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CONTENTS
MARKET MATTERS 4 | Editor’s letter 6 | Letters to the editor 8 | Reading between the Lines A look at CMHC premium changes
NEWS 10 | News analysis Spring forecast; cancellation fees; the end of preapproved fencesitters? 18 | National pictureat-a-glance
FEATURES 14 | Broker advice on coming to terms with collateral charges 32 | Broker Sentiment Poll A roundup of trends and broker concerns in 2014 44 | Broker debate Will brokers ever agree on a social media strategy 42 | Finalists for all Canadian Mortgage Awards 54 | 14 industry beliefs debunked 56 | Canadian and global housing affordability
issue
9.3
20
COVER STORY
Top Independent Brokerages Their numbers may be dwindling as more brokers join the big networks, but there are still a select few independent brokerages holding strong
Get the shovels ready. Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $1 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $4M to $100M. Blake Cassidy | 800 494 0389 | www.romspen.com
License # 10172
MARCH 2014 | 1
CONTENTS
MARKETING
REGULARS
40 | Business strategy Going beyond referral sources is the key to growing your business, writes Doren Aldana
62 | Favourite Things
50 | Bolster your brand Michael McQueen outlines the 10 keys to winning the battle for relevance. 58 | Presentation skills and the art of persuasion 60 | Ten outrageous economic predictions for 2014
2 | MARCH 2014
64 | CMP Service Directory
46 MARKETING
Brokers are more comfortable reading balance sheets than writing blogs, but the latter is increasingly key to generating organic leads
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MARCH 2014 | 3 TM
CONTENTS / EDITOR’S LETTER
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SPIRITED INDEPENDENCE COPY & FEATURES SENIOR EDITOR Vernon Clement Jones STAFF WRITER Justin da Rosa CONTRIBUTORS Doren Aldana, Dustan Woodhouse, Maggie Crowley. Michael McQueen,Michael Sjerven, Cindy Tonkin, Andrew Young COPY EDITOR Rachel Naud
ART & PRODUCTION GRAPHIC DESIGNER Red Redrico
SALES & MARKETING ASSOCIATE PUBLISHER Trevor Biggs GENERAL MANAGER - SALES John Mackenzie MARKETING AND COMMUNICATIONS Claudine Ting PROJECT COORDINATOR Jessica Duce
CORPORATE PRESIDENT & CEO Tim Duce OFFICE/TRAFFIC MANAGER Marni Parker EVENTS AND CONFERENCE MANAGER Chris Davis COVER PHOTO Robert Brodey Editorial enquiries vernon.jones@kmimedia.ca Advertising enquiries trevor.biggs@kmimedia.ca Subscriptions tel: 416 644 8740 • fax: 416 203 8940 subscriptions@kmimedia.ca KMI Publishing 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 mortgagebrokernews.ca Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as CMP magazine can accept no responsibility for loss.
We all fancy ourselves individuals; independent and, dare I say, free. But when it comes to the business world, isn’t it better to join the biggest and most influential teams? Mortgage professionals profiled in our first-ever feature on independent brokers don’t think so. In that cover feature (starting pg. 20), CMP profiles six of Canada’s leading independent brokerages all of who operate without the influential backing of the big broker networks and instead take complete control over their businesses. Their reasons may differ but the end result is much the same: As one of our independents puts it, “I keep 100 per cent of what I earn, and 100 per cent control of what I do and how I choose to do it.” We’ve also invited one former independent - now a member of the “other side”- to explain his reasons for making the switch (Pg. 30). Also in this issue, look out for our annual Broker Sentiment Poll, starting pg. 32. It provides a comprehensive snapshot of the industry issues of the day, featuring concerns, trends forecasts, ratings and much more. And of course, our Canadian Mortgage Awards are just around the corner. Check out page 42 for a complete list of finalists. The winners will be crowned on May 9 at the Liberty Grand in Toronto. I know I’ll see you there.
Cheers, Vernon Clement Jones
CONNECT
Contact the editor:
vernon.jones@kmimedia.ca
4 | MARCH 2014
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CONVERSATIONS / LETTERS TO THE EDITOR
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DRIVEN TO
DIVERSITY
Necessity is the mother of invention but it’s also the driver of broker RE: BACK TO BASICS (CMP 9.2) Broker Deepak Bansal offered his take on diversification, say readers what new and established mortgage RE: DIVERSIFIERS (CMP 9.2) More and more brokers are tabbing other services on to their menus. The 2014 Diversifiers report highlights the successes of those multitalented individuals. LIVE AND LEARN… Thank you for the insights on how to take on new challenges. I’m still perfecting the brokering, though. -Margaret Paul
The GTA market is all that I can handle as a broker. If I tried to branch out into insurance and other areas, I would lose some referral partners that I rely on for my brokering deals. That’s the only problem I see with this type of strategy if you are already established in your business.
MORTGAG EBROKER NEWS.CA ISSUE 9.2 | $6.95
THE
professionals should be doing to generate leads in a tighter market
EDDY COCCIOLLO A PLEDGE FROM MCC PRODUCT TWEAKS LENDERS UNDER THE LENS
DIVERSIFIERS
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Meet brokers piecing tomorrow's diversifi together ed business model
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Brokers weigh in on AMP changes
Pg. 62
-Earl Benson
I am planning to get licensed as an insurance agent with a brokerage to be able to offer my mortgage clients those services as well. I think that’s probably the way to go rather than starting up your own insurance brokerage. The challenges there might outweigh any benefits. It is better to leave the overhead and the headaches to somebody else. -Broker Toronto
I think all brokers will be challenged regardless of how many other services they offer. Their connections with past clients will dictate who survives in the slower market. -Andrew Plummer
6 | MARCH 2014
These are pretty basic marketing points that I think we can all benefit from having a refresher on. The bridal show is something I haven’t done in the 10 years I’ve been an agent, but I would be willing to try, although you (Deepak Bansal) may have just given away a valuable secret. -Terry Mackinnon
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READING BETWEEN THE LINES / CMHC PREMIUM HIKE
CMHC PREMIUM PROBLEMS The Crown corp. is hiking its default insurance premiums in early May. Andrew Young of Mortgage Wise Financial reads between the lines and explains what effect the change will have on clients , the industry and, of course, brokers
FOR IMMEDIATE RELEASE 3
CMHC TO INCREASE MORTGAGE INSURANCE PREMIUMS
OTTAWA, February 28, 2014 – Following the annual review of its insurance products and capital requirements, CMHC will increase its mortgage loan insurance premiums for homeowner and 1-4 unit rental properties effective May 1, 2014. 2 Andrew Young, Mortgage Wise Financial
1. To some, the changes come as a surprise. To
the other insurers, Genworth and Canada Guaranty, it is a long-awaited modification. Premiums haven’t seen a change in nearly a decade. In fact, the last change came in 2005 when they were lowered to stimulate the growth of the housing market. The fee increases represent a 15 per cent hike in the standard, high-ratio mortgage insurance fees. For the average Canadian homebuyer who requires a high-ratio mortgage, this will add approximately $5 to their monthly mortgage payment. Not earth-shattering, but who wants to pay more money?
