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CONTENTS
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UPFRONT 04 Editorial
New features and new regulations
06 Statistics
10 UPFRONT
44 42
NEWS ANALYSIS
A closer look at the latest round of industry regulations
They’ve heard your feedback on their performance – now hear what lenders had to say about how they plan to keep brokers happy PEOPLE
Setting the record straight on unregulated mortgages
14 Market update
What’s behind the recent decline in housing starts?
16 Opinion
PEOPLE
12 UPFRONT
INDUSTRY ICON
COMMERCIAL UPDATE
18
40
Elaine Taylor, MCAP’s vicepresident of sales, weighs in on where the industry is headed
08 Head to head
Why Vancouver’s foreign buyer tax won’t have the intended effect
FEATURES
LENDERS REPLY
As Vancouver sinks into controversy, will Toronto’s market rise?
47 Career path
Dong Lee’s journey from wartime Korea to the helm of Mortgage Architects
48 Other life
Dancing up a storm with Jordan Thomson
The oil aftershock has hit Calgary’s commercial real estate market
PEOPLE
BROKER INSIGHT
Nicholas L’Ecuyer explains how surrounding yourself with the right people makes all the difference
2
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UPFRONT
EDITORIAL
A first for CMP – and the industry
O
ur annual Top 75 Brokers issue, released each April, has long been the most popular among readers. But it soon may have some competition from our October issue, as this month marks the debut of our Top Brokerages feature. Sure, individual success is great and should be celebrated. But, as many in the industry will tell you, sharing accomplishments with your team is just as sweet. And that’s what we’re honouring this month – some of the industry’s leading brokerage teams.
Individual success is great and should be celebrated. But, as many in the industry will tell you, sharing accomplishments with your team is just as sweet The entrants cut a wide swath across the country, with many operating in the country’s biggest markets. Those in smaller markets, however, prove that you don’t need million-dollar homes and massive year-over-year sales gains to make your mark. That’s the good news in this issue. The bad, if you want to call it that, is the recently announced housing policy rules. They were unveiled in early October, and the reaction was … somewhat confused. The new rules seemed to create more questions than they answered. We dive into that – as well as the year’s top brokerages – later in this issue. The team at Canadian Mortgage Professional
www.mortgagebrokernews.ca ISSUE 11.10 EDITORIAL Editor Justin da Rosa Writers Joe Rosengarten Libby Macdonald Ephraim Vecina Kimberly Banks Executive Editor – Special Features Ryan Smith Copy Editor Clare Alexander
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UPFRONT
STATISTICS
All about Toronto
Toronto, ever the bridesmaid in Canada’s red-hot real estate market, may soon get its turn to shine
AS VANCOUVER reels from the imposition of a 15% foreign ownership tax, all eyes are on Toronto to determine if Canada’s most populous city will become the centre of attention for offshore investors. So far, according to a recently issued report from Sotheby’s International Realty Canada, all signs point to yes. Brad Henderson, president and CEO of Sotheby’s International Realty Canada, says he
sees the western city’s market cooling swiftly, and he predicts that Toronto’s market will pick up the pace in short order. “The two cities that have been at the forefront of the Canadian real estate market have been Toronto and Vancouver, and we are going to see a clear divergence between their performances this fall. Vancouver’s record-setting sprint will return to a more moderate pace, but Toronto’s market cadence is set to accelerate.”
Vancouver
81%
Year-over-year decrease in searches for housing over $1 million in Vancouver on Chinese property site Juwai.com
143%
Year-over-year increase in searches for housing over $1 million in Seattle on Juwai.com
79%
Year-over-year increase in sales of detached homes over $4 million in the GTA
1.4%
Current economic growth projection for Canada, downgraded from 1.6%
-65%
August sales of single-family homes over $1 million
-46% -49%
August sales of luxury homes over $4 million August sales of condos over $1 million
Source: Juwai.com, August 2016; Conference Board of Canada, July 2016
LIVABLE, BUT NOT AFFORDABLE
EARLY GAINS IN MILLION-DOLLAR PROPERTIES
Canada’s two most vibrant markets are also among the world’s most livable urban centres, according to an index from The Economist, which rates cities on criteria like stability, infrastructure, education, healthcare and environment.
Even before Vancouver’s tax went into effect, the GTA was already favoured by well-off buyers. In the first six months of the year, Toronto and the GTA saw the biggest year-over-year gains in sales over $1 million of condominiums, attached and single-family homes.
GTA
1
Melbourne
6
Adelaide
2
Vienna
7
Perth
3 Vancouver
8
Auckland
Vancouver
4 Toronto
9
Helsinki
Montreal
5 Calgary
10 Hamburg
Calgary
Source: The Economist Intelligence Unit, August 2016
6
YEAR-OVER-YEAR SALES INCREASE 65%
Toronto
35% 26% 16% 9% Source: Top-tier Real Estate Report, 2016 Mid-year Report, Sotheby’s International Realty Canada, July 2016
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A NEW HAVEN FOR MILLIONAIRES? In Vancouver, sales of residential real estate in the $1 million-plus category have fallen off sharply since the new foreign buyer tax was unveiled in July. While other cities in Canada have picked up some of the slack, none have done so quite as much as Toronto, leading Sotheby’s to predict that this fall will see the GTA lead the nation in sales in this category.
Greater Toronto Area
Calgary
+83%
Summer sales of single-family homes over $1 million
+74% +89%
Summer sales of luxury homes over $4 million
+11%
Montreal Summer sales of single-family homes over $1 million
+16%
Sales of real estate over $1 million in the first half of 2016
Summer sales of condos over $1 million Source: 2016 Fall Market Forecast, Sotheby’s International Realty Canada, September 2016
$4 MILLION+ PROPERTIES SPIKE
THE EMPLOYMENT CONNECTION
Also in the first six months of the year, real estate valued at over $4 million made even more impressive gains – the GTA posted an increase of more than 80% yearover-year, while Vancouver saw double the sales since the same time last year.
Local unemployment trends play a key role in major metropolitan housing markets; above-average unemployment in markets like Calgary and Montreal is helping to keep those markets sedate for now.
YEAR-OVER-YEAR SALES INCREASE 100% GTA Vancouver
UNEMPLOYMENT RATE, SEPTEMBER 2016 10% 9.5% Calgary
80%
8%
60%
6%
40%
4%
20%
2%
0%
$1 to $2 million
$2 to $4 million
$4 million
Source: Top-tier Real Estate Report, 2016 Mid-year Report, Sotheby’s International Realty Canada, July 2016
Montreal 8.1% 7.2% Toronto
National average: 7%
5.4% Vancouver
0% Source: Statistics Canada
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UPFRONT
HEAD TO HEAD
Is the media misinformed on unregulated mortgages? The term is making the rounds in mainstream media, but many brokers feel the headlines are founded on fear, not facts
Ross Kay
Ron Butler
Advisor/founder TheWealthyHomeowner.ca
Mortgage broker Butler Mortgage
“One of our core strategies embraces private (unregulated) mortgages, which are generally misunderstood by the media and the public. The results: news headlines that often cast a shadow over a process that, when enacted with the assistance of a lawyer and CPA in conjunction with a fee-based mortgage broker, all working for the mortgagee, offers great opportunity. Unfortunately, headlines sell papers, and whether it is unrealistic returns suggested by some mortgage syndicators or families in distress being taken advantage of by unethical mortgagors, the decades worth of good done through private lending remains hidden.”
“The mainstream media don’t really understand what unregulated mortgages are; most appear to believe that any mortgage not issued by a bank, trust or credit union is unregulated. We know that is not true – provincial regulators and overlapping mortgage insurer and NHA investor regulations effectively mean almost every mortgage falls under some form of government scrutiny. The media makes some mistakes in its coverage: References to ‘shadow banking’ make it sound like a comic book menace, and often the media’s coverage of defaulting borrowers is almost laughably one-sided. I’d love a more knowledgeable media, but I doubt that will happen.”
Jennifer Coy Mortgage specialist Invis
“Many people rely on news coverage to stay informed and make decisions and form opinions accordingly. Just the words ‘unregulated mortgage’ are enough to incite fear, and when used incorrectly in a trusted publication or on a televised forum, that fear spreads. Except for a very specific and small portion of Canada’s mortgages – mainly in private lenders and small MICs – the rest are very much regulated and required to be administered with due diligence. The media must be responsible for, and held accountable to, learning the difference between regulated and unregulated mortgages before reporting on them.”
PRIVATE MORTGAGES SURGE IN POPULARITY In the midst of churning, high-value markets and new regulations that have upped the threshold for insured, bank-originated mortgages, many consumers are open to anything when it comes to financing the purchase of a home. It’s unsurprising, then, that private lenders are seeing a surge in market share. In fact, according to one ministerial briefing in late 2015, uncovered by The Globe and Mail under the Access to Information Act, unregulated lenders now represent approximately 15% of the country’s mortgage origination. In a research note on the subject released in August, one economist from CIBC World Markets noted that private subprime lending in Ontario had grown to more than 6% of total origination, surging ahead of the 4.5% figure from 2012.
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UPFRONT
NEWS ANALYSIS
The impact of new mortgage rules It’s been a whirlwind few months in terms of changes to the housing industry. So what do all the new regulations mean, and what could still soon come to pass? FINANCE MINISTER Bill Morneau dropped the latest bombshell on the Canadian mortgage industry on October 3 when he announced three new measures meant to ensure stability in the housing market. Those preventative measures include standardizing lending criteria for high- and low-ratio mortgages, including a mortgage stress test; closing tax loopholes for capital gains exemptions on principal residence sales; and consulting with industry stakeholders to ensure risk is properly distributed, which could lead to lender risk-sharing. The first measure is a tweak to the quali-
payments at a higher interest rate,” the Ministry of Finance explained in its backgrounder on the changes. “Currently, this requirement only applies to a subset of insured mortgages with variable interest rates or fixed interest rates with terms less than five years. Effective October 17, 2016, this requirement will apply to all insured mortgages, including fixed-rate mortgages with terms of five years and more. Homeowners with an existing insured mortgage or those renewing existing insured mortgages are not affected by this measure.” But some experts believe that this new
“These tighter regulations will reduce the supply of mortgages and/or increase their cost to the borrower” Dr. Sherry Cooper, Dominion Lending Centres fying requirements for insured mortgages – and it’s the one that has raised the most concern in the industry so far. “To help ensure new homeowners can afford their mortgages even when interest rates begin to rise, mortgage insurance rules require in some cases that lenders ‘stress test’ a borrower’s ability to make their mortgage
10
rule will put a greater burden on homebuyers. “These tighter mortgage insurance regulations will reduce the supply of mortgages and/or increase their cost to the borrower,” Dr. Sherry Cooper, chief economist for Dominion Lending Centres, wrote in an analysis of the new rules shortly after the announcement.
