MORTGAGEBROKERNEWS.CA ISSUE 16.05 | $12.95
MORTGAGE TECH Discover what your business needs to thrive in a post-pandemic world ANOTHER STRESS TEST CHANGE
Will it be a major hurdle or a minor blip? Industry players weigh in
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A MORE STREAMLINED TRANSACTION
New innovations that will make it easier to collect documents, choose a lender and more
ALL ABOUT REVERSE MORTGAGES What you need to know about a product that’s quickly gaining steam
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ISSUE 16.05
CONTENTS
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DRIVING CHANGE FEATURES
How has mortgage technology evolved over the past year – and what trends are likely to emerge in the future? CMP spoke to four experts in the space to find out
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ISSUE 16.05
CONNECT WITH US
CONTENTS
36
30
FEATURES
THE ERA OF THE REVERSE MORTGAGE
04 Editorial
Cutting through the noise
Industry players weigh in on the impact of the proposed stress test change
10 Bank update
What the BoC’s latest announcement means for the future of interest rates
12 Technology update
Where is Canadian fintech headed?
14 Opinion
Why mortgage professionals need to pay attention to blockchain technology
FEATURES
PEOPLE
34
INDUSTRY ICON
THE PEOPLE BUSINESS
2
UPFRONT
08 News analysis
A new innovation promises to streamline the document-gathering process by connecting with clients’ bank account history
16
facebook.com/MortgageProfessionalCA
Key data that should be on your radar
REPLACING DOCUMENTS WITH DATA
During his 26 years in the mortgage industry, Ron De Silva has built his reputation on doing what’s best for brokers
twitter.com/CMPmagazine
06 Statistics
FEATURES
Reverse mortgages are becoming increasingly popular in Canada – so what do brokers need to know before offering them to clients?
Got a story or suggestion, or just want to find out some more information?
PEOPLE
At Vine Group, the formula for success is simple: focus on people above all else
42
28 Taking private lending to the next level The time is right for private lenders to embrace new technology
29 An interconnected mortgage industry A private lending platform hooks up with a broker portal to streamline the mortgage process
32 Upping the ante
How Filogix is making collecting tax documentation easier than ever
40 The customer-obsessed advantage
Being laser-focused on borrowers and brokers has given HomeEquity Bank an edge in the reverse mortgage market
PEOPLE 48 Other life FEATURES
A RAPID RISE
Equitable Bank has helped expand the reverse mortgage market in Canada – and it has its sights set on further growth
Going against the grain with broker and woodworker Paul Dueck
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UPFRONT
EDITORIAL
www.mortgagebrokernews.ca ISSUE 16.05
The value of expertise
I
n April, two stories broke in quick succession that likely sent shivers down mortgage brokers’ spines. First came OSFI’s announcement that it plans to raise the qualifying rate on the stress test for uninsured mortgages, followed by a statement from the Bank of Canada indicating that it had readjusted its commitment to keep interest rates low through 2023. The OSFI move seemed designed solely to slow down the frenzied rate of home-buying and bidding in Canada, with speculation mounting about possible further federal intervention in the market. The Bank of Canada statement, meanwhile, suggested that the bank expects to hit a sustainable inflation target by the second half of 2022, which could prompt it to raise interest rates sooner than expected.
Brokers’ true value lies in their ability to cut through seemingly worrying developments and give it to clients straight
EDITORIAL
SALES & MARKETING
Managing Editor Paul Lucas
Vice-President, Sales John Mackenzie
Editor Fergal McAlinden
National Account Manager Corey Bahadur
News Editor David Kitai Writers Ephraim Vecina Mallory Hendry Copy Editor Clare Alexander
CONTRIBUTORS Shawn Allen Mark Carter
ART & PRODUCTION Designer Joenel Salvador Production Coordinators Loiza Razon Kat Guzman Client Success Coordinator Cole Dizon
Sales Executive Alan Stewart Global Head of Media Marketing Lisa Narroway Project Coordinator Jessica Duce
CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Global CEO Mike Shipley Global COO George Walmsley
EDITORIAL INQUIRIES
fergal.mcalinden@keymedia.com
SUBSCRIPTION INQUIRIES
Taken together, the stress test hike and prospect of increasing interest rates might have been seen as bad news for the mortgage industry. Yet the broker community didn’t panic, coolly assessing each development and getting a firm grasp on the details. In CMP’s conversations with brokers in the days and weeks following the two announcements, the prevailing mood was one of calmness. Most pointed out that the stress test hike, as a relatively modest increase, will affect only a small number of prospective homebuyers. On the Bank of Canada news, many brokers emphasized that with rates currently extremely low, even a couple of consecutive rises likely wouldn’t be the end of the world for clients. The reaction of the broker community to those two stories was as clear an indication as ever of brokers’ true value: the ability to cut through seemingly worrying developments and give it to clients straight. It’s reassuring to know that when those types of announcements come through – ones with the potential to cause alarm or panic among the general public – mortgage brokers are there to provide outstanding advice.
The team at Canadian Mortgage Professional
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Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss
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UPFRONT
STATISTICS CREDIT ACTIVITY DURING THE PANDEMIC
CANADIAN HOMEOWNERS PLOT THEIR NEXT MOVES
0.5%
Have no plans to sell their current home in the next two years: 75%
Thirty-day delinquency rate of personal loans (including mortgages) in Canada during the third quarter of 2020
The majority of homeowners in Canada have no plans to sell, despite the high-demand housing market and record low interest rates, according to a new CIBC poll. Instead, Canadians said they’re more likely to renovate their current home – around a third have already done so, and another 31% said they plan to undertake renovations in the next 12 months. “These results suggest that supply won’t be improving in the near term,” said Carissa Lucreziano, vice-president at CIBC Financial and Investment Advice.
Believe low interest rates aren’t a compelling enough reason to sell: 63% Have renovated their current home over the past year: 34% Have done basic home maintenance over the past year: 54% Have made landscaping adjustments over the past year: 45% Plan to upgrade their current home over the next 12 months: 31%
0.86%
Thirty-day delinquency rate of credit cards in Canada during the same period
KEY MARKETS DRIVE GROWTH
13%
Share of borrowers who took advantage of payment deferral programs in 2020
$23,043
Average debt per consumer (excluding mortgages) in Canada as of the end of 2020 Sources: TransUnion, Equifax
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Accelerated activity in certain hotspots is propelling a sustained increase in house prices, according to the latest data from Teranet and National Bank. The March numbers showed the biggest price increases in Halifax, Hamilton and the Ottawa-Gatineau region.
ANNUAL INCREASE IN THE NATIONAL COMPOSITE HOUSE PRICE INDEX Halifax: 22.5% Hamilton: 20.9% Ottawa-Gatineau: 19% Montreal: 16.1% Toronto: 11.2% Victoria: 10.5% Quebec City: 8.1% Vancouver: 7.9% Winnipeg: 7.8% Edmonton: 2.9% Calgary: 1.8% Source: Teranet–National Bank House Price Index
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NATIONAL MARKET CONTINUES TO SOAR A bit of supply relief helped Canadian home sales reach yet another all-time high in March. According to CREA, Canada saw a total of 76,259 residential deals closed during the month, surpassing the previous monthly sales record by nearly 14,000 transactions.
MONTH-OVER-MONTH CHANGE
5.2% National home sales
3.1% MLS Home Price Index
7.5% Number of newly listed properties
Source: CIBC Housing Poll, April 2021
Source: Canadian Real Estate Association
… AND DETACHED HOUSES
FIRST-TIME BUYERS WANT AFFORDABILITY … A desire for more space and lower overall debt is prompting nearly half of first-time buyers in Canada to search for properties in the suburbs, according to a new BMO survey. In BC and Ontario, the proportion of first-time buyers targeting the suburbs was even higher (53%).
A large part of first-time buyers’ interest in the suburbs and smaller cities can be attributed to their desire for a detached home – the prospective buyers surveyed by BMO showed a clear preference for this property type.
WHERE FIRST-TIME BUYERS WANT TO BUY
TYPE OF PROPERTY FIRST-TIME BUYERS ARE LOOKING FOR
Plan to purchase here
SMALLER CITY/TOWN
SUBURB 50% 40%
Drawn by affordability Drawn by price-to-square-footage ratio Drawn by proximity to workplaces
50%
47% 44%
30%
41%
50%
47% 47%
40% 30%
MAJOR CITY CENTRE
35%
20%
20%
20%
10%
10%
10%
0%
0%
0%
61% Townhouse
32%
49%
40% 30%
Detached home
Semi-detached home
30%
Source: BMO Home Buyers Survey, April 2021
28% Condo
27% Source: BMO Home Buyers Survey, April 2021
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UPFRONT
NEWS ANALYSIS
A new source of stress OSFI’s proposal to hike the stress test rate for uninsured mortgages has triggered debate in the industry about how significant the consequences are likely to be IN SOME WAYS, it was the news the Canadian mortgage industry had been bracing itself for. Speculation had been in the air for months about possible federal intervention to cool the housing market, and it arrived in April with an announcement from the Office of the Superintendent of Financial Institutions (OSFI) that it planned to raise the minimum stress test qualifying rate for uninsured mortgages. OSFI’s review of the stress test level had been on hold for more than a year following the outbreak of the COVID-19 pandemic, when mounting fears that home prices would plummet led the regulator to pause its plans in March 2020.
financial risk. OSFI is taking proactive action at this time so that banks will continue to be resilient.” The news inevitably turned heads in the industry, reviving memories of past measures aimed at stemming the tide of Canadians seeking to secure a mortgage. Yet when the furor died down and the proposed measures were fully examined, mortgage professionals largely seemed unmoved by their potential impact. OSFI’s plan to raise the stress test level to 5.25% or two percentage points above the market rate – whichever is higher – was viewed as a decidedly mild course of action, considering earlier fears about the possible extent of federal intervention.
“I don’t think that change in the mortgage amount for the uninsured, and no change for insured buyers, is really going to have that much of an impact” Rob Goodall, Atrium Mortgage Investment Corporation “A strong financial system that is able to support Canadians in today’s environment will be critical to Canada’s post-pandemic economic recovery,” OSFI said in a statement announcing the proposed hike. “The current Canadian housing market conditions have the potential to put lenders at increased
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Rob Goodall, president and CEO of Atrium Mortgage Investment Corporation, believes that with insured mortgages unaffected by the proposals, and purchasing power reduced by only around 5% for uninsured mortgages, only “marginal” buyers would be significantly affected.
“I don’t think that change in the mortgage amount for the uninsured, and no change for insured buyers, is really going to have that much of an impact,” he says. In fact, many in the mortgage industry felt the regulator was missing the mark with the measures and that the government’s focus should be on addressing another significant issue in the current climate: the market’s lack of inventory. “Creating more supply to match the demand is a very hard thing to do, but it’s definitely something that we should be working on now,” says Mortgage Alliance president Peter Aceto, who also points out that the changes do little to solve the problem of prospective homebuyers being currently frozen out of the system. “One of the biggest struggles concerns new homebuyers and families trying to get into the housing market,” he says. “For me, making the buffer even bigger doesn’t seem like the most logical tool to help borrowers and lenders – and to cool down the housing market.” Some thought the OSFI proposal might
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KEY DATES IN THE OSFI STRESS TEST
January 1, 2018
OSFI’s stress test on both insured and uninsured mortgages goes into effect
January 24, 2020
OSFI announces it is reviewing the stress test rate on uninsured mortgages
March 13, 2020
Plans to change the stress test rate are suspended in response to the COVID-19 pandemic
April 8, 2021
OSFI proposes changing the qualifying rate for uninsured mortgages to 5.25% or the mortgage contract rate plus 2%, whichever is higher
have the opposite impact of its intended effect, temporarily heating up the housing market as prospective buyers rush to complete deals before the change takes place on June 1. In a report released shortly after the OFSI announcement, TD economist Rishi Sondhi argued that the proposed hike was likely to
The OSFI announcement also stirred some speculation that it was merely an opening salvo ahead of further regulatory changes meant to curb activity in the housing market. Instead, those suggestions proved largely unfounded when Finance Minister Chrystia Freeland’s federal budget – an opportune
“Creating more supply to match the demand is a very hard thing to do, but it’s definitely something that we should be working on now” Peter Aceto, Mortgage Alliance accelerate market activity for the remainder of April and May – and that its long-term impact would be negligible to modest. “Any softening should prove temporary, and this policy is unlikely to significantly alter market psychology or cause a steep or protracted drop in activity,” Sondhi wrote.
moment for the government to introduce other restrictions – landed serenely on the housing front. Aside from a new tax on non-resident and non-Canadian-owned real estate and a $2.5 billion top-up of the government’s 10-year affordable housing strategy, the budget contained little in the way of
May 7, 2021
The comment period on the proposed changes will end
June 1, 2021
The new stress test rate for uninsured mortgages will take effect
dramatic action in the housing market. With the economy still delicately poised and the nature of the country’s postpandemic recovery uncertain, this arguably represented a wait-and-see approach on the part of the government. Still, Goodall points out that federal authorities will eventually have to work with private enterprise to deal with the market’s current discrepancy between supply and demand. “I personally think that the private sector is the one to fix it – maybe with some incentives from government,” he says. “The supply issue is a really difficult one that’s not going to be solved in the short run.”
