CMP 8.07 by Key Media

MORTGAGEBROKERNEWS.CA ISSUE 8.7 | $6.95

TOP BROKERS BY VOLUME

REVEALED

They — and the Small Market Top 20 — defy expectations and Jim Flaherty! WHO QUALIFIES? DEFINING A BROKER

THE BIG QUESTION WHY CONSUMERS NEED YOU!

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CONTENTS

MARKET MATTERS

FEATURES

6 | Letters to the Editor

18 | Are Rural Clients More Loyal? CMP magazine’s Donald Horne asked brokers who work in urban and rural markets just how they cultivate client loyalty

8 | Reading between the Lines The Mortgage Centre’s Eddy Cocciollo does some reading between the lines on the DLC purchase announcement 12 | News Analysis With all the talk about shrinking demand for homes, what is really pulling the strings of the broker market? 14 | Broker Advice Why use a mortgage broker? Len Lane, owner of Verico Brokers for Life, has the answer

38 | Buddy-Buddy Brokers There are some great buddy-buddy movies out there, but the best stories yet to be told are those between brokers and Realtors

42 | Mom and a Broker Amy Wilson shares her secret to being a full-time broker and mom 46 | Costs...Benefits You’ve passed the first hurdle – you are ready to do a commercial deal. But there are many more hurdles out there to trip you up; time to do some cost-benefit analysis

17 | Statistics If you build it, they will come – or so the forecast predicts

issue

License # 10172

8.7

COVER STORY

CMP’s Finest 75 Brokers CMP received a record number of submissions for the Top 75 brokers list

It’s all done wIth money. Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $1 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $4M to $100M. Blake Cassidy or Pierre Leonard | 800 494 0389 | www.romspen.com

JULY 2013 | 1

CONTENTS

NEWS 10 | Product News RateHub.ca launches its sister site, MyClosingCosts. ca; KMI Publishing and Events earns a spot on the PROFIT 500 list of Canada’s fastest-growing companies

MARKETING 44 | Unfair to Women? One broker established herself marketing specifically to women – placing a family-friendly face on an industry that has traditionally been lacking in heart 49 | Who is an Alberta Broker? Who exactly should be regulated as a mortgage broker in that province is something regulators are ready to take up 50 | Specialists Rock! The days of jack-of-all-trades brokering are gone, writes Doren Aldana 54 | How to Deliver Exceptional Service Bad service damages your public perception, credibility and market reputation – but focusing on the little things can transform you from average to exceptional

REGULARS 62 | Favourite Things 64 | CMP Service Directory

Twitter.com/ CMPmagazine Like Us on Facebook Canadian Mortgage Professional

2 | JULY 2013

Take the first step towards a giant leap in your career. With innovative programs, sales incentives, and value added benefits, HLC helps empower you to achieve more. If you’re ready to discuss your career options with HLC, call the Regional Sales Director in your area.

Grant Bennett

Dodi Kozak

Mark Buller

• Grant.Bennett@hlcmortgages.com

• Dodi.Kozak@hlcmortgages.com

• Mark.Buller@hlcmortgages.com

• 1-866-978-9919

• 1-866-443-9427

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Nicole Bernier

Angelo Froudakis

Geoffrey Woodford

• Nicole.Bernier@hlcmortgages.com

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• Geoffrey.Woodford@hlcmortgages.com

• 1-866-264-8571

• 1-866-702-4994

• 1-866-217-5159

British Columbia

Quebec

Alberta

GTA & Ontario East

Ontario West

Atlantic Canada

HLC Home Loans Canada Brokerage Licence #10423 3877337 Canada Inc. is a subsidiary of CIBC Mortgages Inc. and carries on business as HLC Home Loans Canada (“HLC”) except in Quebec, where it carries on business as HLC Hypothèques Logis Concept and is licensed as a mortgage agency. HLC is licensed/registered in Ontario as a mortgage brokerage under Licence #10423, in British Columbia and Nova Scotia as a mortgage broker, in Alberta as a mortgage brokerage and in New Brunswick as a credit broker. TM HLC Design is a trademark of CIBC.

CONTENTS/ EDITOR’S LETTER

THE NUMBERS DON’T LIE COPY & FEATURES EDITOR Vernon Clement Jones SENIOR WRITER Donald Horne CONTRIBUTORS Doren Aldana, Len Lane, Nikki Heald, James Veigli, Paolo Di Petta COPY EDITOR Rachel Naud

ART & PRODUCTION GRAPHIC DESIGNER Alicia Chin

SALES & MARKETING ASSOCIATE PUBLISHER Trevor Biggs MARKETING AND COMMUNICATIONS Julia Comitale PROJECT COORDINATOR Jessica Duce

CORPORATE PRESIDENT & CEO Tim Duce OFFICE/TRAFFIC MANAGER Marni Parker EVENTS AND CONFERENCE MANAGER Chris Davis

Editorial enquiries vernon.jones@kmimedia.ca Advertising enquiries trevor.biggs@kmimedia.ca Subscriptions tel: 416 644 8740 • fax: 416 203 8940 subscriptions@kmimedia.ca KMI Publishing 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 mortgagebrokernews.ca Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as CMP magazine can accept no responsibility for loss.

Let’s celebrate, brokers: the CMP Top 75 is here, and don’t forget about the Small Market Top 20. But you may or may not want to run out for a bottle of champagne given funded volume numbers that reveal a slower, if still steady, market for mortgage professionals. We’ll save that discussion for later, as some of this year’s top brokers expound on the challenges of 2012, but also on how they were able to overcome them. The truth is no matter how you slice it, this year’s tally of funded volume is impressive, but especially so considering the uncertainty that marked the 2012 housing market. The top broker overcame those hurdles, with a business model in step with the times and focused on volume (Pg. 32). Other high fliers aren’t far behind him, and offer their own advice on what you can do to up your game in a market marked, or rather marred, by fierce competition and increasingly fickle consumers. Just as compelling a read can be found in the personal stories of other effective professionals who made this year’s Small Market Top 20. Their individual feats are remarkable considering they lack the top-tier home prices of their Toronto and, yes, even their Vancouver counterparts. Read on, starting page 33. But this magazine issue doesn’t end with the rankings. Edmonton broker Len Lane makes a good case for why brokers will continue to play a key role in the home-buying process for tens of thousands of Canadians each year (Pg. 14). Take note of his arguments, you might even put them to use. So read on, and then drop us a note after you’re done. Look for some of those comments in next month’s Letters to the Editor, although this issue’s instalment on page 6 is nothing to sneeze at. Cheers, Vernon Clement Jones

CONNECT

Contact the editor:

vernon.jones@kmimedia.ca

4 | JULY 2013

CONVERSATIONS/ LETTERS TO THE EDITOR

LETTERS

TO THE EDITOR RE: 2020 WISHLIST (CMP 8.6)

scros cMP nada ca ate iv r P g guide in lend

The sky is falling K.S.

Time to wake up from the dream of the late 90s through to 2008, Mr./Ms. Broker. It is not going to get easier – this is not the real estate industry where the major brands own 80 per cent of the market. This is an industry where the banks own the market, and if brokers left the field of play, it would not even register a blip on the radar for consumers. They will just carry on and deal with lenders direct. Unless you have a business model that allows for additional services to the consumer, or the broker industry actually figures out how to change their ways, you will be lucky to be here in 2020.

s ratio deBt numBer p ch-u crun er ne Br ok gA ge 5 mo rt 8. 6 | $6 .9 e is su

w s.c

ird

e igenc s er intell Brokot it! g ing a Buildroker B t Agen g in trAin

of ce n e W minfluen e salut CMP’s ustry d to in etters go-g

Not really

2013

13/06/

6 PM

1:57:2

RON BUTLER

Wow, I thought I was pessimistic, I am little, fat Miss Sunshine compared with these posters. Don’t worry, Mortgage Brokers, rats and cockroaches; we can survive disaster and we’ll still be around to make deals happen.

LETTERS TO THE EDITOR ARE WELCOME! Due to space considerations, priority is given to those 300 words or less. We reserve the right to edit, condense or reject submissions for accuracy, brevity, clarity, good taste and legal reasons. Writers must provide their full name, address and telephone number to verify authenticity. Please reference the article and send your letter to vernon.jones@kmimedia.ca

6 | JULY 2013

indd

Spine.

OBC_

OFC_

RE: WOMEN OF INFLUENCE (CMP 8.6)

Thank you

MARILYN SPENCER

3267 +

I am very new to the industry and really enjoyed reading about the success of other women. I think that they have created a trail for us to follow. Thank you and thank you, Canadian Mortgage Professional magazine.

Woman power! WALLY EWACUK

I have a couple women on my team and they are the leaders in their funded volume and professional ethics. I think we will see more women come into the industry as a higher percentage of the overall new entrants.

No 32%

Yes 67%

POLL

Do the best brokers come from the banks?

MARKET MATTERS/ READING BETWEEN THE LINES

READING BETWEEN

THE LINES

Brokerages were abuzz with talk when it emerged that Dominion Lending Centres had snagged MCC, purchasing it for an undisclosed amount from CIBC. That buzz hasn’t necessarily died down, despite reassurances from DLC President Gary Mauris that The Mortgage Centre would remain a separately run entity. This month MCC President Eddy Cocciollo is reading between the lines and backing up Mauris. He is also explaining why the deal is a good match.

DLC Acquires Mortgage Centre Canada DLC RELEASE Acquires Mortgage FOR IMMEDIATE Toronto, ON – June 13th, 2013 FOR IMMEDIATE RELEASE

Centre Canada

Dominion Lending Centres is proud to announce the purchase of Mortgage Centre

1. The Mortgage Centre is an iconic

brand that has built a culture that is envied by many in our industry.

2. Having one of the top brokerages in Eddy Cocciollo, President, The Mortgage Centre:

the country view The Mortgage Centre as a strategic piece to its continued success, with its artillery of tools and expertise to help move MCC to the next level, excites all of us.

3. I have spent some time with Gary and our vision for

MCC align. MCC brokers and agents will see only value-added changes in technology and tools to help them grow their businesses. The core of what has made MCC successful over the last 24-plus years will remain intact.

4. CIBC has made it apparent that the mortgage broker

space is no longer a strategic direction for them. With all the success that DLC has had in a short time, I can only imagine how quickly MCC will see benefits from its new partner.

5. It is important to be nimble and react to the industry

quickly and CIBC was challenged in its decision process, which made it more difficult for the management team to compete. With DLC, I believe we now have the autonomy and support to compete much more fiercely.

6. MCC will be a separate competing brand to DLC that will

continue to give brokers and agents choice when it comes to partnering with a national brokerage.

8 | JULY 2013

Canada (MCC) the Canadian Imperial Bank of Commerce (CIBC). Toronto, ON from – June 13th, 2013

MCC is an iconic Canadian brand consisting of 90 franchises operating out of 160 loca-

Dominion Lending Centres proud to announceIn the of Mortgage Centr tions across the country with 1,133ismortgage professionals. 2012,purchase MCC successfully Canada (MCC) the Canadian Imperial Bank of Commerce (CIBC). funded more thanfrom $6.9 billion in mortgage volume. DLC went through tremendous due diligence before deciding to acquire MCC and is

MCC is an iconic Canadian brand consisting 90 franchises out of 16 committed to the brand with the intention of adding freshofperspective, support,operating techlocations across the country with 1,133 mortgage professionals. In 2012, MCC nology and enhancements to MCC’s offerings. successfully funded more than $6.9 billion in mortgage volume. MCC will continue to operate as an independent brand, and this purchase will not affect the day-to-day operations of MCC or DLC.

DLC went through tremendous due diligence before deciding to acquire MCC and “We are very excited with this purchase as it further demonstrates DLC’s long-term committed to the brand with the intention of adding fresh perspective, support, commitment to the Canadian mortgage brokering channel,” says Dominion Lending technology and enhancements to already MCC’smet offerings. Centres President Gary Mauris. “We have with the MCC team this morning and are working to keep the MCC head office team intact going forward.”

MCC will continue to operate as an independent brand, and this purchase will no About Dominion Lending Centres: Canada’s largest and fastest-growing national affect the day-to-day operations of MCC or DLC. mortgage brokerage and leasing company with more than 2,250 Mortgage Professionals spanning the country. Launched in January 2006, DLC quickly grew to fund

“We arethan very with this purchase further demonstrates more $13 excited billion in mortgage volume in 2012 –as theitlargest origination volume of DLC’s long-ter commitment the Canadian mortgage brokering channel,” says Dominion Lendi any Canadian to brokerage. DLC continues to be recognized by PROFIT Magazine as one Centres President Gary Mauris. “We havethe already met50with MCC team this of Canada’s Fastest-Growing Companies – making PROFIT HOT list ofthe Emerging Growth Companies (2009 &to2010), PROFIT 200 (2012) andoffice PROFITteam 500 (2013). morning and are working keep the MCC head intact going forward. DLC and our agents continue to be recognized at the annual CMP Canadian Mortgage

Awards (CMAs), Lending most recently winning National Broker Network of the Year in 2013. About Dominion Centres: Canada’s largest and fastest-growing national mortgage brokerage and leasing company with more than 2,250 Mortgage Professionals spanning the For more information, please contact: country. Launched in January 2006, DLC quickly grew to fund more than $13 billion in mortg Cindy Freiman volume in 2012 – the largest origination volume of any Canadian brokerage. DLC continues recognized PROFIT Magazine as one of Canada’s Fastest-Growing Companies – making Director of by Public Relations & Communications PROFIT HOT 50 list of Emerging Growth Companies (2009 & 2010), PROFIT 200 (2012) an Dominion Lending Centres Inc PROFIT 500 (2013). DLC and our agents continue to be recognized at the annual CMP Can Direct: 289-240-6322 Mortgage Awards (CMAs), most recently winning National Broker Network of the Year in 201 Email: cindy@dominionlending.ca Website: www.dominionlending.ca

For more information, please contact: Cindy Freiman Director of Public Relations & Communications Dominion Lending Centres Inc

FINANCIAL LP

“First National’s

reliability and

innovative technology has helped me establish an Ed Kim, Underwriter Maria Dominelli, AMP, Senior Mortgage Broker, Invis Lyndsie Beale, Account Manager

outstanding reputation.”