2. These early summer changes will certainly
have an effect on the housing and mortgage markets. We were already anticipating a strong spring market, as the polar vortex seemed to put a freeze on the market, literally and figuratively. We will not only feel the warmth of the longawaited spring, we will feel the heat of the early May deadline. With only 50 days until what I refer to as “FEE DAY,” there has already been a
8 | MARCH 2014
The increase applies to mortgage loan insurance premiums for owner occupied, self-employed and 1to-4 unit rental properties, including low-ratio refinance premiums. This does not apply to mortgages currently insured by CMHC. CMHC’s capital management framework is consistent with international practices and Canadian guidelines for mortgage insurers. Increased capital targets are consistent with Canadian and international industry trends and makes the financial system more stable and resilient. “The higher premiums reflect CMHC’s higher capital targets” said Steven Mennill, CMHC’s VicePresident, Insurance Operations. “CMHC’s capital holdings reduce Canadian taxpayers’ exposure to the housing market and contribute to the long term stability of the financial system.” For the average Canadian homebuyer1 requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on the housing market. Effective May 1st, CMHC Purchase (owner occupied 1-4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges. Loan-to-Value Ratio Up to and including 65% Up to and including 75% Up to and including 80% Up to and including 85% 4 Up to and including 90% Up to and including 95% 90.01% to 95% - Non-Traditional Down Payment
Standard Premium (Current) 0.50% 0.65% 1.00% 1.75% 2.00% 2.75%
Standard Premium (Effective May 1st, 2014) 0.60% 0.75% 1.25% 1.80% 2.40% 3.15%
2.90%
3.35%
CMHC reviews its premiums on an annual basis and, going forward, plans to announce decisions on premiums in the first quarter of each year. The homeowner premium increase follows changes CMHC made to its portfolio insurance product earlier this year. As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable housing solutions that will continue to create vibrant and healthy communities and cities across the country.
1
Cover
The Year ahead
MORTGAGEBROKERNEWS.CA
significant increase in activity since the changes were reality out there instead of trying announced. People lookingwill to secure their to sell around it, thenare people before May 1 to avoid the rising premiums. trustpurchases us.” But any efforts the industry may 3. The greatest effectwill these increases undertake as a whole have no will have is on theifself-employed or business-for-self effect individual brokers don’t do (BFS) clients cannot provemeans their income in a traditional manner. theirwho parts, which giving Thethe “stated program”service, fees went up clients bestincome value-added aggressively and dramatically. For a self-employed improving efficiencies and funding individual to purchase a home with 15 per cent down, ratios with lenders, and of course, theyclients will now with have to addright on a 6.35 per cent fee as placing the lenders opposed to the previous 3.35 per cent, when using the for their needs. stated income This comes as no surprise as “Focus on theprogram. best interest of the insurers and lenders have been client first and foremost,” said trying to eliminate the BFS program forat a number of years we now. Therien. “We are a crossroads: either go back to being the person you First-time homebuyers willas feel little squeeze. go to4.when the banks say no it awas Most of theor time they aretruly excited about owning their 25 years ago, become trusted first home andcustomer generally see a formality. advisers to our andit as move up Affordability won’tCMP be compromised, as the increase in to the next level.”
48
morTgagebrokernews.ca
the monthly payments is nominal. The second-time homeowner will feel a little pinch, as they tend to move up quite significantly in purchase price. Self-employed clients will feel the cold, stiff backhand of the rapacious increase. “FEE DAY” is upon us. Good news for the insurers, terrible news for the people who have the courage to start their own businesses and offer services to their communities that the large corporations fail to deliver.
71% of homeowners say they
In closing, rates are low. Lenders are competing for business. There will soon be an abundance of listings are in a good position to on the market to choose from. weather a potential downSource: Mortgage Insights: Highlights from CAAMP’s Fall 2011 consumer and industry surveys (CAAMP/Martiz Research Canada)
turn in the housing market
MARCH 2014 | 9
MARKET MATTERS / NEWS ANALYSIS
OUCH! BACK ON THE FENCE
Brokers remember the days when preapproved clients preferred to sit on the sidelines? Those days may be soon be back Homebuyers across Canada are increasingly cast in the starring role of a multiple-bid scenario. That’s nothing new. But in the country’s two largest markets, they’re likely to face no less than three or four of those showdowns this spring before moving to close on a purchase – and before you, their trusted brokers, get paid. “It’s becoming more of a reality,” says Toronto-based Royal LePage agent Belinda Lelli. “There’s just nothing out there. There is zero supply and 100 per cent demand.” For brokers, it means an increase in the number of shell-shocked clients unable to act on that urge to buy. It also means that a growing number of those preapproved borrowers in Toronto and Vancouver will face several multiple-bid scenarios before finally coming out on top. “It doesn’t bode well for the spring season – that’s for sure,” says Michael Simon, an agent with XRG Mortgage Solutions. “I’m just concerned that some of my clients will give up and jump back on the fence to wait for more houses to come on the market.” Those buyers may be sitting for a while yet. As the housing market begins to heat up for the spring, experts believe that the supply will remain tight in most major centres. The Canadian Real Estate Association and Sotheby’s International Realty Canada released reports in March, predicting inventory challenges will keep sales low and prices high as sellers sit pat, themselves stymied by a meagre supply It’s a catch-22 situation that’s likely to limit broker attempts to better business this spring and summer over last year’s boon.
TREND TO WATCH? OR TREND TO FEAR? Here’s something to test even the strongest broker’s resolve to put the client first.There’s growing indication that downsizing homeowners should be leasing their condos instead of buying and, so using a mortgage broker to arrange the requisite financing. According to leading consumer advocate Dan S. Barnabic, the case of renting – even for well-heeled baby boomers prepared to put down a whack of cash as down payment – is increasingly easy to make. It’s all about rents peaking as condo supply threatens to overshadow the admittedly strong demand in Canada’s urban centres. “For seniors with fixed incomes and limited cash reserves,” he writes in a recent column, “there is a very convenient way to enjoy the condo lifestyle without always being on the edge with respect to market trends and unexpected expenses: Leasing.” That opinion is finding favour with a growing number of Canadians looking to sell their family homes and move into smaller digs. But the increasing availability of long-term leases at market rents is convincing many to ditch plans to purchase, and otherwise invest the cash from the sale of their homes. That’s not a trend likely to work in the broker’s favour, although mortgage professional market share among downsizing baby boomers is relatively small, say analysts.
10 | MARCH 2014
POLL
WOULD YOU CONSIDER CHARGING ONLINE RATE SHOPPERS A CANCELLATION FEE? LAST YEAR THE OVERWHELMING RESPONSE WAS LIKELY “NO,” BUT A TIGHT MARKET AND INCREASINGLY FICKLE BORROWERS APPEAR TO HAVE CHANGED ALL THAT.
70% Yes
30% No
MORTGAGEBROKERNEWS.CA
SPRINGING INTO THE SEASON
January 1 is a distant memory, still the 2014 real estate forecasts keep rolling in. Here from Sotheby’s International Realty Canada is a crystal ball view of two trend-setting markets.
Calgary Market Highlights: Following record-setting growth in 2013, Calgary housing sales and prices are expected to trend upward through the spring. Low levels of resale and rental inventory combined with strong consumer demand predict a continued trend of multiple offers, bidding wars and above-asking prices, particularly in the single family home segment. Economic strength from oil, gas and potential pipeline projects will support gains in immigration and net migration, bolstering demand for housing.