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UPFRONT
BANK UPDATE NEWS BRIEFS Customer confidence in Big Five banks takes a hit
Canadian consumers’ overall satisfaction in financial institutions declined this year, according to new J.D. Power study – and the drop was most significant among the country’s Big Five banks. The survey revealed that while satisfaction in midsized banking institutions increased, the overall decline in confidence was attributable to greater dissatisfaction with Canada’s top five banks. Only 43% of Canadians said they felt supported by their banks, according to the survey, compared to 63% of Americans.
EQ Bank launches digital mortgage platform
EQ Bank, powered by Equitable Bank, has unveiled a new digital service, Mortgage Marketplace, that allows users to shop for more than 2,000 mortgage products offered by Canadian lenders. Created in partnership with digital mortgage brokerage nesto, the service includes a customized recommendation function that narrows down users’ searches to products tailored to their needs. Mortgage Marketplace will also “pre-qualify customers in minutes, not days, with regular digital updates on the status of their application,” said Mahima Poddar, SVP and group head of personal banking at Equitable Bank.
RBC poll highlights unsustainability of market
Sixty-two per cent of Canadians believe they will be priced out of the housing market in the next decade, according to a recent RBC poll, suggesting that current demand and activity in the Canadian housing market is not sustainable in the long term. Another
54% of Canadians said they believe the current market is skewed towards sellers, up from 41% last year. “Some level of moderation in growth going forward in terms of what’s happening in the market, and the dynamics that are being created, would be a healthy thing overall,” RBC VP Amit Sahasrabudhe told MortgageBrokerNews.ca.
CMHC greenlights Laurentian Bank bond program
Laurentian Bank of Canada has received CMHC approval to establish a $2 billion legislative covered bond program in accordance with the CMHC Canadian Registered Covered Bond Programs Guide. This will allow the bank to occasionally issue covered bonds in accordance with prevailing market conditions. Rania Llewellyn, Laurentian’s president and CEO, said the covered bond program will “help further diversify our funding sources, reduce our cost of funding and help us deliver competitively priced products to our customers.”
Scotiabank exec addresses affordability crisis
It will take a concerted effort by Canada’s major banks to improve conditions in the housing market, according to Jake Lawrence, Scotiabank’s head of global banking and markets. In a recent interview with Bloomberg, Lawrence said the banking sector’s resources and networks would prove invaluable when combined with government initiatives aimed at fixing Canada’s affordability crisis. “We need all levels of government to work together to ease obstacles to construction for all forms of housing,” Lawrence said. “Whether it’s affordable, whether it’s rentals or owned accommodations, a key step is getting more supply in the market.”
The rising rates question What’s in store for interest rates following the latest Bank of Canada announcement?
Amid a prolonged period of record low interest rates, the Bank of Canada’s latest announcement indicated that those rates could be on the rise sooner than initially anticipated. In its April 21 rate announcement, the bank held its overnight rate at the lower bound of 0.25%, in line with its prior commitment not to raise rates in the short term. However, after projecting in January that its inflation target of 2% would not be sustainable until well into 2023, the bank said it now believes that will occur by the second half of 2022 – an acknowledgement that the days of rockbottom rates will be coming to an end sooner rather than later. The statement was predicated around optimism on the economic front. “The outlook has improved for both the global and Canadian economies,” the bank said in its rate announcement. “Activity has proven more resilient than expected in the face of the COVID-19 pandemic, and the rollout of vaccines is progressing.” However, the bank also noted that “the recovery remains highly dependent on the evolution of the pandemic and the pace of vaccinations.” It had always been clear in the mortgage industry that rate increases were coming down the line, but the bank’s revision of its earlier forecast led to some speculation that even further changes were in the offing. “I expect that if the economic indicators that they monitor continue to be strong, it
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could be even sooner than [the latest announcement indicated] – the first half of 2022, for example,” says James Laird, co-founder of Ratehub and president of CanWise Financial. Still, with much uncertainty remaining about the post-pandemic landscape and what
“We’re going to be recovering from an economic downturn, so I can’t see rate increase after rate increase” the future looks like for Canada’s emergence from lockdown, some pointed out that any interest rate hikes are likely to be measured. “We’re going to be recovering from an economic downturn, so I can’t see them doing rate increase after rate increase,” says Leah Zlatkin, co-founder and principal broker at Brite Mortgage. “There’s usually quite a bit of spacing between those increases. It’s also based on the fact that [the Bank of Canada] is hoping there will be a recovery by the end of 2022, so if the recovery is a little bit slower, then their tune may change.”
Q&A
Joe Flor Director, national sales EQUITABLE BANK
Years in the industry 20 Fast fact Flor has been nominated twice as BDM of the Year at the Canadian Mortgage Awards
A better broker and customer experience How was business for Equitable Bank in 2020? It was a really good year. Obviously, many businesses didn’t know how they would be affected by the pandemic, but in Q3 and Q4 in particular, we were extremely busy. We had record years in reverse mortgages as well as prime. For Equitable, that’s a testament to what we stand for in the broker community. We’re a very reputable bank and lending institution. We’re regarded as one of the top lenders out there when it comes to service, and being Canada’s challenger bank has really come full circle – we’re really getting that message out to brokers in terms of what we represent in this market.
What’s new with the company in 2021? Lots! Our strategic initiative this year is really focusing on the service. It really is the core value of Equitable Bank and its status as Canada’s challenger bank. Our focus is thinking about constantly challenging the status quo, thinking about innovative solutions, always being nimble to adapt to the market, and thinking about product and service enhancements that are going to make the broker and client experience better. We constantly try to become more high-tech, more high-service, more digitized, and it all stems back to improving that broker experience. We went out, did some surveys, spoke to a lot of our big supporters, heard what they have to say, and now here we are bringing those to market, driving those deliverables through.
It’s been a significant year on the reverse mortgage side. What are your thoughts on the future for that sector? I think this product will continue to grow. We have huge expectations this year; we did increase our loan-to-value on the reverse mortgage Flex side to 55%, so we’re extremely competitive with this product. We think it’s going to continue to accelerate for us for the years to come.
What’s the main thing mortgage brokers should know about working with Equitable? There are a lot of great things that we do. We’re a one-stop-shop lending institution, and we’re trying to position ourselves as the Swiss Army knife of mortgage solutions. Brokers should know that we’re there to listen to them, whether that’s through conducting surveys, talking to our key supporters or continuing to strategically build our inside sales division to provide further outreach to brokers. We’re constantly educating and working with our partners to get deals across the finish line as part of an overall effort to increase brokers’ business. We want their businesses to grow as much as ours. We’re working in tandem with them, and it’s a true partnership that they get when they work with Equitable.
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UPFRONT
TECHNOLOGY UPDATE
The future of Canadian fintech What challenges and opportunities await Canada’s expanding financial technology realm?
director and financial services lead in Canada. The report emphasized that securing deals and growing business in the US could prove to be a significant opportunity for Canadian fintech companies, noting that “a renewed focus on encouraging and retaining crossborder investment may benefit Canadian hubs, given the negative impact of COVID-19 on 2020 fintech deals.” In the mortgage space, there are other concerns about potential future bumps in the road. Despite the growth of mortgage
“Canada has much to learn and much to contribute to our global peers”
The growing influence of technology has been a significant theme within the mortgage industry of late. That trend has been mirrored across the financial sector as a whole, leading to a particularly pronounced rise in fintech offerings over the past decade. In Canada, the fintech boom has been especially significant; the country has emerged as a global tech powerhouse in recent years. A recent Accenture report on the future of fintech named four Canadian cities – Toronto,
NEWS BRIEFS
Vancouver, Montreal and Calgary – among the world’s top 20 fintech hubs. However, Canada’s status as a fintech powerhouse can’t be taken for granted. Accenture noted that much still needs to be done to consolidate and expand the country’s strength in the sector. “Canada has much to learn and much to contribute to our global peers, including those who are developing open banking digital identity and data portability solutions,” said Robert Vokes, Accenture’s senior managing
Newton adds CRM component to Velocity
Newton Connectivity Systems has launched Velocity CRM, a client communication component within its Velocity operating platform. The new CRM is the result of an intensive five-month development process with the help of a steering committee that included CRM experts, mortgage brokers and network representatives. Newton CEO Geoff Willis touted Velocity CRM as an “all-in-one” solution for mortgage professionals to communicate with clients and reach new ones via a single integrated platform.
tech, some have argued that the sector would benefit from a more level playing field and greater freedom of choice for brokers. Greg Williamson, chief revenue officer at Canadian fintech company Lendesk, believes a bright future lies ahead for mortgage technology – if the twin components of innovation and competition are allowed to flourish in the industry. “The world is changing at the speed of thought,” he told CMP. “It’s all about how fast somebody can come up with a new innovative idea that we all benefit from. The mortgage industry is not immune to that; it needs to foster innovation and competition. That’s better for everybody.”
Marble Financial teams up with Fintel Connect
Marble Financial has launched an affiliate marketing program with Fintel Connect in a bid to reach more consumers with its MyMarble platform. Marble said the program will give a larger demographic better access to MyMarble’s offerings, including AI-powered recommendations, credit monitoring, financial education and budgeting technology to boost credit scores. “By leveraging Fintel’s publishing network, this exciting partnership will support rapid growth and expansion,” said Marble Financial CEO Karim Nanji.
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Q&A
Shannon Dolphin CEO DOLPHIN ENTERPRISES
Years in the industry 16 Fast fact Dolphin sold MIC shares years before the creation of the MIC Manager software
Cresting the wave of lender technology What does Dolphin Enterprises offer in the Canadian mortgage industry? Dolphin has been implementing a software system for MICs and Canadian private lenders for over 30 years. We previously customized software for trust and loan companies, which built the sophisticated back-end accounting platform for all of our products. Dolphin products are the only private lending solution available with an integrated internal accounting platform. MIC Manager was created in 2004 and has been expanded exclusively by MICs for 17 years, resulting in a robust and sophisticated MIC software solution.
What’s been happening at Dolphin in 2021? Dolphin continuously enhances the software with new reports, features and functions to meet the industry’s changing needs and client requests. With the changing regulations for MICs, Dolphin recently launched EMD Manager, the first and only exempt issuer product integrated to a MIC software, providing a seamless system to eliminate duplication of error while meeting investor regulatory requirements.
What training do you offer? Dolphin’s philosophy is to work personally and closely with each client, implementing, training and supporting each user on the software. We work exclusively with each new client, ensuring the system is configured, accounting and business rules are set, and users are fully trained. We pride ourselves on being incredibly responsive to clients’ requests for assistance and even on business in
Toronto portal scooped up by US firm
Toronto-based real estate listings portal BuzzBuzzHome has been acquired by US-based data firm Zonda, which is looking to expand into Canada’s new-home online listings space. BuzzBuzzHome serves both the supply and demand sides of the new residential construction market and is the latest step in Zonda’s efforts to become a premier listings service provider in Canada. In early April, Zonda acquired Vancouver-based Urban Analytics to boost its data capabilities in the urban and multi-family markets.
general. Dolphin is more than a software provider, as we offer our clients a personalized and exclusive approach, recognizing each unique client’s needs.