“By offering fast turnarounds, exceptional service and competitive products and rates, First National has helped me be successful.” For the past 25 years we at First National have invested all of our time, expertise and energy into helping mortgage brokers build successful businesses. Behind the scenes

Thank you mortgage brokers for 25 years of shared success. Ontario Mortgage Brokerage Licence No. 10514

MARKET MATTERS/ PRODUCT ROUNDUP

PRODUCT NEWS

AND INDUSTRY ANNOUNCEMENTS

A bite-sized guide to the industry’s newest products and appointments as they come down the channel

CLOSING IN ON THE CHANNEL? WHO: MyClosingCosts.ca WHAT: RateHub.ca launches a new companion site, focused on helping mortgage clients calculate closing costs and hunt for service providers, including lawyers.

THE FACTS: MyClosingCosts.ca is designed as a first-stop, onestop shopping site for those who have already secured a broker and/or lender, and are now looking for the best price on lawyers and appraisers. The model mirrors those of rate sites, and broker reaction has been mixed. Some fear it leads to further erosion of client ownership and the increased influence of rate sites in the mortgage shopping process.

THE EXPLANATION: “We kept mortgages out of it purposefully so mortgage

Nobody likes to see deals declined because of a low credit score.

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TURN THOSE DECLINES INTO DEALS! 401 Bay Street, Suite 1600 Toronto ON M5H 2Y4 Tel: 416-479-9585 l Fax: 1-888-813-9403 www.score-up.ca

10 | JULY 2013

1 Some may take longer When client joins score-up and payment is received

MORTGAGEBROKERNEWS.CA

brokers could use it without fearing that they will lose clients,” says company president Alyssa Richard. “We respect the fact that they don’t want to send them to RateHub. We’ve had the site up and running for about a month now, and the brokers and real estate agents who have been using it love it.”

company has now, in fact, launched a new title WealthProfessional.ca, designed to bring breaking news, analysis and forum discussion to Canadian financial advisors, among them the growing number of mortgage brokers who are dually accredited.

COULDN’T HAVE DONE IT WITHOUT YOU

“We’re very honoured and grateful for the support of our readers and clients,” says KMI President and CEO Tim Duce. “Certainly, it’s been a tough five years for all traditional media and publishing companies, and to be the only B2B & B2C media company on this year’s list is an illustration of the business model we brought to Canada, but also the entrepreneurial initiative of our team.”

WHO: KMI Publishing and Events WHAT: The publisher of CMP and MortgageBrokerNews.ca earns a spot on the PROFIT 500 list of Canada’s Fasting-Growing Companies.

THE FACTS:

THE EXPLANATION:

KMI Publishing and Events has seen its new-world mix of trade and consumer titles coupled with industry conferences grow revenue by 162 per cent over the last five years. The Toronto-based media

JULY 2013 | 11

MARKET MATTERS/ NEWS ANALYSIS

CONSUMER CONUNDRUM CMHC study shows buyers are seeking out brokers, but...

WOULD THE REAL PROBLEM STAND UP? There’s more and more talk about shrinking demand for homes, but what’s really pulling the strings of the broker market? What has been left off the radar for many brokers when considering the housing market and interest rates is the state of uncertainty in the global economy, say industry analysts. “It’s impossible to deny the potential ramifications of any U.S. or Asian economic issues impacting our Canadian housing market,” says Chris Karram, a partner and financial adviser with Safebridge Financial.

CMHC’S CONSUMER SURVEY (2013) 12 | JULY 2013

“Personally, I don’t see a huge lack of demand being the issue based on recent trends disclosed by TREB, but rather the ability to receive funding being the primary reason for a possible slowdown in our real estate market.” Several reports coming out of China predict slowing as stocks plummeted. This dampens forecasts of a U.S. recovery by RBC Economics, predicts which American growth spurred economic growth here in Canada – projected at 2.9 per cent for 2014. Prior to the news from China, RBC’s chief economist Craig Wright was reported as saying “our forecast is for Canada’s economy to grow at rates which

should help propel the economy to full capacity in early 2015.” Karram feels the proof in the pudding will be how government and lenders react to the news. “A global economic scare is going to impact everyone, one way or another,” Karram tells CMP. “My belief still comes back to the reality that consumers will react out of emotion, and the lenders will react out of facts. If lenders change their guidelines again, or the government continues to get more and more involved, that will have an impact not necessarily on Canadians desire to purchase their first or next home, but more on their ability to do so.”

1. FIRST-TIME MORTGAGES WITH BROKER

49%

More than half of recent buyers (56 per cent) reported contacting at least one lender or broker to learn about mortgage options, according to a new report from the Canada Mortgage and Housing Corporation. But not so fast: Unfortunately, those consumers using a broker’s services dropped to 23 per cent for 2013, compared to 27 per cent in 2012. It’s also worth noting that one in five recent buyers contacted at least one lender and one broker during the process of arranging mortgages. Still, the bright spot for mortgage brokers are signs they are holding their own in market share among recent buyers. The CMHC survey shows 49 per cent of all mortgage originations among first-time buyers and 34 per cent among repeat buyers are accounted for by brokers. Twenty-six per cent of those looking to refinance opted for a broker, with 17 per cent choosing a broker to arrange the renewal. The survey shows that 66 per cent of mortgage consumers look to online information sources to get their information on mortgage options and features, and, a full 84 per cent chose interest rates as the most popular search term. But what is growing in popularity is the usage of online mortgage calculators. “Of consumers who went online for mortgage information, nearly two-thirds (63 per cent) used a mortgage calculator,” says the report. “Almost half (47 per cent) reported using a calculator from a lender website, followed by 17 per cent using a CMHC calculator, and 13 per cent using a calculator from a broker site.” Of those using the online calculators, two-thirds wanted to determine the amount of their mortgage payments, while 39 per cent used a calculator that compared two or more mortgage offerings – 36 per cent were trying to determine how much mortgage they could afford. Loyalty among first-time buyers remains low, with only 54 per cent arranging their mortgage with the financial institution they were dealing with the most. Of those who decided to switch lenders, 44 per cent cited a better interest rate as their reason.

2. REPEAT MORTGAGE WITH BROKER

34%

MARKET MATTERS/ BROKER-TO-BROKER ADVICE

WHY CONSUMERS

STILL NEED YOU!

With all the rates cluttering the Internet, the question comes up over and over again: Why use a mortgage broker? Len Lane, owner of Verico Brokers for Life in Edmonton has your answer

14 | JULY 2013

Cover

The Year ahead

MORTGAGEBROKERNEWS.CA

reality out there instead of trying to sell around it, then people will When the general public thinks mortgage, the first trust us.” thingBut thatany comes to their mind is walking into their efforts the industry may local bank branch and will ask to speak undertake as a whole have no with someone who specializes in mortgages. This,do obviously, is one effect if individual brokers don’t their which means of the parts, right approaches, asgiving we all rely on our own clientstothe best value-added service, banks provide us with the best rate and the best improving effi ciencies and funding product, in the most professional, knowledgeable ratios with lenders, and of course, and straightforward way. But, lot of times this is not placing clients with the right lenders the that the client gets as bank specialists forexperience their needs. work“Focus for theon bank the bank’s the and besthave interest of the best interest atclient heart. first and foremost,” said Therien. “We are at amortgage crossroads: we and agents, We, as independent brokers either go back to being the person youthat specialon another hand, work with companies go to when the banks say no as it was ize, for the most part, only in mortgages. In Canada, 25 years ago, or become truly trusted independent mortgage brokerages are usually headed advisers to our customer and move up by registered mortgage CMP broker who typically has to athe next level.”

several agents working for him/her. These agents

morTgagebrokernews.ca

We, as independent mortgage brokers and agents, work with companies that specialize, for the most part, only in mortgages

71%

of homeowners say they are in a good position to are usually known as mortgage associates,weather sub a potential downbrokers, salespersons although the general public is turn in the housing market used Source: to referring to allInsights: of them as mortgage brokers. Mortgage These individuals are knowledgeable Highlights from CAAMP’s Fall 2011 mortgage proconsumer and industry fessionals, very often withsurveys experienced financial (CAAMP/Martiz Research Canada) backgrounds. It’s important to explain to your client that using

JULY 2013 | 15

MARKET MATTERS/ BROKER-TO-BROKER ADVICE

a mortgage broker to obtain your mortgage has been a growing trend among Canadians in the last two decades. While in 1998 only 8 per cent of all residential mortgages were obtained using mortgage brokers, the percentage of those who use mortgage brokers is close to 30 per cent today. The driving force behind this trend is no doubt the benefits associated with using a mortgage broker – and they are the advantages that must be explained to clients. Here are some of them:

ACCESS TO THE BEST RATES AND PRODUCTS Mortgage brokers have a relationship with several financial institutions that are competing to get that mortgage business. These institutions continuously compete with rate, product and service promotions, hoping to win the client’s business. Working with a mortgage broker will provide the client with access to some of the best deals and most innovative mortgage products you can obtain on the mortgage market. Obtaining the best interest rate is probably one of the most important reasons why consumers use mortgage brokers. Mortgage brokers shop the market for the best mortgage rate available. They have the access to discounted mortgage rates, which are significantly lower than the posted rates offered by banks to the general public through their branches. In most cases, the mortgage broker has the ability to find the best rate, which sometimes would not be the case if the client walked into a branch and negotiated the rate him or herself. Obtaining the best mortgage product is another major reason why it is beneficial to use a broker. Each

Obtaining the best interest rate is probably one of the most important reasons why consumers use mortgage brokers 16 | JULY 2013

financial institution has its line of products and sometimes in order to find the mortgage product that meets your unique needs there is a need to check several banks. A mortgage broker is familiar with numerous products offered by financial institutions and will do the search for you.

NON-TRADITIONAL LENDING Mortgage brokers have working relationships not only with major institution such as banks or credit unions (known as “A” lenders), but also with so-called “B” and private lenders. These institutions will very often overlook the standard conditions required by “A” lenders, especially for individuals with troubled credit history, those who cannot provide standard income confirmation.

SHOPPING AROUND/CREDIT SCORE A client shopping for the best mortgage rate on his/ her own could easily turn into a process that negatively affects credit score. Every time you submit an application for a mortgage approval or a pre-approval, the credit score drops. By doing this at several financial institutions you are running a risk of significantly affecting your credit score. We as mortgage brokers will check credit history only once, and based on the information obtained will assess the quality of the application and send it to the lender that can offer the best mortgage solution for your situation. The upside? The client’s credit will be checked only once by the lender where the application is sent.

MORTGAGE BROKER’S SERVICES ARE FREE It’s important that the client know that the services of mortgage brokers are usually paid for by the lending institution where the mortgage is placed through a so-called “finder’s fee.” We have to disclose this – unlike bank employees. Clients may believe that bank employees are paid a salary when in fact they may work on a commission. In other words, mortgage broker services are free to the client provided it’s for a regular “A” deal. There are cases, however, where the institutions do not pay a finder’s fee to the broker, in which case the broker will charge the client directly. This occurs usually with “B” and private lenders.

Alberta claims

Brokers on the Top 75

MARKET MATTERS/ STATS

80000

70000

IF YOU BUILD IT WILL THEY COME? Genworth Canada is offering new predictions for how high housing starts and home sales will rise by the close of 2013. “The Canadian housing market is transitioning to a balanced level of supply and demand,” said Brian Hurley, chairman and CEO of Genworth Canada. “While lower demand has cooled the housing market, this latest research shows moderate growth over the next few years, which points towards a more stable market for both buyers and sellers.” These graphs spell out that analysis, but do they foretell the fortunes of brokers in those individual regions? That’s for you to decide. Well, you and time, that is.