Montreal Market Highlights: The overall performance of Montréal’s spring housing market will be closely tied to the outcome of the provincial election on April 7, with sales momentum slowing until an electoral decision is reached. Economic hurdles that will continue to temper the city’s real estate market include rising taxes, an unemployment rate that exceeds the national average and diminishing government revenues. Favourable influences include strong immigration numbers (the second highest in the country) and a Canadian exchange rate that supports Montréal’s manufacturing and exports sectors, as well as its climate for foreign real estate investment.
MARCH 2014 | 11
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MARKET MATTERS / BROKER ADVICE
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BROKER-TO-BROKER ADVICE:
BATTEN DOWN
THE HATCHES
Brokers may think collateral charges will eventually blow over, but that storm is here to stay, cautions industry veteran Dustan Woodhouse. What do you need to know?
14 | MARCH 2014
Collateral Charge – A competitive advantage? Much ado has been made about the presumed ‘evils’ of collateral charge-style mortgages as more and more lenders seem to favour them. These concerns are largely based on issues around a client’s inability to move to a new lender at renewal time without triggering renewal fees. The broker’s viewpoint might change if all lenders offered trailer fees. However, our industry lacks trailer fees, which, arguably, limits the standards of professionalism. Although many brokers see the long-term value in treating their books of business as a farm,
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MARKET MATTERS / BROKER ADVICE
nurturing and tending to the existing crop of clients with great care, there are still many who employ a ‘hunter/eat-what-you-kill’ style. This same structural issue applies to many bank representatives with very similar commission structures resulting in zero fiscal motivation for subsequent personal client followup. The opportunity within this dichotomy is another topic altogether, so let’s talk about how the collateral charge-style registration can, in fact, give you, the independent broker, a competitive advantage. When it comes to mortgage brokering, these are three priorities to live by. • The client’s best interest is priority No. 1 • The lender’s interests are second in line • The broker’s interests are a distant third place After all without the first two parties a broker can’t exist. Now let’s consider the topic of collateral charges from these three perspectives:
1
THE CLIENT BEING PLACED IN A COLLATERAL CHARGE PRODUCT
The (potential) win for the client is that there are no new legal fees for securing a line of credit or increasing the mortgage balance in the future (assuming, generally speaking, that they choose either the 125 per cent of the value option or a max amount other than the actual mortgage amount). If the client chooses to register their mortgage with a collateral charge lender for only the mortgage amount then the upside for them is quite limited moving forward. Some negatives for the client: They are effectively entering into an ‘all indebtedness’ mortgage, which brings any other debts to that specific lender under the umbrella of the registered security against the real estate. In other words co-signing a credit card or car loan for somebody that stops making payments with the same lender holding the mortgage can ultimately result in a foreclosure notice against the original client’s property. This is often not clearly spelled out on a mortgage commitment. This alone should be enough to stop most clients in their tracks with a few questions. It is also costly to move to a new lender at renewal time, in particular if the mortgage is a smaller one. This is now secondary if the client is still wrapping 16 | MARCH 2014
his head around a $5,000 credit card balance that is potentially triggering a foreclosure – which it very well can. In one of my own client’s cases, it was a $29,000 Visa balance racked up by an exspouse still on title; even though said ex was neither residing in nor contributing to the property itself. This brings us to a key point. The Collateral charge is neither good nor evil. It simply ‘is.’ It is here to stay; it is the future of the majority of mortgage registrations. Thus we need to learn how to present it in a neutral fashion. How to proceed with collateral mortgages Considering that nearly all institutions (most likely including the client’s current bank) now register in this fashion, it is perhaps worth advising the client not to have all their banking, credit cards, and small loans with the same institution with which they place their mortgage. Instead they should spread their money and investments among two or more institutions. In fact, placing their mortgage with a third altogether is more prudent still. So, for example, a client could have his personal banking with Lender A, business accounts with Lender B, and mortgages with Lender C (clearly this opens the door for a discussion on the virtues of monoline lenders as well). If all banking is done at ABC bank, and the mortgage alone is all that is held at DEF bank, we then eliminate the potential darkest of sides of a collateral charge mortgage to come into play: a foreclosure triggered by a small consumer debt. Yes this is how you, the expert broker, can use the collateral charge against the client’s own bank. You are educating the client about the pitfalls of having all their eggs in one basket. If the client still prefers to be placed with a big bank or credit union, fair enough – you have not painted a picture of the collateral charge as a negative with another institution and their exposure is still greatly decreased with the multiple-institution solution. As the expert adviser, you have simply enlightened the client about the ramifications of a collateral charge with their current lender as opposed to a lender independent of the balance of their banking. All that remains is potential upside for the client. This, of course, is aside from the issue of moving the client’s mortgage at renewal. Clients may not even consider the topic of renewal -- or what should be done at renewal time.
MORTGAGEBROKERNEWS.CA
“What? You will want all of this paperwork, my time and this stress all over again two, three, or five years from now? Can’t you place me with a lender you have some influence over my renewal with? You were supposed to make this process simpler,” they may say. Yes. You can, and you will – because that is the right thing to do. Place the client with the lender that makes the most sense for them in the long run; do not let your own issues cloud things. Do the right thing every time and the money will follow. Ultimately ‘porting’ at renewal is becoming less of an issue as we already have at least two lenders stepping in to offer a no-fee switch program for collateral charge mortgages. No doubt in three to five years there will be even more doing the same.
2
THE LENDER REGISTERING A COLLATERAL CHARGE.
I think we have made the case for why lenders love this format and are unlikely to change it anytime soon -- ‘All indebtedness’ and the increased security over the entire client relationship gives them complete control. Although lenders are increasingly under pressure to disclose all of the details more clearly, current mortgage commitments are lacking in any sort of detailed explanation. This is left up to the mortgage broker to provide. Master your script and ensure that the language is unbiased, matter of fact, and when clients ask for more information from the lender themselves you can forward this excerpt from the Department of Finance website:
Collateral Charge Mortgage Dept of Finance comments While many consumers continue to choose a traditional mortgage to secure their home loans, many are increasingly choosing collateral charge mortgages. The impacts of having a collateral charge mortgage may differ from traditional mortgages. For instance, switching between lenders may be more difficult. To make an informed choice, consumers need sufficient information to clearly understand the costs and consequences of collateral charge mortgages relative to traditional mortgages. The Government will require enhanced disclosure, better equipping borrowers to understand these impacts.
