, Scott Neufeldt, Conrad Oakes, Ben Oyhenart, Chad Parker, Matthew Persaud, Andre Pinsky, Eitan Poletti, Mauro Ryan, Steve Shcherbatykh, Anna Smith, Tyler Trainor, Scott Westlake, Scott Wilkins, Clinton Yates, Tyler
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COMPANY Invis Invis Pure Mortgage DLC HT Mortgage Group True North Mortgage Loewen Group Mortgages Mortgage Intelligence Invis Optimum Mortgage/Canadian Western Bank Axess Mortgage Home Trust Company DLC Home Capital Solutions TMG The Mortgage Group/Neucom Tech DLC YBM Group DLC Aegis Mortgage Services Tudor Mortgage Safebridge Financial Group DLC Origin Mortgages Mortgage Intelligence TMG The Mortgage Group Regina Verico C.O.D. Financial Services The Mortgage Centre/SKY Financial Corporation The Mortgage Associates DLC Denova Group Centum Home Lenders Verico The Mortgage Wellness Group
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FEATURES
COVER STORY: YOUNG GUNS RYAN DENNAHOWER
DUSTIN JAMES
Mortgage agent
DOMINION LENDING CENTRES PREMIER FINANCIAL GROUP Age: 30
BESPOKE MORTGAGE GROUP Age: 26
A relative newcomer to the mortgage industry, Ryan Dennahower’s passion for his chosen vocation is obvious. “Prior to being a broker, I worked with TD Canada Trust in branch banking for six years,” he says. “I fell in love with mortgages, and I have a real passion for lending. My clients could tell I was really passionate about it when I spoke with them.” Dennahower joined Mortgage Intelligence two years ago before moving to his current firm, Bespoke Mortgage, in January. The move was clearly a good one – halfway through the year, he has already matched his sales from 2015. His location in Toronto has been advantageous in that respect, but it’s not without its own challenges. “It is definitely a really hot market, and that makes it extremely competitive and fast,” Dennahower says. “What I’ve found is that turnaround time and customer service are everything.” While Toronto’s white-hot market is creating plenty of opportunities for brokers, it’s also cause for concern. “It drives a lot of first-time home buyers out,” Dennahower says. “Most first-time buyers now need help from their parents or other family members, whereas in the past they could have done it themselves. A lot of people are making the decision to buy based on the rates, so it’s going to be an interesting couple of years to see where the rates go.”
SCOTT NAZARETH Mortgage agent DOMINION LENDING CENTRES HOME CAPITAL SOLUTIONS Age: 25
The ability to educate clients about mortgages is one of Scott Nazareth’s favourite parts of the job – and technology is key in being able to do that in 2016. “There has been a huge shift online for lead generation, with the prominence of rate shopping websites,” he says. “There has also been a shift in the outsourcing of underwriting. This indicates that technology and efficiency will play a major role in the coming years for lenders as well as brokers.” The fact that many clients are tech-savvy means those guiding them must be, too. It’s a challenge for some, but Nazareth sees it as an opportunity. “My immediate goal is to build an educational platform online for consumers to manage their debt,” he says. “There is a growing concern about household debt and soaring property values. Now more than ever, disciplined financial management surrounding debt will benefit average Canadians who may have trouble saving or investing.”
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Mortgage agent
Servicing Ontario’s picturesque Kawartha Lakes area, Dustin James has built a reputation for offering expert advice in residential, commercial and private mortgages. He also realizes the importance of communicating with his clients regularly, be it in person or through regular blog posts. Most recently he wrote on mortgage renewals, offering guidance to homeowners who think they may be paying too much and demonstrating a broker’s ability to procure thousands of dollars in savings over a bank renewal offer.
CHRISTOPHER MOLDER Principal broker/owner AXESS MORTGAGE Age: 33
For Christopher Molder, the mortgage industry is in his blood. His father, Arnold, first started the Tridac Corporation in 1977. The firm still exists today, albeit in a different guise – it changed its name to Axess Mortgage two years ago. “Axess Mortgage was created as a brand with affiliation to Axess Law,” Molder explains. “We are separately owned and operated, but share a common vision of delivering our services to the marketplace in a unique and deliberate manner. The immediate goal is to further develop our brand and position it as a leader in mortgage origination for the modern consumer.” Molder has had a solid climb up the industry ladder since he decided to join the family business a decade ago – and he’s witnessed great change during that time. “Over the last decade, I feel there has been a shift towards what I consider a commoditization of a broker’s service,” he says. “Borrowers are using the readily available digital tools and websites to self-serve. This commoditization presents some obvious challenges to the broker community, but also great opportunities for growth.” Based in Toronto’s famous Danforth area, Axess Mortgage has also been witness to the booming property market in Canada’s largest city. It’s been great for brokers and lenders alike, but that’s not to say the job is simple to master, as Molder explains. “As brokers, we are sometimes very restricted by our lenders’ credit policies,” he says. “I perceive that branches can run circles around us with the same clients, and I’d like to see that gap close a bit, especially when it comes to insured mortgages. Sit down with any broker, and they’ll share the same war stories.”
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YOUNG GUNS 2016
KEVIN HUYNH Mortgage advisor MORTGAGE FINANCIAL Age: 30
An advisor with Mortgage Financial, Kevin Huynh believes greater transparency in the lending process will benefit all those concerned. “For the industry to become more efficient, I believe there needs to be more awareness created to tell the story of how a mortgage broker can help all homebuyers, and not just the poor-credit, low-income clients,” he says. “Once the awareness is out there, the industry as a whole will benefit and become more efficient.” Not only will that efficiency create fewer grey hairs for lenders, brokers and agents, Huynh says, but it will also make for more content clients. “The finance process does not have to be a stressful one with the right systems and people in place,” he says. “Here at Mortgage Financial, we are continuously working on different ways to make the whole process more enjoyable.”
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FEATURES
COVER STORY: YOUNG GUNS JAMES HARRISON Mortgage broker DOMINION LENDING CENTRES HOME CAPITAL SOLUTIONS Age: 33
It’s been an eventful year for James Harrison. Last November, his firm, DLC Mortgage Village, merged with DLC Home Capital Solutions, and business has been booming for the Torontobased firm. And as for fears that the city’s housing market is about to go bust, Harrison isn’t worried – he believes it’s a story that’s getting too repetitive to be taken seriously. “I don’t know why the economists are saying what they are saying,” he says. “They have been saying it for the past nine years, too. There doesn’t seem to be any accountability to making false claims.” Having joined the industry in late 2007, Harrison is now approaching veteran status, and he believes certain changes should be implemented to improve efficiency in the brokerage businesses. “I would like to see more lenders join the broker channel, like all banks,” he says. “I would also like the insurers to increase the $1 million limit for CMHC-insured mortgages and increase the maximum amortizations back to 30, 35 and 40 years. I feel this is needed for millennials to be able to buy homes on their own without the bank of mom and dad.” Regardless of the current challenges, Harrison is confident his team can continue to excel. “I want to improve the efficiencies of my team and free up time for more business development and meeting more Realtors,” he says. “Then everyone can experience our amazing customer service and expertise – which is seriously lacking at the bank branches.”
RAYMOND ISKIN Owner DOMINION LENDING CENTRES STREAMLINE MORTGAGES Age: 28
As proprietor of DLC Streamline Mortgages, Raymond Iskin has seen the mortgage business change greatly in recent years. As such, he believes mortgage brokers need to up their level of knowledge to adequately meet the needs of clients. “In my time in the industry, I have seen agents get their mortgage licence and give it up just as quickly due to what I think is a lack of training during the licensing process,” Iskin says. “I think a more well-rounded education would go a long way in helping new agents succeed and provide better service to their clients.”
MAURO POLETTI
ROMAN LECKI
Mortgage agent
Mortgage agent
MORTGAGE INTELLIGENCE Age: 33
CONCIERGE MORTGAGE GROUP Age: 33
A positive personal experience drove Mauro Poletti to become a mortgage agent himself. “What motivated me to enter the industry was the level of service and expertise from my broker who arranged my home financing,” he says. “He took the time to explain every single detail, and it was such a smooth process. I had heard horror stories from friends about the experiences they had. I thought to myself that the industry was full of brokers who were not educating their clients.” Now that he has joined the profession, Poletti believes his ability speaks for itself – and his referrals from satisfied clients back that up. “I don’t advertise much at all, and a huge portion of my business has been referral-based, which says a lot about my work ethic,” he says. “I am fortunate to work with a great mentor and belong to a great team, which has allowed me to exceed even my own expectations.”