“I have no doubt that the pace of mortgage lending will slow from what it would otherwise be as a result of these government actions,” Cooper added. “However, these actions do nothing to address the shortage of housing supply in Vancouver and Toronto.” As officials grow increasingly desperate to curb price growth in those two markets, this may not be the last we’ve seen of government intervention this year. Former Finance Minister Joe Oliver penned an opinion for the Financial Post in late September, imploring policymakers to institute a foreign buyer tax in Toronto similar to the one recently passed in Vancouver. “I’ll admit I am outside my comfort zone in recommending a tax hike,” Oliver wrote. “However, I have always taken a pragmatic rather than ideological approach to fiscal policy, and what I’m about to recommend is not a tax on Canadian residents. So, here goes. The Ontario government should quickly
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MAJOR REGULATION CHANGES THROUGH THE YEARS
2008 • Minimum down payment raised from 0% to 5% • Maximum amortization for high-ratio mortgages lowered from 40 years to 35 years
2010 • Maximum LTV lowered from 95% to 90% • Qualifying rate for high-ratio mortgages must meet five-year benchmark rate
2011 • Maximum amortization for high-ratio mortgages lowered from 35 years to 30 years
2012 • Stated income for BFS clients requires 35% down payment • Maximum amortization for high-ratio mortgages lowered from 30 years to 25 years • Absolution of mortgage insurance for properties over $1 million
2016 • Additional 15% tax applied to all foreign buyers in Vancouver • All insured mortgage clients now must qualify for the BoC’s five-year benchmark rate impose a 15% tax on purchases by nonresidents and foreigners of residential property in certain Greater Toronto Area communities.” Oliver’s piece appeared on the same day it was reported that Vancouver’s tax had helped
With the sales tax seemingly having the desired effect in Vancouver, it may not be long before Toronto policymakers take a page out of the same book – but Oliver had some suggestions for how to avoid Vancouver’s missteps.
“As far as the brokerage industry goes, I’m not sure how much [a tax on foreign buyers in Toronto] will affect us” James Laird, CanWise Financial curb foreign purchases of real estate. According to a statement by BC’s Ministry of Finance, a rush of foreign buyers flocked to the market prior to the Aug. 2 deadline. Interest petered off significantly following implementation of the tax, however – the Ministry claims that home sales dropped 94% in August, compared to the prior months.
“I would time the implementation differently than in BC,” he wrote. “The tax should take effect the instant it’s announced, rather than giving buyers eight days to skirt it. Also, it should not apply retroactively to transactions that were signed but not closed, which is fundamentally unfair.” It’s a measure one broker believes is all but
inevitable – but not necessarily the right move. “I believe that for a foreign investor who is still interested in Canada and can no longer choose Vancouver, the most obvious place for their funds is Toronto,” says James Laird, president of CanWise Financial. “So obviously there is a concern that what they’ve done will accelerate foreign funds in Toronto. I generally do not think it’s a good idea. I think it’s a bit of a knee-jerk reaction.” However, unlike the recently passed ‘stress test’ rule change, Laird argues this may have a much smaller impact on the industry. “As far as the brokerage industry goes, I’m not sure how much it will affect us,” he says. “It depends what niche you’re in. I don’t believe our brokerage, specifically in Toronto and British Columbia, was seeing any of these deals anyway. I think a fair amount of these deals are purchased with just cash. The ones that require financing would likely require unique, private, alternative financing.”
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UPFRONT
COMMERCIAL UPDATE
Calgary occupancy at record lows As professionals flee the ailing economy, Calgary offices and rental spaces have been left reeling
of negative absorption has been observed in Calgary’s office space from mid-2014 to mid-2016, according to Adam Hayes of Cresa Calgary. “To put it in perspective, that is about equal to the pace at which space was occupied and leased in 2011 to 2013, when Calgary was on its last bull run,” Hayes says. “As opposed to how many floors are available, people are starting to talk about how many acres are available in the building.” Various analysts have pointed out a similar development in Calgary’s residential rental market, which is suffering from the
“The overall trend is for companies to shift to a smaller footprint”
In its latest analysis released in late September, real estate company Re/Max found that nearly 25% of Calgary’s office space is unoccupied, reflecting the troubled condition of the Albertan city’s real estate across all categories. According to the 2016 Re/Max Commercial Investor Report, the continuous weak performance of petroleum assets is making itself felt on Calgary’s lease segment. “As a result of companies downsizing, leaseholders in long-term leases are looking to sublease, and in order to do so, have to price below market rate,” the report said. “This is
NEWS BRIEFS
having the most impact on office space, but is affecting retail as well.” While “a slow but eventual recovery is expected,” the city’s occupancy rate is not likely to improve if demand does not intensify – a prospect that remains dim in light of the mass outbound migration of skilled professionals over the past few quarters. “More office space is continuing to come on the market, while at the same time, the overall trend is for companies to shift to a smaller footprint,” the Re/Max report stated. Approximately 5.2 million square feet
BC apartments feeling the pinch of new tax
Vancouver commercial property owners have voiced concerns about the possible effects of the BC government’s recently implemented 15% foreign buyer tax, including its impact on the flourishing apartment segment. The new levy, which was intended to cool down the Vancouver housing market, applies to any property that is used for residential purposes, which would include apartment buildings. However, said Edmond Luke, a partner at Fasken Martineau, “I don’t know that foreigners are speculating on our apartment blocks.”
mass exit of energy sector workers – who often hail from other provinces – after the worst effects of weak oil prices have become apparent in Alberta. Itinerant labourers in the province numbered more than 150,000 just three years ago; 70,000 to 80,000 worked in oil & gas as well as other segments involved in fossil fuel production. As of August, however, approximately 56,000 of those employees have departed following layoffs and facility closures. As a result, the residential vacancy rate saw a 10-year high of 4.3%. The number of unoccupied homes province-wide increased dramatically to 21,000 as of April, far above the 8,300 from the same time last year.
OTPP looks to sell Vancouver real estate portfolio
One of Canada’s largest institutional investors is searching for buyers for a minority stake in a $4 billion real estate portfolio that encompasses 14 commercial buildings in Vancouver and Richmond, including several office towers and shopping malls. Sources told the Financial Post that Cadillac Fairview, the Ontario Teachers’ Pension Plan’s real estate unit, is aiming to raise $2 billion from the sale. The unnamed sources added that Cadillac Fairview has tapped CBRE Group and the Royal Bank of Canada to work on the sale.
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Q&A
Medhi Shokri
Taking the pulse of commercial real estate
Principal AVISON YOUNG
Years in the industry 11 Fast fact In addition to being one of Avison Young’s top brokers worldwide, Shokri is also the chair of the North Vancouver Chamber of Commerce
Red tape and other regulatory roadblocks have been cited by various observers as the biggest obstacles to high-rise development. How do these factors influence your market? They definitely contribute to rising costs because roadblocks equate to poor timing and delays, which are unaccounted for from a financing perspective. Obviously, the increased costs associated with building these properties will then be passed on to the buyers to meet the developers’ profit targets. Roadblocks also have a significant impact on supply. The longer it takes, the greater the pressure on the municipalities to have the capacity to attend to the procedural requirements of the delayed projects. This creates a bottleneck in the system, and everyone ultimately loses: Developers are not getting their products out quickly enough, and the market suffers from not having enough options available.
The number of commercial transactions valued at $1 million and above has been gradually increasing over the past few years. In your view, is this sustainable? Absolutely. If anything, $1 million is now too low of a benchmark in terms of commercial properties.
In a recent report, National Bank announced that commercial lending grew by 3% year-over-year this quarter. Has this development affected your client activity? Our company is actually reporting record levels of
Developer sues Vancouver for land sale
Leading developer Concord Pacific is suing Vancouver for the city’s attempt to sell a parcel of land that had originally been slated for a low-rise project. The site at 601 Beach Crescent, which Concord turned over to the city two decades ago, was put up for sale in May. According to the Concord lawsuit, “it was an expressed and/or implied undertaking of the city that the Concord lands would not be used for development of high-rise market housing, a use that would compete with Concord’s own development plans for its other lands.”
revenue. And when there is more money to go around, there are more opportunities for buyers to take advantage of the market.
The proportion of foreign money in Canadian commercial real estate is steadily growing. What are your thoughts on this issue? I think it will remain an upward trend. With the recent announcement of the new regulatory requirements on foreign capital, it’s only going to accelerate foreign interest and commercial activity. That being said, I think we’ve been seeing more sophisticated foreign capital investing in commercial real estate. It’s no longer just independent individuals from other countries who are buying. It’s increasingly institutional, well structured capital that understands Canadian commercial real estate, and they are definitely looking at positioning more money in our market.
Are the fears of an ‘overseas takeover’ of the national markets justified? I don’t think they are justified at all. I think one could point to that same fear towards institutions such as Canadian pension funds, which own a majority of office buildings, which in turn would basically allow them to take over and monopolize the office market. I don’t think there’s going to be a takeover of any kind. I think the market would dictate what type of properties that buyers would want to purchase, and right now there are thankfully a lot of groups that plan to buy and sell in our market.
Canadian-focused Chinese bank launched
Wealth One Bank of Canada, a Schedule I bank catering to the needs of Canada’s Chinese community, was recently launched in Vancouver and the GTA. Started by Chinese-Canadian entrepreneurs, the bank plans to provide a diverse range of financial products, including residential and commercial mortgages. “At the heart of this bank is a team with a deep knowledge and respect for Chinese values and culture, and frontline financial services managers who are fluent in Chinese and English,” said president and CEO Charles Lambert.
Vancouver activity breaks record levels
In a recent study, Altus Group revealed that transaction volume in the Vancouver commercial real estate market broke records – quarter-over-quarter activity intensified by 34% in Q2 2016. Those three months saw $3.75 billion worth of commercial sales; 875 of those transactions were valued at $1 million or greater. “The record-setting first half of 2016 has been fuelled by a combination of both high-value asset trades as well as a sharp uptick in the deal velocity,” said Paul Richter, director of Altus Data Solutions Canada.
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UPFRONT
MARKET UPDATE NEWS BRIEFS Quebec intensifies campaign against fraudsters
The Quebec government is stepping up its campaign against wealthy immigrants who have been using the province’s previous regulatory regime as a ‘trampoline’ into Canada’s vibrant housing market. The phenomenon has led the provincial government to tighten their criteria and review process, refusing entry to applicants showing signs of wanting to reside in another part of the country. “If you have BC property, if you have a child attending a BC school, there is a question mark on your intent to settle in the province of Quebec,” said immigration lawyer Richard Kurland.
Two banks impose stricter mortgage application rules
Two Canadian banks have taken the first step in addressing red-hot housing activity in Vancouver and Toronto by implementing tighter requirements on mortgage applications. The regulatory changes come amid increasing concerns over the alleged effect of nonresident homebuyers on Canadian residential real estate prices, according to The Globe and Mail. Scotiabank recently terminated its pilot program that allowed clients who make large down payments to skip income verification procedures. Meanwhile, BMO is now requiring all mortgage applicants to present documents that validate their level of wealth and their source of income.
Observer warns of contagious fear in Vancouver market
Ever-rising prices in Vancouver, along with BC’s new 15% tax on foreign buyers, have led to widespread apprehension that might threaten the stability of the entire market, one analyst cautioned. “In the property market, where the mood
of individual buyers matters so much, there is no question that fear – and loathing – have an effect,” said market observer Don Pittis. “In highly liquid stock markets, experienced institutional investors act as an anchor on wild market swings. But the housing market is not liquid. And the majority of traders are inexperienced amateurs.”