What should be top of mind for private lenders when choosing software? Diversity and robustness of the software. As a private lender grows, so do their software requirements. A onetype solution may look good on the surface, but it will be an issue when the inevitable business complexity arises and a standard system will no longer meet their needs. MICs and private lenders need a system that is flexible, able to be customized if required, and has the diversity of application and design to meet the complexity of the growing private lender’s business.
How significant has the pandemic been in transforming the digital space for MICs and private lenders? The financial services sector is expanding its reach at a rapid pace due to the changing business environment. Interactions between client and vendor are now remote, which provides a need for online components, integrated applications, and a full and complete system to manage all business. The pandemic has provided changes for private lenders, which now require a onestop solution of a robust and sophisticated system to meet all their needs in a comprehensive system. My hope is that the Canadian digital space will continue to cooperate to offer enhanced solutions that are of more value than the parts.
MLA Canada launches new marketing platform
MLA Canada has unveiled a new residential marketing platform, MLA Oi, which aims to offer a much-improved home sales experience. The new service offers a digital framework aimed at providing deeper insights, better homebuyer experiences and improved revenue management. MLA Canada president Ryan Lalonde said the platform will be especially valuable for homebuyers, marketers, developers and agents, adding that “we can fundamentally change for the better the way homes are marketed and sold.”
Properly reports 150,000 users of AI calculator
Canadian fintech Properly drew as many as 150,000 users to its new AI-powered calculator, Instant Estimate, in the week after its April launch. Instant Estimate was able to determine the GTA areas that have seen the largest jumps in home value by comparing prices at around six months before the pandemic to current valuations. “As the real estate market skyrockets … there is a demand for people to get the most accurate and immediate home valuations,” Properly said in a statement.
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UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email mortgagebrokernews@kmimedia.ca
The blockchain revolution As blockchain technology continues its rapid rise, the mortgage industry needs to be prepared to embrace it, writes Shawn Allen THE WORLD of technology is changing, and no industry stands to benefit more from these changes than the banking and financial sector. The future of global banking will be shaped by the implementation of blockchain technology. The biggest thing since the internet, the pegged blockchain is a decentralized distributed ledger consisting of records called blocks, stored across a network of independent computers. The data contained in these blocks provides a record of consensus, which is validated and maintained by multiple individual users using a cryptographic audit trail. Once written, the data cannot be changed or altered without retroactively altering subsequent blocks. This makes each transaction secure and immutable, as each block is stamped with a unique digital signature called a hash. Though still in its infancy, blockchain technology has many use cases. The banking sector would benefit by eliminating the reliance on intermediaries in the mortgage transaction. A consortium of financial institutions, solicitors, insurers and mortgage professionals would be able to collaborate via a standardized peer network, providing an end-to-end ecosystem beneficial to all stakeholders. Using the blockchain for KYC would enable financial institutions to emancipate several processes in the sales life cycle – such as ID, title income and credit verification – making it accessible by parties privy to this information. This would offer better data security by ensuring data can only be accessed after permission is granted, eliminating the chance of unauthorized access. Automation is another use case of block-
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chain technology – and smart contracts are the driving force behind this initiative. These are programmable, self-executing parameters that are executed when all conditions are met and run on the blockchain. A smart contract permits agreements to be carried out among anonymous parties without the need for a central authority. While the blockchain is the ledger in which the data is stored, the smart contract is the agreement between the parties transacting on the blockchain. As an example, let’s imagine a buyer, Mark. He wants to buy a home from Mike, the seller.
currency, is a decentralized digital currency whose transactions are stored on the blockchain. It’s used as a medium of exchange to purchase real-world items such as vehicles (it’s accepted by Tesla), event tickets (the Dallas Mavericks), art and, in this example, a home. Some may wonder whether adoption of the currency for payments requires a sizeable upheaval of a company’s payment systems; others might feel apprehension due to the volatility of the digital asset and queries over the legality of its use. These are all valid concerns, but the reality is that transacting with cryptocurrency is no different than accepting Visa or Mastercard. There are similar concerns about transacting in dollars. Thanks to extensive currency printing as a result of COVID-19, the purchasing power of the dollar in our monetary system is being diminished. Bitcoin, by contrast, has increased in value by over 700% in the past year, while the cost of lumber has increased by over 300%. This illustrates huge volatility in the purchasing power of dollar-denominated transactions, which isn’t being taken into consideration when comparing those transactions to Bitcoin ones. The CRA has characterized cryptocurrency
“The reality is that transacting with cryptocurrency is no different than accepting Visa or Mastercard” In a very simplistic form, an agreement is formed between Mark and Mike using a smart contract that says, “Mark to pay X amount to Mike, then Mark will receive ownership of Mike’s house.” Once this smart contract is in place, Mark can feel confident in paying Mike for the house. Mike would have put his deed on the blockchain, and Mark would have been able to verify that the deed was present prior to sending his payment. This transaction eliminated the use of a lawyer, as the parties were able to transact directly. Cryptocurrency is the medium of exchange that parties use to barter on the blockchain. Bitcoin, the most popular type of crypto-
as a commodity, and accordingly, the use of cryptocurrency to pay for goods or services is treated as a barter transaction, with Canadian tax laws and rules applying to its use. We must embrace blockchain technology. The future is that of a safe, secure environment where people can transact on their own. Whether you’re directly involved in the digital space or not, it’s essential that you develop an understanding of how the blockchain will transform our lives. Shawn Allen is the CEO and broker of record at Toronto-based brokerage Matrix Mortgage Global.
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PEOPLE
INDUSTRY ICON
A LABOUR OF LOVE After more than 25 years, Broker ONE president and CEO Ron De Silva’s passion for the mortgage industry is as strong as ever
FOR RON DE SILVA, the question of how to switch off after a busy week at the office is a difficult one. It isn’t that De Silva has a tough time finding other pursuits to occupy his time – from a love for travel to a burgeoning tequila collection and a voracious appetite for reading, he has a wide and varied range of interests. It’s just that he loves what he does – and for someone who doesn’t view the workday as a daily grind, there’s little need for a release valve when it ends. “That’s the thing,” says De Silva, the founder of Real Mortgage Associates (RMA) and president and CEO of Broker ONE. “When you set up an organization like this, it’s in your blood. It’s who you are, and it defines you. As a result, even when you’re not working, you’re working – and you don’t really consider it to be working.” It’s been an eventful journey for De Silva in the mortgage industry. His establishment of RMA in mid-2006 was preceded by a range of executive roles that provided him crucial insight into how the mortgage business operated. After moving to Canada from Sri Lanka in 1972 as an 11-year-old into what he describes as a “tough neighbourhood,”
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De Silva has never once taken that distinguished career for granted. “When my family and I arrived, we were immigrants and didn’t have much money,” he says. “It was tough. But I’m very grateful for what this country has offered myself and my family.”
in driving mortgage sales – a theme that would continue throughout his career. “I realized that the ethnic markets were going to be the ones that would generate a lot of the mortgage business, so I hired a lot of people for their skills in languages and retrained them in the mortgage side
“When you set up an organization like this, it’s in your blood. It’s who you are, and it defines you. As a result, even when you’re not working, you’re working – and you don’t really consider it to be working” A marketing course at Toronto’s Centennial College helped De Silva lay the foundations for what would become his career. Stints in retail and real estate were followed by his entry to the mortgage world in 1995 as a mobile mortgage specialist at CIBC. There, he developed a strong understanding of the importance of the immigrant demographic
of things,” De Silva says. “That worked out extremely well.”
A new beginning That winning formula helped pave the way for De Silva to take on a series of executive roles in the industry, including helping to launch Invis Financial Group into Ontario during
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PROFILE Name: Ron De Silva Title: President and CEO/principal broker Company: Broker ONE/Real Mortgage Associates Based in: Toronto Years in the industry: 26 Fast fact: De Silva grew Real Mortgage Associates into a successful brokerage from scratch, starting with an initial investment of just $7,500
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PEOPLE
INDUSTRY ICON
a time of profound and dramatic change for the mortgage brokerage profession. “At that time, what was going on was that mortgage brokers were starting to get more market share and better rates,” De Silva says. “Mortgage banks were coming into the industry and offering better rates – and, of course, they were starting to get market share. I felt that was where the future was going to be.” Dissatisfied with what he viewed as a lack of transparency in how many brokerages communicated with their brokers about fees and compensation, De Silva decided to forge his own path, establishing RMA during what he describes as a “cathartic” moment for him. “I decided to create a model that was very
After that choppy start, things settled down; RMA became a thriving enterprise and eventually embraced the network model in 2008 through its establishment of RMAI (now Broker ONE). A decade after founding the company, De Silva made the tough decision to sell RMA. “To this day, I look back and think it was the right move for various reasons, but it was a difficult decision,” he says. “I put a lot of sweat and blood and tears into this, and there were a lot of battles that we fought to get to where we were.”
Moving forward De Silva has remained at the helm of RMA since the sale, also taking on the role of presi-
“At the end of the day, if I was doing it for money, I would have walked away [from RMA]. I was doing it for the right reasons; it was the right thing for the broker”
RON DE SILVA’S MORTGAGE JOURNEY
1995
Starts as a mobile mortgage specialist with CIBC
1996
Becomes a sales manager at CIBC
2000
Moves to Invis as a broker and sales manager, eventually becoming VP of marketing, e-commerce and information technology
2005
Joins Cervus Financial as VP of sales and marketing
2006
Founds Real Mortgage Associates upfront and said to brokers, ‘All the money belongs to the feet on the street, but you pay us for the services that you must pay us for: payroll, compliance, all the legislated services that we must provide,’” he explains. While that model led to a turbulent start in the industry for RMA, making it initially unpopular among its competitors, De Silva never once considered giving up on the company. “At the end of the day, if I was doing it for money, I would have walked away,” he says. “I was doing it for the right reasons; it was the right thing for the broker. Those brokers – the feet on the street – kept saying, ‘What a great business model. It makes sense to me.’ That reinforced my belief that it was the right thing to do.”
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dent and CEO at Broker ONE, which has allowed him to maintain a strong influence over the direction of the company. Last year, De Silva celebrated his 25-year anniversary in the mortgage industry, a milestone that gave him the chance to take stock of both his past and future in the business. He’s already eyeing an ambitious travel itinerary with his wife, planning trips to the Caribbean and Pacific Rim. And he’s ready to take the next steps with RMA and Broker ONE; despite his hectic schedule, there’s little danger of burnout when work is a labour of love. “That’s why I don’t really see myself as having to switch off or get away from it,” De Silva says. “I just do it, and I enjoy doing it.”
2016
Sells RMA but remains with the company as principal broker
2018
Is appointed president and CEO of the Broker ONE network
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FEATURES
MORTGAGE TECH
DRIVING CHANGE CMP spoke to some of the most influential figures in Canada’s mortgage technology space to find out what the future has in store THERE ARE few things more essential to the daily lives of mortgage professionals than the technology they use. Its significance has only been amplified by the COVID-19 pandemic, which forced brokers and their clients to replace tasks that would once have been done in person – discussing options, collecting signatures, submitting documents – with virtual solutions. Yet the digital revolution in the mortgage space was already well underway before the pandemic. Over the past few years, a plethora of new options and competitors have entered the industry to foster a healthy culture of innovation across a host of different areas: marketing, lead generation, document transfer, deal submissions and more.
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When CMP spoke with some of the leading figures in the mortgage tech space, that increasing diversity of products and offerings was abundantly clear. While the mortgage industry was once defined by a one-sizefits-all approach to technology, the explosion of new entrants to the sector can only be viewed as a positive development – one that gives mortgage professionals more options than ever in their choice of digital solution.