61,932 60000

50000

37,579

40000

30,587

30000

25,684

20000

15,175

11,256 10000

Source: Conference Board of Canada (commissioned by Genworth Canada)

Atlantic

Quebec

Ontario

Prairies

Alberta

British Columbia

Geared to Handle EXCEPTIONS SOLUTION BASED LENDER:

EXPERTS IN FINANCING FOR:

• Refinancing for debt consolidation • Experts in exceptions other lenders can’t handle

• Builders and renovators • Land developers • Real estate buyers

Let us solve your exceptions: Cam Delli-Pizzi

613 282-1242

Mortgage Administrator Licence #11209

cam@pillarfinancial.ca

JULY 2013 | 17

MORE THAN 30 YEARS EXPERIENCE PILLARFINANCIAL.CA

MARKET MATTERS/ RURAL CLIENTS

ARE RURAL CLIENTS

MORE LOYAL? Customer loyalty is crucial to broker success – but are rural clients more likely to keep their business with a broker as opposed to a homeowner in Toronto or Vancouver? Donald Horne reports on cultivating client loyalty For Omer Quenneville, a broker with Centum Regal Financial in Toronto, customer loyalty comes with mutual respect – and that needs to start with the broker. “I have one of the highest return rates for clients at 90 per cent,” says Quenneville. “And it is all about taking the time with the client right from the beginning. You need to spend the time with them, educate them – show them it is more than just rate.” Quenneville feels that it lands on the brokers’ shoulders if their clients decide to choose a bank instead of returning to them for their refinancing or their next purchase. “So many brokers are focused on volume – so why should the client show them any loyalty?” he asks. “The banks are very good at pulling people away – we as brokers should be better at what we do. It is such a simple lesson: the volume takes care of itself when you take care of the client first.” “Loyalty in smaller markets is huge,” says Alyson Thiessen, broker/owner of Mortgage Intelligence, The Get Er Done Girls in Red Deer, Alta. “Although we have rate shoppers, I believe it only represents about five per cent of hardcore shoppers.” “There is just so much more temptation out there,” says Angela Calla, a broker with Dominion Lending Centres in Port Coquitlam, B.C. “Even with the most loyal clients, something will happen – a new franchise will open, or a family member or good friend will become a broker – and they will move their business to them out of an obligation. “But then you will have a customer who will say ‘Even if my mom becomes a broker, I won’t leave you.’ That is the relationship-building that we strive

F 18 | JULY 2013

for; that keeps us successful.” Although Calla – like other successful brokers in the channel – has built her business on personal relationships, she does admit that there is a segment who will only ever be interested in the lowest rate out there. “Some just want the rate, and after talking with them and trying to explain to them that there is more out there to consider than just rate, they will still leave only wanting the lowest rate out there,” she says. “I’d say that about five per cent of the population out there are only interested in rates.” So strong does Calla feel about the overall product, she removed rates from her website. “Everything we do is about educational material, and clearly articulating the risks, and demystifying the process,” says Calla. “If the customer is understanding, then we can continue the relationship. If they don’t buy into it – there can be no relationship.” Glen Tosh, a broker with Dominion Lending Centres in Souris and Brandon, Man., sees the banks scooping up clients even after they have been consulting with a broker. “The banks are for sure our biggest competition in rural Manitoba,” says Tosh, who operates just west of Brandon. “I find that people aren’t afraid to call a broker for advice and rates, but when it comes time to make the final decision, they tend to sway back to their bank, if the bank will match the rate.” The biggest reason for choosing the bank over a broker, says Tosh, is comfort. “Their comfort level is with a bank rather than a broker who puts the mortgage with a ‘virtual’ lender,” says Tosh.

MORTGAGEBROKERNEWS.CA

Greg Nowik, lead mortgage planner with Mortgage Architects The Nowik Team in the Vancouver area, says that personal service is key to ensuring customer loyalty – no matter where you are. “We have offices in Port Coquitlam, a suburb of Vancouver and Nanaimo on Vancouver Island, population 85,000,” says Nowik. “We see that the valueadded service we do supports customer loyalty in both locations. The key is that value-added personal service for us.” Murray Groen, a broker and regional partner with The Groen Team, Mortgage Brokers Ottawa, says it all boils down to trust. “I think it all depends on how the broker and client were connected along with the level of trust and expertise that is perceived by the client in dealing with the broker,” says Groen. “In many cases if you enable a client to place themselves in a better position because of the advice you provide along with a com-

petitive rate as a broker, you should be able to build a strong enough relationship to explain why rate is not the only thing that needs to be considered, which often will help solidify the business. “Ultimately you need to provide sound financial advice to your clients and show them why they should deal with you versus the bank.” Groen says that holding these values as sacred will ensure that no matter whether you are broker in Toronto or Timbuktu, you will maintain client loyalty. “Be a professional at what you do and by being honest and providing sound advice you could secure the business of this client and many referrals from them afterwards as well,” he says. “Whether you are in a less populated community or a large urban centre, if you treat your clients as individuals and provide sound advice you have a better chance of earning the business.

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JULY 2013 | 19

COVER/ TOP 75

Proudly sponsored by ®

TOP BROKERS BY VOLUME

REVEALED In its sixth year, CMP’s top brokers list received a record number of submissions but not necessarily an increase in funded volumes. CMP reports on the results

20 | JULY 2013

MORTGAGEBROKERNEWS.CA

Ontario: 28

BROKERS BY THE PROVINCE

Quebec: 2

Nova Scotia: 2

Manitoba: 1

British Columbia: 25

Alberta: 14

Saskatchewan: 1

AVERAGE YEARS BROKERING

6.8 15.9 2011

Newfoundland: 1

New Brunswick: 1

TOTAL FUNDED VOLUME

$4.8B $4.24B

2012

METHODOLOGY As always, each broker had to be employed as a mortgage professional, able to write loans and their deals must have been personally originated. They also provided a breakdown of their deals by lender with contact information, which was verified by the CMP team. All deals were residential, and while back-office support in processing loans is acceptable, no other parties received commissions on these deals.

2011

2012 JULY 2013 | 21

COVER/ TOP 75

AN OVERVIEW

2012, you did your best, but you were no match for the CMP Top 75. Despite the challenges you threw in their way, brokers did more than eke out a living, collecting commissions on $4.24 billion in funded volume, specifically on residential mortgages. That’s the good news. Now here’s the great: While the total funded volume for all those on the list slipped $600 million from 2011’s high, the number of deals also fell, by 1,300. It means, as a group, the Top 75 bettered their performance with property prices across several markets climbing in 2012, even as home sales receded.

As a group, the Top 75 bettered their performance with property prices across several markets climbing in 2012, even as home sales receded When all the submissions were gathered and double-checked, more than 20 brokers from last year had reclaimed spots on the CMP Top 75 for their individual funded volumes in 2012. In many cases, those numbers exceeded last year’s performance. CMP is very proud of the diversity of this year’s list. Brokers from nine out of 10 provinces are represented, including Quebec. Some of those same names appear on CMP’s second Small Market Top 20, which recognizes the successes of top performers in markets where the average home price is $290,000 or less. Together, both lists point to an unmistakable trend: The gap is growing between the very top performers in this industry and other mortgage professionals.

OUR SPONSOR ®

$4.24B TOTAL FUNDED VOLUME

14,869

TOTAL NUMBER OF DEALS

1,194

TOTAL NUMBER OF YEARS IN THE BUSINESS

15.92

Average number of years in the business:

25 50 Women

Men

BY THE BROKER NETWORK Dominion Lending Centres 33 Verico 26

VERICO is one of Canada’s largest Mortgage Broker Network with over 190 offices and 2,300-plus brokers who originate over $12 billion in annual loan volume. With a hard-earned and coveted reputation, the VERICO Mortgage Broker Network prides itself on our core pillars of excellence, professionalism, integrity and ethical standards. Find out why the most respected brokers and influential mortgage companies in this industry are members of the VERICO Network.

Axiom 4 Invis/Mortgage Intelligence 4 Centum 2 The Mortgage Centre 2 Argentum 1 Mortgage Alliance 1 RMAI 1 Independent: (Tourloukis) 1

22 | JULY 2013

MORTGAGEBROKERNEWS.CA

Rank

Name:

Company

City/Town:

Funded Volume ($)

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

Jim Tourloukis

Advent Mortgage Services

Unionville, Ont.

218,114,349

592

Collin Bruce

Dominion Lending Centres Mortgage Mentors

Edmonton, Alta.

201,005,200

671

Dave Butler

Verico Butler Mortgage Inc.

Mississauga, Ont.

186,577,252

693

Nicole Drummond

Dominion Lending Centres The Mortgage Source

Ottawa, Ont.

123,700,667

527

Jason Singh

Verico COD Financial Services

Toronto, Ont.

121,041,907

322

Scott Travelbea

Dominion Lending Centres Travelbea & Associates

Victoria, B.C.

101,972,742

293

Win Lui

Verico Clear Trust Mortgages

Vancouver, B.C.

95,182,032

290

Irina Antipova

Axiom Assured Mortgage Services

Toronto, Ont.

93,237,735

216

Dustan Woodhouse

Dominion Lending Centres Canadian Mortgage Experts

Coquitlam, B.C.

79,802,060

175

Susie Inglis

Dominion Lending Centres Mortgage Evolution

Vancouver, B.C.

76,511,557

182

Angela Calla

Dominion Lending Centres Angela Calla

Port Moody, B.C.

75,013,333

266

Nick L'Ecuyer

Verico The Mortgage Wellness Group

Barrie, Ont.

71,256,897

316

Debbie Bellair

Dominion Lending Centres Smart Debt

Ottawa, Ont.

70,744,498

245

Viktor Schaefer, AMP

Verico One Link Mortgage & Financial

Steinbach, Man.

70,218,384

319

Greg Martel

Dominion Lending Centres Harbour View Mortgages Corp.

Victoria, B.C.

70,000,000

182

NO. 5 JASON SINGH

Rounding out the Top 5 is Jason Singh, an agent with Verico COD Financial Services in Toronto, who had a funded volume of $121,041,907on 322 deals. “It is great to be included, and I appreciate being able to make this select group,” says Singh. “It is a privilege.”

Q&A WITH NO. 5 CMP: Do you feel the year was a success despite the overall lower numbers compared to 2011? Singh: I feel the year was a success as we were able to maintain a high level of client relations. Even with the drop in numbers, the fact that a lot of my existing clients returned for business and also continued to provide referrals was very rewarding. CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Singh: No I do not use rate sites. But I do think it’s a great way to get generate business.

CMP: How much of an effect did the new restrictions placed on amortizations have on business? Singh: The new restrictions did have an effect on business in terms of potential clients not wanting to make that leap into home buying with the perception that they may not be able to afford the payments, etc. CMP: Dan Eisner decided to bow out this year so another person could claim top spot. Do you think he would have won? Singh: It was gracious of him to allow another person to be recognized. CMP: Which product packed the most punch in putting you on the list? Singh: With the low rates being put out by lenders the products themselves were very attractive. I believe my determination to provide the best service to my clients allowed me to have the success I did. Their willingness to return as clients and referring me to others allowed for the year to be as successful as it was.

Jason Singh

Y.O.Y. FUNDED VOLUME

JULY 2013 | 23

COVER/ TOP 75

Rank

Name:

Company

City/Town:

Funded Volume ($)

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

Mark Goode

Mortgage Man Dominion Lending Centres

Orillia, Ont.

67,432,000

396

Enza Venuto

Centum Streetwise Mortgages

Vaughan, Ont.

65,000,000

375

Nick Kaaki

Dominon Lending Centres The Mortgage Source

Ottawa, Ont.

62,725,641

231

Terry Kilakos

Verico NorthEast Mortgages

Montreal, Que.

57,765,121

227

Todd Payzant

Neighbourhood Dominion Lending Centres

Sudbury, Ont.

57,393,874

245

Jordi Browne

Verico Preferred Financing Inc

Chilliwack, B.C.

56,599,536

222

Skye McLean

Argentum Atlantic (HS) Financial

Calgary, Alta.

53,543,143

162

Diana Zitko

Dominion Lending Centres West Coast Mortgages

Coquitlam, B.C.

52,569,769

161

Deb L White

Dominion Lending Centres White House Mortgages

Vernon, B.C.

52,381,217

206

Clinton Wilkins

Centum Home Lenders Ltd.

Halifax/Dartmouth, N.S.

50,771,603

253

Jody Henry

Dominion Lending Centres Arrowsmith

Qualicum Beach, B.C.

49,075,877

183

Chris Landry

Verico Paragon Mortgage Group

Burnaby, B.C.

48,992,125

141

Adil Mawji

Invis

Calgary, Alta.

48,863,783

150

Mackenzie Gartside

Mackenzie Gartside & Associates Verico Select Mortgage

Courtenay, B.C.

48,763,387

240

Steven Brouwer

Dominion Lending Centres Drake Entrust Mortgage Services

Chilliwack, B.C.

48,610,851

291

NO.4 NICOLE DRUMMOND

Nicole Drummond, broker with DLC The Mortgage Source in Ottawa, just edged out Jason Singh for fourth place with $123,700,667 in funded volume for 2012 on an unbelievable 527 residential mortgages. “I worked some very long hours, seven days a week,” says Drummond, surprising even herself at the total number for 2012.

Q&A WITH NO. 4 CMP: Do you feel the year was a success despite the overall lower numbers compared to 2011? Drummond: I feel that 2012 was more successful than 2011 as my sales numbers were higher in 2012. CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Drummond: I do not use rate sites. CMP: How much of an effect did the new restric24 | JULY 2013

tions placed on amortizations have on business? Drummond: The new rules actually increased my sales in the first seven months, before they took effect, because I put out a campaign to educate my clients that they should refinance before the changes. After the changes, there was a definite effect of 25 per cent decrease, which will be reflected in 2013 CMP: Dan Eisner decided to bow out this year so another person could claim top spot. Do you think he would have won? Drummond: Based on Dan’s model he probably would have won for dollar volume. CMP: Which product packed the most punch? Drummond: There is a mix of everything for 2012 because of the regulation changes. I had a lot of purchase, refinance and secured line of credit. CMP: Who do you feel was your closest competition - be it an individual or a network? Drummond: Any broker working in the Dominion Lending Centres network could be competition because of the tools that they provide to grow our business.

Nicole Drummond

My reason

Calum Ross

VERICO The Mortgage Management Group Member since 2012

“Joining VERICO was the best decision for my brokerage, as VERICO brings the right support elements to the table yet lets its brokers shine and operate under their own unique branding and business models. VERICO has a visionary and highly ethical leadership team, industry-leading marketing tools, and finally, an engrained commitment to continually improve its offerings and to stand behind them.