Economist says Vancouver prices could continue rising until 2041
Amid a greater inbound population and ever-dwindling supply, hopeful homebuyers should not hold their breath for cheaper homes in Vancouver, according to a prominent BC economist. Central 1 Credit Union chief economist Helmut Pastrick noted that the influx of an estimated 1 million immigrants from now up to 2041 will make the ongoing affordability crisis worse, especially for young professionals and new families. “We just have a shortage of land,” Pastrick said at the recent Union of BC Municipalities convention. “As long as we have ongoing growth, we will see increased demand for housing.”
Experts call for federal attention on money laundering
Market observers have posited that illicit financial activity in Canadian real estate is partly to blame for rising housing prices and merits increased federal attention. “I would like to suggest the federal government convene an inquiry into whether or not there is a financial crime problem in the [real estate sector] and what can be done to resolve it,” said money laundering expert Christine Duhaime at a rally in downtown Vancouver on September 17. UBC professor Paul Kershaw agreed, saying that the current situation represents a perfect opportunity for the government to decisively resolve Vancouver’s housing problems.
Housing starts trend way down A recent CMHC report points to a decrease in starts spurred by improved housing supply The Canada Mortgage and Housing Corporation recently announced that housing starts declined significantly in August, a development attributable to the lower number of intentions in specific regions. CMHC’s trend measure of housing starts throughout the country fell from 201,379 units in July to 195,640 in August. “Construction of multi-unit dwellings slowed in most regions, led by lower activity in Alberta and Manitoba,” said CMHC chief economist Bob Dugan in the organization’s report. “However, housing market activity levels remain elevated, and this decline in starts is the market’s response to increasing levels of supply. Multi-unit inventories are above average in several major markets across the country.” The trend is expected to hold until next year, if other forecasts are any indication. National Bank recently projected that Canada will see 176,900 starts in 2017, with Ontario leading the charge at 64,500 (compared to 71,800 predicted for 2016) and British Columbia following with 35,000 (compared to 42,100 predicted for this year). Supply has been cited by several observers as the prime mover of price growth in Canada’s real estate markets, contrary to the popular notion of foreign capital as the chief culprit of over-
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heating in Vancouver and Toronto. A news release from Fortress Real Developments in late September pointed out that the drastic reduction in the supply of singledetached housing in Canada over the past few years has coincided with the acceleration of growth in average home prices across the country.
“Housing market activity levels remain elevated, and this decline in starts is the market’s response to increasing levels of supply” “Municipalities pushed right against the Greenbelt like Aurora, King City, Richmond Hill, Vaughan and Whitchurch-Stouffville are experiencing a shortage of single-detached homes and high price growth,” said Ben Myers, senior vice president of market research and analytics at Fortress. “Until recently, the lack of residential unit supply has rarely been discussed as a factor influencing high house prices. Factors that lead to a decreased housing supply include vehicle transportation and commuting, bodies of water and natural boundaries, obstructive planning policies, and disruptive taxes.”
Q&A
Rob Zwick Real estate agent RE/MAX CREST REALTY WESTSIDE
Years in the industry 10 Career highlight Being named in the top 1% of Realtors by the Real Estate Board of Greater Vancouver
The generation gap and home-buying How is your clientele responding to the ongoing trend of home price growth in Vancouver, especially in contrast to the sluggish economy elsewhere? Right now, they are more affected by the psychological impact of the foreign buyer tax, as well as the other aspects of governmental regulation on our market. Record-low interest rates have been cited as a driving force for intensified borrowing among millennials. What would be your advice to young professionals who have just entered the market? First-time home buyers should, above all, be conservative. What’s most important is making a sound investment on the very first purchase – ideally, getting into a good-quality building that is well financed and well maintained. Buyers in this city often make multiple purchases during the early stages of their lives, and what this means is that most of them aren’t staying in properties for more than three to five years after purchase. Because young people usually cannot immediately buy the home they would really need for the long term, it forces them into playing the property ladder game. An increasing number of wealthy domestic buyers belong to the Baby Boomer generation. Based on your transactions, how do these consumers operate in the market? Among the wealthier Baby Boomers on the west side, the value of their properties tends to range anywhere from $3 million to $5 million. They are typically looking for larger homes with a minimum area of 1,600 to 1,800 square feet, which falls squarely into the luxury segment of the market. Baby Boomers usually spend around 50% of the value of the homes they’re selling on their next purchases, and they may distribute some of the money to their children to help them get into the market. Also, they often purchase recreational properties. A lot of people from the west side buy in Whistler, in the Sunshine Coast or in the Okanagan, while keeping a property within Vancouver that they can come back to. The latest forecast by the Canadian Real Estate Association is projecting declines in sales volume and prices by next year. What steps can local buyers take to protect themselves? Purchasing in good buildings in quality locations, for the same reasons that new buyers should acquire spaces in well maintained buildings. When the market does experience a downturn, any property with a problem becomes far more difficult to sell. In the current fiscal climate, should Canadians who don’t qualify for traditional mortgages rent or buy? It’s definitely on a case-by-case basis. Once you’re in the market, I strongly suggest that you stay in the market. But if you can’t quite afford what you’re looking for yet, it’s prudent to rent for a short period.
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UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email mortgagebrokernews@kmimedia.ca
Tax won’t help affordability Vancouver’s foreign buyer tax is unlikely to improve housing affordability, writes Dr. Sherry Cooper – something other jurisdictions should consider before following suit THERE HAS been much hand-wringing about the overheated housing markets in Vancouver and Toronto. Accelerating price gains in the past year are indicative of a buying frenzy, especially in Vancouver, which is clearly unsustainable. New listings are way down, new supply is constrained, and buyer euphoria seems to be suggestive of panic, all of which has made housing less affordable and far out of reach of most middle-class households. Housing affordability is a hot-button political issue, so it is not surprising that the BC government, facing an election in less than a year, has felt compelled to do something to dampen the fervor. Time will tell how impactful the new tax will be, but one thing is certain. Housing in metro Vancouver will remain unaffordable for most households. RBC estimates that owning a singlefamily detached home in the Vancouver area would require 120% of a typical household’s income. In other words, unless the buyers have access to a huge down payment (thanks to, let’s say, Mom and Dad), it is out of reach. Even condos are too expensive for average earners in Vancouver. In the Toronto area, owning a single detached home is also a stretch – eating up roughly 72% of typical household income – but condo ownership is still reasonably viable for many, requiring about 37% of average household income. But this is really no different than many other global cities. Average earners typically can’t afford to buy a home in San Francisco,
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New York, London or Sydney, and there is nothing the government can do to change this. Scandinavian and some other European governments have built subsidized housing in metro areas, but it is doubtful that Canadians are willing to pay the kind of taxes that would require. Besides, land
has limited foreign purchases to newly constructed or renovated homes, while Switzerland sets quotas for personal-useonly purchases. Canada could also impose a tax on property flipping by foreigners (or anyone else) – say, a capital gains tax on properties sold within two years of purchase. Or we could penalize foreign owners of vacant properties that are not properly maintained. The fact is, as other countries have seen, this might take some of the steam out of the markets, but it will not make housing affordable for average earners in Vancouver. Notably, there are early signs that the red-hot markets are cooling, at least a bit. Resales have slowed in the past few months, and housing starts have picked up. Boomers are downsizing, and much more of that will come over the next decade. I believe house price inflation will slow in the next year, which should encourage many who are thinking of selling to put their properties on
“Housing affordability is a hot-button political issue, so it is not surprising that the BC government has felt compelled to dampen the fervor ... but housing in metro Vancouver will remain unaffordable for most households” shortages in Vancouver and Toronto are part of the problem. Increasing housing supply through changes in land-use restrictions might help at the margin, but density and green space markedly impact the quality of life. Public transportation pressures are already endemic to Vancouver and Toronto, and densification along major public transit routes is already underway. As we have seen, it is politically enticing to blame the affordability problem on foreigners. They don’t vote in Canada, so they are easier to tax. Other countries have done it. For example, the UK, Hong Kong and New Zealand have imposed capital gains taxes on foreign-owned properties that are not a primary residence. Australia
the market. So while housing in Vancouver and Toronto will remain expensive, the pace of appreciation is likely to slow. Will prices fall enough to make them affordable? No. Even if prices fell 30%, it would simply take them back to where they were a year or so ago. Overextended firsttime homeowners would continue to make their payments as long as they don’t lose their jobs, because Canadians don’t walk away from their homes. Dr. Sherry Cooper is the chief economist for Dominion Lending Centres. An award-winning authority on finance and economics, Cooper is also a professor at the DeGroote School of Business at McMaster University.
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STAY Deal Connected MCAP Service Corporation | Ontario Mortgage Brokerage #10515 | Ontario Mortgage Administrator #11692
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PEOPLE
INDUSTRY ICON
FROM THE LENDER’S PERSPECTIVE Working for some of the country’s biggest banks and lenders, Elaine Taylor, VP of sales at MCAP, has seen the mortgage industry evolve – and she has some ideas about how that evolution will continue
ELAINE TAYLOR took a somewhat unconventional path to the mortgage industry. After spending 25 years working in corporate relocation, she decided it was time for a change – but she wanted to stay in a real estate-related field, and she figured that mortgages would be a logical next step in her career progression. “A very close friend of mine was in the mortgage business in a senior role at CIBC Home Loans Canada,” Taylor explains. “I had primarily been in corporate relocation and then commission financing. I decided to use the skills I had gained over the years to go into mortgages, and I joined HLC/CIBC as an area sales leader. My role was to recruit, train and manage a team. In 2007, it was expanded to include launching CIBC mobile mortgage specialists into the GTA.” After leaving her mark on the big bank, Taylor joined MCAP in 2007, taking on the role of sales leader for eastern Canada. “From there, I decided in 2010 to move into head office and became director of communications until 2012,” she says. “I then moved into a strategic role to become senior director of strategic partnerships – I was responsible for key relationships with brokers,
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franchise and head offices, and also for setting the sales strategy.”
Winds of change Two years ago, Taylor was promoted to VP of sales at MCAP, a position that’s afforded
change. We need to be aware of things that will influence change – things like the economy, not just at a local or national level, but globally. “Influences are more direct,” she continues. “We’re seeing much more external influence than ever before. The biggest challenges, I
“I don’t know that it’s about winning market share from the banks; I think it’s more about how we can ensure that our channel has a value proposition that entices or is relevant enough for customers to use us” her a front-row seat to the ongoing evolution of the mortgage industry. And while no one can predict exactly how the industry will change in the coming years, Taylor says there are things brokers and lenders can do to be more prepared for whatever is ahead. “How will [the industry] change? That’s the million-dollar question,” she says. “I think it’s important we watch the drivers of that
think, will be adapting to the forces at play, not only within the industry, but in business and the economy as a whole.” To that end, Taylor points to technology as one important area that brokers should keep an eye on. “It’s moving at such a quick pace,” she says. “Less than two years ago, we didn’t even know the term Fintech. It’s now part of our
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PROFILE Name: Elaine Taylor Title: VP of sales Company: MCAP Years in the industry: 11 Career highlight: “The diversity of roles I’ve been able to work in and the people I’ve had the privilege to work with.” Career lowlight: “Managing the work-life balance – it always presents challenges because you feel like you are compromising. The key is understanding that the two sides are connected; it’s like two sides of a coin. The two pieces are really a whole.”