The new normal While the importance of technology in the mortgage industry had already been rising precipitously before the pandemic, there’s little question that its trajectory was accelerated by the circumstances that came into play
last March. One of the executives CMP spoke with estimated that mortgage technology experienced three to five years’ worth of evolution in the space of a few months as mortgage professionals grappled with the reality of having to conduct business remotely. That new arrangement meant that even those brokers who had proved most resistant to technology were forced out of their comfort zone. Virtual meetings replaced face-to-face interactions across all levels of the mortgage industry, whether through daily or weekly staff meetings, conference calls with partners, or advisory sessions with clients. That’s a feature of the past year that might be less prevalent as soon as the pandemic is over and staff begin to return to offices,
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MEET THE EXPERTS André Boisvert Chief technology officer M3 Group As chief technology officer at the M3 Group, André Boisvert leads product development and all technology operations. With a combination of extensive business and technical knowledge, Boisvert is recognized as a strategic thinker and thought leader in the world of digital transformation. He has held key technology roles at several organizations, including the Montreal Exchange, BCE Emergis, Yellow Pages, Transcontinental and Group Dynamite.
Geoff Willis President and CEO Newton Connectivity Systems Geoff Willis was appointed president and CEO of Newton in 2017 following DLC’s acquisition of Marlborough Stirling and has led Newton’s Velocity system to become a challenger to the incumbent submission platform. Willis’ 32-year career in the mortgage origination and technology business also includes progressively expansive roles with TD Canada Trust and Vancouver-based brokerage Origin Mortgages.
although there have also been indications that many companies will allow their employees to continue working from home at least part of the time. There’s no question that the value of in-person interaction – among co-workers and clients alike – will remain potent even in the post-pandemic business landscape. Still, many of the changes the pandemic brought to the day-to-day lives of mortgage professionals are clearly here to stay. It seems
Ryan Spence Director, strategic accounts Finastra
Ryan Spence has worked with mortgage brokers for more than 20 years. As Finastra’s director of strategic accounts, Spence provides brokerages and agents with strategic and operational thought leadership. With a background that includes technology, training and education, Spence is a past winner of the MPC Founders Award and is the current chair of the Alberta Mortgage Brokers Association.
Carter Zimmerman Chief product officer Lendesk Technologies
Carter Zimmerman has a passion for helping to make the mortgage experience easy, accessible and transparent. In 2017, Zimmerman and his business partner, Greg Williamson, founded Finmo Financial Technologies with a vision to create “a mortgage in minutes.” In 2020, Finmo was acquired by Lendesk Technologies, where Zimmerman now serves as chief product officer.
inconceivable, for instance, that online document portals or collection of e-signatures will fade into the background, as those measures increased the ease and speed of submission for brokers and clients alike. For brokers, the digital space also offers an array of new opportunities in client outreach and retention, allowing them to take their marketing and lead generation efforts to another level, whether through social media,
email or other channels. In fact, each of the mortgage technology experts CMP spoke with seemed to agree that even greater digitalization of all stages of the mortgage process is coming down the pipeline. While it’s true that the ability to meet clients and establish a connection in person is an important part of creating and cultivating business opportunities, those customers also value the convenience of a smooth and effortless digital process. Another emerging trend is increasing harmonization of that process, which is allowing brokers to focus on growing their business and engaging with clients rather than becoming overburdened with administrative tasks. Making things more convenient and saving time for all parties – whether lender, client or broker – is something that’s likely to expand further in the coming years. Of course, with the new abundance of opportunities in the mortgage tech space, there’s also a burden of responsibility. The executives CMP interviewed for this feature all stressed the need for service providers to ensure that solid measures are in place to protect the data, documents and personal information of their users.
Taking the plunge At this stage, there are likely few – if any – mortgage professionals who haven’t embraced technology to some degree in their daily work life. Still, for those who are apprehensive about the prospect of increasing the size of their digital footprint, the tech execs seemed to agree that with persistence and patience, it won’t be long before that technology begins to make sense. Finding the right fit in terms of the technology needed to drive business is obviously important, so mortgage professionals should consider the full gamut of options and carefully select the provider that best works for their company’s needs. Because selecting a technology provider can be an incredibly longterm decision with significant implications for a company’s operations, mortgage professionals should prioritize the reliability and consistency of the platform so they can feel comfortable that it’s the right choice for the
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FEATURES
MORTGAGE TECH CANADIAN FINTECH ON THE WORLD STAGE Top 20 global fintech hubs 1. Silicon Valley 2. New York City 3. Shanghai/Beijing 4. London 5. Boston 6. Los Angeles 7. Berlin
How has the pandemic altered the mortgage technology space?
8. Toronto 9. Tokyo 10. Hong Kong 11. Singapore 12. Vancouver 13. Paris 14. Montreal 15. India 16. Calgary 17. Sydney 18. Tel Aviv 19. Seoul 20. Dubai Source: Canadian Fintech Report 2021, Accenture
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foreseeable future. They should also ensure that their tech provider is able to provide a quick response when they need clarification or encounter an issue. For those in the mortgage industry who aren’t ready to embrace the ongoing digital revolution, the message is clear: Those who don’t move with the times will be left behind. Still, with mortgage tech becoming ever more intuitive and easier to use – a trend that’s likely to accelerate in the near future – professionals who are wary about upending their business by embracing technology or changing tech providers have nothing to fear.
Geoff Willis: The tech has become critical to serve customers. Many, as a result of being sent home from the office, have no access to printers or scanners to provide personal documents, so having access to secure online document portals for easy uploading helps to skip the scanner. Access to bank branches has been impacted, so online universal bank account statement collection with secure transfer has grown. Last but not least, the acceptance by lenders of digital signatures, and the collection of those signatures via virtual Zoom meetings to complete the mortgage process, has also been widely accepted now. André Boisvert: It is obvious COVID-19 has changed how consumers perceive and use the technology. Technologies like videoconferencing and e-signature have significantly gained popularity with consumers in the last year. These technologies already existed before, but COVID-19 accelerated their widespread adoption by three to five years. This also means that consumers are likely to be more receptive for what’s to come. Carter Zimmerman: COVID-19 accelerated innovation in the industry, and while there was a lot to take on in the first few months of the pandemic, it ultimately needed to happen. The new generation of homebuyers was raised with Uber and DoorDash; they are
not only used to but expect seamless digital experiences. When it comes to a huge financial decision like obtaining a mortgage, the expectation of having a seamless digital experience increases tenfold. During COVID-19, mortgage technology became the backbone of the mortgage process, not just something to use when convenient or when the client requested it. Ryan Spence: The past 15 months have seen a vast acceleration in the adoption of new consumer behaviour. Such changes have pushed the average consumer and the average agent into a position that previously would have been the domain of the early adopter. Leading agents who focused on their processes over the past years were in a good position to take advantage of the change, as they were historically looking for ways to move ahead of the curve of their peer group. For others, they were pushed rapidly into making technology decisions they had previously put off. Technology choices were abun-
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dant, mirroring the societal changes we have witnessed over the past 20 years with the rise of e-commerce and the digitalization of services. We have now reached a point where two large trends are coming together, with an abundance of choice and the urgent need to make a decision.
What do you believe will the most significant future trend in mortgage technology? Geoff Willis: The ability to connect the client’s supporting documents and their banking content to the application data so a lender can make a complete decision on the request one time. This will reduce turnaround time on firm mortgage approvals and save the customer, broker and lender on stress as they reduce their volume of interactions to complete a transaction.
Carter Zimmerman: Speed. Transparency. Accessibility. Mortgage technology will push the envelope on what people currently think is possible when it comes to the amount of time it takes to get a mortgage. At Lendesk, we believe in building a mortgage in minutes. Simultaneous to the enhanced speeds, the best mortgage technologies will create crystal-clear transparency for the borrower. Any technologies trying to create more profit for themselves by making borrowing choices less transparent will be disrupted. And finally, who is lending and how they’re doing it is being transformed. Ultimately, this will make lending more accessible to those who need a mortgage. I believe all three are key future trends that can’t be separated from each other. Ryan Spence: Post-COVID, people will continue to consume services with a strong desire for ease of transaction. Trends such as gamification will accelerate, and users will seek simpler processes to deliver more, faster. Ease of use – not just for the consumer, but also for the broker and agent – will be critical. André Boisvert: Clearly, there are three trends that will affect the mortgage industry – and all industries, for that matter. The first one is the importance of the digital world for the consumer – the borrower in our world – both in terms of attracting consumers via social media or e-marketing and providing services to them through a customer portal. The second trend is the use of data to predict consumer behaviours and proactively provide services and interfaces that adapt to each customer. Finally, and in support of the first two trends, there will be the need for infrastructure to implement robust security and respect of privacy.
“Mortgage technology will push the envelope on what people currently think is possible when it comes to the amount of time it takes to get a mortgage” Carter Zimmerman, Lendesk Technologies
What’s the most important thing mortgage professionals need to keep in mind when choosing mortgage technology? Geoff Willis: How comprehensive is my chosen solution? Will I need to maintain other key systems manually in order to make
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FEATURES
MORTGAGE TECH this solution work? Experience tells us that when a system is an all-in-one integrated solution, we are better positioned to deliver a consistently better client experience to our mortgage customers. Carter Zimmerman: The most impor tant thing for a mortgage professional to keep in mind when choosing a technology is the freedom to integrate with any other partner and move their data anywhere as their business matures. I believe it will become commonplace for an agent to talk about the technology stack they use to run their business. By using a foundational technology that is eager and willing to integrate with others, you’re essentially choosing the most powerful stack possible.
“With so many choices in the market, it is crucial to understand the relationship between your strategy and the tools and tactics needed to activate that strategy for the long term” Ryan Spence, Finastra
Ryan Spence: There are groups of mortgage professionals with different goals and different responsibilities. The managing broker, who will be tapped on the shoulder by their regulator, has a different point of view from the agent who wants to complete the transaction. With so many choices in the market, it is crucial to understand the relationship between your strategy and the tools and tactics needed to activate that strategy for the long term. It is also important for mortgage professionals to feel empowered. A configurable solution allowing them to do more, faster – for flexibility and scalability – is paramount. Filogix Expert Plus and Filogix Expert Pro are fully configurable, allowing mortgage professionals to do more. André Boisvert: Selecting a mortgage technology is an important and long-term decision. Like any decisions of this sort, it is important that you select a technology that is developed and backed by someone you can fully trust, that allows you to grow and evolve as you yourself do, that can be adapted and tailored to your own style of work, and that has a solid record of constantly evolving and bringing innovation. You want to know that the technology you choose now will still be around and up to date for the years to come.
What has been the biggest evolution in mortgage technology since you started out in the industry? Geoff Willis: The volume of choices for providers and the demand from mortgage brokers to expect that their tech provide them better client experiences. Ryan Spence: Can I say the switch from LocalTalk to ethernet cable? I remember being on the help desk in 2001, thinking how great it would be once everyone had their computers connected via ethernet cable. There is some irony in this question. Considering I have a degree in evolutionary theory, and that I couldn’t find a job in that field 20 years ago, I joined a small software company that eventually became Filogix
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and Finastra. I’m now answering a question about the evolution of the industry I joined because I couldn’t make a living in the industry of evolution. All said, the biggest evolution is the increasingly rapid rate of change that drives an ever-expanding marketplace. That ecosystem now has many niches, increased specialization, and many smaller pushes and pulls that influence an agent’s day to day. For some, slight perturbations cause large problems, while some large events that would have derailed many in the past are now moderated by the resilience of the industry. André Boisvert: Freedom of choice for the broker is probably the biggest change in technology since I started. There used to be a time when it was ‘one size fits all’ in the mortgage industry. There has been an evolution
“There used to be a time when it was ‘one size fits all’ in the mortgage industry. There has been an evolution where there are now multiple choices, and this is a good thing for mortgage professionals” André Boisvert, M3 Group where there are now multiple choices, and this is a good thing for mortgage professionals. That’s the reason why we at the M3 Group believe in an open ecosystem. This fosters competition and innovation. Carter Zimmerman: I may be biased, but I think the Finmo by Lendesk borrower portal with smart documents changed everything. When I started, it was normal for a broker to
take an application and documents through a series of emails. Through Finmo, a broker can send out a link – or create one for a referral source – and collect a full application and the relevant documents in under 15 minutes. Now, through Lender Connect, they can submit the deal to the lender after validating the correct product with Lender Spotlight. This is a monumental change from five years ago.