A mortgage agent with Concierge Mortgage Group, Roman Lecki reveals how his career trajectory helped him become a much more well-rounded and efficient agent. “I entered this business in a general administrative position,” he says. “This allowed me to learn the business from the ground up. Being a part of the organization and seeing how happy our clients were, obtaining financing and moving into their first home, was really gratifying. It motivated me to obtain my licence and focus on serving my clients.” In that time, the standards for agents have also changed greatly, but Lecki views that as a positive. “The biggest change in the industry has been a greater focus on compliance and fraud prevention,” he says. “It’s an important aspect of the business because it protects homeowners along with lenders.”
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www.mortgagebrokernews.ca
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14/07/2016 10:45:42 AM
YOUNG GUNS 2016
COLE HENNIG Mortgage expert DOMINION LENDING CENTRES PLAN B MORTGAGE SERVICES Age: 25
Education is crucial to maintaining standards in the mortgage industry, according to Cole Hennig of DLC Plan B Mortgages. “I would like to see an update of the provincial licensing courses,” he says. “I fully support the notion of a detailed and challenging system for becoming a licensed mortgage broker. We don’t want [just] any person with a pulse able to become a broker. A high level of skill and dedication is required for our industry.” Hennig has no shortage of dedication himself, judging by his goals for the rest of 2016. “If you aren’t growing, you’re dying,” he says. “We want to expand our list of lending partners, continue to build and develop strong relationships with our networks of brokers, and look to add new services that can benefit our clients.”
ANGELA CALLA Mortgage professional DOMINION LENDING CENTRES Age: 33
MATTHEW ALBINATI Mortgage broker TMG THE MORTGAGE GROUP Age: 28
Despite being part of the millennial generation, Matthew Albinati misses one part of how business used to be done. “Old-school me would like to see the return of the phone call,” he says. “So much more can be accomplished in a few minutes on the phone compared to an email exchange. I understand the requirement for email in many cases, but let's talk this deal through on the phone.” Being a broker in 2016 is all about achieving balance amidst shifting demographics, in Albinati’s view. “Some brokers are social-media-driven, many develop leads online, and others through their personal and professional relationships,” he says. “I like to think that we have a balanced business model – some new-school and some old-school.”
When discussing what attracted her to the mortgage business, Angela Calla is unequivocal about the need to find value for her clients as they make the biggest purchase of their lives. “I love saving people money for what matters in life – anything is better than interest!” she says. “It's my passion. I want to continue to educate Canadians on how to get their mortgage working for them. With our help, bottom line, you will always save the most amount of money.”
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FEATURES
COVER STORY: YOUNG GUNS ALEX CONCONI
2016
RACHAEL BEEMER
Owner
Principal broker/owner
LENDESK Age: 31
VERICO MY BETTER MORTGAGE Age: 35
Alex Conconi followed his father into the mortgage industry in 2006, but by 2010, he had decided to pursue other avenues. Studying finance at graduate school, he went on to form his own private lending company, and after becoming frustrated with the technology available for underwriting, CRM and document management, he started Lendesk as a side project in 2013. Today, Lendesk employs close to 20 people, and Conconi is committed to driving innovation in the industry. “We’ve got to stop skating to the where the puck is and start skating to where the puck is going to be,” he says. “At Lendesk, we’re working on lots of innovations that we’re quite excited about sharing this fall. But if there was one thing I’d like to see a lender take a stand on, it would be moving to accept e-signatures for pre-conveyance documents.” The importance Conconi places on technology is a direct response to the changing wants and needs of clients – and not just the millennial ones. “Too many people spend too much time looking down on millennials rather than seeking out the opportunity they bring,” he says. “But it’s not just millennials – all borrowers’ expectations are being set by interactions they have with technology in verticals that have nothing to do with mortgages. If experience has always been the battleground, then technology is the new weapon.”
JORDON MULLEN Mortgage originator HOME TRUST COMPANY Age: 24
One of the youngest members of this year’s Young Guns list, Jordon Mullen originally became a mortgage broker after witnessing the positive effect brokers can make on people’s lives. “The mortgage industry has always been part of my life,” she says. “My mother is a broker, and I’ve seen firsthand how the right mortgage professional can improve the lives of hard-working individuals. While studying business in college, I became even more determined to work in a field where I could help those who don’t quite fit the narrow ‘in-the-box’ definition the major banks apply to all applicants.” The regulatory requirements for brokers are constantly evolving, but this is a positive development in Mullen’s eyes. “There have been many changes to the industry since I first started, including a number of regulatory updates such as B-20,” she says. “These requirements strengthen our collective ability to provide the best service to clients. Many of these changes have provided new opportunities for the self-employed and those with a limited credit history. By providing us with nontraditional documentation, we have opened the door to new and improved lending criteria.” The ability to help people achieve their dream of homeownership is at the forefront of Mullen’s business, and she has some ideas about how the system can be improved to facilitate that process. “The thing I would most like to see change is the idea that Alt-A borrowers are somehow less deserving of a chance to own their own home,” she says. “I’ve learned that simply because an applicant does not meet the lending criteria of a Schedule A bank, with some extra due diligence, they are able to demonstrate creditworthiness, and this is a beautiful aspect of Alt-A lending.”
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YOUNG GUNS
Having tasted success here in Canada with her business, My Better Mortgage, Rachael Beemer has now set her sights further afield – to Central America. “I've recently expanded into Costa Rica, and I'd like to grow that side of my business,” Beemer says. “The agents who are working for me there are actually sourcing refinancing transactions for my agents here in Canada. My goal for that expansion is to make the lives of my agents less stressful and to better someone else's life there. Needless to say, the housing market in Costa Rica is somewhat different than in Canada, making Beemer's commitment to growing her business in a foreign country all the more impressive.
ANDRE PERSAUD Mortgage agent SAFEBRIDGE FINANCIAL GROUP Age: 33
A mortgage agent with Safebridge Financial Group, Andre Persaud believes the industry, while not short of red tape, still needs to do more to protect clients – particularly in hot markets like Toronto and Vancouver. “A major change I would like to see is on the side of real estate agents,” he says. “I would like to see something put in place to prevent Realtors from listing properties very low in order to draw a bidding war. This is causing a lot of issues because clients always want to go in without a condition of financing. It has almost eliminated this condition that is meant to protect buyers.”
www.mortgagebrokernews.ca
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14/07/2016 1:47:47 PM
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14/07/2016 10:45:57 AM
FEATURES
COVER STORY: YOUNG GUNS ADIL MAWJI Mortgage broker INVIS Age: 31
The province of Alberta – and Calgary in particular – hasn’t had the best run over the past two years. The oil shock has devastated the city, and its effect is being felt far beyond the energy industry itself. Calgary-based broker Adil Mawji concedes that it’s been a tough time, but the silver lining has been his ability to reconnect with clients on a much deeper level. “Having an established client base has allowed us to pull through,” he says. “There are more opportunities out there now to help people, so that’s what we are concentrating on.” A former president of the Alberta Mortgage Brokers Association and its representative on the board of directors for Mortgage Professionals Canada, Mawji joined Invis in late 2008. That too was a period of great economic uncertainty, but the experience hardened him for the tough times that would return again in 2015. Now that Calgary and Alberta are slowly but surely making a recovery, opportunities for Mawji to build his business will soon return. Bearing that in mind, he has some suggestions for improving the industry as a whole. “I would like to see full and transparent product offerings from all banks to the broker channel,” he says, “but let’s be realistic – I would be dreaming if this happened.”
BRYAN BAKER Mortgage professional INVIS SMARTCAP Age: 32
Bryan Baker is embracing the industry changes that are transforming how people buy their homes. Rather than complaining about how brokers must adapt their methods, he calls on his peers to grow into new roles. “The industry is changing every year, often with increased lender guidelines and regulatory restrictions,” he says. “These changes often have industry professionals being reactive instead of proactive. They are viewed as restrictive rather than opportunistic. With every change comes an opportunity to reinvent yourself. How boring would a career be without change?” One area where Baker would like to see the industry evolve is through greater cooperation between all those involved in the increasingly complex lending process. “I would like to see a change in the industry culture, working more efficiently with other industry professionals to ensure a win for all,” he says. “Your bottom line will grow in correlation with the rewarding experience we as industry professionals provide to the consumers.” For Calgary-based Baker, a turbulent local economy has made business growth somewhat uncertain at the moment, but it’s a challenge he clearly relishes. “With a weakening in the Canadian economy, growth means working a little harder and a little more efficiently than we have in past years,” he says. “Our goals for 2016 are centred on relationships. We are strengthening existing relationships by identifying new opportunities and booking in time to find new relationships.”
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SCOTT WESTLAKE Founding partner DOMINION LENDING CENTRES DENOVA GROUP Age: 34
This industry has provided an opportunity for Scott Westlake to do much more than simply make a living for himself. The opportunity to help people achieve their dream of homeownership was what drew him to the business, and it remains a thrill to this day. “The industry has allowed me to appreciate how real estate can impact one’s life,” he says. “It's shelter for one’s family, the biggest investment for others. It's where so many memories are made. The industry has allowed me to peek through the window into so many other people's lives and has certainly humbled me.”