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PEOPLE
INDUSTRY ICON ELAINE TAYLOR’S CAREER TIMELINE
1986 VP of national operations ERS Ltd. vernacular, and it’s something we have to watch because it’s something that can change our business drastically.” The other thing brokers need to keep tabs on, Taylor says, is the influence of government and regulation. “We’re seeing it have a bigger role in influencing what happens in the mortgage industry – all bodies of government,” she says. “We’re hearing about different bodies of government that are having influence and awareness of what is happening in the mortgage industry – FSCO, FICOM, mortgage regulators, OSFI, the department of financing and housing. Their presence is more felt.” The question is whether brokers and lenders can successfully adapt to the changes within
think of it not so much as taking things away, but rather building towards. As an industry, what we have to be aware of is what value we’re bringing to customers, and ensuring we’re meeting the needs of our customers – and understanding one size does not fit all.” In Taylor’s view, diversification will play a key role for brokers in their quest to differentiate themselves from the banks in the eyes of consumers. “As time moves on, we [need to] understand that competition amongst us is good, and that going forward, part of the strength is that we are diversified,” she says. “The important thing is to understand that diversification is good – that we, within our own niche, understand our own value proposition.”
“Less than two years ago, we didn’t even know the term Fintech. It’s now part of our vernacular, and it’s something we have to watch because it’s something that can change our business drastically” the industry while meeting customers’ expectations at the same time. “There is a lot up in the air, and we have to be aware of it and look for opportunities in that,” Taylor says. “Success will be our ability to navigate through.”
Brokers versus banks When it comes to competing with the big banks, Taylor suggests that brokers frame the idea differently. “I don’t know that it’s about winning market share from the banks; I think it’s more about how we can ensure that our channel has a value proposition that entices or is relevant enough for customers to use us,” she says. “I
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She points to specialization that is already occurring in the industry, such as brokers who source through the internet or those who source face-to-face. The ability to offer different options to homebuyers is a good thing, she adds. “Customers now come in all shapes and sizes and credit scores,” Taylor says. “As things move along, there is a need for diversified sources of mortgage funding. It’s not only prime business – it’s the privates, the alternative channel, as well as commercial. I think customers will need to have brokers who can handle and who are well versed in handling all types of situations so their needs can be met.”
1994 Director of quality and business process re-engineering PHH Relocation Services
1995 Project manager PHH Relocation Services
1997 VP of sales and marketing Cendant Mobility
1998 Vice-president Royal LePage Relocation Services
1999 President Agent’s Equity
2005 Area sales leader CIBC
2007 Sales leader, eastern Canada MCAP
2010 Director of communications MCAP
2012 Senior director of strategic partnerships MCAP
2014 VP of sales MCAP
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FEATURES
COVER STORY: TOP BROKERAGES
CMP’s inaugural list of Canada’s top 50 brokerages takes a closer look at the teams that are making waves in the industry – and revolutionizing how mortgage brokers do business
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ACROSS THE country, mortgage brokers are going above and beyond to guide their clients through tricky economic times and ever-changing mortgage regulations – and it’s hard to go it alone. The brokerages highlighted here are the top teams in Canada’s mortgage industry, representing more than $235 billion in volume in the past year. There are things that they all struggle with, including staying competitive with commission splits and keeping on top of lender requirements. There are also things they all embrace, such as various ways to support their agents. But there are plenty of differences as well, such as how these brokerages attract new team members and their priorities when it comes to retaining them. They say that teamwork divides the task and multiplies the success – this year’s Top Brokerages would swear to that.
TOP 50 BROKERAGES BY THE NUMBERS
843
$11 million
Total number of transactions
Average volume per broker/loan writer
26
10
Average number of agents per brokerage
Average number of years in business
WHERE DO THE TOP BROKERAGES DO BUSINESS? Ontario
52.7%
British Columbia
27.2%
Alberta Quebec
12.7% 3.6%
Nova Scotia
1.8%
Saskatchewan
1.8%
Company
Page
Company
Page
Company
Page
Axiom Coast to Coast Mortgage Group
30
DLC Griffin Financial Group
30
Mortgage Alliance Enrich Mortgage Group
29
Axiom Mortgage Wise Financial
36
DLC Hilltop Financial
34
Mortgage Architects Big City Financial
32
Canada Mortgage & Financial Group
28
DLC Homestead Financial
26
Mortgage Architects River City Financial
26
Centum Champions
34
DLC Innovative Mortgage Solutions
39
Mortgage Architects Sherwood Mortgage Group
28
Centum Metrocap Wealth Solutions
34
DLC Mortgage Evolution
38
Centum Professional Mortgage Group
35
DLC Origin Mortgages
38
Mortgage Financial Corp. Brian Hogben Mortgage Team
24
Centum Streetwise Mortgages
32
DLC Parato Mortgage Group
33
Neighbourhood Dominion Lending Centres
39
CHD Partenaires
38
DLC Powerhouse Mortgages
27
RMA Loewen Group Mortgages
26
DLC Brokers for Life
33
DLC Regional Mortgage Group
30
The Mortgage Centre – Durham
26
DLC Canadian Mortgage Experts
28
DLC Service First Mortgages
30
The Mortgage Centre Mortgage Brokers Ottawa
39
DLC Capital Region
24
DLC Smart Debt
29
Tracy Valko/Dominion Lending Centres
36
DLC Centre-Ouest
36
DLC The Mortgage Man
32
Universal Mortgage Architects
34
DLC City Wide Mortgage Services
36
DLC The Mortgage Source
29
Verico Premiere Mortgage Centre
27
DLC Clear Mortgage
32
DLC The Roberts Group
33
Verico The Mortgage Advisors
27
DLC Clear Trust Mortgages
35
DLC White House Mortgages
39
Verico The Mortgage Professionals
24
DLC Drake Entrust Mortgage
24
DLC Yellow Brick Mortgage Group
26
Verico Tribe Financial
24
DLC Estate Mortgages
32
Home Leader Realty
38
Verico Xeva Mortgage
30
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FEATURES
COVER STORY: TOP BROKERAGES VERICO TRIBE FINANCIAL
MORTGAGE FINANCIAL CORP. BRIAN HOGBEN MORTGAGE TEAM
Verico Tribe Financial has only been in business for a couple of years, but their agents hit the ground running. Located in Burlington, Ontario, Tribe insists that there is “strength in numbers,” and clearly they’re right: Each of their 15 agents pulled in an average of $20 million in 2015. Mortgages are only part of the puzzle at this brokerage, which also provides financial advice. “We guide our clients through the home-buying and financing process with heart and consideration of both their long- and shortterm financial needs,” says a team member. “It is never about the rate with our firm and our clients. It’s not about the transaction, but how we can make their lives better.”
Mortgage Financial Corp.'s Brian Hogben Mortgage Team opened its offices in Hamilton, Ontario, three years ago, specializing in residential mortgages. “Simply put, our goal is to be our clients’ mortgage advisor for life and help get them out of debt with the best financial solution for their particular situation,” a team member says. Hogben’s team includes two agents and three support staff; in 2015, the brokerage funded 254 loans worth $65 million.
DLC CAPITAL REGION Despite the economic hardships throughout Alberta, Edmonton-based Dominion Lending Centres Capital Region is thriving. Although the brokerage has only been around for two years, it proves that experience goes a long way. “We have seasoned agents who try to provide a personalized service to the clients,” says a team member. The results speak for themselves: Liliana Peric and her team of four agents had an average volume pf $34 million each in 2015.
VERICO THE MORTGAGE PROFESSIONALS This 28-member team (23 agents and five support staff) has been operating out of Kingston, Ontario, for 26 years. The secret to their success? Agents are required to complete a lengthy internal training program – which often lasts for more than two years – before representing themselves to the community as an industry professional. “Exceeding clients’ expectations is our standard,” says a team member. “We have the most knowledgeable agents in the area, who puts our clients’ interests first. Trusted business partnerships have been developed and grown through the years to a level others could only envy.”
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DLC DRAKE ENTRUST MORTGAGE Led by owner Steve Brouwer, the agents at DLC Drake Entrust Mortgage have been in Chilliwack, British Columbia, for eight years. Last year, they completed 844 transactions valued at $384 million. “We have experienced brokers, monthly sales and lender training, a great team environment and good status with lenders to get deals done,” a team member says.
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FEATURES
COVER STORY: TOP BROKERAGES
UNIVERSAL MORTGAGE ARCHITECTS For 25 years, the philosophy at Universal Mortgage Architects has been to make sure clients get everything they need. “Our mortgage planning consists of showing our customers some budgeting tools and actually reviewing their situation every year to show them how to use their change in cash flow to pay down debt, save for a rainy day and/or retirement, and have fun – a true balanced lifestyle,” says a team member. The Universal Mortgage Architects team is composed of six agents, who funded $97 million in 2015.
MORTGAGE ARCHITECTS RIVER CITY FINANCIAL This Edmonton brokerage funded $98 million in 2015, thanks in part to a focus on client education and overall financial fitness. “Our team supports each other through each transaction; as a team, we do not reward on volume, and we do not have any practices in place that recognize top producers,” a team member says. “We are developing a culture of equality in our competitive business.”
DLC YELLOW BRICK MORTGAGE GROUP Although DLC Yellow Brick Mortgage Group’s team of 47 agents shares just one support person, that doesn’t mean the job doesn’t get done. Quite the opposite, in fact: The company has been going strong for 15 years, funding $318 million in 2015. What’s more, three of the top rookie agents in Canada over the past 10 years have come from the office, located in Barrie, Ontario.
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RMA LOEWEN GROUP MORTGAGES James Loewen’s Loewen Group has operated out of Burlington, Ontario, for the past seven years. In 2015, the three-agent team completed 247 transactions for a funded volume of $95 million. “We keep in touch with our clients, we care and are always available,” says a team member in regard to the brokerage’s recipe for success.
DLC HOMESTEAD FINANCIAL DLC Homestead Financial specializes in residential, self-employed and investment property purchases from their office in Waterdown, Ontario. “Our reputation and experience set us apart from competing offices, and we take pride in the service we provide,” a team member says. “We offer objective advice on our clients’ financial options, providing them with helpful tools such as down payment and refinance calculation sheets, as well as closing cost calculations for purchases.” Homestead's eight-agent team processed 269 transactions in 2015 for almost $83 million in volume.
VERICO THE MORTGAGE ADVISORS Fifty agents call this independently owned, Ottawa-based brokerage team home; together, they funded almost $300 million last year. Founded by Matt Daniels and Christa Tessier, Verico The Mortgage Advisors has been serving the Ottawa market for more than 10 years. “They are very family-oriented,” says a partner. “They believe in lender/broker relationships and are very easy to work with.”
DLC POWERHOUSE MORTGAGES Clients in Regina and the surrounding area can rely on the 22-agent team at DLC Powerhouse Mortgages, which funded 791 deals last year. “Our team has many years in the banking industry and can help our clients with their entire financial future, not just mortgages,” says a team member. “Training is supplied weekly, and community involvement is always highlighted.”