It sends a clear message to the broker industry that VERICO has one-year renewable contracts, with the point to not lock brokers in, but convert them to self-subscribing loyal customers through delivery on its service promise.”

IN 2010

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My reason

Gord Pipkey

VERICO Real Mortgage Services Inc. Member since 2010

“Being part of a national network has added depth to our activities in the market area. Just the branding alone has developed more awareness and recognition from our existing clients and realtor community. We are very appreciative of the efforts of Sean Widdess, Director of Member and Lender Relations, and the team at VERICO Canada in supporting our business and our partnership.”

IN 2011

COVER/ TOP 75

Rank

Name:

Company

City/Town:

Funded Volume ($)

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

Shaun Zipursky

Dominion Lending Centres City Wide Mortgage Services

Vancouver, B.C.

47,974,021

119

Kelli Pardo

Verico iMortgage Solutions

Edmonton, Alta.

47,800,000

182

James Loewen

RMAI Loewen Group Mortgages

Burlington, Ont.

47,053,400

168

Jeff Attwooll

Verico K-W Mortgage

Cambridge, Ont.

46,540,315

198

Sarah Makhomet

Dominion Lending Centres Mortgage Village

Mississauga, Ont.

45,487,844

180

Sabeena Bubber

Verico Integre Mortgage Partners

West Vancouver, B.C.

45,357,000

120

Denise Devente

Dominion Lending Centres Mortgage Evolution

Vancouver, B.C.

44,909,510

135

Anthony Spadafora

Verico Premiere Mortgage Centre

Burlington, Ont.

44,459,616

138

Jordan D'Haese

Axiom Jayman Financial

Calgary, Alta.

44,217,725

125

Tammy Pope

Axiom Jayman Financial

Edmonton, Alta.

43,450,565

107

Luisa Hough

Verico Exclusive Mortgage Professionals

Surrey, B.C.

43,352,000

125

Terry Short

The Mortgage Centre Advantage Financial Services Inc

St John's, Nfld.

42,840,637

190

Michael Noik

Dominion Lending Centres Centura Finance

Montreal, Que.

42,639,218

127

David Griffin

Dominion Lending Centres Griffin Financial Group

Peterborough, Ont.

42,010,177

210

Janet MacDonald

Verico The Mortgage Professionals

Kingston, Ont.

41,770,556

195

NO. 3 DAVE BUTLER

Being among the top three in CMP’s Top 75 Broker list is quite an accomplishment in and of itself, and for Dave Butler, a testament to how he does business. That’s through referrals and past clients, not rate sites. Butler, a broker with Verico Butler Mortgage Inc. in Mississauga, recorded $186.6 million in funded volume for 2012, coming in a close third behind Collin Bruce.

Q&A WITH NO. 3 CMP: Do you feel the year was a success despite the overall lower numbers compared to 2011? Butler: My numbers were up from 2011 so I definitely feel the year was a success given how many Brokers were down in 2012 compared to 2011. CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Butler: I do not use rate sites for business. My father and brother’s side of Butler Mortgage is heavily involved with them. However my side of Butler 26 | JULY 2013

Mortgage no longer advertises as of about three years ago and I have never used a rate site for business. One hundred per cent of my personal business is through referral partners and past clients. A big misconception that people have about Butler Mortgage is that it is just some company that advertises low rates on the rate sites. The truth is that Butler Mortgage is a brokerage that has many independent agents, myself included, and I operate independently of my father and brother’s team. CMP: How much of an effect did the new restrictions placed on amortizations have on business? Butler: It actually didn’t really affect my business. A tremendous portion of my clients are investors who are putting in 20 per cent down payment to purchase an Investment property. At the 20 per cent down payment level you can still get 30 year amortizations. CMP: Dan Eisner decided to bow out this year so another person could claim top spot. Do you think he would have won?

Dave Butler

Y.O.Y. FUNDED VOLUME

MORTGAGEBROKERNEWS.CA

Butler: Absolutely he should have won. Dan Eisner, as per the criteria that CMP uses for their Top 75 Brokers, is the largest broker in Canada. One hundred per cent of the volume that he submitted to CMP last year was generated by him or his advertising. The criteria of the CMP Top 75 Broker list is that you count the volume that you brought in which you did not pay any employee a commission on. Dan Eisner’s model does not pay commissions to its agents. His agents are paid a salary with a bonus structure, very much the same model that I employ but with fewer employees. CMP: Which product packed the most punch? Butler: There is no specific product that packs a punch to put me on the Top 75 list. What puts me on the Top 75 list is that I started running a team when I was 22 years old and I work my tail off. I eat, breathe and sleep mortgages from Sunday night at 10 p.m. until Friday afternoon at 5 p.m. Not only that, it certainly helps to have grown up with a father,

brother and mother who are also in the business. This clearly put me at an advantage when getting started in this business as I had successful people that I could turn to and help guide me to the success level that I have attained to this point. CMP: Who do you feel was your closest competition (be it an individual or a network)? Butler: I really don’t know who my closest competitor was in the broker world, I guess it would be anyone on the list that is ahead of me and the ones that did not submit their volume to CMP and write more business than I do. Having said that, I don’t necessarily believe that I am competing against any one broker or brokerage. I compete against the bank branches and banks/lenders that do not operate in the Broker channel. Is it really wise to worry about competing against other Brokers given that brokers as a whole do not even own a 30 per cent share of the market? Shouldn’t we worry about competing against the people and institutions who are holding the other 70 per cent of the market?

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JULY 2013 | 27

COVER/ TOP 75

Rank

Name:

Company

City/Town:

Funded Volume ($)

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

Kuljit Singh

Mortgage Alliance AKAL Mortgages Inc.

Mississauga, Ont.

41,505,154

116

Tracy Luciani Price

Dominion Lending Centres Forest City Funding

Fergus, Ont.

41,413,009

211

Ron Lefebvre

Invis

Edmonton, Alta.

40,241,872

145

Sherri Hislop

Verico Alliance Mortgager Group

Stratford, Ont.

39,482,096

189

Scott H. Bentley

Verico Premiere Mortgage Centre

Halifax, N.S.

39,385,118

154

Sundeep Saggu

Verico The Mortgage Wizards

Toronto, Ont.

39,324,452

Lena Ohanjanians

Verico Ultimate Mortgage and Finance Solutions

Toronto, Ont.

39,019,125

114

Stephen D'Souza

Dominion Lending Centres Origin - Client First Mortgage Solutions Inc.

Maple Ridge, B.C.

38,669,491

101

Sharnjit Singh Gill

Verico Superior Mortgage Inc.

Surrey, B.C.

38,653,006

151

Ling Lem

Axiom Jayman Financial

Calgary, Alta.

38,108,476

114

Yves Cormier

Verico Cormier & Cormier Consultant Inc

Edmundston, N.B.

38,086,354

295

Lisa Yun

Dominion Lending Centres Innovative Mortgage Solutions

Coquitlam, B.C.

38,000,000

Kent Bittner

Dominion Lending Centres Bittner Mortgages

Regina, Sask.

37,471,632

135

Narish Maharaj

Dominion Lending Centres Mortgage Mentors

Edmonton, Alta.

37,120,278

127

Ken Lankin

Mortgage Intelligence - Niagara

Niagara Falls, Ont.

37,104,000

296

NO.2 COLLIN BRUCE

Aside from Jim Tourloukis, Collin Bruce was the only other broker to crack the $200 million threshold with $201 million in funded volume – relying on Alberta’s economic engine to drive what has been a sluggish year for the country’s housing market. Bruce, the broker-owner of DLC Mortgage Mentors in Edmonton, saw volumes increase by 20 per cent over 2011, and managed to do it without resorting to rate sites, which he sees as a “slippery slope that we as brokers are going down.” Despite strong numbers for 2012, Bruce points to the stiff competition banks pose to brokers; citing a full “50 per cent of transfers we originated” being taken away by banks.

Q&A WITH NO. 2 CMP: Do you feel the year was a success despite the overall lower numbers compared to 2011? Bruce: Yes I do. Our volume increased by 20 per cent from last year.

28 | JULY 2013

CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Bruce: No, I do not use rates sites. I am all for the consumers to be educated, I just do not agree with advertising bought-down rates like most brokers do on those sites. I think it is a slippery slope that we as brokers are going down. CMP: How much of an effect did the new restrictions placed on amortizations have on business? Bruce: Minimal effect, I think the lower rates helped, though. I am finding that lenders limiting products due to investor issues are having a bigger effect. CMP: Which product packed the most punch? Bruce: It was such a mix of products and clients this year, so really all of them. CMP: Who do you feel was your closest competition (be it an individual or a network)? Bruce: The banks, especially on transfers. We probably closed only 50 per cent of transfers we originated.

Collin Bruce

Y.O.Y. FUNDED VOLUME

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COVER/ TOP 75

Rank

Name:

Company

City/Town:

Funded Volume ($)

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

Rishel Tomlinson, BA(Econ), AMP

Verico Custom Mortgages

Burnaby, B.C.

37,000,000

Morris Briglio

Verico - The Mortgage Advantage

North Vancouver, B.C.

36,750,000

114

Max Omar

Dominion Lending Centres Capital Region

Edmonton, Alta.

36,000,000

118

Sarah Davison

Mortgage Intelligence

Grande Prairie, Alta.

35,995,943

140

Carolyn Callero

Verico Premiere Mortgage Centre

Georgetown, Ont.

35,915,891

116

JoAnne Purcell

Dominion Lending Centres Mortgage Services Inc.

Calgary, Alta.

35,904,884

104

Adam Bazuk

Dominion Lending Centres YBM Group

Barrie

35,875,517

148

Denny Segal

Dominion Lending Centres Origin

Vancouver, B.C.

35,000,000

Dave McNabb

Dominion Lending Centre Regional Mortgage Group

Red Deer, Alta.

34,688,400

114

Len Lane

Verico Brokers For LIfe Inc.

Edmonton, Alta.

33,759,498

Catherine Evel

Dominion Lending Centres Homestead Financial

Waterdown, Ont.

33,714,955

128

Rudy Dedic

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Vancouver, Ont.

31,234,955

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31,220,697

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Kingston, Ont.

31,167,718

148

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COVER/ TOP 75

NO. 1 JIM TOURLOUKIS This year’s winner is as independent as they come. He’s also wondering if profitability might one day decide who ranks where on this list. Don Horne reports “Jim Tourloukis.” It’s a name always high on the list of CMP’s Top 75 Brokers. But this year – finally, this year!– it’s at the very top. The owner of Advent Mortgage Services in Unionville, Ont., recorded a funded volume of $218.1 million for 2012, earning him the No. 1 spot on this year’s coveted list. And the independent broker feels he could have done even better, telling CMP “there is so much opportunity in this business” and so many initiatives just waiting to be put in place. Having 592 funded residential mortgages in 2012, Tourloukis rode to success on the ever-popular 5-year fixed conventional mortgage. Despite his reputation, less than 15 per cent of his business can be attributed to rate sites. He hopes to reduce that figure even further, focusing on “more profitable and “stickier” business. A mortgage broker/agent for some seven years, Tourloukis did the lion’s share of 2012 business with ING Direct, which funded $122.3 million. Of course, that was before the lender’s move to quit the channel. Last year Tourloukis came in third behind Dan Eisner of True North Mortgage and Gord Pipkey of Verico Real Mortgage Services. In 2011, Tourloukis had almost $232.1 million in funded volume on 622 deals – far behind Eisner’s $412.8 million on 1,365 deals. But ever the gracious winner, Tourloukis does tip his cap to Eisner, declaring him this year’s unofficial winner due to his perennially high numbers. But Tourloukis does point out that the Calgary-based head of True North Mortgage is operating with lower margins and higher office and staffing overhead. Should CMP choose to change its criteria for what constitutes a Top 75 Broker, taking net profit into consideration could produce a better apples-to-apples comparison between all brokers, says Tourloukis.

32 | JULY 2013

Q&A WITH NO. 1 BROKER JIM TOURLOUKIS CMP: Do you feel the year was a success despite the overall lower numbers compared to 2011? Tourloukis: Not really. There is so much opportunity in this business and we could have easily put some of these initiatives in place and funded much more business. We hope to do so in the months to come. CMP: You use rate sites; do you feel you could have had those numbers not using a rate site? Tourloukis: We actually lowered our use of rates sites the past year. I would say less than 15 per cent of our business is as a result of these sites. We hope to drop this even further in the coming year and rather focus on more profitable and ‘sticky’ business. CMP: How much of an effect did the new restrictions placed on amortizations have on business? Tourloukis: The amortizations did not impact us at all. What did impact us was the elimination of high ratio mortgages over $1 million. We typically fund 30-40 of these types of deals, all of which can no longer get done. CMP: Dan Eisner decided to bow out this year so another person could claim top spot. Do you think he would have won? Tourloukis: Of course, Dan would have won. Nobody is close to his numbers. Truthfully, he should be on the list as those funded dollars are his funded dollars. On the flip side, no one has the infrastructure cost of him either. Look: without a doubt he will continue to fund the most in Canada (and so he should with his infrastructure). A more interesting comparison would be to compare profitability, both in absolute and a margin basis. When you factor in his lower margin (because he always buys down rates 10-15 bps) leaving him a smaller start at 50 bps net income, and his overhead (expensive offices, 30 staff, a tremendous amount of spend on advertising, etc.), I’m not sure he would be at the top. So you have to ask, which numbers really count? Funded volumes or the money that is in your pocket?