STEVE HARRISON Mortgage agent DOMINION LENDING CENTRES HOME CAPITAL SOLUTIONS Age: 35
The Toronto and Vancouver property markets – and foreign buyers’ role in driving up their prices – continue to dominate headlines, and Toronto-based mortgage agent Steve Harrison has some suggestions for what should be done to address the situation. “I feel like the non-resident lending in Canada is not fair when compared to how equity lending virtually doesn't exist for Canadians,” he says. “If a non-resident can buy something in Canada with 50% down and virtually no paperwork, a Canadian who pays income taxes here should be given the same opportunity.”
www.mortgagebrokernews.ca
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YOUNG GUNS 2016
EITAN PINSKY
EMILY MCLAUGHLIN
Mortgage Expert DOMINION LENDING CENTRES ORIGIN MORTGAGES Age: 31
Mortgage specialist OPTIMUM MORTGAGE/ CANADIAN WESTERN BANK Age: 29
This is shaping up to be an especially exciting year for Eitan Pinsky, who’s focusing on building his team at Origin Mortgages. “My new office space was completed just this month,” he says. “It is 450 square feet connected to my brokerage. I built three beautiful glasswalled offices where my team and I will work. I have one full-time associate, and I’m hiring another. There are some very respectable names in the industry who have built teams that work and service a book of business; I want to copy that model and improve upon it if at all possible.”
Typical of many of this year’s Young Guns, Emily McLaughlin is embracing the changes in the industry, particularly the advantages technology offers. “The industry has changed in the sense that we are now required to ask for more documentation due to new government regulations,” she says. “The technology we use has also changed and improved. The loan origination systems, documentation management systems and apps available make it easier, faster and more efficient to underwrite a deal. We have a lot more data at our fingertips than we did before.”
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FEATURES
COVER STORY: YOUNG GUNS CLINTON WILKINS Mortgage advisor CENTUM HOME LENDERS Age: 33
DIANA LEE Mortgage consultant INVIS Age: 34
While the market in Alberta has certainly been challenging over the past two years, that’s not to say there aren’t opportunities out there – and Diana Lee has seized them. “I had one of my best years last year,” she says. “We are lucky to be in Edmonton; I have friends in Calgary who were affected differently. It has slowed down a little bit this year. It’s important to diversify so when sales aren’t as much, you focus on refinancing.” Prior to joining Invis, Lee spent five years as a mortgage specialist with TD Bank. The move from one of the Big Five to a specialized brokerage allowed her greater freedom to meet the needs of her clients – needs that are constantly changing. The difference is particularly pronounced among the different generations, Lee observes. “Loyalty is a big difference between the generations,” she says. “You can do all the research and build those relationships, but it’s just not as strong a bond as with Gen X clients. I always grew my business on those relationships. It’s tougher with millennials, who I’m not sure value it as much.” But because millennials will make up a major portion of Lee’s client base over the next 20 years, she’s committed to finding ways to break down those barriers. “The question is, how do you reach them? Is it more social media and catering to their interests more?" she says. "I’m kind of in between the generations, but I definitely have a different model of communication. It’s less face-to-face with millennials.”
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When Clinton Wilkins entered the industry in 2006, it was almost unrecognizable compared to what exists today. “When I started, there were lenders giving 100% financing and 40-year amortization – if you had a heartbeat, you could get a mortgage,” says the Nova Scotia-based broker. “Even if you had damaged credit, people were getting approved by A lenders. That meant the market was super-heated, especially here in Atlantic Canada, where we had never really seen a boom before. But it was artificially inflated because credit was so easy to obtain.” The financial crisis and the housing crash in America caused a crackdown on lending practices, which signalled an end to the party for brokers in the region. “We saw the peak of our markets here in 2011,” Wilkins says. “That was prior to the change in the refinancing rules. Before, we could refinance for up to 95% of the value of people’s homes. The federal government started to tinker with mortgage lending constraints, so after 2011 was when things really started to soften here.” That downturn lasted until recently, but Wilkins is confident Atlantic Canada has turned a corner. “It has been really good in 2016 – year-to-date we are up 30%,” he says. “In Halifax, the market has really picked up. Last year was our toughest year so far. I have been working a lot smarter rather than harder.”
FARHAN MAHMOOD Mortgage broker MORTGAGE INTELLIGENCE Age: 35
Aside from providing a means to support his young family, Farhan Mahmood’s role as a mortgage broker also allows him to make a real difference for people. This is one of the major reasons he decided to pursue this career two years ago. “When you are a broker, you have the ability to make a real change in someone’s life,” he says. “A house is someone’s biggest investment, so if you can provide the right advice for them and guide them into the right areas, you can change their financial picture completely.” Relatively new to the broker side of the industry, Mahmood sees his role as more than just securing financing for homes. “I have been in the industry for seven years now,” he says. “Before I was a mortgage lender, and I was with MCAP as an underwriter. Now I see myself as a financial advisor rather than a broker because all I’m doing is advising people on how to manage their finances.” That approach is clearly getting results for Mahmood, who is based in Guelph, Ontario. “It’s been a great 2016 so far,” he says. “In the first six months, we have had sales equal to the whole of last year. It’s been incredible. I have a target of $50 million in funding for this year. My ultimate goal is to be one of the top brokers in Canada, doing something like $200 to $300 million in business each year.”
www.mortgagebrokernews.ca
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YOUNG GUNS 2016
RON LEFEBVRE Mortgage Consultant INVIS PURE MORTGAGE Age: 34
Previously a heavy equipment mechanic, Ron Lefebvre elected to change careers and joined Invis six years ago – a decision that has been more than vindicated. “I think the primary reason I made the change was that I have a passion for real estate,” Lefebvre says. “Being a numbers person, I had initially planned to go to university and get a degree in accounting, but then I had an opportunity to become a mortgage broker, and that seemed a better fit.” Now six years into his new career, how has the job changed? “For me, it has evolved on what my value is to clients,” Lefebvre says. “I have found that being very upfront with my clients has helped me. When you first break into the industry, you want to make every single deal, but now I’m a lot more upfront about what my value proposition is and what I do that is different than the banks or other mortgage brokers.” Alberta’s struggling economy has presented another challenge, although it’s one Lefebvre has had no trouble overcoming. “Last year
was the biggest year I've ever had, and this year is close to that again,” he says. “There still is a big need for mortgage financing. The deals may be a little tougher to put together. Before, a lot of people may have used overtime pay in order to qualify, and a lot of that overtime has gone away.” Yet despite tough economic times, Lefebvre remains focused on the goal he set for himself when he became a broker. “When I first got into the industry, I set a goal of financing $100 million in mortgages a year, but I realize now that’s very difficult,” he says. “I still would like to get there by providing value to my clients [and] offering ancillary products.”
www.mortgagebrokernews.ca
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FEATURES
COVER STORY: YOUNG GUNS SCOTT TRAINOR
JAMES LOEWEN Owner DOMINION LENDING CENTRES ORIGIN MORTGAGES Age: 34
For James Loewen, the decision to switch from being an agent to a broker has proved pretty fruitful. Now running his own business serving the GTA from his office in Burlington, Ontario, Loewen reveals some of the reasons Loewen Group Mortgages has been able to increase its business every year – including an almost 19% jump this year. “Every time a door shuts, I think a window opens,” he says. “As the rules and guidelines continue to get tighter and tighter, you need to educate yourself and stay in touch with your clients and really earn your business.” And the scorching-hot market in his home base doesn’t worry him in the least. “We have been talking about a housing bubble for almost a decade,” Loewen says. “Our qualification guidelines for mortgages are extremely conservative and are only getting tighter and tighter. From a geographic breakdown, there are lines of people right now who are trying to buy a home. For the bubble to happen, it would require demand to decrease extremely, but that doesn’t seem to be happening.” Toronto’s rising prices, in his view, are merely a reflection of basic supply-and-demand economics. “Immigration is fantastic,” he says. “Toronto is recognized as one of the most diverse cities in the world right now. In Burlington, you have Highway 407 north of us, so you can’t build past that. Our neighbours in Hamilton and Oakville have water to one side, so you can’t build there either. There is only so much land available, so people are dying to eat it up.”