VERICO PREMIERE MORTGAGE CENTRE Top 10 brokerage by volume
Verico Premiere Mortgage Centre prides itself on allowing brokers and agents to build their businesses independently while fostering the kind of communication that enables them to work together for greater success. “We’ve spent a ton of time in the last 10 years making sure that we understand the wants, the needs, the support that’s needed to help each of these guys,” says vice-president Kerri Reed. “I truly respect what each and every one of them does every single day – I have been there; I’ve done it myself. There’s a respectful business relationship that goes on, and I think that makes us very, very different from a lot of brokerages.” Reed sees a challenge when it comes to agents being able to define their commission split relative to the sort of support they’re looking for. “There’s a really big disconnect there,” she says. “I’m quite certain that every single broker/owner would agree with me. It’s just one of the difficulties that comes along with running a brokerage. “It’s a lot of work to grow, build and then support a brokerage of any size,” she continues. “As you continue to grow, whether it be from the inside out or from the outside and bringing it in, you’ve got to learn to work with what you have and figure out what else it is that you need.”
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FEATURES
COVER STORY: TOP BROKERAGES
DLC CANADIAN MORTGAGE EXPERTS Top 10 brokerage by volume
With 125 agents, it’s no wonder that Dominion Lending Centres Canadian Mortgage Experts spends as much effort supporting their brokers as they do their clients. “Our whole management team are all still brokers – we all do our own books, and that helps us stay in touch with what’s important to a broker, not just sell them on something,” says Mike Lloyd, team leader and owner of DLC Canadian Mortgage Experts. The company offers coaching from both internal and external experts. Last year, a coach came in and met with seven brokers; their business has since gone up more than 150%. The brokerage also offers various marketing programs, including a client referral retention program that gives discounts across North America. All meetings are broadcast on YouTube, so location isn’t a barrier to staying on the same page. This year’s annual company-wide meeting saw agents fly in from a number of provinces to participate, which Lloyd says was worth it “because they feel like they’re part of the team, and I want them to feel like that. I don’t want them to feel like they’re stuck out somewhere else and they’re not part of our group.” Lloyd says he’s constantly surprised by how quickly the industry is changing, but he believes the way forward is to adapt. “Keep things moving forward, and just keep fighting the fight,” he says. "I’m a big believer that we’re stronger as a team, and every time we grow, there’s some headaches, but once we get through those, we’re better.” DLC Canadian Mortgage Experts has been in business for a little over five years, and had an average volume of $13 million per broker last year – so clearly they’ve been doing something right.
MORTGAGE ARCHITECTS SHERWOOD MORTGAGE GROUP Top 10 brokerage by volume
Last year, Sherwood Mortgage Group’s 30-plus agents completed 1,200 transactions, funding $650 million in volume. Its core group, led by Anthony Contento, moved to the brokerage side from “the Big Blue Bank” and brought agents on board whom they already knew. Over the years, Sherwood has put a high priority on maintaining that family culture – Contento insists that an intimate familiarity among agents is imperative to the environment at his brokerage. “As much as the agent coming on board wants to make sure that the company can provide everything they need to make their business progress as well as their career, I would always ensure that the agent also sees the big picture that the company needs to grow with the individual,” he says. “It’s a two-way street, and it all comes from really knowing who you’re bringing on board and what the value proposition is on both sides.” Working with brokers he knows also allows Contento to foster an atmosphere of trust. “I’m not one of those people where you have to earn my trust,” he says. “My trust is given to you right from the beginning, so it’s yours to lose.”
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CANADA MORTGAGE & FINANCIAL GROUP A relative newcomer to the industry, Canada Mortgage & Financial Group opened its doors three years ago under the direction of Ameera Ameerullah. “I don’t believe in competition but collaboration, and I do not compete with any associates,” Ameerullah says. Despite being an independent brokerage, Ameerullah has managed to obtain the same or better pricing from lenders as other brokerages and enhance customer satisfaction by covering or waiving fees. It’s obviously working – the vast majority of her clients are repeat customers.
www.mortgagebrokernews.ca
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DLC THE MORTGAGE SOURCE Top 10 brokerage by volume
For 25 years, Dominion Lending Centres The Mortgage Source has served Ottawa in the area of residential real estate. The office processed almost 2,500 transactions last year with a funded volume of more than $695 million. DLC The Mortgage Source has a team mentor who mentors new agents and helps current agents put deals together, “so there’s a lot of sharing of information, of best practices, and interacting,” says owner Kim McKenney. The team also participates in activities together outside of the office, including two events per year for all agents and their families. Most of the new agents with DLC The Mortgage Source start out in the mentorship program, McKenney explains. “We’re able to train them right from the get-go, so we know what their habits are because we train them with those habits. So they grow into our culture in believing that everything they do has an effect on the other agents, and we know what their best practices are because we taught them those.” McKenney says most of her time is spent helping her agents to learn and grow their businesses. “There’s a difference between running a brokerage and brokering your own mortgages – you have to make that choice,” she says. “If you’re going to run a brokerage, your agents have to be your clients. If you want to grow and thrive and for them to be able to grow and thrive, they have to be first and foremost.”
MORTGAGE ALLIANCE ENRICH MORTGAGE GROUP Richard Anderson leads a team of 60 agents at Mortgage Alliance Enrich Mortgage Group in Calgary. The brokerage covers a variety of mortgage transactions, including residential, refinance, debt consolidation, commercial and investment properties. Agents have daily online training sessions as well as biweekly team meetings. “We offer coaching to our newer agents, as well as a private Facebook group for our team members, giving us the ability to ask the team for help or coaching any time of day,” says a team member. Enrich also puts a priority on convenience for clients; Realtors and a real estate lawyer are part of the team as well.
DLC SMART DEBT Dominion Lending Centres Smart Debt has the longest track record of all of this year’s Top Brokerages, clocking 34 years in the industry. Under Debbie Belair, DLC Smart Debt’s 13 agents raked in more than $200 million across 700-plus transactions. “We’re one big happy family and only realized recently how well we fare with regard to overall volume compared to the rest of the brokerages across Canada,” says a team member. “It doesn’t get much better than this.”
www.mortgagebrokernews.ca
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FEATURES
COVER STORY: TOP BROKERAGES
DLC REGIONAL MORTGAGE GROUP Despite their location in the challenging market of Red Deer, Alberta, the 39 agents of Dominion Lending Centres Regional Mortgage Group funded almost $325 million worth of loans last year across 988 transactions. “Our office remains in the top 20 brokerages within the DLC family, even though our economy has been hurt hugely by the oil shutdown,” says a team member, who adds that “there is no other office doing the volunteer work in our community that Regional does.”
VERICO XEVA MORTGAGE Top 10 brokerage by volume
Based in Surrey, British Columbia, Verico Xeva Mortgage logged 1,775 transactions last year, and each of its 60 brokers funded an average of $10 million. The brokerage sets itself apart in the industry by having a dedicated underwriting centre, which allows its agents more time to grow their own businesses. “We’ve developed our company on professionals that have been in the industry for a period of time but have had difficulty trying to bring their business to another level,” says CEO Trevor Hanson. “So people who have continued to come to us are people that have been sort of stuck in that $10, $20, $30 million range and have never been able to get up into that $40, $50, $75, even $100 million range. Our underwriting centre has given them the ability to do that – to go out and get that business and bring it in, and we can sort of take care of it from there.” Initially, Hanson thought Xeva would make its mark elsewhere in the industry. “When we launched our company, we really thought we were changing the marketplace with our flat-fee model,” he says. “Most companies do a commission split of some sort, and coming into that marketplace, we really thought it was the best game-changer out there. What really was the biggest surprise for us was the underwriting centre. That has been the biggest selling feature for brokers.” Hanson advises newer brokerages to find their own unique selling proposition. “Try to expand and not do the same old thing that we’ve seen over the last 15 or 20 years,” he says, “but really try to come out and be something different and keep trying to grow the industry in the right way.”
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DLC GRIFFIN FINANCIAL GROUP DLC Griffin Financial Group’s four agents funded 435 deals last year for a volume of just over $96 million. They focus on both commercial and residential real estate in Peterborough, Ontario.
AXIOM COAST TO COAST MORTGAGE GROUP This Winnipeg brokerage has been in operation for six years, focusing on residential mortgages. Its 32 agents completed 250 transactions in 2015, resulting in $74 million in funded volume. “We are a family-oriented brokerage company; we value each other and ultimately the greatest customer satisfaction,” says a team member.
DLC SERVICE FIRST MORTGAGES Dominion Lending Centres Service First Mortgages has been living up to its name for the past five years. There’s one support staff member for all 22 agents, but the team still managed to complete 576 deals in 2015, worth nearly $180 million. “We have a very strong culture with our agents; everyone is willing to help each other,” says a team member. “We support our agents to obtain as much education as possible in order to help clients succeed. We host team meetings with lenders, presentations and sales training, and IT support/CRM training.”
www.mortgagebrokernews.ca
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Another Great Agents’ University Tour! Thank you to our speakers, lenders, brokers and franchise owners for joining us on our cross-country Agents’ University tour this fall! Our full day conferences were jam-packed full of business-building information specific to making our brokers even MORE successful. See what other events DLC offers exclusively to our Network – including our 2017 National Sales Conference in Palm Springs at www.dlcevents.ca
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FEATURES
COVER STORY: TOP BROKERAGES
DLC ESTATE MORTGAGES Dominion Lending Centres Estate Mortgages is a little different than other mortgage brokerages in that it shares an office with a Royal LePage franchise, which allows Realtors to essentially take care of financing in-house. The office has been in operation for eight years, and its 15 agents funded $190 million in 2015. DLC Estate Mortgages puts a high priority on education and career development as well: “All of our agents are assigned a mentor when first coming on board to ensure they get the proper guidance in starting their careers,” says a team member.
CENTUM STREETWISE MORTGAGES Centum Streetwise Mortgages is a small, boutique brokerage that caters to clients who need advice in the specific areas of divorce and separation, business-for-self, and real estate investing. “We are a relationship boutique and provide sound advice [for clients’] current and future needs,” says a team member. The brokerage, located in Woodbridge, Ontario, funded $92 million in 2015.
DLC CLEAR MORTGAGE Dominion Lending Centres Clear Mortgage specializes in residential real estate; together, the team funded 508 deals worth $71.6 million in 2015. Gayle Focken and her team of seven agents have served the Pentiction area of British Columbia for a decade. “Clients receive top notch-service that they can trust,” says a team member. “Our brokers are efficient, honest and very hard-working. Clients will receive the best product for their unique financial situation.”
MORTGAGE ARCHITECTS BIG CITY FINANCIAL Braden Gabert fosters a great atmosphere in the Calgary offices of Big City Financial, which has been in operation for four years. Last year, Big City’s 17 agents funded 288 deals worth $75 million. “Our ultimate goal is to create lasting relationships with each of our clients so that we may continue providing excellent service for many years to come,” says a team member.
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DLC THE MORTGAGE MAN DLC The Mortgage Man brings almost 15 years of experience and local expertise to the Ontario Lake Country. Dedicated to providing value-added service to clients, each member of the six-agent team has their own area of mortgage expertise; collectively, they focus on comprehensive mortgage planning for clients.
www.mortgagebrokernews.ca
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DLC PARATO MORTGAGE GROUP
DLC THE ROBERTS GROUP
John Parato and his team of six agents work out of Burlington, Ontario, and have done so for the past 17 years. The six agents completed 230 deals last year, worth almost $73 million. “Utilizing our financial background allows [us] to confidently recommend products during each economic condition,” says a team member.