Jim Tourloukis

Y.O.Y. FUNDED VOLUME

FEATURE/ SMALL MARKET TOP 20

BY THE GROUP

$877M

THE SMALL MARKET

TOP 20

Proudly sponsored by

Hard work and community spirit can and have overcome the limits of smaller markets, say brokers on this year’s list BY THE BROKER NETWORK

20 INTE INVI S/MO RTGA GE

1 CENT UM

RE CENT MOR TGAG E

2 LLIG ENCE

VER ICO

TH E

DOM INIO N LE

NDIN G CE

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2011

$802M 2012

3,880

TOTAL NUMBER OF DEALS:

274

TOTAL NUMBER OF YEARS IN THE BUSINESS

13.7

AVERAGE NUMBER OF YEARS IN THE BUSINESS

Small-market brokers step into the spotlight this year as CMP introduces its second Small Market Top 20 list in conjunction with the Top 75. The Small Market Top 20 was open to all brokers and agents who did a minimum 80 per cent of their deals in markets where the average home price is at or below $290,000. They must be MLS-identified regions, cities or towns. That cut-off is considerably lower than the national average, which closed 2012 just above $350,000. For this running of the Small Market Top 20, brokers from Alberta, Ontario, Nova Scotia, Manitoba and Newfoundland & Labrador shared that spotlight, many of them amassing total funded volumes that outstrip their counterparts in much pricier markets. It suggests that they worked harder to achieve it, often doing 10-, 20- or, even, 40- per cent more deals. Add to that Ottawa’s moves to cut amortization and 2012 was a trying year for brokers. “The changing of the amortizations certainly had an effect on the first-time homebuyer,” says Terry Short, broker-owner of The Mortgage Centre- Advantage Financial Services, in St. John’s, Nfld. “In my market, it meant the difference of being able to buy approximately $30,000 less than the 30-year amortization.” A strong presence in their tight-knit communities has helped many brokers to grow their books despite the regulatory and market challenges, says Mark Goode. His advice to brokers entering smaller markets is to make a sincere effort to become part of the community they service. For example, Goode and his team are active sponsors and participants in local soccer, hockey and lacrosse teams in Orillia. Many brokers are also members of the chamber of commerce. “Get to know your clients, get involved in the community,” Mark Goode, an DLC broker in Orillia and No. 2 on this year’s list, told CMP last year. “People want to know that you actually live and work in the community and not just driving in to get their business.” JULY 2013 | 33

FEATURE/ SMALL MARKET TOP 20

Rank

Name:

Company

City/Town:

Funded Volume ($)

Funded Deals

Support staff who don’t write loans

Support staff who write loans

Years as a Broker/ Agent

Viktor Schaefer

Verico Onelink Mortgage & Financial

Steinbach, Man.

70,218,384

319

Mark Goode

Mortgage Man Dominion Lending Centre

Orillia, Ont.

67,432,000

396

Todd Payzant

Neighbourhood Dominion Lending Centres

Sudbury, Ont.

57,393,874

245

Clinton Wilkins

Centum Home Lenders Ltd.

Halifax/Dartmouth, N.S.

50,771,603

253

Terry Short

The Mortgage Centre Advantage Financial Services Inc.

St John's, Nfld.

42,840,637

190

David Griffin

Dominion Lending Centres Griffin Financial Group

Peterborough, Ont.

42,010,177

210

Janet MacDonald

Verico The Mortgage Professionals

Kingston, Ont.

41,770,557

195

Tracy Luciani Price

Dominion Lending Centres Forest City Funding

Fergus, Ont.

41,413,009

211

Sherri Hislop

Verico Alliance Mortgager Group

Stratford, Ont.

39,482,096

189

Scott H. Bentley

Verico Premiere Mortgage Centre

Halifax, N.S.

39,385,119

154

Ken Lankin

Mortgage Intelligence - Niagara

Niagara Falls, Ont.

37,104,000

296

Sarah Davison

Mortgage Intelligence

Grande Prairie, Alta.

35,995,943

140

Dave McNabb

Dominion Lending Centres Regional Mortgage Group

Red Deer, Alta.

34,688,400

114

Sean Binkley

Dominion Lending Centres Alliance

Kingston, Ont.

31,167,718

148

Linda Ross

Verico The Mortgage Professionals

Kingston, Ont.

31,072,592

148

Brian Matthey

Verico The Mortgage Professionals

Kingston, Ont.

30,201,451

134

Dan Sauve

Verico Mortgage Corp. Financial Services Inc.

North Bay, Ont.

29,313,464

200

David Wild

Dominion Lending Centres Regional Mortgage Group

Red Deer, Alta.

27,432,228

Bruce Gilkinson

The Mortgage Centre Gilkinson Financial

Listowel, Ont.

27,020,267

152

Jean-Guy Turcotte

Dominion Lending Centres Regional Mortgage Group

Red Deer, Alta.

25,627,770

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Greg Kakuno 34 | JULY 2013 604.329.6067

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FEATURE/ SMALL MARKET TOP 20

NO. 1 VIKTOR SCHAEFER “Look, Ma, no rate site!” It’s a boast the No. 1 broker on this year’s Small Market Top 20 can make

Viktor Schaefer

“Hard work” shot Viktor Schaefer, of Verico One link Mortgage & Financial, to the top of CMP’s Top 20 Small Market list. More specifically, it was the fruit of that labour: a funded volume of $70.2 million from a whopping 319 deals. “We have to do a higher volume out here,” says Schaefer, who is based in Steinbach, Man., 45 kilometres outside of Winnipeg. “Our average house price is $240,000 or $250,000, so a lot of my business is from Winnipeg.” Tighter mortgage rules are forcing brokers across the country to work harder to essentially keep pace with themselves. That’s no less the case in markets where average home prices come in below $290K. It’s also not that easy given the slowdown in home sales. Still, Schaefer managed to better his 2011 performance of a $68 million funded volume from 330 deals. Rising prices likely gave him and other small-market brokers a boost. But there’s no denying the effects of Mr. Flaherty’s policy moves, coming in the middle of 2012. “If we didn’t have those government regulations, I would have had a least 15 per cent more business,” he told CMP. “But I am anticipating an even better 2013 – people have adjusted, and they are coming back.” Schaefer has been brokering in Canada for about a decade, and was in the mortgage industry in Germany for nine years prior to coming to Steinbach. And yes, there are differences in how things are done, he says. “One huge difference is the CMHC,” he says. “In

Germany, it is all up to the lender to determine what the rate will be for a mortgage. The more you put down, of course, the lower your interest rate and risk. But here, that risk is basically determined by the CMHC.” And although many brokers work hard at cultivating Realtors for leads and referrals, Schaefer prefers to put his money into social media. “I don’t think Realtors are the best way to find business,” he says. “Social media is where it’s at.”

Q&A WITH VIKTOR SCHAEFER, NO. 1 CMP: Do you feel the year was a success despite the overall industry lower numbers compared to 2011? Schaefer: Yes I certainly feel that the year was a success. My business continues to grow and my volume continues to increase. That is not typical for many fellow mortgage professionals, so I feel very fortunate. CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Schaefer: We do not use rate sites. In fact, I am against them because there is much more than rate to consider in finding the best mortgage solution for my clients. I feel that these websites force mortgage brokers to buy-down rates using their commission, which could lead to the collapse of our industry. CMP: How much of an effect did the new restrictions placed on amortizations have on business?

If we didn’t have those government regulations, I would have had a least 15 per cent more business. But I am anticipating an even better 2013 – people have adjusted, and they are coming back 36 | JULY 2013

FEATURE/ SMALL MARKET TOP 20

BY THE PROVINCE

Schaefer: There was a definite impact with all of the rule changes. I think I would be at least 10 per cent higher in volume without the changes. CMP: Dan Eisner decided to bow out this year so another person could claim top spot. Do you think he would have won? Schaefer: Yes, he would win, but I don’t think his model is fair to compare to what other brokers are doing. In general, and not that he does this, I do not support mortgage pooling and feel that lenders should reward individual success at a higher standard. CMP: Which product packed the most punch in putting you on the list? Schaefer: Personally we continued to focus on purchases in a very stable local economy, specifically a large portion of first-time homebuyer deals. CMP: Who do you feel was your closest competition (be it an individual or a network)? Schaefer: I feel that my main competition is RBC and our local credit union.

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FEATURE/ MARKETING

Y 38 | JULY 2013

MORTGAGEBROKERNEWS.CA

BUDDY-BUDDY

BROKERS There have been some great buddy-buddy relationships in the movies,but the best ones are between brokers and Realtors and lenders. Carolyn Callero and Matthew Hill are one such team and have contributed to each other’s success for more than a decade.

You know there is a deep trust and friendship between a mortgage broker and a real estate agent when one is godfather to the other’s child. “We’ve probably known each other for 11 years, it’s a very trusting relationship,” says Carolyn Callero, a broker with Premiere Mortgage Centre in Georgetown, Ontario and a member of the CMP Top 75. “He’s the godfather for my four-year-old son Lucas – I guess that shows how good our relationship is!” That Realtor – Matthew Hill of the Halton Homes team @ Johnson Associates Real Estate Ltd. – is the perfect complement to Callero, sharing personality traits and the same work ethic. Together they are an excellent example to kick off CMP’s “Buddy/Buddy” series on broker-Realtor-lender relationships that work. “We’ve never had a deal fall through using Carolyn,” says Hill. “Without question we send 90 per cent of our clients to her.” His team of five Realtors all depend on Callero, says Hill, and Callero places that trust in high esteem. “He always refers his clients to me, because he knows they are going to be looked after and the deals are going to be approved,” says Callero. “There is a great confidence there between us.” More than that, Callero appreciates how Hill does

more than just refer clients, but goes the extra mile to ensure that she succeeds with her own clients too. “Just this morning, he brought my attention to one of my clients who was coming up for renewal,” she says. “He was selling his home and moving to Quebec, and somehow the client had fallen through the cracks in my system – which is unusual for me.” The attention to detail – which Callero says she and Hill share to the point of being anal retentive – is one of the personality traits that make them a suc-

He always refers his clients to me, because he knows they are going to be looked after and the deals are going to be approved Carolyn Callero

JULY 2013 | 39

FEATURE/ MARKETING

All the people on our team would say the same thing: we have happy buyers and happy sellers, and there is never any question that the deal will be done. You just know everything is going to be taken care of with Carolyn. Matthew Hill

cessful team in complete sympatico. “Each of us wants to do the right thing. We don’t want to push people into what they don’t need or aren’t comfortable with,” she says, crediting about one-quarter of all her business to Hill’s referrals. “It may be even more,” she admits. “Matt will send me a client, and then they will refer me to two of their friends, and those two refer me to two more of their friends – it is hard to put a number on just how well we work together. And of course, when I’m dealing with a client in need of a Realtor, I will always ask them, ‘Have you spoke to Matt yet?’” For Hill, it is the client satisfaction factor that keeps him and his realty team going back to Callero. “All the people on our team would say the same thing: we have happy buyers and happy sellers, and there is never any question that the deal will be done,” he says. “You just know everything is going to be taken care of with Carolyn.” Callero credits Kerri Reed – who at the time was a mortgage professional at a different company with Callero, but is now better known as the vice-president and principal broker at Verico Premiere Mortgage – with introducing them and starting the 11-year-long successful run of mortgage deals. “I work in a small town (Georgetown), and Matt has a great deal of respect in the community,” says Callero. “We’re also in a networking group that has built up to about 30 people – Business2Community 40 | JULY 2013

– and that is a huge network that works well for us.” The B2C is a non-profit network of Halton-based businesses whose purpose is to grow and support each other’s clientele. What also works well for Callero is Hill’s computer “geek” expertise. “He’s been known to help me with my computers. Yes, he’s a computer geek – and a successful realty geek,” she laughs. “I dropped my iPhone in the toilet once and called him right away. He showed me how to contact the Apple people, and they were able to help me the next day. I didn’t realize that if you are on the Cloud and you have your Apple ID, you can access all of your contacts and information, as it is automatically backed up on the wireless Cloud server. The phone was a total loss, but my client database was saved!” Hill has seen the real estate market get tougher with the new guidelines set out a year ago. “Financing has been a little more challenging to get, especially for self-employed clients,” he says. “But we haven’t had a deal fall through using Carolyn. She has been a big help, and we can always depend on her.” Callero sees this as a relationship that will last as long as they will be making mortgages. “He’s been bringing me wonderful clients for years; I don’t see that ever stopping,” she says.

Ontario claims

Brokers on the Top 75

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FEATURE/ MOM AND A BROKER

A MOM

AND A BROKER Mortgage broker Amy Wilson shares her secret to being a fulltime broker and full-time mom with CMPâ&#x20AC;&#x2122;s Donald Horne

42 | JULY 2013

B News

InternatIonaL

u.s.