ANNA SHCHERBATYKH
Mortgage broker THE MORTGAGE ASSOCIATES Age: 27
Scott Trainor’s motivation for making his business a success is particularly powerful. “My wife and I had a son last year, and he was born prematurely with a complex heart condition called hypoplastic left heart syndrome,” Trainor says. “He was the smallest baby the surgeons have ever successfully performed open-heart surgery on at the Stollery Children’s Hospital in Edmonton. Since then, he has had one more surgery, 100 days in the hospital in 2015, and now is on track to have his last open heart surgery in a few years. Being able to give my child the life he deserves after he beat unbelievable odds drives me every day.” His wife is expecting another child, so Trainor is doing everything he can to make sure his team at TMG remains cutting-edge. “As time passes, I see technology becoming more pronounced in this industry,” he says. “I am right now testing daily video updates to clients with rave reviews – the personal touch seems to be appreciated.”
Mortgage agent VERICO C.O.D. FINANCIAL SERVICES Age: 30
STEVE RYAN Mortgage associate
Anna Shcherbatykh is crystal clear about her motivation for joining the mortgage industry. “I liked the challenge that comes with the mortgage business: high competition, constant demand for learning and improving current knowledge, and constantly developing and mastering analytical skills,” she says. Shcherbatykh’s pursuit of excellence in the industry makes her well placed to comment on legislative changes in the industry – which, in her opinion, aren’t a positive development. “Ongoing consideration of changing the minimum down payment to 10%, in my opinion, will not serve the purpose of proper selection of the candidates, but rather make it less possible for many first-time homebuyers to own their first home.”
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TMG THE MORTGAGE GROUP REGINA Age: 32
Based in Saskatchewan’s second-largest city, Steve Ryan has made his name in the business by focusing on first-time buyers – a market that has been somewhat overlooked at a time when skyrocketing prices have made buying a home an impossible dream for many. Ryan also specializes in finding financing for two other groups who have recently found it difficult to get loans from traditional lenders: newcomers to Canada and the self-employed. This approach has clearly served Ryan well – this is his second appearance in a row on CMP’s Young Guns list.
www.mortgagebrokernews.ca
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YOUNG GUNS 2016
JORDAN D'HAESE
ADAM HAWRYLUK
Mortgage associate
Mortgage broker
JAYMAN FINANCIAL Age: 32
DOMINION LENDING CENTRES CANADIAN MORTGAGE EXPERTS Age: 32
Already an industry veteran at age 32, Jordan D'Haese looks back on the numerous ups and downs he has experienced in his 15 years in the job. “It’s funny being considered a Young Gun after being in the industry since 2001,” he says. “When I entered the industry, the prime rate was 6%, borrowers were required to put 25% down to avoid CMHC, and every lender required supporting documentation to be faxed in.” Technology has obviously changed the game since then, but the peaks and valleys of the market remain inevitable. “The lending landscape has changed drastically,” D’Haese observes. “Some may say for the worse – lenders requiring more paperwork and greater detail – but I think that all of these changes are just a sign of the times. Qualified buyers are still getting approved, and there are still options for anyone who needs a little bit of extra assistance.”
The mortgage industry is becoming increasingly competitive, but there are some – Adam Hawryluk, for instance – who would like to see more cooperation between brokers. “There needs to be more sharing, more openness,” he says. “Our fellow brokers aren't our competitors, yet many times we don't learn about better systems or practices because we exist in a bit of a vacuum. I think organizations like CMBA would be well suited to execute on this, as well as the brokerages themselves. Having the resources is one thing; it's another to be taught how to implement them.”
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FEATURES
COVER STORY: YOUNG GUNS D’ARCY HENNEBERRY Senior mortgage planner MORTGAGEPAL Age: 31
Having made the switch from a bank to a brokerage, D’Arcy Henneberry understands the limitations of his previous role in meeting clients’ needs. “It is very important to me that my clients make an informed decision when purchasing a mortgage,” he says. “Being a mortgage broker enables me to educate my clients on the different types of lenders, how those lenders will register their charge on title, and the seemingly bewildering array of products and options available.” Given his focus on clients’ needs, Heneberry sees some other areas of the industry that need to evolve. “The real estate side of our business runs like a cheetah, while the mortgage side, due to the burden of documentation, creeps forward like molasses,” he says. “We need to become more efficient as an industry. New technologies and services will continue to develop, providing us all with the opportunity to streamline our administrative workload, enabling us to focus on our clients.” And Heneberry intends to do his part by harnessing that technology to try to connect with more and more clients. “There is a great opportunity to diversify by participating in both online and traditional models,” he says. “Working online allows for greater efficiency, which enables the broker to process a higher volume of business while connecting with a greater number of Canadians on a daily basis than ever before.”
DARYL EYJOLFSON Mortgage broker DOMINION LENDING CENTRES WHITE HOUSE MORTGAGES Age: 35
The autonomy of Canada’s provinces has its advantages and disadvantages – especially in the mortgage industry, as broker Daryl Eyjolfson points out. “I would like to see more provinces recognizing the other’s licensing,” he says, “with a more seamless and cost-effective interprovincial licensing process.” Eyjolfson also believes lenders should recognize the changing nature of today’s job market. “I would like to see more lenders recognizing a mix of seasonal, self-employed and multiple job situations on applications. The steady full-time job that was prominent to the Baby Boomer generation is slowly starting to fade.”
DANIELLE HILL Mortgage agent NEIGHBOURHOOD DOMINION LENDING CENTRES Age: 28
Danielle Hill broke into the lending business at a young age. “My father, Gary Meger, has always been my motivation for getting into this business,” she says. “He has shared his knowledge and passion and taught me the importance of always loving what you do.” An industry veteran at the young age of 28, Hill believes that when operating in a hot market such as her home base in the GTA, speed is key. “The market here moves really quickly, so it puts a lot of emphasis on making sure your clients are pre-approved and have all of their documents upfront,” she says. “That means that if you find a property, you can move forward right away.” Speedy service also comes into play when dealing with millennial borrowers, Hill observes. “The speed that people expect answers is different between the generations. With younger clients, it is a matter of hours, so you build your team to be able to work with them. With low interest rates, that is becoming the norm. Older clients can remember interest rates of 10%.” But Hill knows interest rates won’t stay this low forever, and she stresses the importance of communicating that to clients. “I think it’s important that you have that conversation with clients and make sure they are comfortable with what they're buying,” she says. “You need to make sure they can afford their mortgage payments at these low rates, but also if they went up.”
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BEN OAKES Mortgage agent DOMINION LENDING CENTRES YBM GROUP Age: 31
While Ben Oakes has witnessed the mortgage industry adapt and evolve a great deal, he believes that process needs to continue – starting with a greater shift toward using technology to cater to clients’ needs, which he says will bring dedicated brokerages more in line with the banks. “There should be more lender electronic portals so clients can access their mortgage data at their convenience, similar to big banks,” he says. “This would make things more efficient for the broker obtaining information pursuant to further refinances or sales/purchases.”
www.mortgagebrokernews.ca
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YOUNG GUNS 2016
CHAD OYHENART Mortgage broker DOMINION LENDING CENTRES AEGIS MORTGAGE SERVICES Age: 33
With more than a decade of experience behind him, Chad Oyhenart has seen plenty of big changes in the mortgage industry. “Policy changes, government changes, rates – the list goes on,” he says. “Everything has changed dramatically since I first started 13 years ago.” Among those changes is the fact that first-time homebuyers are having an increasingly hard time entering the market – many are being priced out, while others are taking on worryingly large debt loads. For that reason, Oyhenart has made educating first-time buyers one of his key goals.
TYLER YATES Mortgage broker VERICO THE MORTGAGE WELLNESS GROUP Age: 34
Now in his fourth year in the mortgage industry, Tyler Yates has a good handle on the skills one needs to succeed as a broker. “I’ve come to notice that brokers need to be very good at coaching and assisting clients for face-to-face meetings, as well as providing solutions and communicating extremely well through remote services such as video conferencing, online meetings and sending/ receiving of documents through different online services,” he says. Now that millennials are becoming an increasingly important target market, brokers need to be able to adapt to their needs, Yates adds. “If you only stick to face-to-face meetings, you’re handing a large chunk of business to another broker who can accommodate.”
www.mortgagebrokernews.ca
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FEATURES
COVER STORY: YOUNG GUNS REZA GHAZI
VP of Eastern credit operations
COO
PARADIGM QUEST Age: 33
GREENFLOW FINANCIAL Age: 34
JAMES DE VUYST Mortgage professional VERICO XEVA MORTGAGE Age: 31
The 2008 financial crash had far-reaching effects on the mortgage business, and in James De Vuyst’s view, the industry has reacted well. “The industry, in my opinion, has become much more refined,” he says, “and policies have become much tougher in order to prevent a US-type crash here in Canada.” That’s not to say everything is perfect, however. “I believe this industry needs to be more stern in regulating the amount and quality of brokers who obtain a licence,” De Vuyst says. “We are seeing an influx of new brokers, some who are eager to learn quickly and dedicate their career to brokering, and others who are part-timers, buying down rates to gain clientele and not providing their clients with sound financial advice.”
www.mortgagebrokernews.ca
2016
RACHELLE GREGORY
As someone that who been with Paradigm Quest since the very beginning, Rachelle Gregory has had a front row seat to the company’s rise as a national force in the lending business. “The company had just launched when I started,” she says. “I took care of credit and payroll at the beginning. I had a lot of different roles with the company after that, before becoming vice president of Eastern credit operations. I run the credit team for any mortgage submitted in Atlantic Canada or Ontario.” Gregory also played a key role in establishing the Western credit centre in Vancouver in 2008. Today, the company continues to expand, and the Eastern office and the Toronto market are a large part of that. “We are not a bank; we are a monoline lender, so we have the opportunity to deal with many different investors and have more products and more rate offerings,” Gregory says. Another change this year has been the new deposit rule introduced by the federal government. This has done little to slow the market in Toronto, however, and Paradigm has reaped the benefits. “In Canada, we have always been quite conservative, so the underwriters are used to pretty tight guidelines,” Gregory says. "Paradigm has had a great year – we have increased our underwriting team by 40%. Our market share has grown, too.”