Dominion Lending Centres The Roberts Group may be small, with just three agents and two support staff, but it’s pretty darn mighty. Not only has the brokerage been in business for almost 30 years, but it notched almost 300 transactions in 2015. So what’s been the key to their success? “We treat every client as if they are our only client,” says a team member. “Our clients continue to refer our office.”
DLC BROKERS FOR LIFE For the past six years, DLC Brokers for Life has provided Edmonton residents with “real-life mortgage solutions.” The 14 brokers in this office have an average funded volume of $9.28 million each. “We are not here to just take our commission and run,” says a team member. “We want to be here for the lifetime that you have a mortgage.”
www.mortgagebrokernews.ca
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FEATURES
COVER STORY: TOP BROKERAGES
CENTUM CHAMPIONS Sanjeev Gupta and his team of five agents have operated out of Mississauga, Ontario, for the past eight years. Last year, their 280 transactions resulted in a funded volume of $84 million. Their modus operandi is simple: “Fair and honest service.”
THE MORTGAGE CENTRE – DURHAM
DLC HILLTOP FINANCIAL Dominion Lending Centres Hilltop Financial and its 15-person team are specialists in the Langley/Surrey area of BC. The brokerage prides itself on its true community focus: “The vast majority of our business comes directly from our local area, as opposed to the Greater Vancouver area,” a team member says. The office has been in operation for almost a decade; last year, Hilltop Financial funded a total volume of more than $117 million.
CENTUM METROCAP WEALTH SOLUTIONS Broker/owner Ann Brill will be the first to tell you that her agents at Centum Metrocap Wealth Solutions do it all. “We go the extra mile for service and informing clients of options and focusing on solutions,” Brill says. “We give back to the community by supporting local sports teams and school events, and sponsoring cure-for-cancer events and boat cruises. We have great relationships with all of our partners, lenders, lawyers, etc. We love what we do, and it shows!” In 2015, the 38-member Torontobased team processed 220 transactions for a funded volume of $75 million.
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www.mortgagebrokernews.ca
For more than 25 years, The Mortgage Centre – Durham has been helping clients obtain mortgages in the Durham Region of Ontario. The office has a number of initiatives to support its staff, including an HR consultant; a training and mentorship program; an opportunity to purchase shares in the company, which allows brokers to increase their income and/or participate in the management of the company; full administration and underwriting support; and administration and sharing of lenders’ marketing dollars. The brokerage also donates a percentage of its commission on each transaction to Big Brothers and Sisters of Durham. In 2015, The Mortgage Centre’s 20 agents completed an average of 64 transactions worth $22.1 million.
CENTUM PROFESSIONAL MORTGAGE GROUP Under the direction of Vittorio Oliverio, this five-agent brokerage operates out of Lethbridge, Alberta. “Associates wish nothing but success for each other, and we make sure that when things are not going well, our team rallies to help each associate succeed,” says a team member. Centum Professional Mortgage Group extends that culture of caring to its community, too, through the Give Back Mortgage promotion, which enables the brokerage to donate a percentage of its commissions toward a client’s favourite charity.
DLC CLEAR TRUST MORTGAGES Top 10 brokerage by volume
Dominion Lending Centres Clear Trust Mortgages came onto the scene five years ago; in 2015, it completed 4,000 transactions, the highest number of all of this year’s Top Brokerages. CEO and managing director Robert Afan says helping new brokers get started in the industry is one of his favourite parts of the job. “Mortgage brokering is a challenging career, and we wanted to make sure that not only do they have the right support, but also the right encouragement and the right guidance as they get into this business.” To that end, Clear Trust provides coaching sessions, workshops and dedicated support for any broker who needs help packaging a deal. Brokering can be a lonely business, and it’s easy to lose focus without peers around you on a daily basis. But that’s why Afan started a brokerage in the first place. “I thought I had something to offer,” he explains. “I thought the business model that I created, which is focusing and putting an emphasis on making sure that every broker that we bring into our organization is fully supported, would be well received in the mortgage brokerage community. And I know that’s a cliché, I know everybody talks about, ‘Hey, come and join us; we’re going to support you,’ but to me, I see that all the time. I see that there are some brokers out there who think that once they get their licence, it’s easy to be successful, but it’s not.”
www.mortgagebrokernews.ca
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FEATURES
COVER STORY: TOP BROKERAGES
TRACY VALKO/DOMINION LENDING CENTRES Tracy Valko and her team of five provide long-term mortgage strategies for their clients in Kitchener, Ontario. In 2015, the two agents funded 258 deals for a volume of $63 million. “Humility goes a long way in this industry,” Valko says. “Honesty, integrity and compassion are the many values each of my team members provide at my office every day to our clients. Having a passion and strong desire to treat every client with special attention and care with every transaction sets my office apart from many of our competitors in our community.”
DLC CITY WIDE MORTGAGE SERVICES
AXIOM MORTGAGE WISE FINANCIAL
Top 10 brokerage by volume
Operating in Vancouver for more than 20 years, the 24-agent team at Dominion Lending Centres City Wide Mortgage Services funded an average of $6.5 million per broker in 2015. “In team-building and team meetings, we encourage everybody to assist everybody else because everybody has a different niche,” says senior mortgage planner Wayne Mah. “It encourages everybody to help everybody out when they have question about a certain deal.” The mortgage industry has changed dramatically since the days when brokers were seen as a last resort. Now, however, there are different challenges, including finding ways to show potential team members the value and support they’ll get from City Wide. Mah says that many of their brokers started as newbies, but others have come by word of mouth. “People get along; people have fun together,” he says. “We work, but then there are a lot of activities that we do outside of the office as a group as well. So far it’s just been a perfect blend of different characteristics of the individuals. “ City Wide also created the SPIRIT Foundation in 2012, which has raised $16,000 to support various causes in the community.
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Last year, the nine agents at London, Ontario-based Axiom Mortgage Wise Financial processed 540 transactions for a total funded volume of $120 million. According to a team member, “All of our agents/ brokers are experienced, high-producing mortgage professionals. With a dynamic administration staff, we offer incredible customer service and unparallelled mortgage advice.”
DLC CENTRE-OUEST Location isn’t just important in real estate; it can be crucial for brokerage offices as well. “We are strategically located in the heart of the city, just above Central Station, and we share offices with one of the best real estate companies in the world, Keller Williams,” says a member of the team at Montreal-based Dominion Lending Centres Centre-Ouest. “Both offices being in one strategic location makes a great combination for success.” Last year, the brokerage’s 17 agents funded 513 deals for a total of $153 million.
www.mortgagebrokernews.ca
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FEATURES
COVER STORY: TOP BROKERAGES
DLC MORTGAGE EVOLUTION In 2015, Denise Devente and Susie Inglis led their team of 31 to 728 transactions worth more than $320 million. During the 15 years they’ve been in business, they’ve focused on building relationships, both internally and externally. “We work together as a team to get deals done and have a long-established relationship with the lenders,” a team member says. “We are very good at getting the tough deals done.”
DLC ORIGIN MORTGAGES Top 10 brokerage by volume
Geoff Willis and his team of 45 brokers at DLC Origin Mortgages have been operating in Vancouver for 10 years. Origin’s support staff plays a crucial role in the workflow process by providing a variable-cost assistant service that allows agents to delegate administrative duties and focus on taking care of clients and referral partners. “I think it’s always helpful if you get a whole bunch of salespeople on the same page in terms of how they do it because then you can share best practices with each other,” Willis says. “As a result, I think our people are way more productive, and they get to have way more fun because they get to do the parts of the job that they most enjoy.” Origin developed an operating system called OTTO (which has since been licensed to other brokerages) that manages the entire mortgage approval process from initial client application to distributing commissions. This also provides agents with automatic, consistent and ongoing communications and connections with clients. Willis says Origin tends to look for agents with an entrepreneurial spirit. “We really believe that you have to stand out, you’ve got to be confident in what you bring to the party, what you bring to the process,” he says. “It isn’t about the rate; it isn’t about the lenders – it’s about you.”
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CHD PARTENAIRES Focusing on residential mortgages, Centres Hypothécaires Dominion Partenaires offers its team – which has grown from 18 brokers in 2015 to 27 brokers in 2016 – some very special tools. To help brokers get a quick handle on everything they need to know on a daily basis, CHD Partenaires provides a daily rate sheet, along with information on lenders and current promotions. “We are conducting meetings frequently in order for our team members to stay in touch, share best practices, exchange ideas, etc.,” reports one team member. “We are very proud of our team and what we have accomplished after four years.”
HOME LEADER REALTY This independent brokerage, which boasts five agents and five support personnel, has been a fixture in downtown Toronto for 10 years. Run by Maziar Moini, Home Leader specializes in investment sales of retail, office and industrial properties; commercial leasing; and the assembly/sales of vacant land for development purposes. Last year, the team’s funded volume was $50 million.
www.mortgagebrokernews.ca
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CANADA’S #1 BROKERAGE BY VOLUME
NEIGHBOURHOOD DOMINION LENDING CENTRES Top 10 brokerage by volume
In the eight years since Neighbourhood Dominion Lending Centres opened in Newmarket, Ontario, it’s come to be known for its positive environment, team support and commitment to ongoing education. “We realize that we’re here to serve our agents, that they’re mobile assets, and we have to earn that right every day to keep them,” says co-owner Gary Nugent. Neighbourhood doesn’t take on rookie agents; rather, they work constantly with experienced agents on ways to better serve their target markets. “Our biggest challenge is teaching the public what we actually do and working with our brokers on different ideas and different ways to market to the community so we can generate different ideas,” says co-owner Gary Meger. “We have such a diverse team, from Ottawa and Pedawawa in the east to Thunder Bay in the west, as far down as downtown Toronto, and every one of the communities is different.” Neighbourhood has held an annual conference for their 62 agents for the past 11 years, in addition to regular sales meetings and events. They have a full-time IT person, and Nugent and Meger help agents keep in touch with clients. Both partners agree that there’s a lot of behind-the-scenes work to running a team – something a lot of people don’t realize. “We’re working in a very, very low-margin business,” Nugent says. “You’re not going to get those huge returns on your investment right off the bat; it takes time. And you’ve got to be prepared to reinvest in the business. If you’re not, then you’re fooling yourself.”
DLC WHITE HOUSE MORTGAGES DLC White House Mortgages was founded 11 years ago with the goal of providing clients better service than they would get at a bank. “The atmosphere of White House is that of a house,” a team member says. “A client does not sign or leave the office unless we are comfortable that they fully comprehend what they have been presented. It is because of this attention to detail that our repeat and referral business is one of the highest in the industry – over 70%.” White House has 23 agents and two support staff; last year, the brokerage funded almost $170 million.
DLC INNOVATIVE MORTGAGE SOLUTIONS In 2015, the 23 agents at Dominion Lending Centres Innovative Mortgage Solutions funded 388 loans with a total value of more than $215 million. The brokerage has a dedicated commercial expert, detailed lender information that is updated and shared in an efficient reference format, and a monthly sales meeting with informative speakers.