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FEATURES
MORTGAGE TECH What advice would you give to a mortgage professional who isn’t confident yet about embracing mortgage technology? Geoff Willis: It’s easier than it looks, and many suppliers help you to simulate what you have come to know well for a period of time as you transition to modern technology platforms. In truth, it’s going to continue to get easier to embrace [technology], and in short order, your customers will likely expect it from you. Ryan Spence: Practice. Confidence is gained through the experience of doing, and it is positive reinforcement when a small success leads to more understanding and capability. Years ago, there wasn’t as much thought in the value of a book of business. Increasingly, we see brokers looking to create a process
“It’s going to continue to get easier to embrace [technology], and in short order, your customers will likely expect it from you” Geoff Willis, Newton Connectivity Systems THE CANADIAN FINTECH WAVE Number of Canadian fintech startups founded, 2010–2020 120
100
101
80
70
60
66
75
70
56 40
35
43
42
20
18
15 0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Canadian Fintech Report 2021, Accenture
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that drives cash flow – a recurring revenue for the brokerage independent of the name or even the product. This comes down to attracting a consumer, understanding when they are ready to buy something and then providing them with something they want to buy. It’s important to understand the vision of how that experience happens and being able to articulate it. This generally means some research and knowing in detail each stage of the process, even if there is no direct ownership of that stage. Find and connect with partners who are happy to discuss your questions and boost your confidence. Our Filogix team of experts are trusted partners, willing to empower mortgage professionals and enable them to unlock their potential and embrace innovation. Carter Zimmerman: Make sure you do your due diligence in investigating customer support and response times. If you’re not as confident when it comes to embracing technology, you can’t do it alone – you’ll need support. The number-one thing you should look for is a technology platform with strong response times. If you see a lot of comments or feedback about brokers having to wait hours or even days to get support from a technology provider, that’s probably not a solution that would inspire confidence. At Finmo, we have a live chat that is available throughout the day, with an average response time of less than two minutes. This should be standard – busy mortgage professionals don’t have time to wait to get the support they need. André Boisvert: The technology is there to support the mortgage professional in doing their work. It is important to select a technology that is easy to understand and that is backed by support that can help in understanding and growing your usage of the technology platform. When we developed the latest version of our technology platform, we made sure that the interface immediately brings work efficiencies, yet can be easily and quickly grasped. Once you have mastered the first steps, feel free to explore the tools, learn new features and don’t hesitate to reach out for help.
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SPECIAL PROMOTIONAL FEATURE
TECHNOLOGY
Taking private lending to the next level With innovative features and integration with multiple companies, Mortgage Automator is dedicated to making things easier for private lenders
FOR MORTGAGE AUTOMATOR, it’s always been about making the loan origination and servicing process as seamless as possible. Its platform, which the company describes as being designed “for lenders, by lenders,” is essentially an end-to-end solution that allows private lenders to manage their entire business in one place without having to worry about changing systems or re-entering data. Now, in addition to its partnership with Equifax and integrations with Lendesk, Finmo, and Filogix, Mortgage Automator has announced a portal integration with Diamond & Diamond Lawyers, a move that co-founder Joseph Fooks says will allow users to track live updates regarding borrowers’ appointments with lawyers and signature of documents. “That means that Diamond & Diamond will be sending live notifications about the process, which we then use to update the brokers on our end as to what’s going on with the file,” he says. “It’s going to offer a significant advantage for users of our platform.” According to Fooks and co-founder Lawrence Schwartz, the integration represents the next step in the company’s significant expansion since its public release in 2019. Originating as a document generation tool to help Fooks and Schwartz run their own private lending business, the platform has since added multiple features to develop into a major player in the mortgage technology sphere. Its recent partnerships are aimed at simplifying the origination and servicing process for private lenders and making their daily work even smoother. Schwartz attributes the company’s rapid
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growth to the focus of its staff on the needs and goals of its clients. “One thing that we really pride ourselves on is supporting our customers,” he says. “Whether that’s with onboarding, training or customer support, we have the manpower within our company to make sure that we respond quickly and provide assistance as soon as possible.” One of Mortgage Automator’s primary goals is to provide private lenders with easier access to brokers through its platform, as well as making the software as intuitive and straightforward as possible. With that in mind, the company has developed a strategic approach to onboarding new users, offering
They’ve clearly seen the evolution of the system year over year, and that’s been influenced by their feedback.” With private lending now more influential than ever in the mortgage industry, Fooks says lenders can’t afford to continue with software that doesn’t provide an all-in-one solution for their needs. “Lenders need to think about optimizing their own businesses and providing the path of least resistance for brokers,” he says. “Brokers want the most convenient solution possible, and lenders who are not using systems that offer that are hurting themselves.” Schwartz says it’s critical that lenders don’t
“We’re always looking to evolve and make our system better over time – that’s really important to us” Lawrence Schwartz, Mortgage Automator step-by-step training specific to their needs to avoid overwhelming clients with irrelevant or excessive training. That’s a reflection of a key driver of the company’s success: its receptiveness to users’ feedback. In fact, its system has grown over time based on input from clients – something Schwartz says Mortgage Automator will never take for granted. “We’re always looking to evolve and make our system better over time – that’s really important to us,” he says. “Our clients know that we’re always striving to make it better.
rest on their laurels in terms of the software they use. Those who are content to stick with their longstanding technology could be missing out on the type of all-in-one integration provided by Mortgage Automator – a product that simplifies the process and could take a lender’s business to the next level. “Even if you’re on another platform, it doesn’t hurt to see what else is out there,” he says. “If you’re looking for a software platform that innovates, that’s always looking to improve and that understands the market, I feel like we have the best product.”
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SPECIAL PROMOTIONAL FEATURE
TECHNOLOGY
An interconnected mortgage industry Why Mortgage Automator’s integration with Lendesk is a game-changer for private lenders and brokers alike IT’S A PARTNERSHIP that arose as a result of a shared goal between Mortgage Automator and Lendesk: making the daily work of mortgage professionals as smooth and productive as possible. The alignment of the two companies harmonizes the data flow and user experience from consumer to broker to lender through Mortgage Automator’s pairing with Lendesk’s Finmo platform, ensuring a more straightforward process through all stages of origination and servicing. That synchronization – described as “a game-changer” for the industry by Mortgage Automator’s Joseph Fooks – means brokers and lenders will have a single location for documents to be uploaded and received, and
says will be a significant help to brokers. “We’re really excited about this new platform,” he says. “Through Lender Spotlight, mortgage brokers will now be able to see the alternative lenders that could be a fit for the deal, as well as prime lenders. Mortgage Automator works with over 165 private lenders in both the US and Canada, so we’re really proud to work with them.” Fooks emphasizes that the connection between the two products means that brokers using Finmo as their origination product will have access to the largest network of private capital in Canada. “By Mortgage Automator having the largest network of private lenders and
“We’re providing a much more efficient user experience, with data seamlessly flowing from one system to another” Joseph Fooks, Mortgage Automator brokers operating with more than one lender won’t have to log in to multiple platforms. “There was a big disconnect in the industry with brokers using a certain software and lenders using a different one,” Fooks says. “By partnering with Lendesk and Finmo, we’re providing a much more efficient user experience, with data seamlessly flowing from one system to another.” The latest product of the partnership is an Alternative Lender Portal for Lendesk’s Lender Spotlight platform – one that the company’s founder and CEO, Alex Conconi,
Lendesk having a considerable market share of the brokers utilizing their systems, we’re providing more resources and tools to help deals get done quicker and easier,” he says. The collaboration between the two companies arrives at a time when private lending has skyrocketed in popularity. Fooks says that for private lenders wishing to engage more with the broker community to optimize business, the Mortgage Automator-Finmo combination offers a massive opportunity. “A lot of private lenders ask how they can better promote themselves to the broker
community and get themselves out there,” he says. “This is something that the Lendesk team is really going to help our clients with – promoting our users to Finmo’s entire broker list.” Conconi says the link with Mortgage Automator has helped make Finmo one of the most comprehensive options for brokers. “We currently have the most comprehensive rate and policy database for mortgage brokers to come and find the right lender – and that now includes private lenders,” he says. “We’ve taken the time working with Mortgage Automator to get those lenders onto the platform – and between Finmo, Spotlight and Mortgage Automator, we’re making the alternative space more transparent and accessible to your average mortgage broker.” The partnership also gives brokers and lenders peace of mind in the security of digital transactions, as all documents and data are transmitted through a single secured, encrypted system at all levels. Conconi says the obvious synergy between the two companies was one of the things that makes the partnership such a success. “Both companies are born out of experience in our respective domains, and I think we’re coming at this problem from a similar place,” he says. “We just want to see everything being more secure, more efficient – and above all, providing a better user experience.” More than 10,000 Canadian mortgage brokers use Lender Spotlight to find rate and product information for their clients. Alternative lenders interested in reaching brokers using Lender Spotlight can reach out to marketing@lendesk.com for further information. If you wish to automate and streamline your private lending business, go to mortgageautomator.com to book your personal demo.
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SPECIAL PROMOTIONAL FEATURE
TECHNOLOGY
Replacing documents with data Newton Connectivity Systems head Geoff Willis tells CMP how the company’s latest innovation will improve the mortgage application process for borrowers, brokers and lenders alike IT’S A well-known headache for lenders and brokers: the often cumbersome process of collecting and verifying client documents for a mortgage application. The inefficiency of that process led Newton Connectivity Systems to seek a solution to significantly accelerate the timeline for collecting and verifying documents, drawing inspiration from a concept that’s already common elsewhere but has yet to be unveiled in Canada. The idea revolves around using data in a customer’s bank account history over an extended period of time to produce a comprehensive report that helps lenders make an underwriting or adjudication decision. This removes the need for customers to locate and send documents while also ensuring that all information accessed by the lender is verifiably correct. According to Newton president and CEO Geoff Willis, this solution represents a significant step forward for the mortgage
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industry in Canada. “At minimum, this upgrades our industry to a standard whereby a client’s most personal information – their tax returns, letters of employment and bank account statements – are being transmitted in a secure and encrypted format, and at best, both the application data and the document contents are connected for accuracy and confirmation,” he says. “This means less back-and-forth communications to confirm discrepancies and a quicker, more straightforward approval process.” In the near future, Willis says, in partnership with Montreal-based fintech Flinks, Newton intends to offer brokers and lenders a Verification of Income & Assets (VIA) report based on clients’ bank account history. It’s all part of Newton’s commitment to enhancing client experience and producing tools to guarantee a smoother mortgage application process from beginning to end.
The idea has already gained significant traction in the US, notably through Finicity, a company that produces the same type of report and was recently purchased by Mastercard. Willis says the quality of data that could be derived from a client’s bank account history would render redundant much of the current verification process. “If a report from a 12-month history of bank account activity confirms that an employer made direct deposits twice monthly into that account,” he says, “is there really a need to call that employer to confirm a client’s employment status or request a pay statement or letter of employment at all?” Currently, electronic banking information is used during the mortgage process to confirm down payments, based on 90 days of account history. Willis says expanding that period to 12 months and creating the VIA report based on that data will allow lenders and underwriters to verify a broader range of information, including down payment, income, employment and revenue. The benefit of the new process for brokers is clear – the report will eliminate the need to return to the client for clarification or to request further documents. It will also bring about a much quicker and more convenient process for borrowers, who would no longer be required to source obscure or hard-to-find documents; instead, information can be sent to a broker or lender with the click of a few buttons. Willis adds that Newton’s efforts to enhance the client experience also include empowering customers with education on what they can qualify for and at what rates and terms – always giving them the option to speak with a broker for further advice or to complete the process on their own. Ultimately, Willis believes bringing this concept north of the border will remove barriers in the mortgage approval process that can prove troublesome for all parties. “We’re thinking through what’s important to lenders, making sure that the crucial info is front and centre in the report that we give you,” he says. “It ultimately means that you won’t have to hunt through all that data to figure out the right thing to look at. Not only does it save time, it will also save money.”