3
THE BROKER
Let’s address the main points from the broker’s perspective 1. A broker’s concerns about switching a client out to another lender three to five years later should be far lower than ensuring the client is placed with the appropriate lender upfront. 2. Focusing on what makes the most sense for the client both product- and lender-wise during mortgage inception should be priority No.1. 3. Strong communication throughout the mortgage term will see that the client refers and returns to their original broker for any increases or porting. 4. If you originally spent time talking a client out of a collateral product upfront and that client returns looking for more funds, ask yourself this: Are you now going to cover the cost of their legal fees, which otherwise would have been nil? 5. As more lenders go the way of the collateral charge-style product, there will be more lenders that will accept a transfer of an existing collateral charge. 6. Most Importantly, understand all the ins and out and ups and downs of a collateral charge and do not back yourself into a corner one way or the other. A sad example of a broker failing to understand and clearly explain this topic recently resulted in a client coming into my office convinced they could borrow 125 per cent of the value of the property, and that they did not need to re-qualify. The client was not impressed to discover this was not the case, despite what the previous broker had suggested. Ultimately we were still successful with the refinance, but the misunderstanding eliminated the original broker’s chances of doing any further business with the client. So know your stuff! For example, legal fees are waived, but there is still another appraisal required. Which, of course, requires credit and income confirmation. It is like underwriting any other refinance. Collateral-charge products are here to stay, so learn about them and use them for what they are; an excellent competitive opportunity to move a client’s mortgage relationship away from their existing financial institution. Unless of course you placed the client’s mortgage in the first place, in which case you should be considerate of both the client’s time as well as the current lender’s status alike and make use of the increased provisions that a collateral charge provides prior to looking to move the client.
About the author Dustan Woodhouse a B.C.-based mortgage broker with Dominion Lending Centres
MARCH 2014 | 17
STATISTICS / RESIDENTIAL SALES ACTIVITY
NATIONAL PICTURE AT-A-GLANCE
Ah, to be a mortgage professional in Ontario’s Bancroft District is to be a busy broker Home sales remained steady in February 2014 on a month-over-month basis according to the Canadian Real Estate Board’s latest stats released mid-March. Markets that marked a drop were roughly even with those that recorded a spike in sales, resulting in a fairly level month overall. “Sales in February rebounded in some of the smaller local markets where activity was impacted by harsh winter weather in January,” CREA President Laura Leyser said. “The strength of sales activity during the crucial spring market period will be influenced by the availability of listings, which varies considerably from market to market. British Columbia and Northwest Territories recorded the largest year-over-year percentage changes in sales activity, reporting a 23.9 per cent increase (BC) and 100 per cent increase (NWT), respectively. Conversely, Ontario and the Atlantic provinces all recorded drops ranging from -3.6 per cent (Ontario) to -11.8 per cent (Prince Edward Island). According to CREA, spring sales will be bolstered by declining rates, which are expected to draw buyers to the market. “Sales activity this spring will be supported by the recent decline in the benchmark five-year conventional mortgage rate,” Gregory Klump, CREA’s chief economist said. “That’s because buyers needing mortgage default insurance who opt for a term of less than five years must qualify for mortgage financing based on that rate, and not a discounted rate that their lender may be offering. “The support will be of particular importance in some of Canada’s larger urban markets where home prices are higher than those in smaller markets.” 18 | MARCH 2014
100
per cent Lloydminster(SK)
68.8
per cent
34.9
per cent Lloydminster(AB)
Powell River
10.6
per cent
Brandon
HOTTEST MARKETS Canada’s sunniest cities for February real estate sales
(year-over-year percentage change)
MORTGAGEBROKERNEWS.CA
SALES ACTIVITY BY PROVINCE (year-over-year monthly percentage change)
Northwest Territories: +100 per cent Source: CREA
News
British Columbia: +23.9 per cent
InternatIonaL
u.s.
+1.9
U.S. housing market worse than thought
The number of Americans who bought previously occupied homes rose in October. But the National Association of Realtors says it overstated more than three million sales during and after the Great Recession, showing the housing market was weaker than previously thought. The private trade group says sales rose four per cent in October to a seasonally adjusted annual rate of 4.42 million. That’s below the roughly six million homes a year that economists say are consistent with a healthy housing market. But it’s ahead of 2008’s revised sales, now considered the worst in 13 years. The trade group revised its sales from 2007 to 2010 down 14 per cent, from more than 20.6 million to nearly 17.7 million. Among the reasons for the lower figures, the Realtors group says: changes in the way the Census Bureau collects data, population shifts and some sales being counted twice. The Realtors consulted with government and private housing experts, including the Federal Reserve, the Department of Housing and Urban Development, the Mortgage Bankers Association, the National Association of Home Builders, mortgage giants Fannie Mae and Freddie Mac and CoreLogic, a California-based data firm that first raised doubts about the annual numbers earlier this year. CoreLogic has estimated that the Realtors group overstated sales in 2010 by at least 15 per cent. The changing numbers could affect how economists view the trade group’s data. It could also affect companies that use the figures for hiring and expansion plans. Sales are measured when buyers close on homes. But many deals are collapsing before that point. One-third of Realtors said they had at least one contract scuttled in October, up from 18 per cent in September. Contracts are being cancelled for several reasons: Banks have declined mortgage applications; home
per cent
&
90.6% 52.1% Percentage of homeownership costs, including mortgage payments, utilities and property taxes that take up a typical household’s monthly pre-tax income in Vancouver and Toronto, respectively (RBC Economics Housing Trends and Affordability Report)
Overall Canadian sales activity
185.7
per cent
Bancroft District
inspectors have found problems; appraisals Yukon: showed a home was worth less than+21.1 the bid; a per cent buyer lost a job before the closing. More than two years after the recession officially ended, many people can’t qualify for Saskatchewan: loans or meet higher down payment+6.9 per cent requirements. Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling. Sales are also being hurt by a decline in first-time Alberta: buyers, who +1.8 per cent are critical to reviving the housing market. Sales have fallen in four of the five years since the housing boom went bust in 2006. Manitoba: Declining prices and record-low mortgage rates +0.7 per cent haven’t been enough to boost sales. At the same time, home construction has begun a gradual comeback and should add to the economy’s growth in 2011 for the first year since Quebec: the Great Recession began in 2007. Last month, -0.7per cent builders broke ground on an annual rate of 685,000 homes, the government said recently. That was a 9.3 per cent jump from October Ontario:and the fastest pace since April 2010. -3.6 per cent Most economists say home prices will keep falling, by at least five per cent, through 2012. Many forecasts don’t foresee a rebound prices Newin Brunswick: -4.5 per cent until at least 2013. The high rate of foreclosures has made resold homes cheaper than new ones. The median price of a new home is roughly 30Scotia: per Nova cent above the price of one that’s been -10.7occupied per cent before – twice the normal markup. Investors are taking advantage of the discounts. The housing market is struggling even Newfoundland andinLabrador: as the broader economy has improved -10.3 per cent recent months. The economy grew at an annual pace of two per cent in the July-September quarter. Many Prince Edward Island: economists expect slightly better growth in the -11.8 per cent October-December quarter. CMP
23.7
per cent
St.John
60
per cent
Yarmouth
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MARCH 2014 | 19
COVER / INDEPENDENT BROKERAGES
CANADA’S
INDEPENDENT BROKERAGES Their numbers may be dwindling as more brokers sign up with the big networks, but there are a select few independents claiming phenomenal success. Here’s their strategy
20 | MARCH 2014
This is it: a tip of the hat to the lone wolves, the ones who prefer to do it their own way or no way at all. A first-ever for CMP, we are showcasing those who embrace and embody the independent spirit at a time when some of the major networks are pouring thousands into marketing campaigns, advertising on TV and expanding their reach throughout the country. These few independents, however, are content to go it alone. Because, as one of our featured brokerage owner puts it, “(the) large networks and franchises have not convinced me that they can drive enough business to my door to offset the cost of signing onto their network.” Members of larger networks may be reading this and wondering why exactly these brokers haven’t joined their ranks. Canada’s independents explain it in their own words. Read on to hear from some of the leading independent mortgage brokerages in Canada.