U.S. housing market worse than thought

The number of Americans who bought previously occupied homes rose in October. But the National Association of Realtors saysand it overstated thanreBeing a full-time mother mortgagemore broker three million sales during and after the Great Recession, quires the talents of a juggler with a master in time showing the housing market was weaker than management. previously thought. “You don’t want to take time away from your chilThe private trade group says sales rose four per dren, but you want to make sure the client doesn’t cent in October to a seasonally adjusted annual rate of feel you are only giving half your atten4.42like million. That’s below thethem roughly sixofmillion homes tion,” Wilson,say a broker with Verico a yearsays thatAmy economists are consistent withBrokers a healthy housing market. But it’s ahead of “It 2008’s sales, for Life near Edmonton, Alta. is a revised juggling act, now considered the worst in 13 years. and it all boils down to mastering your time.” TheWilson, trade group its sales 2007 to that 2010 For it allrevised starts with thefrom school bus down 14 per cent, from more than 20.6 million to nearly picks up her two boys Jake, 7, and Korben, 5, in the 17.7 million. Among the reasons for the lower figures, morning. the Realtors group says: changes in the way the Census “Thecollects bus leaves at population 8:40, and Ishifts am inand the some officesales until Bureau data, 1being p.m.,”counted she says, thankful that she does work from a twice. The Realtors consulted and home office. “From 1 p.m.with I amgovernment on the road for the private housing experts, including the Federal next two or three hours for appointmentsReserve, – I am the Department of Housing andfor Urban lucky that the show homes newDevelopment, construction the Mortgage Bankers Association, the National don’t open until 2 p.m. or 3 p.m. – and then it is back Association of Home Builders, mortgage giants Fannie home for the kids to cook dinner.” Mae and Freddie Mac and CoreLogic, a California-based Wilson admits she didn’t magically these data firm that first raised doubts about thehave annual qualities start, numbers from earlierthe this year.but learned to schedule her hasimportantly, estimated that Realtors daysCoreLogic – and more to the stick to thatgroup schedoverstated sales in 2010 by at least 15 per cent. ule. She makes a point to never schedule appointThe changing could affect how economists ments past 8 p.m.,numbers having learned the lesson of always view the trade group’s data. It could also affect companies being “at the office” when at home. that use the figures for hiring and expansion plans. “ISales was stuck in a rut of shutting myself office are measured when buyers closein onmy homes. atBut home never coming out,” shethat says. “Now the manyand deals are collapsing before point. only thingofthat is always ‘on’ is myatphone – and if it One-third Realtors said they had least one contract in October, fromthe 18 per September. isscuttled a Sunday night, I up return callcent on ainMonday. Yes, Contracts are beingand cancelled for several reasons: my hours are flexible I am always available, but Banks have declined mortgage applications; home I do set boundaries for my business and my family

MORTGAGEBROKERNEWS.CA

90.6% 52.1% You don’t want to take Percentage of homeownership costs, including mortgage payments, utilities and property taxes that take up a typical household’s monthly pre-tax income in Vancouver and Toronto, respectively (RBC Economics Housing Trends and Affordability Report)

British Columbia claims

Brokers on the Top 75

inspectors have found problems; appraisals showed a home was worth less than the bid; a buyer lost a job before the closing. More than two years after the recession officially ended, many people can’t qualify for loans or meet higher down payment requirements. Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling. Sales are also being hurt by a decline in first-time buyers, who are critical to reviving the housing market. Sales have fallen in four of the five years since the housing boom went bust in 2006. Declining prices and record-low mortgage rates haven’t been enough to boost sales. At the same time, home construction has begun a gradual comeback and should add to the economy’s growth in 2011 for the first year since the Great Recession began in 2007. Last month, builders broke ground on an annual rate of 685,000 homes, the government said recently. That was a 9.3 per cent jump from October and time.” the fastest pace since April 2010. included flying in Being a master of scheduling Most economists say home prices keepbreak her mother from Vancouver during thewill spring falling, by at least five per cent, through 2012. last year, so she could watch her children during one Many forecasts don’t foresee a rebound in prices of the untilbusier at leastweeks 2013. of the mortgage market season. Wilson doesrate haveofan office in town well, underThe high foreclosures has as made standing that some clients may not be child-friendly. resold homes cheaper than new ones. The median a new home around is roughly 30screaming per “I can’tprice haveof kids running and cent above the price of one that’s been occupied while I’m trying to conduct a deal,” she laughs, acbefore – twice normal markup. Investors knowledging thatthe her husband Colin is both are undertaking advantage of the discounts. standing and knowledgeable of the demands of her The housing market is struggling even job.as the broader economy has improved in “He knows the industry 100 per cent, and he has recent months. his lateThe nights too as marketing andpace salesofmanager economy grew at an annual two cent in Homes,” the July-September quarter. Many good forper Sterling she points out. “With economists expect bettercalendar, growth inwe themake communication and slightly a wonderful October-December quarter. CMP it work.”

time away from your children, but you want to make sure the client doesn’t feel like you are only giving them half of your attention

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JULY 2013 | 43

FEATURE/ MOM AND A BROKER

MORTGAGE MARKET UNFAIR TO WOMEN BROKERS? MARCY BERG ANSWERS BECOMING A SUCCESS AS A MORTGAGE BROKER IS A RICH REWARD – BUT IS THE INDUSTRY LACKING IN HEART, ESPECIALLY WHERE WOMEN AND FAMILY ARE INVOLVED. DONALD HORNE SPOKE TO ONE BROKER WHO ESTABLISHED HER BUSINESS SOLELY TO SERVE THAT MARKET, AND TO PUT A FAMILYFRIENDLY FACE ON IT.

The founder of Mortgages4Women would like to see CAAMP – and the industry as a whole – step up and make brokering more family-friendly. “No mat (maternity) leave, no sick days, no consideration for family,” says Marcy Berg, the owner of Mortgages4Women in Cobourg, Ont. “The mortgage broker industry is all about money, money, money.” Berg, who designed her brokerage specifically to service the unique needs of women back in 2003, is frustrated that the mortgage broker industry isn’t family/ female-friendly enough. She laments the fact that comparable industries offer better compensation packages for women who choose to have children, and not just the legislated minimum that is out there. “If you have a book of business but leave it to have a baby and raise the child, then come back a year or two later – is that book still there?” she asks. “Of

course not. Women get a really lousy shake in this business.” Berg also points to the “old boys club” mentality, where late nights and quarterly expectations of higher and higher funding targets are the norm. “How do you define ‘Making It’?” she asks. “Are we to be measured against the top producers, through late-night schmoozing of lenders? It is a whole scene that is just awful. “A lot of women would be happy making $60,000-$100,000 a year and consider themselves a success,” she says. “Look at some of the bigger brokerages – they are going to take your points and expect higher volumes each quarter; and if you don’t produce, they just kick you aside and get the next person in line.” Berg, who decided to form her own brokerage a decade ago, laments that nothing has changed in the business – nor is likely to ever change. “Should CAAMP try to do something? Absolutely. Will it change?” she observes. “Not until there is some money in it for them will change ever happen. “CAAMP, like the government, measures everything according to major urban centre markets. There are other trends in housing that have little to do with these markets. Why are they being ignored?” For Berg, Mortgages4Women is dedicated to meeting the needs of women

CMHC & Conventional Mortgages for:

CMHC/Conventional Financing Phone: 416-368-3266 Email: toronto@peoplestrust.com

44 | JULY 2013

If you have a book of business but leave it to have a baby and raise the child, then come back a year or two later – is that book still there? Of course not Marcy Berg

Single Family Alternate Equity Lending:

Multi-Family Rental Properties Senior’s Housing Projects Commercial Properties Construction Projects

Toronto

who fall between the cracks of mortgage and lending requirements. “This is more than just a story to be told for me,” says Berg. “It is a movement – a movement that needs to take hold and spread throughout the channel.”

Equity Take Outs Purchases/Refinances Homeowner or Rental Flexible Income Verification

Calgary CMHC/Conventional Financing Phone: 403-237-8795 Email: calgary@peoplestrust.com

Vancouver CMHC/Conventional Financing Single Family Financing Phone: 604-685-1068 Email: vancouver@peoplestrust.com

MORTGAGEBROKERNEWS.CA

I can’t have kids running around and screaming while I’m trying to conduct a deal Amy Wilson The booming Alberta housing market also makes life easier, Wilson admits, with housing prices rising an average of $2,000 or $3,000 per lot just recently. “The market is good right now, as I deal with new construction single-family dwelling and two-storey homes, specifically in the south side of Edmonton,” she says. “The builder I’m currently working with is offering homes in the $475,000 to $650,000 range. Although the over $600,000 homes aren’t moving, the $500,000-$600,000 ones are moving very quickly.” Wilson deals with “A” lenders working on a draw mortgage with 20 per cent down, specifically with lenders ATB and Bridgewater. “I do work with credit unions from time to time, but those two banks are who I deal with primarily,” she says. Draw mortgages, or new construction mortgages, are given on a progress advance basis. The full amount that you need to borrow, in order to complete your construction, is given to you in stages – otherwise known as “draws” – as you complete various levels of completion. If you already own the property you want to build on, the amount needed will be issued in three stages: lock up, drywall and completion. However, if you do not own the property, your lender will often give you a fourth draw first – the “initial land draw” – to help you purchase the land. The majority of Wilson’s clients are opting for the fixed-term mortgage, specifically three or five on new builds. But her older clients are bracing for the future and higher interest rates. “Those in the 45-65 year age bracket are downsizing and moving into duplexes, and they are the ones looking for a 10-year fixed mortgage,” she says. “They’ve seen six per cent interest rates up to 14 per cent or more. They know those days can be right around the corner.”

JULY 2013 | 45

FEATURE/ COMMERCIAL COST-BENEFIT ANALYSIS

COSTS … BENEFITS You’ve crossed the first hurdle – you want to do a commercial deal. But are there other hurdles to trip you up? Time to do some cost-benefit analysis

Residential brokers have finally broken through the wall separating them from the commercial space. But they continue to grapple with calculating the cost benefit analysis of doing those laborious deals. After all, if it takes six to eight months to get to closing – the same amount of time it takes to find and finish 10 residential mortgages – is it really worth it? A veteran of commercial brokering walks CMP readers through some of what they’ll need to know to be able to answer that question for themselves. A large part of the process involves nailing down what they can reasonably expect in terms of a payday.

WHAT’S MY CUT?

“Without a doubt, we are all interested in making a living, as such, we need to understand our share of fees, commission,” says Steve Fabian, No. 6 on last year’s CMP Top Commercial Brokers list. “The trouble is that far too often a deal lays dormant 46 | JULY 2013

MORTGAGEBROKERNEWS.CA

because someone is worried about fees and their split too early in the discussion. “To best tackle this quandary, I think it is important to first understand what is ‘typical’ in terms of fees and what is a realistic split for the originating broker’s level of co-brokering.” While there are some notable exceptions, commercial lenders don’t pay any sort of fee split or commission to brokers, says Fabian. In fact, none pay basis points for commercial transactions, leaving brokers to charge fees. Those fees are set by the marketplace and competition, but generally, run from 0.5 per cent up to two per cent. Three per cent is by no means out of the question. “This is generally driven by deal size and complexity,” says Fabian, “and, naturally, as commercial transactions are generally of a higher dollar amount, the potential fees generated can be quite high.” That money – even before it’s crossed the palm of the broker or the co-broker – have the potential to hurt the spirit of cooperation so integral to the commercial deal. It just about kills the idea of co-brokering. “Those who oppose or are reluctant to co-broker will often mistakenly take the position that they should insist on a minimum split to their favour, the thought process often being that they found the deal and lead generation is key,” says Fabian.

Got Plans?

While there are some notable exceptions, commercial lenders don’t pay any sort of fee split or commission to brokers While that’s true, a “lead that goes nowhere pays nothing, and 20 per cent to 25 per cent of something is much better than 50 per cent of $0,” he jokes.

THE SPLIT So, what is a proper fee split for a co-brokered deal? Opinions vary, but industry veterans concur: 25 per cent of the fee for a referral is fair and the closest thing to industry norm. The split can, in fact, be higher for the referring agent if he or she is more active in the deal because of very practical considerations like a language barrier or the distance created by geography, says Fabian. But the idea of collecting 50 per cent of the fee when the commercial player does most if not all of the deal-making is unrealistic and can kill the deal before it’s begun. It seems that too often the originating broker expects 50 per cent of the fee when most of the work will be done by the commercial specialist. “It is best to get a deal done and earn 25 per cent

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JULY 2013 | 47

Brokerage # 10160

FEATURE/ COMMERCIAL COST-BENEFIT ANALYSIS

of a fee than to get hung up on split or, worst yet, fumble the deal due to inexperience,” offers Fabian. “The originating broker needs to recognize that a commercial transaction requires a great deal of time and, depending on deal type, some specialized skills in order to get it done.” That last consideration figures prominently in any cost-benefit analysis the residential broker undertakes before signing on to do, or participate, in a commercial transaction. Co-brokering is increasingly viewed as the best way to get a deal done for a client at the same time holding onto some of the money that generates. It also expresses the sentiment of the slowing market where brokers are intent on squeezing every possible dollar from any deal or lead that comes their way. Leaving money on the table is no longer an option, says another broker – if, indeed, it ever was.

WHAT IF THE DEAL GOES SOUTH? That question may be better posed as “What happens when the deal goes south?” When an upfront deposit is taken on a deal and then a deal dies, says Fabian, “depending on the amount, these are generally returned; in the odd circumstance where they are not, it would not be typical for the originator to expect to be compensated for that.” It’s convention that a newbie to commercial can’t

afford to overlook. It’s also key to figuring out whether you should get involved in the first place. But just as important to establish from the get-go is what future business will result from this commercial deal. The answer centres on whether the client is yours or that of the commercial broker you partnered with. “While it may seem counter-intuitive to many sales people, especially when the commercial deal presents a large number, the earlier a commercial specialist is engaged and the client handed off, the easier the deal will flow,” says Fabian. “Too often a clear picture of the deal and the borrower’s full information is muddied by the fear of losing ownership of that client. “If you are the residential agent who has a commercial lead and you have decided to co-broker, you should only do so with a broker and/or brokerage you trust.” That only strengthens the likelihood that the commercial broker will reinforce your relationship with the client, rather than undermine it. But there’s such a thing as trust but verify. When co-brokering, the commercial brokerage will often sign an agreement with you, cementing the terms of that relationship. Getting a preview of that contract is key to performing your cost-benefit analysis.