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YOUNG GUNS
Entrepreneurship is alive and well in the industry – and brokers like Reza Ghazi are a prime example. Breaking into mortgages in 2003, Ghazi has experienced the numerous ups and downs that have gone with the territory since then. The lessons he learned led him to form his own company, GreenFlow Financial, in 2013. I moved out on my own to implement a model that is trying to challenge the status quo,” he says. “There is a gap in the industry where agents do not specialize in certain areas. They want to be everything to everyone. I want to focus specifically on the self-employed and entrepreneurs.” It’s a target market he believes is being woefully underserved by banks and other mainstream lenders. “I like to be on the non-bank end of the business, where I can help invest some of the funding I have from private investors and other non-banking sources,” Ghazi says. “We do quite a bit of construction financing, and also second mortgages and first mortgages with the trust companies, and some small to medium-sized commercial deals as well.” Now two years in operation, GreenFlow Financial’s MO is gaining traction. Ghazi has high hopes that the company will continue to establish itself as a go-to brokerage for the self-employed. “Self-employed people are having a tough time getting funding from the banks,” he says. “They are not getting higher leverage from the banks. They need extended amortization on loans or someone to listen to their problem and come up with a solution. Obviously, growth and profitability are what any business wants. But at the same time, we want to innovate and come up with modules that can better serve our clients.”
FEATURES
COVER STORY: YOUNG GUNS STEVEN LEVINE
MEGAN LEMAY
Certified mortgage broker
Mortgage broker
TRUE NORTH MORTGAGE Age: 31
DOMINION LENDING CENTRES HT MORTGAGE GROUP Age: 29
Having spent five years as a Realtor before becoming a broker, Steven Levine has been immersed in both sides of the property business for a decade now. This has allowed him to develop broad expertise in the market, which is increasingly valuable to his clients. “The reason I got into real estate was that I wanted to help people out,” he says. “I thought moving into brokerage was a good way to understand the whole system. I understand real estate, and it’s something that I can always go back to, but now, focusing on mortgages, I can help people out on this side.” The switch from Realtor to mortgage broker also means that if the market experiences a downturn, Levine has the know-how to diversify. “For someone like me, I do purchases, refinancing and transfers, so I haven’t noticed any slowdown this year,” he says. “I have noticed appraisals have come back lower, so I guess that means the market has gone down a bit.” Based in Montreal, Levine’s business stretches across Quebec, but is mainly concentrated in the province’s largest city, which also has Canada’s second biggest population – but in contrast to Toronto and Vancouver, Levine characterizes Montreal’s property market as relatively normal. “I’ve had clients tell me they have bought and sold properties [in Toronto or Vancouver] and made $150,000 profit in a year!” he says. “Montreal is nothing like that – the average house price here is around $300,000. Vancouver is being heated by foreign investment, and I think the climate here means you don’t have that same demand.”
Megan Lemay of HT Mortgage Group believes the relationship between brokers and lenders is in need of review. “I think lenders should get away from paying us for volume and instead pay for being efficient,” she says. “So many brokers send a file to multiple lenders without really researching where it fits or understanding the lender’s guidelines, and this does a huge disservice to our whole industry. It's costly for lenders and wastes everyone's time. Pay us to fund a file where it's been approved, and this forces stronger relationships between lenders and agents.”
TYLER SMITH Mortgage associate THE MORTGAGE CENTRE/SKY FINANCIAL CORPORATION Age: 30
Unlike many of those on this year’s Young Guns list, Tyler Smith hasn’t had the advantage of being in a booming metropolitan centre to drive his business. Based in the northeastern Albertan city of Cold Lake, which has a population of just under 16,000, Smith has nonetheless been able to build a solid client base since he entered the industry in 2009. He explains how his job has changed since he made his start seven years ago. “I think the main change since I joined the industry in 2009 is that mortgage brokers are more known to people,” he says. “Back then you really needed to get your name out there and explain what you did. Now with millennials getting mortgages, they do their own online research, and we get a lot of business that way.” Cold Lake is best known for the Canadian Forces base that’s located there, and its economy is inextricably linked to the military. Oil & gas exploration is the other pillar of the economy, and that means the city has a unique demographic. “The average age [in Cold Lake] is 30, I believe,” Smith says. “A lot of young families move here for jobs.” Although the recent oil shock has put the brakes on the rapid expansion Cold Lake has witnessed over the past decade, Smith is confident in his prospects going forward. “My target for the year is to stay above $20 million – we have been able to do that since 2012,” he says. “My goal is to get back to the business we were doing in 2013, 2014 when we were doing $30 to $40 million per year.”
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ALIM CHARANIA Mortgage expert DOMINION LENDING CENTRES REGIONAL MORTGAGE GROUP Age: 34
The challenging economy in Alberta over the past two years has made life more difficult for prospective homeowners in the province. All the more reason to seek the assistance of an expert – and Alim Charania has stepped up to help those struggling to secure financing. “There has been a progressive tightening of lender and governmental guidelines over the past five years,” he says. “Given the current economic downturn in Alberta, I do not foresee this changing, and people will need the services of qualified mortgage professionals more than ever to help them achieve their goals.”
www.mortgagebrokernews.ca
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YOUNG GUNS 2016
SARAH DAVISON Mortgage broker QUANTUS MORTGAGE SOLUTIONS Age: 35
Sarah Davison is in a period of transition – at the beginning of July, she opened her own office in Grand Prairie, Alberta. She looks back on what inspired her to go into the mortgage industry in the first place. “After several years with RBC and Scotiabank in personal banking, I wanted to focus on lending, specifically mortgages,” she says. “It was attractive to have more options for my clients and be able to specialize. Although the big banks gave me my start, there was an immediate income ceiling in my salaried position, and I wanted to be in the driver’s seat for my earning potential. I’ve never looked back.” It’s that ambition that eventually led Davison to want to call the shots – but is she worried about launching her own business during a dismal time for the Albertan economy? “Oil & gas has hugely affected our unemployment rate, and housing values have fallen too,” she says. “It’s definitely more of a challenge now. We are facing underwriting restrictions too. Everything is cyclical, though – it will come back around.” To prosper in a challenging economic environment, Davison and her team are doing everything they can to meet the evolving needs of clients. “I think our typical buyers are doing more research into homeownership in general before we meet them on terms, rates and even us, their broker of choice,” she says. “I don’t necessarily think these are negative things – reform to some lending practices was a safe change in a time of economic uncertainty. Clients researching the biggest purchase of their lives creates a vested interest and hopefully a more financially savvy and prepared buyer.”
www.mortgagebrokernews.ca
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FEATURES
COVER STORY: YOUNG GUNS
YOUNG GUNS 2016
BERNARD IMMEL Mortgage expert DOMINION LENDING CENTRES CANADIAN MORTGAGE EXPERTS Age: 28
CONRAD NEUFELDT CEO TMG THE MORTGAGE GROUP/NEUCOM TECH Age: 28
While Conrad Neufeldt had plenty of career options at his disposal upon leaving university, in the end, there was only one job that really resonated with him. “After graduating university, I took the highestpaying job I could find,” he says. “Within three years, I had already amassed well over 30 job offers, several of which had six-figure salaries. And yet, I turned them all down – I wanted to be a part of something bigger than what they could offer. I wanted to be in a career I thought mattered and would make a difference to people. Shortly after, I discovered the mortgage industry, joined, and have never looked back!”
MATTHEW PARKER Mortgage advisor
TUDOR MORTGAGE Age: 31
Matthew Parker wasn’t exactly stepping into the unknown when he joined the mortgage industry. Rather, he followed in the footsteps of his father, who provided expert tutelage to Parker from a young age. “I have been working with our family company, Tudor Mortgage, as a mortgage advisor since 2007, but I have been a part of the business for more than 20 years, as my father, John Parker, founded our company in 1992,” he says. “Growing up around the mortgage business has given me an insider's knowledge, along with a passion for helping clients to save money.”