MORTGAGEBROKERNEWS.CA
REDWOOD MORTGAGE CORPORATION
Robert (Bob) Gascon
Database marketing: Direct mail to clients that I have dealt with in the past. 95 per cent of all the business I write is for a client I have had a relationship with in the past, or someone an existing client has referred to me.
Mississauga, Ont.
What are the advantages of being an independent brokerage? In my case, the advantage is I am one of one rather than one of a thousand. All of my marketing and all of my efforts flow right back to me. If I am a member of a large group I can be advertising for someone down the street.
What is the most important thing a broker can do to grow their business? Build relationships and build long-lasting relationships. You also have to become knowledgable about changes, to become an expert; to be able to offer A-business, B-business and C-business and be an expert in all those areas to be a true professional and expert.
What is the secret to building a successful brokerage? The secret is relationships, relationships, relationships. I will stack my relationships against anybody’s technology any day because people deal with people they trust, that they’re comfortable with, who are competent and who provide good service and good knowledge. You must put out a very clear message that says who you are, what you do, what separates you from the competition and where you can be found.
Have you considered joining a large network? No. Because large networks and franchises have not convinced me that they can drive enough business to my door to offset the cost of signing onto their network.
How do you think independent brokerages can continue to thrive in today’s market? By building a relationship-based business model. There are people who are in the franchise business, there are people who are in the agent business and there are people in the mortgage business. There will be successes and failures in any model. One size does not fit all; some people are comfortable being on their own and some people are comfortable in a franchise environment.
What advice would you offer to brokers who would like to set up an independent brokerage? Make sure that you are well-capitalized, make sure that you have a business plan and marketing plan. Because the M in mortgage stands for marketing and it is very key that you know what you’re going to do when you open your doors and go to market with a relationship-based model.
What is your strategy for generating new business?
What trends have you noticed this year? Have you had to adapt your business strategies to the market conditions?
EST. 1987 A-BUSINESS (25%) ALTERNATIVE (75%)
We had to move a year ago to the B-market from the A-market because we are not discounters. We don’t buy-down rate so we’ve moved to alternative lending.
What are your goals and strategies for the years ahead? Our goals and strategies are to continue to work in the alternative A and B markets and focus less on A business. We also, in the last year, launched a mortgage administration company that provides a platform for private lenders to run their business on.
Have you diversified outside of mortgages? If so, how have you incorporated this into your business? No, absolutely not. The reason for that is people come to me because I’m a mortgage expert. They don’t come to me looking for chequing accounts, GICs, banking products; that’s not the identity I wish to project. I am a mortgage broker and I do one thing very well.
As an independent, what extra pressures do you feel surrounding volume bonuses? Is there any loss of diversity of product as a result? I don’t look at volume bonus as a make or break on my business. I don’t base my decisions on how much money I’m making on a file. I’ll trade that for my independence. MARCH 2014 | 21
COVER / INDEPENDENT BROKERAGES
MORTGAGEBROKERNEWS.CA
What is your strategy for generating new business?
MORCAN DIRECT
The bulk of our business comes from our existing clients. We also do a fair bit of Internet advertising in addition to some radio and print. My favourite way to spend marketing dollars is on my existing clients; the goal is to figure out a way to transfer the greatest amount of value from us to them.
Marcus Tzaferis Toronto, Ont.
As an independent, what extra pressures do you feel surrounding volume bonuses? Is there any loss of diversity of product as a result? With our volumes we are not missing out on volume bonuses. For the select few lenders that pay based on the brokerage’s production, the benefits of being with MorCan Direct far outweigh the small difference in commissions. Our focus is not the dollar amount of commission anyway; if a mortgage product makes the most sense for our client, it is our job to work with the lender providing that product. We try to place as much of our business with lenders who pay trailers, over the years we have found that their products better serve our customers.
What are the advantages of being an independent brokerage? Being independent means that we can play by our own rules. We can roll out an advertising campaign quickly; we can build our own brand, and we are creating our own valuable brokerage.
Have you considered joining a large network? MorCan has been approached by several brokerages but it has never seemed to be the right fit. There are some great broker networks in the Canadian marketplace; each network has its own positive and negative attributes.
How do you think independent brokerages can continue to thrive in today’s market? Independents must play by the same rules as any other player in the mortgage marketplace. We have to keep our customers happy and keep them referring clients. Treat everyone that walks through your door fairly, be totally unbiased and you will see the benefits.
What is the most important thing a broker can do to grow their business? Stay uncomfortable. Always tinker with your business model and process because you can always get better.
What trends have you noticed this year? Have you had to adapt your business strategies to the market conditions?
EST. 2001 A-BUSINESS (75%) ALTERNATIVE (25%) 2014 BROKER SENTIMENT POLL
AS AN INDEPENDENT, WOULD YOU CONSIDER JOINING A NATIONAL NETWORK OR BROKERAGE IN THE NEXT 12 MONTHS?
50.79% Yes
What advice would you offer to brokers who would like to set up an independent brokerage? Build the right team. Everyone from the people who deal with your clients to the people who are in the back office dealing with compliance need to work efficiently in order for your brokerage to stay competitive in the marketplace. 22 | MARCH 2014
49.21% No
Working with clients who have been declined by others or who have been told that they have to accept a higher rate and turning them into A-clients makes it easy to come to work in the morning.
What are your goals and strategies for the years ahead? We will continue to provide an incredibly valuable service. We will stay educated on lender and insurer guidelines. We will listen carefully to our clients and always do what is best for them. We will work to inform the public that there is no better place to get a mortgage than MorCan Direct. We will never get comfortable.
Have you diversified outside of mortgages? If so, how have you incorporated this into your business? We have a MIC. We started Cannect MIC almost one year ago. We use the MIC to fund some of our first and second mortgages.
What is the secret to building a successful brokerage? The first step is to make each client that walks through your door happy. We do this by sticking to our mantra: Sound, unbiased mortgage advice. We work with our clients to find them the best product possible. The second step is to find and retain good talent. The final step is to make sure you never get comfortable. The mortgage industry is constantly changing; as a result we are constantly evaluating the way we do things.
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mcap.com/brokers MCAP Service Corporation Ontario Mortgage Brokerage #10515 Ontario Mortgage Administrator #11692
COVER / INDEPENDENT BROKERAGES
MORTGAGEBROKERNEWS.CA
MORTGAGE EDGE
John Bargis
Richmond Hill, Ont. What are your goals and strategies for the years ahead?
What is your strategy for generating new business?
As much as I’d like to share my thoughts with you on this topic, they are proprietary so all I can say for now is stay tuned.
Our main focus is to invest in our people by being very hands on. They are the key to generating new business. Strong partnerships is where it’s at, and although we utilize the internet for some business development, our main strategy is in relationship building which clearly drives the majority of the business in our industry.
As an independent, what extra pressures do you feel surrounding volume bonuses? Is there any loss of diversity of product as a result? The pressures surrounding volume bonus are non-existent actually. Our approach has always been to distribute volume as evenly as possible to lenders, which allows us access to a diverse cross-section of products, preferred rates, and maximum compensation. Mortgage Edge’s status is treated no differently than any of the network franchises, who are technically treated as independents in the eyes of the lenders as it relates to production requirements and compensation programs.