Got Plans?

We should get together. We’ve been underwriting real estate backed Construction, Bridge and 48 | JULY 2013 Financing for over 35 years. Equity

New Brunswick claims

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Brokerage # 10160

FEATURE/ WHAT’S A BROKER

WHO IS AN

ALBERTA

BROKER?

Who exactly should be regulated as a mortgage broker in Alberta is something regulators are ready to take up

Alberta is ready to examine proposed changes to its broker regulations, and one proposal that is expected to meet resistance from the banking community is the question: What constitutes an individual broker? “There were some concerns raised by brokers as to what defines a mortgage broker and a mortgage banking specialist?” says Gary Siegle, a broker with VP Prairies at Invis/MI and chair of the Real Estate Council of Alberta’s Mortgage Broker Advisory Committee. “Currently the lines are blurred, and we feel that the brokers who represent private lenders should be regulated by the Alberta Securities Commission too. Obviously there will be resistance from the banks on this, but you want the public to know what the difference is, and to understand what a mortgage specialist is.” Alberta began the review of its mortgage regulations a year ago, and has just wrapped up the consultation process, with the aim of presenting to the legislature by 2014. Ontario announced it was launching a review of its Mortgage Brokers Act with the appointment of parliamentary assistant Steven Del Duca. British Columbia is just now reviewing pro-

posed changes to its Act with the Securities Commission. “Alberta did that three years ago,” Siegle told MortgageBrokerNews.ca. “When we started, it was to remove a lot of the duplication and contradictions in regard to the regulation of syndicated mortgages, as it related to the Real Estate Act. There was no sense in having dual regulations – security commissions across Canada are trying to harmonize the regulations, and now Ontario is looking at it.” ALBERTA HAS MADE THREE MAJOR PROPOSED CHANGES:

• taking the regulation of syndicated mortgages out of the Real Estate Act; • regulating mortgage broker who deal with private lenders under RECA; • and applying regulations on mortgage brokering activity to banks and similar institutions currently exempt from the Act.

“By definition, lenders who deal in mortgage products that are from other institutions…that is mortgage brokering activity,” Siegle points out. JULY 2013 | 49

FEATURE/ SECRET #5

SPECIALISTS

ROCK!

The days of jack-of-all-trades brokering are gone, writes Doren Aldana. It’s time to master specialization

SECRET #5: THEY ARE SPECIALISTS, NOT GENERALISTS.

Almost all superstar mortgage professionals are very good at one thing. They become the best of the best at that one thing. They eat, drink and sleep that one thing. There is no one in the world better at doing that one thing. They can do that one thing with two hands tied behind their back. They are the expert on top of the mountain… at that one thing. Now, what are the benefits of becoming a specialist or an expert at that one thing? 1. When people think of that one thing, your name immediately comes to their mind. That’s positioning. 2. When anyone needs advice or services in that one thing, they automatically call you. In other words, prospects come to you. 3. Clients are willing to pay more for your services because they know you specialize in solving their unique problem. 4. Ultimately, you become the envy of your peers with an extraordinary level of freedom and prosper-

50 | JULY 2013

ity, as long as you stay on top of your game. As compelling as these advantages are, I often hear objections from mortgage professionals who fall prey to the misconception that if they narrow down their marketing focus, they’ll miss out on opportunities they would have had if they marketed to a wider range of clients. Can you relate? Well, I’m here to tell you that’s simply not true. The narrower your marketing focus, the more relevant and attractive your

Instead of being a vague generality, you become a meaningful specific, making your job of marketing and selling infinitely easier

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FEATURE/ SECRET #5

Remember, build stability through diversification -- don’t stop at one niche! Once you’ve dominated one niche, rinse, wash and repeat with new niche marketing campaigns. The sky is the limit marketing message becomes to your intended audience. Instead of being a vague generality, you become a meaningful specific, making your job of marketing and selling infinitely easier. You see, people perceive their problems as being unique to them as individuals. Therefore, they want an expert who specializes in fixing that particular type of problem. For example, if you had a heart condition, would you want a General Practitioner doing surgery on you? Of course not! You would want a heart specialist who has done that particular surgery hundreds of times. Another objection to specializing that I often hear from mortgage professionals is that they don’t have the requisite knowledge to be a specialist. Even people who have been in the business for years still feel inadequate and under-qualified. That’s because being an expert or a specialist is more about mindset than 52 | JULY 2013

it is experience. In other words, you have to see yourself as an expert before you’ll ever become one! The truth is, all you really need to do is start promoting yourself as a specialist and then learn as you go. Fake it till you make it! Read all of the lender product information that applies to that area of specialization. Discover all the nuances and special distinctions necessary to successfully solve that unique problem. Survey that specific niche market and learn what their challenges, worries, fears and problems are. Customize your marketing message to position yourself as the expert at solving those specific problems. You want to become the expert problem solver. I guarantee you, if you study that specialty every day for the next six months, you’ll know more than 99 per cent of your competitors. For example, you could launch a niche marketing campaign that targets one of the following target markets: first-time buyers, commercial, jumbo loans, business for self, debt consolidation, Asian buyers, real estate investors, homeowners over 55 (reverse mortgage), etc. Or you could specialize in working with a specific “gateway niche” like Realtors, financial planners, divorce attorneys or For Sale By Owners. Choose a specialty that fits your unique personality and leverages your strengths, gifts and talents. Then go narrow, deep and rich in your niche! Remember, build stability through diversification -- don’t stop at one niche! Once you’ve dominated one niche, rinse, wash and repeat with new niche marketing campaigns. The sky is the limit. In next month’s 6th secret, you’ll learn how you can double the size of your commission cheques, have people virtually begging for your services and be perceived as the ONLY logical solution available. Stay tuned.

Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach and has won the “Best Industry Service Provider” award two years in a row at the 2012 and 2013 Canadian Mortgage Awards. Since 2005, he has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions. For a free copy of Doren’s new CD titled, “21 Secrets of Superstar Mortgage Brokers,” visit: www. SuperstarMortgage Broker.com

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BUSINESS STRATEGY / SERVICE

Bad service damages your public perception, credibility and market reputation. In short, it reduces revenue and drives up costs. But, by focusing on the little things, you can go from a bad or average customer service provider to an excellent one, argues Nikki Heald

HOW TO DELIVER

EXCEPTIONAL

SERVICE 54 | JULY 2013

MORTGAGEBROKERNEWS.CA

JULY 2013 | 55

BUSINESS STRATEGY / SERVICE

Often, we’re so intent on making the sale that we have a transactional view of our clients, rather than taking time to build relationships or demonstrate service excellence. We use them (to increase our profits), abuse them (by giving them inferior service), and then treat them like a one-night stand – attentive today, neglectful tomorrow! Sound silly? Well, complaints such as “You never call”, “You’re always too busy,” and “Why were you late?” are legitimate gripes made by disgruntled clients. In today’s competitive market, client service expectations have increased. Clients are savvy, realize they have a multitude of choice, and expect to be treated exceptionally by their brokers. So what is exceptional service? Exceptional client service is about going beyond what is realistically expected of you. It’s about surprising and often delighting clients, turning them into enthusiastic referral sources that will stick with you, not only because you do great work but also because of the value you bring. Imagine if you could get existing clients to tell others about how wonderful you are? It would certainly save on all of those marketing and networking costs. Great service is not about just doing your job but

Exceptional client service is about going beyond what is realistically expected. It’s about surprising and often delighting clients about establishing connections on an emotional level. It’s about value-adding and finding ways to be unique. Interestingly, research suggests that emotion influences purchasing decisions six more times than rationale. Think about it – when something makes us feel good, we are more inclined to buy. Unfortunately, many businesses believe that delivering stand-out service will cost them too much in staff time, training and developing service standards and procedures. These organizations are only concerned with company profit and cutting costs, and little thought is given to how to make

56 | JULY 2013

clients happy. Additionally, staff recognition and retention is low, which can impact significantly on growth and profit. When you think about it realistically, bad service is actually more costly to your brokerage than great service. Bad service influences more than just a negative customer experience – it reduces revenue and drives up costs. It damages public perception, credibility and market reputation. As we all know, a dissatisfied client is more likely to spread the word about a poor service experience than a positive one. Providing exceptional service is not overly difficult, and it’s important to recognize that little things count with clients. So what are some simple things you can do to ensure your service is exceptional?

RESPOND AS SOON AS YOU CAN Speed is everything, so try to reply to your clients as soon as you can and keep them in the loop as to your progress. Procrastination doesn’t help anyone, and you’re going to have to respond sooner or later. May as well do it now!

LISTEN TO YOUR CLIENTS Avoid speaking, and really listen to what they’re saying. It’s important you understand what your clients are communicating to you. That way, you will be able to meet their needs successfully and provide the correct product or cover.

KEEP PROMISES One of the biggest gripes in business today is that people simply don’t do what they say they’re going to do. If you say you’re going to do something, make

DELIVERING EXCEPTIONAL SERVICE

01 02 03

Lower cost to manage and service client base - higher profits. Increased customer loyalty - raises revenue, lowers marketing fees. I ncreased staff loyalty - better service culture.

MORTGAGEBROKERNEWS.CA

DID YOU KNOW?

93%

sure you do it. It enhances your professionalism and personal brand, and demonstrates that you value your client.

of customers indicated that quality customer service was vital to

KNOW YOUR STUFF

MAINTAINING BRAND LOYALTY.

The perception of your client is that you are the paid expert. That’s why they’ve come to you. So it’s imperative that you keep yourself up-to-date and top of game within your profession. Be ready to answer client questions; unfortunately, if you convey a lack of knowledge, you risk ruining your credibility.

IT’S 6-7 TIMES

GIVE A LITTLE If a client asks you to do something that really won’t cost you a lot in time or money, then treat it as an opportunity to go the extra mile. By doing so, you not only have a contented and indebted client but someone who is more than happy to refer to you.

USE YOUR KNOWLEDGE

MORE EXPENSIVE TO GAIN A NEW CLIENT

Once you’ve built an emotional connection with your client, you would have figured out how they prefer to communicate. Some clients are not detail-driven and won’t require excessive information. On the other hand, some prefer to know every step of the process. Learn to gauge your client’s preferences and use this knowledge appropriately in the service experience.

than it is to retain an existing one.

IT’S NOT SAFE TO WORK ON THE PREMISE OF

FINAL THOUGHTS Finally, within the financial services profession brokers really should view their book of clients as their most valuable asset and take good care of them. More than that, they should take the time to develop long-lasting relationships by keeping in touch regularly, both in good times and bad. It’s not sufficient to wait until renewal time to contact them, but rather, go for an ongoing communiqué. Remember, you’re not just selling a product but providing expert advice that can significantly impact people’s livelihood. So if you haven’t given much thought to your service levels, then perhaps it’s time to conduct a self-audit. If you don’t make the client feel valued, respected and important, your competitors will!

Nikki Heald is a corporate trainer, presenter, businesswoman, founder of Corptraining, and co-author of “Views On The Way To The Top”.

‘NO NEWS IS GOOD NEWS’. Chances are, if your client is

NOT HAPPY

they’ll walk, and they won’t even forewarn you of their departure.

JULY 2013 | 57

BUSINESS STRATEGY / REFERRALS

THE POWER OF

COMPOUNDING REFERRALS How would you like to discover a strategy for turning one client generated each week into 1,200 happy clients in just two years? James Veigli explains all In this article, I’ll reveal a system that will keep you flush with business and yield willing clients lining up at your door. First, I love numbers and you should too! I remember when I was nine years old a friend and I started a game called ‘Numbers.’ The game was simple: grab a piece of paper, a pen, and start writing numbers on the paper: 1, 2, 3, 4, etc. The challenge was to see who could write the most consecutive numbers. I’m pretty sure this went on for weeks, producing dozens of pages of numbers, all written by hand. I even did this (for fun) as homework! I wish I could remember how far we got, but I’d say it was into the tens of thousands. Yes, I was a numbers nerd. Today, I’m still obsessed with numbers and a concept known as the compounding effect – not just so that I can see how big numbers can get but because I can use the power of compounding (combined with the power of effective marketing

58 | JULY 2013

and sales systems) to make money and teach other brokers how to do the same. If you’re not familiar with the compounding effect, consider this: if you start with $1 and double it, you will have $2. Double it again, and you will have $4. Then, if you double your initial $1 10 times, you will have $512. Double that single $1 20 times and you will suddenly jump to having $524,288 in your pocket, and doubling it 30 times will give you $536,870,912! Yes, over half a billion! So, in theory, you could start with $1, gamble it on roulette (betting on red or black), and if you won 30 times in a row (betting all your winnings each time) you would have over half a billion dollars! Of course, the odds of winning 30 times in a row are low (you have a 0.00000009% chance), and the purpose of this article is not to promote or endorse gambling but to get you thinking about how to grow your client base and business fast using compounding referrals.

MORTGAGEBROKERNEWS.CA

So what do I mean by compounding referrals, and how can one client each week potentially turn into 1,200 clients in just two years? First, let me explain the numbers, and then I’ll tell you the strategy of how to go about it.