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Having entered the mortgage business shortly after his 21st birthday, Bernard Immel is now approaching veteran status at the ripe old age of 28. As such, he’s developed plenty of opinions about how the industry can change for the better. “I'd like to see banks and credit unions have full disclosure on interest rate differential penalties for fixed-rate mortgages, disclosure on the rates they offer on renewal and more transparency on the consequences of collateral charges on high-ratio mortgages,” he says. As for his ambitions for the rest of 2016? “In 2015, I completed my financial planning licensing exams,” Immel says, “and so in the future I will be partnering with my godparents’ firm, Life Cycle Financial, to offer full comprehensive planning on everything finances.”
JAMES LAIRD President CANWISE FINANCIAL Age: 31
Having built a successful business with True North Mortgage, James Laird took a big step when he branched out on his own. Now approaching his second anniversary with his firm, CanWise Financial, Laird’s calculated risk has paid off. “I had some ideas on how to grow the business, but they were not being taken advantage of, so I decided to go out on my own,” he says. “So far it has gone better than expected. I’m ahead of all my targets, and I have opened offices in Toronto, Montreal, Calgary and Vancouver with 26 full-time staff.” It’s been a steady rise for Laird, who started in the business at a time when the housing market was in crisis. “I entered the industry in 2008 as the big recession occurred, so it was an interesting time to get in for sure,” he says. “Since then, the Canadian housing market has been on an unprecedented positive run. The industry is very competitive because of that. Technology has also changed how clients want to interact with their brokers. It means that you have to understand your business model much better.” CanWise Financial has thrived under these conditions, but that’s not to say its founder believes the sunny days will last forever. “All good things must come to an end,” Laird says. “It’s impossible that house prices will continue to appreciate as quickly as they have been in Vancouver and Toronto. When will it end? I really don’t know. But it’s a cyclical industry, so we will go through a downturn at some point, and you have to be prepared for that.” But even if the market falters, brokers will still have plenty to keep them busy, according to Laird. “There is about $1.2 trillion of mortgage debt in Canada, so even if there are no purchases next year, that still needs to be renewed and refinanced. That makes us a little more recession-proof than our colleagues in real estate.”
www.mortgagebrokernews.ca
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FEATURES
BRUISED CREDIT
Why it pays to help a client in need By using the resources available to help creditchallenged clients improve their credit scores, brokers have an excellent opportunity to improve their bottom line by winning customers for life
WITH THE introduction of increasingly tight credit requirements, many Canadians no longer fit the profile needed to secure financing from the traditional big-bank lenders. Individuals who would have met the requirements of traditional A lenders as recently as two years ago currently don’t qualify for financing from those lenders. The implementation of these new government regulations is forcing clients with bruised credit to reach out to mortgage brokers in an attempt to repair their credit scores. However, credit-challenged clients are often dismissed by brokers, who can be reluctant to deal with individuals who are unlikely to qualify for financing from a traditional lender. “Brokers who avoid credit-challenged clients are missing the opportunity to really shine and help their clients in a difficult time,” says Brea Watson, residential business development manager at Peoples Trust. “If I were in a difficult financial position, I would really appreciate any broker who helped me
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out in that difficult time a lot more than the broker who fired me.” Watson believes that brokers who refrain from doing business with credit-challenged clients are also missing an opportunity to build their skill set and grow their network. “Those brokers are excluding some of the excellent underwriters on both the alternative and private lending sides,” she says. “The lending market is changing a lot, with a lot of new regulations coming in, and if you don’t know about every side of the business, you’re cutting off opportunities to attract new clients.” Many brokers believe that working with credit-challenged clients is a waste of their time. They also avoid educating themselves on the private lending space, especially if they’re used to doing business with banks or Realtors in fairly straightforward, A-type deals. “If brokers knew a little more about their options in this particular field, it would really incentivize them to make more of an effort – there are more options than
just sending a client to a trustee,” explains Josh Balner, founder of Strategic Credit Solutions. “It’s a fulfilling niche – brokers really get to help people out. There’s also a lot of money in it.” George Kaadi, mortgage broker and owner at The Mortgage Centre, believes that the majority of brokers simply don’t have the knowledge and expertise to help clients with bruised credit. “Mortgage brokers are leaving out too many underserved people and too much money on the table,” Kaadi says. “They can learn how to personalize cash flow and debt management plans to gradually help people become debt-free and fix their challenged credit in the process. Mortgage brokers should think outside the box and learn alternative ways to help the
www.mortgagebrokernews.ca
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clients fix what is broken.”
Credit repair options Brokers can help credit-challenged clients
peripheral programs ask for upfront fees, but I wouldn’t recommend that a broker jeopardize their reputation by pitching such a service,” Balner says. “Ensure that every fee
“Brokers who avoid credit-challenged clients are missing the opportunity to really shine and help their clients in a difficult time” Brea Watson, Peoples Trust improve their situations via a number of routes. Balner advises looking for programs outside the regular market that can help clients establish a better credit score. “Some
is contingency-based and paid from proceeds of the loan. Sometimes lenders don’t require it, but ensuring all the bad debts are paid, even if it’s not a condition of the mortgage,
will speed up the client’s credit rehabilitation and keep those renewals coming.” Kaadi suggests that brokers learn the art of rehabilitating credit and work on educating clients about the reasons why their credit went downhill in the first place so they can gradually fix the problem. “Follow up with the clients to review the progress they’re making,” Kaadi says. “Don’t just do the mortgage and send the client on their merry way.” Brokers have to identify ways they can help clients improve their credit habits and put together some financial goals so the same thing doesn’t happen again. “A secured credit card is an excellent tool for clients who are trying to build or rebuild their credit history,” says Chloe Gagnon, manager
www.mortgagebrokernews.ca
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FEATURES
BRUISED CREDIT
5 TIPS FOR WORKING WITH CREDIT-CHALLENGED CLIENTS Grow a thick skin. “This game is not for the meek,” says Josh Balner, founder of Strategic Credit Solutions. “These clients can be a handful to deal with, and you have to wear many hats. You end up playing marriage counsellor and psychiatrist; it’s a totally different side of the job.”
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Prepare yourself for the unexpected. “Understand that deals are not going to close as quickly, and there will always be issues that you are going to have to solve,” Balner says. “You’re going to have to be able to see around corners.”
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Acquaint yourself with right institutions. “Make sure you have private money – your own lenders – and that you are aware of industry providers that can help you in these situations,” Balner says. “Make sure you brush up on the debt settlement companies, have a trustee and have options for every client.”
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Provide a variety of options. “These clients are not so much interested in the rates,” Balner says. “They already know they’re not going to qualify for traditionally sourced financing. They want to know the most effective way to rebuild their credit and get out of the situation they’re currently in.”
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Set a plan for the client. “And set them up with a prepaid credit card,” Balner suggests. “As long as the consumer is diligent going forward, you can pay off all of the debts from the proceeds. If there are collection items, make sure that they’re paid – don’t leave anything on the bureau that’s reporting negatively.”
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of secured card business at Peoples Trust. “Most clients will rebuild a good credit score in one to three years with a secured credit card, and almost everyone is guaranteed approval. It’s always good to have different types of trades on your credit file, especially active trades. If a client doesn’t have any active revolving credit, a secured card is definitely a good one to have.” Jayson Zilkie, director of sales at Refresh Financial, also points out secured saving programs as an effective way for clients to improve their credit scores. “The product
Ted Michalos, a licensed insolvency trustee and co-founder of Hoyes, Michalos & Associates, believes that the most useful thing any broker can do is to get an understanding of how to read a credit bureau. “What most people don’t understand is that credit bureaus are for-profit enterprises – they simply report the numbers that their members report,” Michalos says. “As such, the information on the credit bureau can be manipulated if you have sufficient time.” Although altering the state of a credit score is fairly simple, learning the intrica-
“To fix a credit score, you need to recognize that the client has had a problem and then work out if it’s something that can be rectified by management or budgeting changes” Ted Michalos, Hoyes, Michalos & Associates we offer is like a loan in every single way – it reports as a loan, but the major difference is that we don’t actually provide the cash upfront,” Zilkie says. “It’s designed as a savings account. So, the clients takes a loan with us from $1,200 to $5,500, and we take that money and put it in secured savings.” Each month a client makes a payment, a report is made on their credit profile as an ‘instalment loan.’ The client may access the funds early or take the entire amount at the end of the term. “It’s like a forced savings account, but it reports to the credit bureau as a term loan,” Zilkie says. “It helps clients to both build credit and save up for a down payment. The best way to build or establish credit is to get an instalment loan, but when you have bad credit, it’s hard to obtain that loan. But with the Refresh Credit Rebuilding Savings Program, the credit score isn’t checked, and 97% of applicants are approved.”
cies of a credit bureau can be difficult. “I’m a trained financial professional, and I had a hell of a time getting people to explain it to me,” Michalos says. “To fix a credit score, you need to recognize that the client has had a problem and then work out if it’s something that can be rectified by management or budgeting changes.” In some cases, the client’s problem may be as straightforward as bad payment history problem, which can be fixed with a small consolidation or bridging loan. “That may take six months, after which traditional financing could be available,” Michalos says. “If the credit situation is more serious, it may be that they have to fall on one of the various debt settlement programs or remedies that are available to all Canadians under the law.”