EST. 2002 A-BUSINESS (83%) ALTERNATIVE (17%)
Have you considered joining a large network? We’ve been approached several times by all the large networks. One even made us what most brokers would consider a very generous signing bonus offer just to carry their brand. But when we ran the numbers very quickly, the franchise network would make that money back in less than a year and a half and Mortgage Edge would be burdened with a very high cost to its revenue for being part of a franchise for the duration of the agreement.
How do you think independent brokerages can continue to thrive in today’s market? My advice to any independent is to first identify what their goals are. For example, is it a niche market they want to focus on, is it growth, or perhaps something else? Once this has been ascertained, a plan should be implemented to proceed with the execution. The key is managing the process very closely and to have the ability to make the required changes along the way in order to achieve success.
What advice would you offer to brokers who would like to set up an independent brokerage? Spend the appropriate time learning about the 24 | MARCH 2014
industry from all aspects first before getting started, so that you have a solid understanding. Strong management skills are also critical if growth plans are part of one’s long-term strategy.
What is the most important thing a broker can do to grow their business? A broker’s strongest attribute should be understanding how to run a business successfully. Brokers need to properly manage their business on many fronts in order to be effective. Some examples are; building and strengthening lender partnerships, not putting all of their eggs in one basket, being in touch with their agents, running financial business models, staying in touch with changes and being transparent.
What trends have you noticed this year? Have you had to adapt your business strategies to the market conditions? The trends are well publicized which are a result of all the regulatory changes the industry has seen. Personally speaking, the changes bode well for the broker industry, and there are many opportunities to shine. I’ve seen these trends before and embracing change and planning ahead is absolutely key.
What is the secret to building a successful brokerage? Our success has been in the investment of our agents and in our lender partners alike. We also make sure we’re very involved with our lender partners from a management perspective. We appreciate and value our partnerships.
What are the advantages of being an independent brokerage? Personally, our agents are their own brand within a brand, and we encourage and work with each of them to create their own value proposition. After all, they are the real reason that referral sources and clients actually do business with us. We just support them throughout the process.
COVER / INDEPENDENT BROKERAGES
ANDERSON ASSOCIATES
Blair Anderson Hamilton, Ont.
cabinets. Every file in my office, old and new, will be digital in 2014.
How do you think independent brokerages can continue to thrive in today’s market?
Have you diversified outside of mortgages? If so, how have you incorporated this into your business?
If independent brokerages continue to offer that service, and continue to push that message, they will continue to attract consumers whose standards continue to rise.
No. I think there is enough diversity in the mortgage business to keep learning and serving different niche markets.
What advice would you offer to brokers who would like to set up an independent brokerage? Go for it! Get a business plan, have enough capital to get started, know your market, and keep busy! Know your strengths, and weaknesses. Don’t ignore your weaknesses. Consider a business mentor. Network with the right people. Be active in your community. Be active on social media. Eating and sleeping are optional.
What is your strategy for generating new business? At this stage in my business, I concentrate more on my existing clients. They are my best ambassadors. I look to them for referral business as well as repeat business. Having said that, I still have to be active and work on my circle of influence.
What is the most important thing a broker can do to grow their business? Take care of your clients. Under promise and over deliver. Manage their expectations. Your clients are the most valuable asset you have. Take care of them and you will last.
What trends have you noticed this year? Have you had to adapt your business strategies to the market conditions? Buying down rates is a race to the bottom. It’s a trend that continues to attract a certain type of client, and a certain type of broker. I am not that type of broker and I am not interested in that type of client.
As an independent, what extra pressures do you feel surrounding volume bonuses? Is there any loss of diversity of product as a result?
EST. 1998 A-BUSINESS (75%) ALTERNATIVE (25%) 2014 BROKER SENTIMENT POLL
IF PART OF A NATIONAL NETWORK OR BROKERAGE, WOULD YOU CONSIDER BECOMING INDEPENDENT DURING THE NEXT 12 MONTHS?
11.11% Yes
What are your goals and strategies for the years ahead? With the forecasted increase in interest rates on the horizon, I need to keep in touch with existing clients who may have concerns vis-à-vis their future plans. I continue to work towards eliminating all my filing 26 | MARCH 2014
88.89% No
Volume bonus earnings are gravy. They should not influence how you run your business. To do so compromises your integrity as an independent mortgage broker. Having said that, I acknowledge the pressures lenders have placed on brokers to reach and maintain status. It’s another discouraging trend that has emerged in the industry over the last few years.
What is the secret to building a successful brokerage? No different than any other business; you need to have a solid administration. Things like marketing, managing human resources, accounting and cash flow management, etc., none of them can be neglected. A formal business place that is revisited once a year is a good idea. However, besides administration, like any other business, perhaps even more, you need to excel in sales.
What are the advantages of being an independent brokerage? Independence is the hallmark of what I do. It’s why customers come to see me in the first place, and it’s not something I’m willing to compromise. I keep 100 per cent of what I earn, and 100 per cent control of what I do, and how I choose to do it (i.e. branding). I operate under the mantra “small enough to care, and big enough to make a difference.” I believe this value resonates with many consumers.
Have you considered joining a large network? Not yet. Both my administration and sales function well the way things are so don’t see any real advantage.
MORTGAGEBROKERNEWS.CA
EST. 2009 A-BUSINESS (80%) ALTERNATIVE (20%)
a retail location in a high traffic area where clients can come to you. While we do not understand all the sales psychology behind it, we close 95 per cent of the (qualified) business that walks in our door.
What trends have you noticed this year? Have you had to adapt your business strategies to the market conditions? Although there is a lot of “buzz” about rate sites, we have avoided this strategy. If your strategy is to be the Tim Hortons of mortgages, that’s great. Our strategy, on the other hand, is to be the Starbucks of mortgages. While they both offer coffee, people are willing to pay just a little bit more for first-class service and leave our office with a better taste in their mouth.
What are your goals and strategies for the years ahead?
MORTGAGE MANAGERS
James Shinners
Hammonds Plains, N.S.
What advice would you offer to brokers who would like to set up an independent brokerage? Becoming independent will require a good business plan and an initial financial investment to set up a good website, rent and renovate office space, have signage, etc. It is also extremely important to stay focussed on your mortgage business and avoid getting side-tracked in other unrelated businesses.
What is your strategy for generating new business? We wouldn’t recommend that a “newbie” become independent. Aside from a good business and marketing plan, you really need a solid client base to draw on. Then, using a good Customer Retention Management (CRM) system, you can farm your client base for referrals, refinances and new purchases.
What is the most important thing a broker can do to grow their business? It’s an old business adage, but location, location, location is really important. We recommend getting
Our near-term goals are to double our volume and the number of quality brokers we have here in Nova Scotia. This will enable us to take advantage of some economies of scale, volume bonuses, and greater market presence overall. Our goal over the next two years is to have brokers in all four Atlantic provinces.
Have you diversified outside of mortgages? If so, how have you incorporated this into your business? We are currently exploring various mortgage-related investment programs for our clients including syndicated mortgages, GIC investment programs, and investment opportunities with private lenders. Offering your clients life & disability insurance is not only a great source of income, it is a great way to protect your clients during a difficult time. We recently had a client pass away unexpectedly and their Manulife MPP Life Insurance paid off the mortgage, leaving the husband mortgage-free. Our brokers also participate in our unique profitsharing, residual income model that enables our brokers to earn more than 100 per cent of their gross commissions from helping us acquire new mortgage brokers.