COMPOUNDING REFERRALS: THE NUMBERS I’m going to assume that you can generate just one new client each week in your business. (There are dozens of ways to do this, and if you don’t know how, visit my website for help.) To keep the numbers simple, we’ll say this equals to four new clients each month, which would give you a total of 96 new clients in two years’ time. Simple maths so far, but a far cry from 1,200 clients. Here’s where the power of referrals comes in. In this example, to get 1,200 clients in two years you will need each new client you see to give you five referrals. Now I know you might be wondering exactly how you would do this, but bear with me as I’ll get to that in the strategy section. The next part of the numbers is where the compounding kicks in. Here we need to assume a conversion rate for the referrals. I’m going to say in this example that you can convert 20%, or one out of the five referrals each month, into a new client (which is a conservative estimate in my view). You start by generating just one new client a week, or four new clients in the first month. Each of those four new clients gives you five cold referrals – so 20 referrals in Month 1. In the next month, you convert 20 per cent, or four of those 20 referrals, into new clients, and those four new clients each provide you with five referrals. Plus, in this second month you also generate another four new leads, so you have a total of 40 new referrals in the second month.

This may be a little confusing, so let’s break it down in a visual table:

New clients New clients Referrals Clients (self-generating) (referrals) (monthly) (total)

Database

MONTH 1

MONTH 2

MONTH 3

132

MONTH 4

216

MONTH 5

100

320

MONTH 6

120

444

MONTH 12

240

312

1,068

MONTH 24

480

1,200

6,096

Assumption: number of referrals per client = 5 Assumption: conversion of referrals into clients = 20%

Take a look at Month 6: you have a total of 84 clients, having started with just one self-generated client each week. What’s more exciting is that during this time your total database has grown from zero to 444 people. That means there are still 360 people on your database who are not yet clients (444 minus 84) and you can put them on a contact management strategy to ensure a good percentage of those prospects convert into clients at some point in the future. Working the numbers out to the two-year mark, Month 24, you can easily see the significance of this strategy. Simply put, just two years after starting from scratch, you would have 1,200 clients on your books, with a total database of 6,096 people, of which a huge percentage could potentially become

JULY 2013 | 59

BUSINESS STRATEGY / REFERRALS

clients over time, using a smart contact strategy (a topic for another article). Are you excited by these numbers? Are you skeptical? Good! Now that you’ve seen the numbers, you need a strategy in order to play this game successfully. If you’re skeptical, it’s probably because you’re not following the strategy below.

COMPOUNDING REFERRALS: THE STRATEGY In the numbers section, I said that for each new client you see you should extract five cold referrals to get your 1,200 clients. Now I’m not talking about being annoying and hard-selling or pressuring clients. I’m not even talking about asking for ‘warm’ referrals; I’m just after ‘cold’ referrals. Here’s the difference, which is key to making this work: • A ‘warm’ referral = a direct personal endorsement or recommendation from the client to the referral. For example, you tell your best friend about a new café they should visit. • A ‘cold’ referral = provision of contact information (email, postal address, cell nunmber) without the client having to directly engage with the referral. For example, providing a friend’s email address when entering a competition (or taking up an offer) so they too can enter or take advantage of the offer. As an aside, five referrals is by no means a hard-and-fast number. In fact, you can make this number anything you like. Not happy asking for five? Go for three. Not satisfied with just five? Go for 10! Of course, changing the number of referrals per client will dramatically alter the speed in which you grow your database and business. Play around with the numbers and do what suits your goals and makes you comfortable. Then, if you want to extract your target number of

referrals from every single client, you’ll need to implement my five pillars strategy. Here’s a breakdown of the five pillars in terms of compounding referrals:

‘WOW’ EVERY CLIENT

If you want your clients to be happy to refer upon request, you need to design and orchestrate your client process so that every single client has a ‘wow’ experience – it cannot be left to chance. TALK ABOUT REFERRALS WITH EVERY CLIENT

If you don’t proactively discuss referrals and prompt them, this strategy will not work. Request referrals from each client as part of your standard sales process. Do this by educating them on the value of referrals to you and your business, and convey your passion for helping as many of their friends, family and colleagues as possible. USE A 100% NON-THREATENING REFERRAL OFFER

A non-threatening referral gives your clients the comfort of knowing there will be no sales pressure on friends they refer you to. Do this by offering to send your client’s referrals an information pack on how you can help, the benefits of your service, with a special offer for taking the next step. If they take action and call you, that’s their decision. MAKE IT EASY TO REFER

Referring people to you is low on your client’s list of priorities. That’s why the referral process must be very simple for the client. Ask who they know would benefit from your services, and have them open their phone and write down the names, emails and postal addresses of five of their friends or family members. INCENTIVISE REFERRALS

Most people are motivated (at least on some level) by what’s in it for them. So create incentives for people to refer, such as value-based incentives of gifts, vouchers, fee rebates or charity donations. Gratitude-based incentives are powerful too – a thank-you call or card is very personal and acknowledges their efforts. Winning-based incentives create a competition environment that brings out people’s desire to try their luck and win.

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MORTGAGEBROKERNEWS.CA

So there you have it. The five pillars for making the power of compounding referrals work. Of course, there are numerous other execution details that I don’t have space to cover in this article, but hopefully at least you now have the motivation (from the numbers) plus the building blocks (the five pillars strategy) to help you get more referrals so that you can help more people and make more money. The only downside is that you could get too busy

and have to expand and take on support staff or brokers. A good problem to have, I’m sure you agree! My final note is this: don’t fall into the trap of dismissing this strategy before you seriously consider and try it yourself. Go get ’em!

THREE STEPS TO MAKE THIS HAPPEN

1. Set yourself a non-negotiable target of extracting a certain number of cold referrals (say three, five or even 10) from every new client. 2. Study the five pillars and design your strategy to cover each of these points. 3. Integrate referrals into your standard sales process with each new client. One suggestion would be to raise the topic of referrals just after you have signed a client up – at the point when you have clearly demonstrated that you can help them and solve their problems.

James Veigli helps mortgage brokers multiply their income using less time and effort so that they can have the business and lifestyle they deserve.

YOUR PARTNER FOR 2ND MORTGAGES

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416.225.6900 www.tribecca.ca JULY 2013 | 61

PROFILE/ FAVOURITE THINGS

Favorite things Lori MacDonald, TMG The Mortgage Group Atlantic, Charlottetown , PEI Product: Definitely “APPLE” ... I can’t go anywhere without my iPhone or MacBook Pro... Makes home and work life easy to manage.

Lori MacDonald

Book: In Prince Edward Island we have so many talented artists and story tellers - I just finished reading a book, The Reluctant Detective by a local author Finley Martin. Love mystery and suspense. You won’t find me reading from a Kobo – I still the love the feel of the pages in my hands :)

Food: We are so fortunate to live in a place where farming and fishing industries provide us with world-class food . Nothing is better than PEI mussels and a PEI Beach Chair with a lager at our local “Gahan House.” Drink: A cold beer on a hot sunny day, white wine with supper or sometimes rum and

coke after a hard day’s work! I was gonna say piña colda’s and getting caught in the rain. Activity: With all of Prince Edward Island’s beautiful beaches, I take advantage of beach-combing with my daughters – finding treasures along the shore – sea glass, starfish, shells...

Vacation spot: I love the

Shopping: Shopping! It requires

Music: I have a wide variety

white mountains of North Conway, New Hampshire – My family and I enjoyed walking in the Flume Gorge, the railway, rock climbing, table rock water falls. Just so many activities for families to take part in. The outlet stores weren’t bad either ;)

of music that I enjoy – however if you were to look on my iTunes you may think rock is not dead!

good running shoes and lots of endurance and stamina!

Movie: Lord of the Rings – an epic story of good vs. evil where strength is found in the most unexpected places.

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GUEST/ COLUMN

COLLATERAL DAMAGE

3 Reasons why Collateral Charges are bad for you, your business and, most importantly, your client By Paolo Di Petta, Mortgage Agent, EQRON Mortgage

In late January, CBC delivered a brilliant expose on collateral charge mortgages. While many brokers tried to call attention to a shift to these types of mortgages over two years ago, they went largely unnoticed until the story was picked up by the Canadian media. Armed with the CBC report in hand, brokers finally have the ammunition to get their clients’ attention. Keep this article on hand as another tool to inform your clients about the dangers of collateral charge mortgages. In the expose, the TD representative outright avoided the question three times, and instead focused on the “benefits” (and I use that term loosely) of their product. Because of this, I saw a need to cover the potentially larger threats that collateral charges bring to brokers/agents and clients alike.

is that it comes at the expense of freedom once the mortgage matures. While it’s relatively easy and inexpensive to switch lenders for a conventional mortgage charge, your client may incur additional charges when switching lenders if they have a collateral charge. Any money saved by avoiding “costly legal fees,” is simply deferred to the time that the client decides to switch lender. This additional charge gives the banks more leverage, and could make them less inclined to offer a competitive rate - as long as the difference in rate is less than the cost of switching, the bank has your client trapped. This isn’t a great position for your client, and it reduces (or eliminates) your ability to provide your client with the best options in the future.

1) LESS FLEXIBILITY

By putting your client in a situation that limits their choices, and that reduces your ability to provide them with the service that makes you valuable, you are sending the wrong message. If you were aware of the detrimental effects of collateral charge mortgages and the product wasn’t a good fit for your client, you’re essentially saying “I didn’t find the best product for you.” And if you just didn’t know better, the message you’re sending is “I wasn’t informed enough to help you make the best decision.” Both of those can hurt your reputation, not to mention the reputation of brokers as a whole. Worst of all, by offering them a product that is designed to neutralize the value of a broker it also sends the message that “You don’t need a broker.” I strive to offer my client the most options today and in the long term. That means avoiding products that lock them in unless they’re in a unique situation that demands it. In a business built on referrals, I want them to know my value and to tell their friends and family. If putting them in a product with a collateral charge affects my ability to provide them with the best value, then it’s the wrong choice. Plain and simple.

With a collateral charge, many banks will register the full value of the property (or greater) on the charge, but will only loan up to 80 per cent. They say that this is a benefit because the loan is readvancable. What they often neglect to mention is that the readvancability could be conditional. If your client’s financial situation changes and they’re depending on a blended mortgage/HELOC collateral charge product to tide them through, they might find themselves out of luck. Not to mention, that the lender may have the option to use the collateral charge mortgage to cover any other debts (credit cards, personal loans) that the client owes the lender if they default on payments. And since the charge is registered for the full value the property, that eliminates any other options from other lenders that you as a broker can offer, such as secured credit lines or second mortgages.

2) LESS CLIENT LEVERAGE The banks claim that clients can save money on “costly legal fees” if they ever need to refinance during the term of the mortgage. What they neglect to mention

Paolo Di Petta

3) REPUTATION

JULY 2013 | 63

SERVICE/ DIRECTORY

Banks

B2B Bank b2bbank.com/mortgages Ph: 1 800 263 8349 Inside Back Cover

Radius Financial www.radiusfinancial.ca Ph: 1 877 369 6398 Inside Front Cover

Tribecca Finance Corporation www.tribecca.ca Ph: 416 225 6900 Page 61

Bridgewater Bank www.bridgewaterbank.ca Ph: 1 888 837 2326 Page 7

Home Loans Canada www.hlcmortgages.com Ph: 1 866 452 1821 Page 3

Mortgage Architects www.mortgagearchitects.ca Ph: 1 877 802 9100 Page 29

Commercial Lenders

ROMSPEN Investment Corporation www.romspen.com Ph: 1 800 494 0389 Page 1

HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 41

Vector Financial Services www.vectorfinancialservices.com Ph: 1 866 483 8018 Page 47-48

National Bank www.nbc.ca Ph: 1 888 483 5628 Page 27 Non-Bank Lenders

RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 45

Insurance

VERICO www.verico.ca Ph: 1 866 983 7426 Page 25 Technology & Software

Canada Guaranty Mortgage Insurance Company www.canadaguaranty.ca Ph: 1 866 414 9109 Page 35

Capital Direct www.capitaldirect.ca Ph: 1 800 959 9290 Page 34

First National Financial LP www.firstnational.ca Ph: 416 593 1100 Page 9

Genworth Financial Canada www.genworth.ca Ph: 1 800 511 8888 Outside Back Cover

Home Trust www.hometrust.ca Ph: 1 877 903 2133 Page 31

Mortgage Protection Plan www.mppbroker.com Ph: 1 866 677 4677 Page 30

D+H Limited Partnership www.dhltd.com Ph: 1 866 345 6449 Page 2

Marlborough Stirling Canada www.morweb.ca Ph: 1 877 626 2022 Page 11 Real Estate

Services

Optimum Mortgage A Division of Canadian Western Trust www.OptimumMortgage.ca Ph: 866 441 3775 Page 19

First Canadian Title www.fct.ca Ph: 1 800 307 0370 Page 37 Broker Networks

Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 44

Pillar Financial Services www.pillarfinancial.ca Ph: 613 282 1242 Page 17

64 | JULY 2013

Canadian National Association of Real Estate Appraisers www.cnarea.ca Ph: 1 888 399 3366 Page 43

Centum Financial Group Inc. www.centum.ca Ph: 1 604 257 3940 Page 5

Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 13

Score-Up www.score-up.ca Ph: 416 479 9585 Page 10

Best Points Travel info@bestpointstravel.com Ph: 1 800 551 8786 Ph: 416 251 9944 Page 15

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