THE MORTGAGE CENTRE MORTGAGE BROKERS OTTAWA
When it comes to the sheer volume of loans funded during the 2015 calendar year, The Mortgage Centre Mortgage Brokers Ottawa, headed by Frank Napolitano and Michael Hapke, tops the list. Individually, its 80 team members averaged around $13 million, bringing in a whopping $1.05 billion for the brokerage as a whole last year. Napolitano and Hapke both came from Canada Trust, where, it was “service first, and then everything else follows, and I think that’s what we’ve tried to practice in our business,” Napolitano says. “We understand that it’s a tough business right now, and it’s getting tougher. Lenders are tougher with everything that they do, and we believe in providing the support and allowing our agents to be as successful as possible without that noise that happens in the background.” For Mortgage Brokers Ottawa, support means having an in-house IT staff member who makes it possible for agents to look in one place for lender rules, as well as an in-house underwriting unit that focuses solely on sending deals to lenders, building solid relationships and vetting deals upfront. They also provide lender lunch-and-learns or seminars on a weekly basis. Mortgage Brokers Ottawa has a significant presence throughout the Ottawa area, with a regular radio show and television segments, and that exposure means brand recognition, which helps its brokers a lot. “Whatever I’ll talk about on the radio show or whatever I’ll talk about on TV," Napolitano says, “[brokers] can relate to, and have that same message for the customer so that it’s a consistent message.”
www.mortgagebrokernews.ca
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PEOPLE
BROKER INSIGHT
Mixing business and friendship Nicholas L’Ecuyer, principal broker at The Mortgage Wellness Group, talks to CMP about playing the long game and the importance of building a strong brand
CMP: How did you get into the mortgage business? Nicholas L’Ecuyer: I started in the business in 2007. Prior to that I was in the consumer packaged goods industry in a sales position. My district sales manager, Jason, who was also my mentor, is the nephew of Larry Barclay, who was number one on the CMP [Top 75 Brokers] list at one point. Larry got Jason into the mortgage brokering business, and because things were going well, he then mentored me into the business. I started with a big local broker in town. Nine years later, Jason is on my team, which is wonderful because he’s one of my best friends.
CMP: How would you describe your time in the industry? NL: Every year gets better, and I wake up with a lot of gratitude every day. Everything we dreamed about, we’ve been able to achieve, and it’s all been thanks to the brokering business.
CMP: What’s the secret behind your success? NL: Hustle – I’m here first and I’m out last. Also, we’ve created a great environment with great people. With my internal team, we live by the mantra that culture trumps experience every time. We hire the right people and then take very good care of them,
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and our people take very good care of our clients. It’s a symbiotic relationship in which everybody wins.
CMP: What’s the most challenging part of the business? NL: It can be difficult keeping up with regulatory and policy changes. What used to be an A deal is now an A- deal, and what used to be an A- deal is now a B deal, and so on.
CMP: Which locations do you operate in, and how have those markets been in 2016? NL: I lead an internal team of about 15 people, and my partner manages our external team. I think we’re one of the few in the business with a truly divided team with management on each side. Our internal team primarily operates in Simcoe Country – Barrie and area – and our external team runs right across the 401 out to Ottawa. The markets that we’ve been serving have
been absolutely crazy in 2016 – the growth has been phenomenal, and we’re seeing nearly every deal go over asking price. Usually, there is some seasonality to our business, but this year, every facet is busy: refinances, switches, purchases and those seeking investment properties.
CMP: Why did you decide to structure your teams in such a way? NL: We wanted to create a business that was structured like a corporation. We wanted to be multifaceted and have certain silos in the business, which are sales, administration, marketing and operations.
CMP: Has partnering with Verico been good for your business? NL: Our partnership with Verico is very, very strong. I was with DLC when I first started in the business, and I didn’t leave for any specific reason other than wanting to grow our own identity. Verico supported us through our
L’ECUYER ON BUILDING A SUSTAINABLE BUSINESS “I listened to the ‘I Love Mortgage Brokering’ podcast earlier today, and it said: ‘Build a database of 250 clients, build a fence around those clients, and then do everything you can do to market to and secure those clients.’ I would echo that. When we first got into the business, we would take every phone call and appointment, and you don’t necessarily need to do that. You don’t want to turn your back on an existing client to build a relationship with a new one. From the very first day, build every relationship to be as strong as it can possibly be.”
www.mortgagebrokernews.ca
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FAST FACTS: NICHOLAS L’ECUYER
Based in Barrie
Founded The Mortgage Wellness Group in 2010
Received the Canadian Mortgage Award in 2009 for Best Newcomer – Individual Agent or Broker
Has been on the CMP Top 75 Broker list every year since 2013
“We live by the mantra that culture trumps experience every time. We hire the right people and then take very good care of them, and our people take very good care of our clients” growth and gave us new opportunities. They’re a reliable group of true professionals who support us in every way possible.
CMP: Do you feel there’s anything more brokers should be doing? NL: You have to play the long game because this business is about people and relationships. Nobody falls in love with a brand – they fall in love with how the brand makes them feel. That’s on our walls, and we remind ourselves of that weekly. Anyone
who’s in the business for the short term, to get the commissions and move on, is doing it wrong. The business is about the lifelong pursuit of helping a family achieve their needs. We’re involved with a client’s financial needs when there’s a life change, like marriage, a new baby, a bigger house, job change or divorce, etc. We want to be involved in every facet of those life changes, and the only way you can maintain a 30-year relationship with a client is to start with a solid foundation.
Is a director of the Downtown Barrie Business Association and a member of the Toronto chapter of the Entrepreneurs Organization
The Mortgage Wellness Group has nine offices across Ontario
The company has been a finalist for the Brokerage of the Year Award at the CMAs for the past three years
The firm was named Barrie’s best mortgage brokerage by both the Barrie Advance and the Barrie Examiner newspapers
www.mortgagebrokernews.ca
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FEATURES
COVER STORY: LENDERS REPLY BROKERS ON LENDERS
LENDERS REPLY Brokers have weighed in on how they think their lender partners are performing. Now it’s time for the lenders to have their say LAST ISSUE’S Brokers on Lenders survey told the story of an evolving industry – and just how eager lenders are to keep up with the changes. We asked brokers to rate their lenders in 10 different categories, from BDM and
underwriter support to product range and turnaround time, to get a sense of just how well the industry’s leading mortgage providers are getting the job done. The results were astounding. Across the board, lenders collectively achieved higher
rankings in every single category than they did a year prior. That’s good news for brokers and, indeed, homebuyers. Now, a few of those lenders have weighed in on their respective performances. Read on to hear what they had to say.
such positive feedback from our brokers is reassuring that our efforts in communicating with you openly, and finding solutions together to make deals work, is recognized and appreciated.”
Product range: “We’re honoured to receive a gold medal in the category of product range, which supports our belief that a one-size-fits-all solution does not always work for brokers. Each client’s needs are different. We look for ways to provide both alternative and prime mortgage products that are appealing and flexible.”
EQUITABLE BANK
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Broker support: “We’re pleased to be awarded a bronze medal for the broker support category, which confirms the importance of offering unique, value-added programs for our broker network. Based on Equitable’s industry knowledge and active engagement of brokers, we’re able to develop educational programs that enhance and help to grow our partners’ businesses.”
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Kim Kukulowicz VP of residential sales and partner relations
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Satisfaction with credit policy: “To have received such positive recognition from our broker partners in this category is very rewarding. Together, brokers and lenders are working in an increasingly complex operating environment, trying to find the perfect balance between meeting regulatory requirements and working through the deals. Views and opinions are not always aligned, but to have received
BDM support: “Our strategy is to be extremely responsive to our brokers’ needs while providing a strong value proposition. By listening and learning, our relationships evolve into long lasting-relationships that are mutually beneficial.”
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Underwriter support: “It’s most rewarding to have our broker partners recognize the underwriter support they receive from Equitable Bank. In an increasingly challenging brokering and lending environment, Equitable remains committed to providing consistent, knowledgeable and responsive underwriting support to find solutions to work through deals together.”
Joe Flor Manager of business development, Central Canada
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Overall service levels: “I am pleased that we continue to remain a leader in the overall service category among the alternative lenders. Our commitment to the broker channel and responding to what our broker partners need to run a successful business remains our top priority. The recognition is very rewarding.”
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Brian Leland VP of residential credit
Gold Product range Silver Turnaround time Silver Interest rates Silver Satisfaction with credit policy Bronze Underwriter support Bronze Overall service levels Bronze BDM support Bronze Broker support Bronze IT/technology Bronze Transparency of commission structure
Note: Results were within the separate alternative lending category
www.mortgagebrokernews.ca
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FIRST NATIONAL
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Turnaround time: “Lenders can play a very constructive role in helping mortgage brokers meet customer expectations, particularly when it comes to turnaround times. When a broker is able to respond quickly because we’ve responded quickly, expectations can be met and even exceeded, and the outcome is often satisfied customers and more referral business.
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Underwriter support: “Given the increased regulatory oversight in general and the challenges imposed on all lenders by B-20 and B-21 specifically, this is one of our most coveted CMP awards. It suggests that First National has done a good job in completely assimilating these rule changes and not letting them interfere with our goal of responsive and collaborative broker service. I think the key for us is the presence of experienced and talented underwriters. Our people stay with us, and that creates a winning culture. Our own internal surveys have told us the same thing we heard in the CMP survey:
Overall service levels: “Winning gold again in this category is an accomplishment that is shared by and due to the efforts of people across First National, from account managers to the folks in our branches and on to our residential administration team. To earn this kind of score while continuing to grow originations is a real testament to the effectiveness and reliability of our team, the consistency of our business process, and underlying all of that, the utility of our technology tools such as Merlin and My Mortgage. People, process and technology: First National puts it all together. It’s an honour to be the best in this category.”
Technology: “First National has long been a leader in applying technology. Fifteen years ago, we introduced Merlin, the industry’s first online mortgage approval and tracking system. Merlin continues to serve as an industry standard for applied technology, helping brokers stay instantly connected to the status of their deals. In technology, longevity is rare, so Merlin’s long-term leadership is pretty special, and we’re going to continue to invest to ensure it meets the needs of the broker community in the years ahead. We also recognize that borrowers have certain technology expectations of their lenders, so we introduced My Mortgage, which can be accessed 24 hours a day, seven days a week by our customers.”
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Transparency of commission structure: “The simple truth is, if you want to build long-term, trusting relationships, you have to be completely upfront and clear about the financial terms of those relationships. First National has always sought to provide that clarity to our broker partners, and that has driven us to be as straightforward as possible in our compensation structure. Given all the moving parts and complexity involved in brokering a mortgage, we try to make working with First National easy and rewarding, and a no-surprise compensation model is a fundamental driver of that.”
Broker support: “First National excels in this area, and we attribute it to our account managers, who complement the work of our branch offices. These two sides of our business work together seamlessly and in a coordinated fashion on behalf of brokers and borrowers to find practical financing solutions. The structure we have in place holds everyone accountable for meeting our shared goal of going beyond service for brokers. Going beyond service, which is our mantra, means being a champion for each opportunity, putting in the time to find the right financing solution and being a reliable delivery partner.”
That’s why First National puts a premium on responding to opportunities quickly and tracks the performance of each office against our stated objective of responding to 90% of submissions in under four hours. We know that speed matters, and speed is a byproduct of expertise, but also a service-oriented culture, one that exists to support the success of a broker’s business. We want responsiveness to be one of our business advantages because we know brokers differentiate themselves on responsiveness. In this way, we support brokers in meeting their brand promise.”