As an independent, what extra pressures do you feel surrounding volume bonuses? Is there any loss of diversity of product as a result? While we do not do the same volumes as the “superbrokers,” we really have not lost any of our lenders. Therefore, our product offering has remained the same. I believe we have a very good reputation MARCH 2014 | 27
COVER / INDEPENDENT BROKERAGES
with our lenders and we offset volume with efficiency and top quality clients.
What is the secret to building a successful brokerage? To be a successful independent brokerage, you really have to be a brave entrepreneur. You have to love helping your clients, you have to love ongoing training, you have to love looking after the day-to-day operations, compliance and accounting. You also have to be more agent-centric than the national brokerages by providing knowledgeable support, training and encouragement.
What are the advantages of being an independent brokerage? The main advantage of being independent is really the sense of accomplishment we get from building our own brand and a business we can call our own. We don’t have to answer to tyrannical corporate policy or worry about being affiliated with brokers who are unethical.
MONSTERMORTGAGE.CA
Kristian Harris and Nick Ametrano Toronto, Ont.
What advice would you offer to brokers who would like to set up an independent brokerage? 1. It will require a lot of hard work 2. Make sure you can offer something to your clients beyond just a great rate 3. Be true to a strong set of core values and core purpose so that you can make the right business decisions 4. GO FOR IT!
Have you considered joining a large network?
What is your strategy for generating new business?
We’ve been mortgage brokers for 10 years, five years as independent and five years with a national brokerage, so we have seen both sides of the coin. We had initially joined a national brokerage with the hopes of receiving ongoing training, support, camaraderie, but we received little of that. In fact, we experienced fellow brokers stealing our clients, having to train ourselves, and figuring things out on our own. So, since we had to become self-sufficient anyway, we decided to leave that brokerage and start our own firm. That brokerage tried to scare us into staying by threatening that we wouldn’t survive the year as an independent, yet here we are five years later.
That one is like the Caramilk secret. We generate a lot of leads for our mortgage agents; for most of our agents over 90 per cent of their fundings every year come from leads that were generated through company marketing initiatives. When you consider that our lowest yielding mortgage agent has not produced less than $17M in volume a year that says a lot about our ability to generate new leads for our agents. Once you have a core set of values in place, it is all about testing, executing, measuring new tactics (then repeat). The final ingredient comes from what we refer to internally as “driving operational excellence.”
How do you think independent brokerages can continue to thrive in today’s market?
What is the most important thing a broker can do to grow their business?
Five to 10 years ago, it was all about volume and the lender’s commission structure was set up for that. Today, with more and more lenders offering “trailer fee” programs, an independent brokerage can earn just as much as they would if they were with a national brokerage; you just have to have a long-term mindset and not be in business for a quick buck. At the end of the day, the client only wants their problem solved: find me a good mortgage that meets my needs. If we can provide that, the logo on the broker’s card is irrelevant to the client.
Pick up the phone and work hard.
28 | MARCH 2014
What trends have you noticed this year? Have you had to adapt your business strategies to the market conditions? People change. Markets change. Businesses change. We will be successful because of our ability to adapt to change and by working with like-minded people whose beliefs and motivations are rooted in the two things that will never change; our Core Values and our Core Purpose.
MORTGAGEBROKERNEWS.CA
As an independent, what extra pressures do you feel surrounding volume bonuses? Is there any loss of diversity of product as a result? To date, I don’t know of any product in the market that our clients want that we don’t have access to as a mortgage brokerage. Chasing extra five to 10 basis points doesn’t make for a sound business strategy. Identifying the right mortgage product that can create a valuable plan for your client is.
What is the secret to building a successful brokerage? For MonsterMortgage.ca it has been all about having a strong core purpose and set of core values that we use as a guide to all our business decisions. Leveraging your core values and core purpose when faced with those difficult business decisions has really gone a long way for us over the years. In particular, it has helped us attract and retain what we feel is the strongest mortgage agent team in the country.
EST. 1997 A-BUSINESS (90%) ALTERNATIVE (10%)
What are the advantages of being an independent brokerage? What are your goals and strategies for the years ahead? • Encourage and reward performance • Continue to be innovative • Discipline
We will continue to refine our systems and processes so that we are disciplined in our approach to providing great mortgage advice to clients.
• Mutual Respect and Support
we will continue to respect and support each other within MonsterMortgage.ca.
• Have Fun
the way we look at it time is precious so if we are going to spend our days working together and trying to serve customers better we are going to make sure we have fun doing it
Have you diversified outside of mortgages? If so, how have you incorporated this into your business? Yes. We offer insurance (term and MPP) to all clients. Ultimately, we believe that clients need to be protected from the unexpected. Having the right insurance product is an important piece to one’s overall mortgage strategy.
Quite simply we don’t give that label much thought nor have we ever taken a step back to analyze what advantages or disadvantages there are to being an independent brokerage. To date, we have won three mortgage brokerage of the year awards as an independent brokerage so we must be doing something right.
Have you considered joining a large network? Not really. We have been approached from time to time to consider joining a larger network. There are some interesting options for agents who feel that being part of a larger network is of value to them but to date we have not seen an opportunity where joining a larger network would add greater value to our customers or our mortgage agents.
How do you think independent brokerages can continue to thrive in today’s market? You need to be able to add real value to clients whether you are an independent or not. If the only value you can offer a client is to buy-down an already low rate then you will eventually cut yourself out of the market. To thrive in today’s market, you need to be able to offer a client something more than just a great rate, and we aim to do that on a daily basis. MARCH 2014 | 29
COVER / INDEPENDENT BROKERAGES
MORTGAGEBROKERNEWS.CA
INDEPENDENT NO LONGER Once the leader of independent brokering – and the highest producing mortgage broker, according to last year’s Top 75 list – Jim Tourloukis explains why he rejoined a broker network “When I originally joined Verico five years ago, it was to access top volume bonus levels with lenders. As my business grew, I was able to reach top volume bonuses and so I made the decision to become an independent,” Tourloukis said. “This time, it’s about taking my business to the next level; aligning myself with the best of the best at Verico and getting access to the best tools in the industry will help me grow my business far beyond what could be accomplished on my own.” For three years straight, Tourloukis has surpassed $200 million in volume as an independent and he hopes to build his business higher under the Verico banner. And the recent career move has already worked in his favour. “The move back to Verico has already paid dividends in spades; within 24 hours of turning on Verico Dynamics and its automatic marketing emails, I received five real deals and another 76 inquiries from leads, Tourloukis said. “Those results speak for themselves.” For its part, Verico is excited to add another experienced and high-producing broker to its growing stable of mortgage professionals. “We are delighted to welcome back Jim Tourloukis and his team at Verico Advent Mortgage Services,” Colin Dreyer, president of Verico Canada said late last year. “Jim’s business values are very much in alignment with Verico’s core values of professionalism, excellence, integrity and high ethical standards and we look forward to supporting his next level of success.” 30 | MARCH 2014
Lorne Rackel
Former independent broker, Lorne Rackel, explains the reasoning behind his move to join a major network Why did you join a broker network?