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SPECIAL PROMOTIONAL FEATURE
TECHNOLOGY
Upping the ante Filogix is taking the mortgage origination game by storm with big new NOA updates to its Filogix Expert Pro solution IT WAS already one of the leading digital solutions for mortgage origination in Canada. Now Filogix is taking its Filogix Expert suite to the next level with new enhancements aimed at making the origination process even more straightforward for brokers. Arising from Filogix’s partnership with MrTaxes.ca, the new Filogix Expert Pro update offers a huge leap forward in tax documentation capabilities. An improved Notice of Assessment (NOA) functionality means that brokers are now able to request the relevant documentation and receive it within 30 minutes (if done within business hours), without having to leave the platform. That means it’s no longer necessary for brokers to process documents or establish a business relationship elsewhere. All tax documentation can be retrieved through Filogix Expert Pro, including the NOA, a T4 from the previous two tax years, assessment summaries from the previous two tax years, a statement of account and a child tax benefit statement. There’s also no broker intermediation required for the borrower to collect the NOA documentation, which is done directly, protecting the borrower’s data. For Siobhan Byron, senior vice-president and head of technology-enabled managed services at Filogix parent company Finastra, the new enhancements and partnership with MrTaxes.ca represent a clear signal of Finastra’s continued commitment to digital enablement for the more than 17,000 mortgage professionals who use Filogix’s Expert solutions to fund mortgages through its network of lenders. “By partnering with MrTaxes.ca to enhance NOA capabilities within the Filogix Expert Pro platform, we’re providing the industry
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with the most modern, fastest, seamless solution for assisting borrowers in obtaining important Canada Revenue Agency documents required by the lender,” she says. These enhancements mark the latest step in Filogix’s efforts to fully digitize the end-to-end mortgage process and give business owners and brokers even more independence in their day-to-day operations.
payment verification from the client’s bank account even quicker. Its data collection capabilities are faster and more efficient than other portals, with all client documents centralized in one secure spot, and its ability to automate tasks frees up brokers’ time to focus on other client priorities. One of Filogix Expert Pro’s most useful components is a custom workflow that allows users to create and manage processes that suit their needs, while enhanced email marketing capabilities help users segment their clients and launch either ad-hoc or drip campaigns. Best of all, for existing Filogix Expert Pro subscribers, the new NOA functionalities are available at no additional cost. It’s easy to see why MrTaxes.ca president and CEO Robert Stone hailed the partnership between the two companies as “removing a significant hurdle for both brokers and
“We’re providing the industry with the most modern, fastest, seamless solution for assisting borrowers in obtaining important Canada Revenue Agency documents” Siobhan Byron, Finastra Both Filogix Expert Pro and Filogix Expert Plus, launched earlier this year, allow access to more than 230 lenders and include a host of features, such as a customer-facing application portal, lender submission, data transfer, and deal and contact management tools. Filogix Expert Pro, an upgrade on the free Filogix Expert Plus product, offers even more capabilities. Billed as the “most powerful and comprehensive solution available in the market today,” it allows brokerowners to manage workflows, gain insight into performance metrics and improve their overall visibility over operations, while lenders can benefit from the ability to receive fuller deal submissions more quickly. The solution streamlines the document execution process for mortgage professionals and their clients through its enhanced e-signature capabilities and also facilitates free bank statement retrievals to make down
clients.” With Finastra committed to taking Filogix Expert Pro to the next level, the new developments are set to provide the most comprehensive tax documentation service that users – broker-owners and lenders alike – have ever experienced.
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PEOPLE
BROKER INSIGHT
The people business Vine Group’s David Goncalves and Hugo Dos Reis tell CMP how a customer-focused approach and top-quality agents have helped propel the company’s meteoric rise
THE MAXIM was one that David Goncalves had used throughout his professional life, and it seemed a fitting description for the Vine Group upon its formation in 2015: “We’re in the people business. We just happen to do mortgages.” Goncalves, who co-founded the company along with Hugo Dos Reis and Christopher Darwiche, says the motto is a perfect summation of Vine Group’s value proposition, one that sets it apart in the industry and has helped contribute to its whirlwind growth. Having funded $180 million in mortgages in its first year, Vine Group is on track to top $1.4 billion in 2021. “We’ve always focused on being customercentric,” Goncalves explains. “I never really cared about chasing the deal size or commission; it was always about giving customers proper advice. And that type of environment is what we’ve created here at Vine. We’re focused on the client experience first and foremost.” That customer-driven approach also means the brokerage isn’t driven by interest rates. “We all know that the lowest interest rate isn’t necessarily always the best product for a customer,” Goncalves says. “It’s huge to be able to have that conversation with the customer: ‘What’s your five-year plan? What’s your 10-year plan, and is this product actually the best one for you?’” Dos Reis notes that the company’s
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emphasis on providing the best possible advice for clients proved particularly valuable at the onset of the COVID-19 pandemic. “We knew that because of the pandemic, there would be a lot of people who would be worried about their income and financial position, and we saw that we could come out as a leader and provide that advisory service,” he says. “The sort of conversations we have with clients have allowed us to grow organically. I think that’s how we’ve been able to differentiate ourselves – we’ve always been advisory and not so much focused on rates.” Having started in Toronto before expanding into Vancouver – even opening a physical office there during the pandemic – Vine Group’s dramatic growth has also been driven by the quality of agents it attracts and the support it’s able to offer them. “We focus on people with experience,” Dos Reis says. “What [our agents] are looking for is a place that will allow them to expand and
grow their business. We’ve got less than 50 agents doing well over $1 billion in volume, so there’s not too many teams that are as efficient as us.” That’s due in part to Vine’s internal credit adjudication tool, the Hub, which removes the administrative element from agents’ jobs and frees up time for business development. Twelve full-time staff members process up to 30 files each day for the Vine team, taking care of things like processing intake, underwriting analysis and working with clients to secure the required documentation. “That infrastructure has really allowed people to grow exponentially,” Goncalves says, “but more importantly, it allows them to focus on what they’re good at, which is selling.” Dos Reis says the Hub has been a “massive differentiator” for Vine. “I don’t think anyone has anything comparable to what we’re offering in that regard,” he says. “All you need
STARTING OUT Vine Group came about through discussions between David Goncalves, Hugo Dos Reis and Christopher Darwiche about building a mortgage business that would be based around a premium brand with a unique value proposition. The trio already had extensive experience in the mortgage and banking sectors, having held various Bay Street roles. After setting up the company, they worked remotely at first before moving into their own office space. “Very quickly, we started to realize that a lot of other agents really liked our value proposition and our vision,” Dos Reis says, “and we grew the brand a lot.”
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“We’ve always focused on being customer-centric. I never really cared about chasing the deal size or commission; it was always about giving customers proper advice” From left: Vine Group co-founders Hugo Dos Reis, David Goncalves and Christopher Darwiche
to do is bring in business. That’s where we add a lot of value.” Given its rapid rise, it’s easy to forget that Vine Group has only been on the scene for around six years. Goncalves is unsurprisingly bullish about the company’s potential, forecasting fivefold growth in the coming years. Central to that continuing expansion, he emphasizes, will be the components that have made the brokerage successful so far. “That’s our agents, our staff and our customers,” he says. “Ultimately, it’s all about people.”
FAST FACTS: VINE GROUP Co-founders: David Goncalves, Hugo Dos Reis and Christopher Darwiche
Number of agents: Five commercial agents in Ontario; 41 residential agents spread across Ontario, BC and Alberta
Headquarters: Toronto Network: Mortgage Alliance
Awards: Named Mortgage Alliance’s numberone team in Canada for the past four years
Specialties: Residential and commercial financing
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FEATURES
SECTOR FOCUS: REVERSE MORTGAGES
The era of the reverse mortgage CMP spoke to two reverse mortgage executives to find out why the product, once considered a fringe offering in the market, has surged in popularity
over the last decade has seen HomeEquity, which exclusively sells reverse mortgages, “drastically” increase its engagement with partners, doubling its sales force and investing massively in marketing to grow its business, which topped $900 million last year. HomeEquity was the sole reverse mortgage player in the market until recently, and Bisaillon says its growth is a good measure of the sector’s increasing popularity. “With new entrants, the pie is going to keep growing more and more,” he says. “But the fact that we’ve seen ourselves grow that much over that timespan speaks to the fact that a lot more people are using the reverse mortgage and seeing it as a more mainstream solution.”
Challenges and opportunities
THE REVERSE MORTGAGE sector has come a long way in recent years. In the past, reverse mortgages – essentially loans for customers aged 55 and older, secured by a residential property – have often been unfairly burdened by assumptions that they represent a riskier type of borrowing, but that perception is changing. It might be tempting to attribute reverse mortgages’ recent rise in popularity to the COVID-19 pandemic, which has upended countless preconceived notions and encouraged borrowers to look beyond more conventional forms of credit. Yet those who are in the know about the product say that the traditional perception of reverse mortgages had been slowly changing for a decade or so before the COVID-19 outbreak. As executive vice-president of referred sales and partnerships at HomeEquity Bank, which has specialized in the reverse mortgage sector in Canada for more than three decades, Eric Bisaillon is well positioned to assess this rapidly growing sphere. He says reverse mortgages are no longer perceived as a last
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resort – a fact that’s attributable to Canadians’ growing awareness and understanding of what the product actually entails. “That perception has changed to being one of a sound financial solution for Canadians,” he explains. “More and more Canadians are
Paul von Martels, vice-president of reverse mortgage lending at Equitable Bank – a significant new entrant to the sector in recent years – says he has also noticed a shift in perception among consumers. “There continues to be improving sentiment towards this product,” he says. “I strongly believe that it’s carried an unjusti-
“Many people who thought they would have to sell their home upon retirement realize that a reverse mortgage has become a great alternative” Eric Bisaillon, HomeEquity Bank becoming better aware of reverse mortgages and considering them as part of their retirement planning strategy. Many people who thought they would have to sell their home upon retirement realize that a reverse mortgage has become a great alternative for those who don’t want to move.” According to Bisaillon, the sector’s growth
fied stigma. We think that more people – whether advisors or just consumers in general – have shed some of their biases on the product and challenged their thinking. We think that more people are taking the time to educate themselves on this product and engaging in conversations with people who can help.”
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Equitable’s emergence in the reverse mortgage sphere has been a roaring success by all accounts. The company doubled its reverse mortgage portfolio between November 2019 and November 2020 – a firm validation of its decision to enter the sector and an indication of the product’s growing popularity in Canada. That shift also seems to be happening on a global level. A recent report from the European Pensions and Property Asset Release Group (EPPARG) and EY predicted that the global reverse mortgage market (known as ‘equity release’ in many other countries) could more than triple over the next 10 years, exceeding US$50 billion by 2031. However, EPPARG and EY noted that a lack of customer awareness represents the main barrier to the sector’s growth. Von Martels agrees that a lack of understanding among consumers remains a problem in Canada – one that’s not necessarily
THE POPULARITY OF REVERSE MORTGAGES AROUND THE WORLD Fewer than 5 lenders
Between 5 and 10 lenders
More than 10 lenders
Source: 2020 Global Equity Release Roundtable Survey, EPPARG and EY
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FEATURES
SECTOR FOCUS: REVERSE MORTGAGES
GROWTH POTENTIAL OF THE REVERSE MORTGAGE MARKET
$500 million to $2 billion Canada’s current annual volume in reverse mortgages
$3 billion to $4 billion Canada’s predicted annual reverse mortgage volume in 10 years Source: 2020 Global Equity Release Roundtable Survey, EPPARG and EY
limited to reverse mortgages. “I don’t think it’s specific to the product,” he says. “It’s more about people’s concern about having any low-cost debt in retirement. Challenging the norm around having mortgage debt in the later years of retirement is the biggest challenge. “It’s very often that we find clients who are deciding whether or not they think the reverse mortgage product is right for them, but they’ve been carrying $50,000 to $100,000 of credit card debt at 20%, year over year. How is that perceived as OK, but a reverse mortgage at 4% is seen as too expensive? People continue to make inefficient financial decisions based on bias and misinformation.” Bisaillon believes the continuing emergence of reverse mortgages in the Canadian market is likely to encourage new lenders
and insurance products being bundled with a reverse mortgage offer. “There will also be a lot more emphasis on digital fulfilment and processing – using technology more in the process,” he predicts.