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“We would not be Canada’s largest non-bank mortgage lender, with almost $100 billion under administration, without the support of our partners in the mortgage broker channel. So hearing informally and formally from our partners about our service, our support and our technology is incredibly valuable to us. While we obviously like what brokers said in this year’s CMP survey, what’s really important to First National is that the findings validate our efforts and motivate us to sustain and, where possible, go beyond where we are today.”
If the rules must change, it really helps when the core service philosophy of the business and the core underwriting team stay the same. We’re tremendously proud of the quality of our underwriters and the consistency and reliability of their approach. We like to think they are the best in the industry, and this award validates it as fact.”
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Scott McKenzie SVP of residential mortgages
Gold Turnaround time Gold Underwriter support Gold Overall service levels Silver Transparency of commission structure Bronze Broker support Bronze IT/technology
www.mortgagebrokernews.ca
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FEATURES
LENDERS REPLY BRIDGEWATER BANK
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Interest rates: “The unique nature of alternative deals means a cookie-cutter approach to rates isn’t realistic. We understand that brokers need some clarity to attract and retain customers, so we’re
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Gord Follett VP of finance
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Broker support: “This category is really the aggregate of what’s important to Bridgewater. We have gotten, and will continue to get, 100% of our business from brokers, so we have to do right by them. It means everything to be supported for gold in this category by the very people we depend on. We’ll continue to use our energy and expertise to make your business better and your life easier.”
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www.mortgagebrokernews.ca
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Transparency of commission structure: “Alternative lending is fluid enough without brokers having to wonder what their compensation will be. We like to focus on getting the deal done,
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Product range: “We understand brokers need a variety of products for their diverse customers, so Bridgewater is committed to expanding our product range. Stay tuned for some product news in the coming months.”
BDM support: “Bridgewater’s greatest value is our expert frontline service, and at the front of our frontline are our BDMs. This gold medal is a testament to their dedication, which knows no bounds when it comes to supporting brokers – they’ve been known to recommend non-Bridgewater solutions if it’s a better fit for customers. We are committed to empowering our BDMs with the tools to create extraordinary relationships and get the deal done.”
Satisfaction with credit policy: “Alternative lending has become increasingly complex over the years. The line between regulatory requirements and getting a deal done can be blurry. Brokers count on lenders to work a deal with both regulatory expertise and underwriting common sense. We continue to work on processes and guidelines that simplify our credit policy so brokers can depend on a consistent experience.”
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Overall service levels: “Our behind-thescenes crew would really like to thank brokers who supported Bridgewater for gold in this category. This is the cherry on top of the recognition our BDMs and underwriters received in their categories. It’s also the appreciation our funding and servicing departments deserve for being important parts of a complete service experience.”
Todd Poberznick AVP of B2B solutions
Dave Treletski Director of risk management
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Underwriter support: “Taking gold here means a lot to our underwriters, half of whom have been with us for more than a decade. The strength of their relationships makes them ultradetermined to make brokers succeed, so being recognized by them is incredible. We’re proud of the commitment our underwriters show; it compels us to work on ways to make them even more accessible.”
IT/technology: “Anything that can enhance broker relationships should be considered by a lender. We’re always interested in technology that makes communication faster and more efficient and user-focused.”
working on a model to make complex alternative rate offerings more simple.”
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Turnaround time: “Bridgewater Bank knows that turnaround times are important to brokers’ business. It can mean the difference between closing or losing potential customers. That’s why improving our turnaround times is a key initiative we’re focused on. We are working on improving our processes to make our broker partners’ job easier.”
which means keeping the rest simple. By supporting us for a gold here, it seems brokers like it simple as well.”
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Peter O’Neill COO
Gold Underwriter support Gold Overall service levels Gold BDM support Gold Broker support Gold IT/technology Gold Transparency of commission structure Bronze Turnaround time Bronze Product range Bronze Satisfaction with credit policy Bronze Interest rates
Note: Results were within the separate alternative lending category
RMG Technology: “The Gateway system was great in the beginning, but we continue to upgrade it to make it even better as we commit RMG to being at the forefront in technology.” O
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Satisfaction with credit policy: “This medal is a tribute to the commitment of RMG staff in both underwriting and sales to be accessible and knowledgeable, and above all, communicate with brokers so that they are aware of our policies.”
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Underwriter support: “RMG boasts a dedicated, knowledgeable underwriting team committed to assisting brokers in getting deals funded. This, coupled with Gateway, makes RMG the number-one choice for many successful brokers.”
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Interest rates: “RMG is proud to have the ability to offer competitive rates, niche products and competitive compensation to assist brokers in competing and growing their business.”
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BDM support: “RMG is proud to have what I believe to be the best sales team in the industry – knowledgeable, accessible and visible.”
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Transparency of commission structure: “RMG’s straightforward approach to commission has always been one of our advantages. Our BDM team has also done a terrific job communicating it to brokers.
Broker support: “We’re very proud to be number one in this category. Through dedicated underwriting and top BDMs, RMG derives 100% of its business from brokers. In return and in appreciation, our top supporting Super Elite brokers have an opportunity to get warm leads directly from our RMG Mortgages website. This has been a surprising success.”
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Bruno Valko VP of national sales
Gold Interest rates Gold Broker support Gold Transparency of commission structure Bronze BDM support Bronze Satisfaction with credit policy Bronze Underwriter support
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Editor’s note: Optimum Mortgage was mislabeled as Optimum Bank in the last issue.
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“Wow! Thank you so very much for this honour! To be voted by our brokers with the highest ranking two years in a row is the best endorsement we could wish for. We attribute our success to the strong partnerships we have fostered with you through the years – thank you for all your support. As a broker, you need to have an alternative lending partner you can count on to provide solutions for your clients. Our policy is, and always has been, to confirm the affordability of each deal. We follow a sensible lending approach to ensure each client’s application is considered based on its own merit and circumstances. Our experienced team will continue work hard to find customized solutions for your clients while providing you with service that is error-free, hassle-free and on time. We know being able to respond to your clients at a moment’s notice is important
and helps you stand out as their broker. That’s why we provide regular ‘milestone’ updates to keep you informed of your deal’s progress every step along the way. We pride ourselves that we can get your deals done quickly and efficiently, and to be voted gold in turnaround times for a second year in a row goes to show how important it is for you too. But don’t let our ranking fool you – we are always looking for ways to improve, and this survey showed us that we have some work to do. Until we win gold in all categories, we won’t stop trying to be the best alternative lending partner there is. You can continue to count on us to provide you with the Optimum Advantage you are used to. Along with our hard work and determination, we are sure that we can be your first-choice alternative lending partner. All of us at Optimum Mortgage would like to thank you for your support in 2016, and we are looking forward to a successful 2017 with you.”
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Lester Shore Vice-president
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OPTIMUM MORTGAGE Gold Turnaround time Gold Interest rates Gold Satisfaction with credit policy Silver Underwriter support Silver Overall service levels Silver BDM support Silver Product range Silver Broker support Silver IT/technology Silver Transparency of commission structure
Note: Results were within the separate alternative lending category
www.mortgagebrokernews.ca
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PEOPLE
CAREER PATH
CHANGING COURSE Despite his singular focus, Dong Lee never hesitated to alter his path when he needed to
Born in South Korea to a family who had experienced the privations of war, Lee was brought to Canada as a toddler. His family landed with $2,000 to their name; his parents studied English and worked menial jobs before ultimately opening a variety store “We were raised with an awareness of how lucky we were. A COMES TO lot of values were instilled in me from stories I had heard [of my CANADA parents’ suffering]”
1975
1996
REPLIES TO A FATEFUL REJECTION LETTER
The urge to thank a recruiter at TD Bank for her rejection letter led to a summer intern management trainee position, Lee’s first job at TD. That summer, he put together a proposal for Korean community banking that resonated with the expat community – and the bank “I was [Korean immigrants’] first banker when they landed; it built a lot of trust. When I officially graduated, I worked especially on that project”
2005
JOINS A STARTUP The relationships Lee forged while travelling for Scotia were pivotal in his decision to join a fledgling company in the broker space “I met and maintained good relationships with a lot of brokers; one started a brokerage [Mortgagebrokers.com] and invited me to join him. It was exciting and also very scary. In entrepreneurism the highs are high and the lows are low – we had a lot of highs and some moments where we almost went out of business”
1992
STUMBLES INTO BUSINESS Lee chose to study business at university at the urging of his older brother, rather than pursuing his initial choice of an education degree “My brother said I wouldn’t make money as a teacher and pushed me toward business. My grades were good enough to qualify for Queen’s – that’s how I stumbled across business. I went into the Queen’s Business School pretty naïvely”
1998
MOVES INTO MORTGAGES A move to CMHC marked a change in focus for Lee, who turned his attention to the broker channel. That was followed by a leap to Scotiabank, where he grew third-party mortgage origination business by more than $400 million “Three years in, I realized I had had enough of the sales side and moved into Scotia Mortgage Corp., delivering sales and marketing strategies for the alternate delivery channels. I developed the first version of the Scotia mortgage broker portal”
2010
ACQUIRES MORTGAGE ARCHITECTS
2016
ASCENDS TO THE TOP JOB When Albert Collu stepped down earlier this year, Lee took over as president of Mortgage Architects “I’ve never had an ego to think that I should be number one, but when the opportunity was offered to me, I made the decision that now is the time. I served as second in command for 11 years and worked with so many different presidents; now I think I’m in a position to lead this brokerage forward”
When Mortgagebrokers.com acquired Mortgage Architects, a brokerage almost three times its size, Lee made the decision to amalgamate the two into one, even though it meant dissolving the brand he had a hand in creating. At the time, it was the largest single brand transition in the industry
“We took in 250 brokers and did a rebrand. It was David swallowing Goliath. Three years later we did it again, amalgamating 500 Argentum brokers into the Mortgage Architects brand” www.mortgagebrokernews.ca
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PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email mortgagebrokernews@kmimedia.ca
DANCING LIKE A STAR
From winning national tap-dancing competitions to teaching dance to kids, Jordan Thomson has never stopped moving DANCING HAS been part of Jordan Thomson’s life since the Vancouver-based mortgage broker was five years old, when mother, a fan of Fred Astaire and Ginger Rogers, first enrolled her in tap lessons – “and I sucked!” Thomson recalls. But the following year brought a breakthrough. “All of a sudden, I became a very, very good tap dancer,” Thomson says. “It just clicked.” In fact, that click was so resounding that Thomson started competing across western Canada “and winning everything I was in.” Her competitive phase culminated in her victory at the North American tap-dancing championship at the age of 12, a title she held for three years. While Thomson’s competitive dance activities subsided in her late teens and early 20s, her love of the art form never did. While travelling in Australia after university, Thomson found her niche teaching small children dance and movement. Upon returning to Vancouver in 2007, she founded BrightStars, a performing arts school for children. The school, while small, is thriving, and runs three terms a year, as well as summer camps over the long school vacation period. “I can’t give it up,” Thomson says. “It’s my soul; it’s who I am. Some people break out in song – I break out into dance.”
25
Hours per week Thomson spent in dance lessons during childhood
175
Dance competitions in which Thomson competed as a child
10,000+ Students Thomson estimates she has taught
48 www.mortgagebrokernews.ca
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© Copyright 2016, Mor tgage Architects Inc., All rights reserved.
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