Resources for brokers Most communities across the country are home to nonprofit organizations that provide
www.mortgagebrokernews.ca
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FEATURES
BRUISED CREDIT
LOWDOWN ON TIGHTENED LENDING REGULATIONS In order to avoid a housing market meltdown, the Office of the Superintendent of Financial Institutions (OFSI) has tightened regulations on mortgage lenders. Ultimately, these changes in lending rules hope to combat risky lending practices. OFSI regulations require lenders to: Be more stringent when verifying borrower income Give more scrutiny to borrowers with low Beacon scores Pay closer attention to how interest rate increases could impact clients Closely examine where down payments come from Directly verify a borrower’s employment Set up a specialized process for self-employed borrowers CMHC recommends: A borrower’s gross debt service ratio should not exceed 32%
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credit counselling services, which help to reduce interest and pool debts. This makes the debt easier for the client to deal with. “When a broker hears that someone is about to file bankruptcy or a consumer proposal, their instincts usually tell them that there’s no way they can help,” Michalos says, “when in fact, if properly managed,
income. It’s important for every broker to know that they have access to flexible, shortterm solutions at very competitive prices for clients who need a year or two to get their credit back on track. Balner believes that brokers need to increase their knowledge of this space in order to remain competitive. “Any brokers
“Any brokers who don’t have access to debt settlement and credit repair tools are going to have a tough time going forward. There’s going to be an everincreasing need for these services” Josh Balner, Strategic Credit Solutions within 18 to 24 months, they probably can service that client. And by helping that client now, while they are in trouble, the broker will have a referral for life.” Peoples Trust’s Brea Watson points out that brokers need to adopt a different approach when working with creditchallenged clients and that rates should never be a part of the conversation. “Those conversations should focus on the solution and how the broker is going to help repair that person’s credit,” Watson says. “Brokers should be discussing all of the other benefits of the deal, including its flexibility or affordable payment(s); they shouldn’t be focusing on rates. If anybody does approach their clients strictly with rate, they’re going to lose every time.” Canadian brokers can choose from a selection of flexible alternative lenders who will work with credit-challenged clients to transition them back into the prime lending space. There are many lenders out there who have strong equity option programs with no Beacon requirements, and many of these programs allow for bruised credit and stated
who don’t have access to debt settlement and credit repair tools are going to have a tough time going forward,” he says. “There’s going to be an ever-increasing need for these services. With the regulation around foreign investment potentially coming next year and the possibility of the Bank of Canada raising interest rates, we’re going to see a ton of people heading down this path. Brokers are going to need to be able to help – in the coming years, you can expect the banks to reject even more people than they do today.” To service the increasing numbers of Canadians who are turned down by traditional lenders, Ted Michalos believes brokers need to take a proactive stance. “It is such a large and growing market segment,” Michalos says. “Brokers are usually the first place people call when they’re in financial trouble if they own a home. Individuals assume they can tap into the equity of their home to deal with their debts. For a broker who monetizes that contact and takes advantage of the fact they’re receiving the call, there is a chance for significant financial growth.”
www.mortgagebrokernews.ca
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PEOPLE
BROKER INSIGHT
Getting to the top with a personal touch Sarah Makhomet talks to CMP about her history on Bay Street, the benefits of partnering with Dominion Lending Centres and an important new arrival
CMP: How did you get into the broker space? Sarah Makhomet: I used to work on Bay Street at an investment firm, but I always knew that I wanted to work for myself, and I really saw a need in the mortgage industry – most people need a mortgage at least once in their lifetime. So far, my experiences in the industry have been excellent. There have been times when I thought, ‘What did I get myself into?,’ but that happens in any business. Most of the time I’ve been really, really happy with my clients and the agents in our office. It’s been a wonderful experience, and I’ve learned a lot, so it’s great from that standpoint.
CMP: Has partnering with Dominion Lending Centres been beneficial? SM: Yes, it has. The brand is great, and I’ve never had to walk into someone’s home and explain who I am – that really helps. The support from DLC has been fantastic. Overall, it’s been very good. I also have a partner, Jonathan Tillger, and he’s been wonderful too. It’s been great being a part of the DLC family.
CMP: What’s the secret behind your success? SM: I tell people all the time that simply
being available to meet clients and being responsive – that’s what differentiates people who are successful from those who are not. I don’t think it’s very difficult to be a mortgage broker, but you do have to be super smart, and you have to get out there to build a network. In the first few years of doing this, 90% of my time was spent on marketing and building relationships. Being able to follow up with clients right away is just as important, because when clients call you, they expect you to get back to them. If you don’t, they may go to someone else. Speed of response is key.
CMP: What trends have you noticed in the broker space? SM: Tightening of regulations has been the big thing that I’ve noticed. In 2008, we used to do 40-year amortizations with 0% down, and obviously those days are gone.
It’s made it a lot more difficult for some people to qualify for mortgages or qualify for as much as they may want. You have to be on top of the regulations because we see so many changes. We see lenders who are constantly changing their own policies and guidelines. These days you really have to know your products and be on top of lender products. It’s been a great learning experience.
CMP: How can brokers keep up with these rapid changes? SM: You have to read up on stuff and attend lender meetings to get to know their products because they’re constantly changing. We get so many emails every day from lenders with policy updates and guideline changes. There is also so much happening with Brexit: How is this going to impact Canadian
MAKHOMET ON HOW TO COMBAT MARKET FLUCTUATIONS “I think that it is really important to accumulate a good amount of clients in your database over the years. If you do that, you’ll be OK, even if we do experience the market slowdown that’s being predicted. Also, stay in touch with your clients and have CRM tools in place; that’s how good brokers will be differentiated from those who are part-timers. If you do all of these things during your career, you’ll be well prepared for whatever is coming in the future.”
being there – being able to answer calls,
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FAST FACTS: SARAH MAKHOMET
Entered the mortgage industry in 2008
Co-owner of DLC Home Capital Solutions with business partner Jonathan Tillger
Offers various mortgage solutions – first, second, private, commercial and residential – as well as debt consolidation and bridge financing
Recently expanded the business to include banking services through CFF Bank
Multiple-time member of CMP ’s Top 75 Brokers list
“I don’t think it’s very difficult to be a mortgage broker, but you do have to get out there to build a network” markets? A lot of investors in Canada are foreign, so you need to have the ability to understand what’s happening globally and how it’s going impact the Canadian market. That’s one of the things that every broker has to do. I wake up every morning and say, ‘What is happening in financial services; where are the stock markets at?’ Even if you’re not a stockbroker, you still must know what’s going on.
CMP: What do you get up to in your spare time? SM: Well, I’ve got a 10-month-old baby, so all of my spare time is spent looking after him! It’s been one of the best ‘hobbies’ you could have – it’s exhausting but incredibly rewarding, and I wouldn’t trade it for anything else in the world. My time is either spent working or with him; there’s nothing much else in between.