How to jump in Von Martels says the success of reverse mortgages in recent years positions the product as one mortgage brokers can no longer ignore or take for granted. “This industry has grown at a tremendous pace – around 20% per year,” he says. “I think, if anything, we’re going to see an increase in those growth rates. With that growth rate acceleration, it’s really a huge opportunity for mortgage brokers to get into the mix.” So how should brokers approach the reverse mortgage sector, given its sometimes
“With the growth rate acceleration [in reverse mortgages], it’s really a huge opportunity for mortgage brokers to get into the mix” Paul von Martels, Equitable Bank to enter the sphere in the coming years – a development that would bring both positive and negative consequences. “On the plus side, it brings more exposure to the solution for Canadians and helps legitimize the brand,” he says. “On the other hand, that could bring a greater lack of understanding or wrong information being conveyed to the market. That’s not necessarily good.” The future is also likely to bring a wider range of reverse mortgage options to Canadians, Bisaillon says, including additional features such as property tax being paid automatically, a line of credit added to the reverse mortgage, or wealth management
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complex nature and the fact that they might not be overly familiar with the product? Bisaillon advises turning to mortgage professionals with experience to guide them through the process and explain areas that might be out of their comfort zone. For von Martels, it’s also a question of challenging any preconceived ideas about the sector and approaching it with an open mind. “Challenge your own biases and stereotypes so that you can do the same for your clients,” he says. “I think some brokers have figured this out and are very skilled in this – but others need to consider how and when to position this product. Give it a shot. You’ll be surprised and happy with what you see.”
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SPECIAL PROMOTIONAL FEATURE
REVERSE MORTGAGES
The customerobsessed advantage HomeEquity Bank’s Eric Bisaillon tells CMP how the lender’s expertise, innovation and “customer-obsessed” approach have made it a leader in the reverse mortgage sector THROUGHOUT ITS more than 35 years in the reverse mortgage sector, one thing hasn’t changed at HomeEquity Bank: its commitment to clients and partners alike. Eric Bisaillon, HomeEquity’s executive vice-president for referred sales and partnerships, describes it as a “customer obsession”: an approach that’s aimed at delivering exceptional support to both over-55 borrowers and the mortgage broker community, whose success HomeEquity values deeply. Of course, it helps that the lender is the only Schedule I bank in Canada focused solely on reverse mortgages, which Bisaillon says adds unrivalled expertise to its customerdriven outlook. “We’re exclusively dedicated to the reverse mortgage business,” he says. “It’s what we’ve done for 35 years, and I think that’s what makes us unique. For our end clients, the sole purpose is to help them enjoy and make the best of their retirement years, and for our partners, we’re committed to helping them complement, diversify and grow their business.” Bisaillon describes HomeEquity’s broker outreach as “the best mortgage broker support in the business,” driven by its team of tireless BDMs: 50 reverse mortgage experts across the country whose aim is to simplify the sometimes complex process for industry professionals.
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“We want to provide expert support for our partners that really makes a difference,” Bisaillon says. “Our BDMs have an average of 25 years of experience in the industry, and their job is to help, support, and educate our partners on how to recognize opportunities and develop business proactively.” HomeEquity accepts prospective deals through Velocity and Filogix, as well as directly through the BDMs themselves, giving brokers the option to be as involved in
the process as they wish. Indeed, those versatile submission options mean that even when the broker chooses to do the deal directly with their client, BDMs and mortgage specialists are still on hand to help guide them through the process where necessary to make it as swift and seamless as possible. In addition to its team of committed BDMs, HomeEquity’s outreach to brokers includes a series of educational webinars designed to help them learn how to grow
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their reverse mortgage business and use industry data effectively. Bisaillon says the company’s proven expertise in the field, gathered during more than three decades in business, offers an invaluable asset in that regard. “We’re reverse mortgage experts, but we can also provide insight into the trends that we’re seeing with that segment market of Canadians, the over-55s,” he says. “We’ve got a number of analyses and data points accumulated over 35 years about what they like, what their worries are, how to better reach them and how to find the best solution for them.” In fact, such is the company’s expertise in the reverse mortgage space that it has literally written the book on the sector. Home Run: The Reverse Mortgage Advantage, co-written by HomeEquity president and CEO Steven Ranson and executive vice-president Yvonne Ziomecki, offers advice and guidance on how to effectively market and offer top-notch service to the over-55 demographic. The book is available both online and through HomeEquity BDMs. Reverse mortgages have witnessed a significant rise in popularity over the last few years, and Bisaillon says HomeEquity is poised for further success after multiple years of double-digit growth. The sector’s strong performance, he says, is due to increased recognition and validation of the reverse mortgage product – although from HomeEquity’s standpoint, it’s also a mark of the company’s ability to look beyond the bottom line and focus on its clients. That customer-centric approach is part of the company’s holistic value proposition, Bisaillon says: the belief that business should not simply be transactional, but geared toward the best end result for each individual client and partner. “We’re not just thinking about one deal, or the best deal,” he explains. “To me, it’s a long-term commitment. For mortgage professionals, it’s about developing business, not just being transactional.”
It’s an approach that Bisaillon says is particularly crucial for mortgage brokers in attempting to differentiate themselves in a crowded field. “It’s really important to be holistic in your outlook,” he says. “Mortgage brokers need to have a value proposition that goes beyond just pricing. For us, it’s how we add value to everything we do with our partners.” Indeed, HomeEquity’s endorsement by and partnership with both the Canadian Association of Retired Persons (CARP) and the Royal Canadian Legion are a testament to an approach that goes beyond simply focusing on profit. That dedication to offering fresh, viable solutions to its customers has led HomeEquity to develop what Bisaillon
highest loan-to-value ratio of any reverse mortgage product in Canada, CHIP Max is geared toward clients seeking to help their children buy their first home, access cash for large unforeseen expenses or pay off debt. For Bisaillon, the development of CHIP Open and Max demonstrates not only that HomeEquity is flexible and attuned to finding solutions to complex market and industry problems, but is also a testament to the innovation and creativity the company is known for. That commitment to innovation is also reflected in the company’s use of technology – HomeEquity is focused on creating a better digital experience for customers and brokers alike.
“It’s really important to be holistic in your outlook. For us, it’s how we add value to everything we do with our partners” Eric Bisaillon, HomeEquity Bank describes as “the most complete product line in the business.” It was also one of the driving factors behind the development of the CHIP Open product, an offering that he says is unique in the Canadian reverse mortgage landscape. Launched last October, CHIP Open offers Canadians a short-term financial solution, with the option to repay the full loan amount at any time with no prepayment penalties. It’s different from a loan or conventional mortgage, in that regular monthly mortgage payments are not required, and was designed to accommodate customers for whom a longterm product is simply not suitable. CHIP Open followed hot on the heels of CHIP Max, another new HomeEquity product aimed at helping younger clients gain more immediate access to a higher percentage of their home equity. With the
“We do this by supporting brokers and the invaluable role they play in their customers’ experience by digitally enabling them to work with us in the way that best works for them,” Bisaillon says. As HomeEquity looks ahead to what’s sure to be an exciting and eventful future for the reverse mortgage sector, Bisaillon says its commitments to innovation, customers and partners are some of the key reasons it continues to lead the way in the space. “At HomeEquity Bank, we’re always looking at how we can improve our products and our services,” he says. “That’s just one reason why we’re the reverse mortgage leaders in the industry: because we look at the market, respond to it and don’t copy what’s being done elsewhere. We’re always at the forefront of innovation and partner support.”
www.mortgagebrokernews.ca
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SPECIAL PROMOTIONAL FEATURE
REVERSE MORTGAGES
A rapid rise Equitable Bank’s Paul von Martels tells CMP what has fuelled the company’s remarkable growth in reverse mortgages and why the product represents an excellent opportunity for brokers
IT’S FAIR to say that Equitable Bank’s rise since entering the reverse mortgage sector has been a significant one. Between November 2019 and November 2020, the company doubled its reverse mortgage portfolio, then realized even more growth following the launch of its Reverse Mortgage Flex product in November. Equitable’s success in the sphere has made it a major player in the reverse mortgage market within a relatively short span of time. CMP caught up with Paul von Martels, Equitable’s vice-president of reverse mortgage lending, to discuss what’s behind that rapid growth and why the mortgage broker community can expect to hear a lot more from the company on reverse mortgages in the near future.
CMP: Tell us about Equitable Bank’s journey since starting out in the reverse mortgage sector. Paul von Martels: After we launched our reverse mortgage program a few years ago, we quickly came to understand the needs of clients and mortgage brokers. Since then, we’ve really refined our product – Reverse Mortgage Flex has been extremely popular since its launch – and we’ve also made a
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concerted effort to educate and work closely with our mortgage broker partners. Our approach is about helping brokers improve their business through Equitable’s reverse mortgages. Brokers in general have really embraced this product over the last few years, and we’d like to see even more realize the immense opportunity in reverse mortgages. We are seeing tremendous growth in the industry.
CMP: What are some of the factors that have influenced your approach to the reverse mortgage sector? PVM: We did an extremely in-depth study looking into some of the reverse mortgage
markets around the world, and one of the countries we have taken the most from is the UK. In many ways, it has a similar regulatory structure to Canada, and there are a lot of similarities in terms of demographics and home price increases. The UK happens to have a very evolved reverse mortgage market, or what they refer to as equity release. What’s interesting about the UK market is that the penetration rate of the equity release product there is around 6%, compared to around 0.8% in Canada. Should Canada get to 5%, for example, it would imply $30 billion in mortgage balances outstanding, compared with the $4.5 billion today. There are thousands of mortgage advisors
ABOUT EQUITABLE BANK’S REVERSE MORTGAGE FLEX Launched last year, Equitable Bank’s Reverse Mortgage Flex product is designed to allow homeowners to access more equity from their reverse mortgage than was previously available – as much as 55% of their home’s value. Accessible to Canadians over age 55 residing in BC, Alberta, Ontario and Quebec, the product is “aimed at providing more benefits for Canadian seniors,” says Mahima Poddar, senior vice-president and group head of personal banking at Equitable. “We have built a full-service home equity suite of products with the best rates and features, designed to preserve the client’s hard-earned equity and ultimately provide greater value to enrich people’s lives.”
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who are incredibly sophisticated and educated in the equity release product in the UK, and there’s also competition amongst lenders, which, up until a few years ago, wasn’t the case in Canada. Competition for the benefit of improving the product, driving down interest rates and bettering service certainly adds value, and I think we’ve taken a lesson from that.
CMP: Is there anything else the Canadian industry could learn from what’s happening in other markets?
PVM: In the UK, we’ve seen that year-overyear growth in the equity release market is often tied to periods of rapid home price appreciation. With that in mind, look at Canada over the last 12 to 16 months – we’ve gone through yet another surge in house price increases, supported by extremely low interest rates. I wouldn’t be surprised if we see another year of extreme growth in reverse mortgages, but I think we as professionals in the mortgage industry can ask ourselves: Are we doing all that we can do right now? Home-
owners in Canada are looking for ways to access some home equity, but the reverse mortgage market has a long way to go before it matches the penetration of the UK market. Currently, we see that the largest channel for the origination of reverse mortgages in Canada is direct to client, meaning it doesn’t necessarily include a mortgage broker. Equitable really wants to change that – we think that mortgage brokers are best positioned to help clients explore this product. However, the mortgage broker community ultimately needs to do more.
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SPECIAL PROMOTIONAL FEATURE
REVERSE MORTGAGES
CMP: How can brokers work with Equitable to improve their own knowledge of reverse mortgages? PVM: Equitable Bank has an excellent team of national business development managers. Supplementing them are two reverse mortgage experts, Allan McNeil and Simone McMillan, who bring another level of product expertise to brokers. Those experts can provide assistance on a deal-by-deal basis, understanding tactics for positioning the product, or bring in other assistance on issues like improving the quality and efficiency of online marketing. Their role is to help brokers expand their business. We also offer a lot of great online resources to help brokers educate themselves on their own time and to provide the best possible advice when they’re speaking to clients.
CMP: What can brokers expect in terms of commission on your reverse mortgage products? PVM: We’ve materially increased the broker commission rates on our reverse mortgage product, which has increased broker engagement. Equitable Bank pays broker partners 200 basis points on advanced principal. With those incentives for our mortgage broker community, we’re helping to fuel investment by brokers into what we think is a fastgrowing category with a lot of opportunity.
CMP: How else is Equitable Bank making things easier for brokers and their clients in the reverse mortgage space? PVM: Our primary focus is speeding up the overall process so that brokers have higher success rates with their business at lower costs. For example, we often issue commitments in less than 24 hours, which can help secure client interest. As well, digital signatures and the use of automated valuation technology can speed up key components to
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the fulfilment process. We’ve launched a new appraisal system in line with the rest of Equitable Bank, meaning that many of our appraisals will now be done in an automated manner. All appraisals now have a fixed rate of $375, whether an AVM or full appraisal. Even though some clients will still need a full appraisal, depending on the nuances of their property, it’s being heavily subsidized by the bank, and we think that’s going to have a lot of value for our reverse mortgage clients who want to move faster on transactions. For us, helping the clients to get through the process faster and more easily means that they’re going to create new opportun-
means that they have more equity than they otherwise would. No surprise, clients really care about this. With that in mind, we offer the lowest interest rate in the market and lower prepayment charges. Those are two material reductions in cost and can make a difference of thousands of dollars in savings for a client over the average life of a reverse mortgage.
CMP: With that in mind, how should brokers approach your reverse mortgage product? PVM: We highly encourage brokers to educate themselves on the merits of the Equitable reverse mortgage product. We get
“Homeowners in Canada are looking for ways to access some home equity, but the reverse mortgage market has a long way to go” Paul von Martels, Equitable Bank ities to feed the mortgage brokers with more business, because they’re going to tell their social networks about how straightforward the process was. The mortgage market is exceptionally busy, which means that home appraisers are busy, lawyers are busy, and most of all mortgage brokers are busy – so Equitable is doing as many things as possible to reduce touchpoints.
it – our solution is still a ‘newcomer.’ More and more, Canadians are educating themselves online about reverse mortgages, and they expect brokers to know the ins and outs as they do with other products. What’s Equitable’s elevator pitch? If your retired client wants to access home equity and wants to save money, Equitable Bank’s product is the right one.
CMP: How would you sum up Equitable’s approach to the reverse mortgage market? PVM: Equitable’s approach to this product
CMP: Is there anything else you’d like brokers to know about your reverse mortgage product? PVM: The Equitable Bank team is on a
continues to be centred around the concept of equity preservation. What we mean by that is lower cost to the borrower – if you fast-forward five to 10 years into the future when clients mature their mortgage, it
mission to make reverse mortgages an everyday product for more brokers. You’re going to see more of us promoting the product and making it increasingly attractive to both brokers and their clients.
www.mortgagebrokernews.ca
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EQB-
It’s time to rethink reverse mortgages Equitable Bank Reverse Mortgage Solutions As Canada’s Challenger Bank™, we’ve been innovating Canadian banking for over 50 years. Today, we bring that same drive to our reverse mortgage solutions. With competitive rates, flexible advance options, renowned service and more, it’s our mission to challenge what a reverse mortgage can look like for Canadians—and for you. We offer: • Lowest reverse mortgage rates in Canada1 • LTV up to 55% • One-time, single, and/or recurring advance options • Lower prepayment charges1 • Simple automated valuation process • Premium broker compensation
Rates as low as
3.44%2 | 4.27% APR3 1 Year Fixed Reverse Mortgage Flex or Lump-Sum
Talk to your Regional Sales Manager today. Call 1-800-825-0573 (AB, BC) • 1-800-897-6564 (ON, QC) Email reversemortgage@eqbank.ca Visit equitablebank.ca/reversemortgage
Based on research conducted by Equitable Bank on April 30, 2021 comparing Equitable Bank’s Lump Sum and Flex Reverse Mortgages and the CHIP Reverse Mortgage offered by Home Equity Bank. The comparison is based on interest rates and prepayment charge terms for a $500,000 1 year fixed rate new reverse mortgage, assuming outstanding mortgage balance being paid in full on any one of the last business days of each calendar year during the term and no interest payments made before the prepayment date. Prepayment privileges not included. 2 All interest rates are subject to borrowers meeting the Equitable Bank mortgage lending criteria and are subject to change without notice. 3 APR means the cost of borrowing expressed as an annualized interest rate for the Interest Rate Term, based on the Initial Advance Amount, interest and any applicable fees. The APR figures above are based on the following: • A mortgage amount of $150,000 and the accumulated interest for the applicable interest rate term; plus • a set-up fee and a closing fee (varies by province); and • all funds drawn as an initial advance; and • no prepayments 1
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FEATURES
RELATIONSHIP-BUILDING
Cultivating strong relationships in the digital age As online meetings have become the norm, one of the biggest challenges has been how to forge and maintain relationships. Mark Carter outlines four ways to do this with technology
THE SOCIAL DILEMMA, currently on Netflix, is the latest in a string of researched documentaries or studies adding credence to going ‘back to basics’ when it comes to human connection in this digital age. So many industry leaders, co-founders, executives and ethical designers are adding to the numbers voicing concerns over addictions to technology. Chamath Palihapitiya, a former Facebook executive, notably expressed personal concern about the platform helping to create “tools that are starting to erode the social fabric of how society works”. It’s a telling sign that so many innovators or digital execs minimize their own offspring’s access to tools they have helped create. The digital age is here to stay as we continue racing into the future. It’s the manner in which we choose to use the technology in our hands that helps maintain strong relationships in a hyper-connected, tech-addicted digital age. The following are four ways to do this.
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www.mortgagebrokernews.ca
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Take off the masks
The first lesson can be learned powerfully from the words of a teenage girl during a seminar I delivered on human behaviour and human connection. “Oh, this explains so much! I get it. I was pretending to be really [emotional] to land the hot guy. Which I did! But then after a while it didn’t work because, you know, we’re just not that alike.” Authenticity is a powerful way of inviting or adding value into our lives and the lives of
biggest dirty little secret in business”. A lack of candour costs a business so much: trust, productivity, innovation, time, everything. The same is true for our personal relationships. They suffer when transparency is sabotaged or subterranean. If someone you truly value has upset you, tell them. Few people have developed the psychic ability to accurately or fully read minds! The digital age seems to breed the anti thesis of candour, with phenomena like ‘ghosting’ or ‘cancel culture’ taking off.
Authenticity is a powerful way of inviting or adding value into our lives and the lives of others. Pretending for the sake of connection often fuels more heartache or disconnection others. Pretending for the sake of connection often fuels more heartache or disconnection. Authenticity allows for a healthy stickiness over neediness. Our historical predecessors thousands of years ago might have been lucky to interact with 150 mainstay connections in a lifetime. These days, people invest so much time in filtering highlights for highlights, seeking to gain a far greater number from a single social post in the duration of a coffee break. Yet the price is significant. A short-term dopamine fix of surface, shallow or even fake loveliness from a digital collection of every Tom, Dick or Harriet bundled into one happy bucket labelled ‘friends’ often only serves to pull us away from the gems in this world.
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Embrace candour
Jack Welch, the late former CEO of GE, described a common trait seen in the digital age – regardless of whether applied personally or professionally – as “the
A conversation culture, rather than a cut-off one, is better for relationships and the social fabric of community.
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Speak a common language
We live in a world of 196 recognized countries and more than 7,000 known languages. More than half of the world’s population speaks the top 10 of these. Yet there remain two common languages we all understand that transcend differences, divisions and geographical boundaries. What’s more, neither of these requires the utterance of words. (And no, they’re not the languages of SMS or emojis! How often do you have to ask friends to help you translate these?) Kindness and love are languages the deaf can hear, the blind can see and that can bring light to the darkest of spaces. In fact, Robert Waldinger, the current director of perhaps the world’s longest study of adult life and development, shares in his “What Makes a
Good Life” TED Talk that the secret to a happy life turns out, after all, to be feeling loved and supported.
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Prioritize quality over quantity
The importance of human connec tion minus technology is rooted in scientific reasoning. British anthropologist and psychologist Robin Dunbar stumbled upon a magic number while studying the behaviours of primate groups. Applying the same modelling to our own primate group, the predictions about the size of social circles or the number of relationships that people can realistically maintain turns out to be surprisingly accurate: 150. This number has been prevalent through out history and is still typical of modern-day social circles, from the average size of the populations of English villages around the 16th century (160) to the number of guests typically invited to weddings today (148, from a study of 18,000 brides) or even the average number of Facebook friends (150 to 200). Among all your connections, consider how many relationships are truly meaningful or present in your world. Perhaps take note of who your 150 are and invest more in them than in strangers. Our humanity and the quality time we invest in relationships nourishes their longevity. Embrace and use technology as a great enabler and connector. Be less concerned about the rush for vanity metrics or popularity. And don’t be so busy rummaging in the digital rocks and stones that you miss the reallife diamonds. Mark Carter is an international keynote speaker, trainer and coach. He has more than 20 years of experience as a global learning and development professional.
www.mortgagebrokernews.ca
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PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email mortgagebrokernews@kmimedia.ca
Dueck says his parents were a strong influence on his hobby: “Growing up, my parents made wood crafts that they would sell at local markets and craft sales on the weekends”
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Years Dueck has been an active woodworker
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Approximate number of pieces he's made so far
1
Typical number of hours he spends on each project
LITTLE MASTERPIECES Broker Paul Dueck devotes the same attention to detail to his woodworking projects as he does to putting together successful mortgage deals PAUL DUECK takes pride in his stellar industry record and connections, which he credits to the valuable skills he’s learned from woodworking, a hobby he’s been dabbling in since childhood and fully embraced during his grad-school years. Chief among these are patience and planning, which Dueck says are critical to a successful woodworking project. “Learning to incorporate both of those in my hobby has translated to my mortgage business,” explains Dueck, a Winnipeg-based mortgage specialist with Castle Mortgage Group. “When I first
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started making things like end tables or even garden boxes, I would have an idea in my mind and then just start cutting. Saving time upfront often meant more work later, and I quickly realized that taking time to draw detailed plans and prepare the materials in advance would reduce the complications later in the project.” The same holds true for the mortgage process, he says. “Spending the time upfront with the clients and detailing the next steps makes the process much more enjoyable for both the clients and myself,
and reduces the stress when the clients have an accepted offer.” Crafting wooden objects is a source of joy for Dueck, and when the pandemic took hold last year, he decided to spread some of that joy to others. “I started making them for friends and family and would drop them off on their doorsteps with a little card,” he says. “It was something thoughtful I could do for others and was a nice break from staring at the computer screen. The part I enjoy the most is seeing other people enjoy the things I have made for them.”
www.mortgagebrokernews.ca
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CMA2
APRIL 29, 2021 ONLINE
CONGRATULATIONS TO THE 2021 WINNERS AND EXCELLENCE AWARDEES After another extraordinary year for the mortgage industry, mortgage professionals have continued to raise the bar in terms of service, innovation, professionalism and leadership. And nowhere is this more evident than in the Canadian Mortgage Awards 2021 winners and excellence awardees. CMP and MortgageBrokerNews.ca, along with our esteemed award sponsors, extend warm congratulations to them all. Winners and excellence awardees will be profiled in CMP Issue 16.06 out in June, which will take an in-depth look at their achievements.
For the full list of award recipients, visit
www.canadianmortgageawards.com
Award Sponsors
Official Media
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