Also offers GICs, RSPs and unsecured lines of credit, as well as regular banking services such as chequing and savings accounts
Works with more than 60 lenders
Credits her success to hard work and dedication to her clients
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SPECIAL PROMOTIONAL FEATURE
REVERSE MORTGAGES
How winning partnerships create success It’s a competitive market in 2016, and anything that can help brokers differentiate themselves from the crowd is an integral part of success
PARTNERING WITH a financial company that has a forward-thinking approach and offers cutting-edge products is one way that Canada’s smart brokers are gaining an advantage over the competition. In introducing innovative products and an optimized broker communication channel, HomEquity Bank is fast becoming the financial institution of choice for Canadian brokers. In response to the rapidly changing and competitive market, HomEquity Bank has stepped up to provide brokers with the sort of product offering and service excellence that the modern Canadian consumer demands. The bank is the only lender in the market to offer a reverse mortgage, a home equity product that allows homeowners who are at least 55 years old to take up to 55% of the equity out of their home. “The biggest benefit of the reverse mortgage product is that there are no payments – once we advance your client the money, they can live for another 30 years, and we will never ask for another penny,” says Yvonne Ziomecki, senior vice president of marketing and sales at HomEquity Bank. “It gives people peace of mind and allows them to stay in the family home, where they’re a part of the community, where their children grew up. Not having the pressure of payments is a really big deal.” Although certain products and lines of
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credit currently in the market may seem attractive on the surface, many require the spouse to requalify if their partner passes away. When a spouse has passed away, the remaining spouse’s debt service ratio will be severely impacted, and if this situation arises, many other financial institutions are quick to call the loan or line of credit. By contrast, HomEquity Bank’s reverse mortgage product cannot be called, and your client will never have to requalify. “There’s still some stigma about the reverse mortgage product, and people think that it’s only of benefit for people who have
Communication is key In order to provide brokers with more efficient service around the reverse mortgage product, in September 2015 HomEquity Bank launched Mortgage Broker Direct, a distribution channel that enables brokers to communicate directly with HomEquity Bank’s back-office team. Mortgage Broker Direct helps brokers stay in control of the client relationship, easily manage the client’s file and make sure their mortgage gets funded. “Broker compensation is also higher than before,” Ziomecki says. “It used to be 65
“If a broker is working with a client who is over 55, owns their home and is looking for a product with limited payment or no payments, we’re the only game in town” Yvonne Ziomecki, HomEquity Bank debt,” Ziomecki says. “While that is the case for some of our clients, we also work with mortgage brokers who use reverse mortgage funds for purchases, lifestyle expenses, travel, home improvements and as a down payment gift for the client’s children or grandchildren. The reverse mortgage is also a very good alternative to private second mortgages.”
basis points, but through Mortgage Broker Direct, it’s 100 basis points. Mortgage Broker Direct is helping brokers to provide a solution when no other solution is available. We’re the only lender in the market that offers a reverse mortgage, so if a broker is working with a client who is over 55, owns their home and is looking for a product with
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Pictured: Skating star Kurt Browning
limited payment or no payments, we’re the only game in town.” Ziomecki attributes HomEquity Bank’s astounding recent business performance – 35% growth year-to-date – to a combination of Mortgage Broker Direct’s launch and the growing awareness around the benefits of the reverse mortgage product. “We’re getting a lot of calls directly from consumers about the reverse mortgage product, but most importantly, the business growth we’re seeing is also coming from mortgage brokers – that’s also up 35% yearover-year,” Ziomecki says. “Mortgage Broker Direct improves the whole process for brokers. We run broker contests and special offers, and we also provide brokers with a lot of different tools and training.”
Skating into success In an attempt to increase awareness of the reverse mortgage product and its broker benefits, HomEquity Bank recently
announced that skating star and Canadian icon Kurt Browning has partnered with the organization as a spokesperson. “As the only provider of reverse mortgages in Canada, brand awareness for the bank, the product and the category is sometimes limited because we’re only ones doing it – it’s a bit of a niche product,” Ziomecki says. “We were thinking about how to elevate the brand and decided to partner with a spokesperson who is well recognized and trustworthy. There aren’t a lot of Canadian companies who use spokespeople, although we’re aware that AAG has recently partnered with Tom Selleck, and DLC previously partnered with Don Cherry.” Before deciding to go with Browning, HomEquity Bank followed a structured process to make sure the person they finally selected was the perfect fit. They started with a list of more than 100 well-known Canadians, slowly narrowing the list down based on reputation and demographic
appeal. When they had culled the list to 24, Ziomecki and her team had an agency reach out to the remaining candidates to ask if they’d be interested in partnering with a financial institution. Although most said yes, some had timing conflicts or exclusivity agreements with certain networks or categories. The selection committee soon had a list of around a dozen candidates, at which point they enlisted a panel of 2,500 Canadians to rate each candidate’s level of celebrity and trustworthiness. “We got a very good read on the people we were considering, and we did some focus groups to get a little more colour around potential candidates,” Ziomecki explains. “We met with all of the candidates, and they were so delightful, but it became pretty clear that Kurt was the right fit. We made an easy decision and started working with him.” Since then, HomEquity Bank has shot a series of commercials, which are due to launch in July. Browning took a lead role during the production, giving input on the script and helping the directors on the day of the shoot. “In one word, it’s been fun!” Ziomecki says. “It feels like more of a partnership, a relationship, than transactional. Kurt is very down-to-earth, so easygoing, but extremely professional. We had long shooting days, during which there was a lot to get done, but he made it fun. When it was a wrap, we all got our skates on and had a chance to informally skate with Kurt and Don Jackson.” Ziomecki has no doubt that she and her team chose the right spokesperson. The reaction to Browning has been resoundingly positive, and she’s certain that their target demographic will relate to him and the hard work he put in to achieve his sporting success. “Having a spokesperson gives credibility to the category, and I think it will lead to brokers getting a lot more questions from their clients about the reverse mortgage product,” she says. “I’m sure that this campaign will raise awareness and lead to an increase in demand for the product across the country. We’re here to help and partner with the brokers who get those calls.”
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PEOPLE
CAREER PATH
THE PERSONAL CONNECTION Dale Koeller may be active in the political side of the mortgage industry, but at the end of the day, it’s all about the people
1980s LEARNS THE FAMILY BUSINESS
2002
TRIES TO QUIT After spending a year learning the business via administrative tasks, Koeller announced his resignation and was tasked with training his replacement. In doing so, he realized what he enjoys about the mortgage industry “I developed my passion by showing someone else how important the work we were doing was. A client wrote me a thank-you card, and that act of thanks was instrumental – it’s the personal connection of working with people that I love”
As the son of Calvert Home Mortgage’s owner, Koeller’s childhood included accompanying his father on rentcollecting trips and fielding phone calls from borrowers to his father’s home office “We had to be professional and take accurate messages – which sometimes included a borrower trying to negotiate with us a delay of their payment obligations!”
2001
JOINS THE INDUSTRY During his time at university, Koeller developed a passion for the field of corporate philanthropy. Co-op work placements followed, including one with a charitable foundation. After school, Koeller joined his father and brother in running a charity out of their mortgage office “When I finished my bachelor’s, my father and brother approached me and invited me to join the company – and I declined. Eventually I said we’d give it a try”
2011
ADDRESSES PARLIAMENTARY COMMITTEES Controversial bill C-13, which sought to expand the government’s surveillance powers in a bid to stop cyberbullying, inspired Koeller to gather a group of affected mortgage investment corporations to bring about grassroots change. He was selected to represent the group in a presentation to Parliament’s Standing Committee on Finance and the Senate’s National Finance Committee
“It was a seminal moment for me. We managed to get our voice heard. It got us, as a company, more active in our industry” 2015
WINS REIN AWARD
Last year, Koeller added the award of Alberta South Real Estate Professional of the Year to his collection of honours, courtesy of the Real Estate Investment Network “The trophy’s nice as recognition, but what I really love are the thank-you cards. That’s where I get my kicks – seeing people make their plans work and achieving their own goals, and being a part of that”
2012
SITS ON PRESTIGIOUS JUDGING PANEL Chosen to be a judge for the Canadian Mortgage Awards, Koeller finds himself “blown away” by the calibre of the submissions “I was really invigorated and excited by the good work being done. I was very impressed about what people were up to in their individual careers, how laudable their achievements are. I got excited about my competitors”
2013
GETS A SEAT ON AMBA BOARD With the experience of his visit to Parliament fresh on his mind, Koeller ran for and won a seat on the board of the Alberta Mortgage Brokers Association “If we want to continue to operate, we have to continue to be in touch with our stakeholders and be organized as an industry. Realizing that we’re part of a community helps us be stronger as individuals and individual companies”
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PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email mortgagebrokernews@kmimedia.ca
NEED FOR SPEED From ski racing to motorcycle riding, Andrea Morris lives life in the fast lane ANDREA MORRIS jokes that she bought her first house to have a garage for her motorbike. The Calgary mortgage broker’s love of motorcycling grew out of the ski racing that defined much of her early life. “I used to get clocked skiing at 110 km per hour,” she says. “I think I developed a need for speed; I enjoyed the adrenaline.” The sister of a college friend was already a rider and provided the catalyst for Morris to move beyond curiosity to taking up the hobby herself – one turn on the bike, and she was hooked. But it’s not just the speed that Morris finds so alluring about motorcycling. “I love the freedom, the control, the solitude,” she says. “You just hop on the bike and go wherever you want.” Even though she reserves long rides for the weekend and takes the occasional group ride at dusk, Morris is very aware of the rejuvenating power of a solitary afternoon ride at the end of the working day. Now the mother of a toddler, Morris’ future riding plans have changed shape to include her daughter – she’s on the verge of trading in her sport racing bike for a cruiser with an eye to future rides with a little one on the back.
2,000
Average number of miles Morris rides per year
11
Number of years Morris has been riding motorcycles
30
Average number of hours Morris rides per month
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