Jim Tourloukis
We got to the point in volumes where we needed a CRM. We needed a platform so we could contact and mine our data base and stay in regular touch with our customers.
How do you see the trend continuing? More people moving from independent to broker networks or the other way around? We were an independent for over 10 years. But there are benefits to joining the superbrokers in relation to technology, for sure. Our Jayman Group of Companies has our own internal IT division and they have advised the cost to build the same thing offered by the broker networks is a very expensive and long journey. So I do see more people moving to broker networks.
What would be the factors contributing to that trend, relating to your own experience? The cost and time to develop, build and implement your own CRM and marketing platform. There are other benefits such as increased volume bonuses in some instances and access to a few more lenders.
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FEATURE / BROKER SENTIMENT POLL
BROKER
SENTIMENT
POLL
You spoke and we listened. CMP’s yearly Broker Sentiment Poll gets at the heart of the major issues in the mortgage industry today, as voted on by those on the frontlines: Our readers and Canada’s leading mortgage brokers POLL
Last year may not have been as tumultuous a year for mortgage brokers as 2012 – what, with brokers getting acclimated to and, dare I say, even thriving in an environment of tightened guidelines and lending rules – but industry professionals aren’t quite in the clear, as evidenced by our poll results. Brokers are still concerned that fewer lenders operating through the broker channel will have an adverse effect on business; a fear that isn’t unwarranted following a major lending partner, ING Direct, leaving the mortgage broker space in 2013. Another chief concern (and one that many brokers may hope the scheduled relicensing period will help cull) is the number of rogue players damaging the reputation of the more professional and dedicated brokers. Still, our poll participants continue to laud the efforts put forth by their current brokerages, with 70 per cent rating their current affiliate houses eight out of 10. And although independent brokers are still blazing their own path – as evidenced in our cover feature in this very issue – over 50 per cent of current independent brokers would consider joining a national network in the next 12 months. Read on for a glimpse of how your peers view the current state of the industry because chances are their concerns align with your own. 32 | MARCH 2014
WHAT PERCENTAGE OF YOUR LOANS WILL BE PUT THROUGH A BANK?
53.97% 0-25%
3.17% 34.92% 26-50%
76-100%
7.94% 51-75%
WHAT PERCENTAGE OF YOUR LOANS WILL BE PUT THROUGH A NON-BANK?
9.52%
25.40% 76-100%
0-25%
15.87% 26-50%
49.21% 51-75%
MORTGAGEBROKERNEWS.CA
POLL
POLL
WHAT ARE YOUR BIGGEST CONCERNS OVER THE NEXT 12 MONTHS?
WILL YOU BE HIRING NEW STAFF OVER THE NEXT 12 MONTHS? Yes - 28.57% No - 71.43%
58.73%
36.51%
Stricter underwriting guidelines and poorer service from lenders
Fewer lenders operating through the broker channel
33.33%
30.16%
Economy/new home sales
Consumer/household debt
25.40%
23.81%
IF YOU ANSWERED NO, WILL YOU BE REDUCING STAFF?
Yes - 6.25%
Reduced revenue due to lower commissions
Industry reputation damaged by rogue brokers
20.63%
19.05%
Meeting the requirements of new regulations/licensing
House prices falling
17.46%
3.17%
Interest rates rising
My brokerage failing
No - 81.25% Only if market conditions worsen - 12.50%
POLL
DO YOU THINK YOU MIGHT LEAVE THE BROKER INDUSTRY IN THE NEXT 12 MONTHS? Yes - 3.17%
No - 96.83%
MARCH 2014 | 33
FEATURE / BROKER SENTIMENT POLL
POLL
HAVE MORTGAGE RULE CHANGES OVER THE LAST YEAR HAD A POSITIVE OR NEGATIVE EFFECT ON YOUR BUSINESS? Negative - 90.32%
Positive - 9.68%
POLL
POLL
ON A SCALE FROM ONE TO 10 (ONE BEING POOR, 10 BEING PERFECT) HOW DO YOU FEEL THE FEDERAL GOVERNMENT IS HANDLING THE ISSUE OF MORTGAGE REGULATIONS?
WHAT DO YOU THINK WILL BE THE BIGGEST CHANGE IN THE INDUSTRY OVER THE NEXT 12 MONTHS?
1 - 7.94% 2 - 17.46% 3 - 17.46%
4 - 11.11% 5 - 14.29% 6 - 11.11%
34 | MARCH 2014
7 - 17.46% 8 - 3.17%
41.27%
38.10%
Big bank mobile sales teams competing with brokers
Remaining banks leaving the broker channel
25.40%
22.22%
New commission structures
Brokers as multi-product sellers
31.75%
25.40%
A decline in home sales
Lenders moving towards efficiency bonuses as opposed to volume bonuses
15.87%
6.35%
A steep decline in overall broker numbers
Brokers charging upfront fees
MORTGAGEBROKERNEWS.CA
POLL
ON A SCALE OF ONE TO 10 (WITH ONE BEING THE LOWEST) HOW WOULD YOU RATE YOUR CURRENT BROKERAGE?
1 - 0% 2 - 0% 3 - 0% 4 - 0% 5 - 7.94% 6 - 1.59% 7 - 20.63% 8 - 26.98% 9 - 19.05% 10 - 23.81%
POLL
WHAT PERCENTAGE OF YOUR BUSINESS WILL COME FROM: Residential 98.39% Commercial 19.35% HELOCs 25.81% Insurance 12.90% Reverse mortgages 3.23% Equipment leasing 3.23% Referral (database) 67.74% Referral (referral partners) 69.35%
MARCH 2014 | 35
FEATURE / BROKER SENTIMENT POLL
POLL
WHICH SERVICES WILL BE YOU BE TAKING ON OR LOOKING TO BUILD OVER THE NEXT 12 MONTHS? Financial planning - 28.57% Real estate - 22.22% HELOCs - 22.22% Mortgage insurance - 41.27% Commercial- 17.46% Equipment leasing - 12.70% Private lending - 25.40% Home, auto or life insurance - 7.94% Private mortgages - 49.21% Construction - 19.05% Development - 9.52% POLL
PLEASE RANK IN ORDER OF IMPORTANCE (ONE BEING MOST IMPORTANT) EACH MARKETING STRATEGY THAT YOU PLAN TO USE IN 2014. Social networking
Email Newsletters 1: 29.51% 2: 11.48% 3: 14.75% 4: 6.56% 5: 8.20% 6: 1.64% 7: 9.84% 8: 4.92% 9: 9.84% 10: 3.28%
36 | MARCH 2014
1: 22.95% 2: 18.03% 3: 9.84% 4: 11.48% 5: 9.84% 6: 3.28% 7: 8.20% 8: 4.92% 9: 4.92% 10: 6.56%
Ads in print publications 1: 10.71% 2: 8.93% 3: 8.93% 4: 10.71% 5: 8.93% 6: 1.79% 7: 12.50% 8: 10.71% 9: 8.93% 10: 17.86%
Direct mail
Blogging
Yellow pages
Community events/trade shows
1: 17.24% 2: 6.90% 3: 13.79% 4: 10.34% 5: 6.90% 6: 12.07% 7: 5.17% 8: 10.34% 9: 6.90% 10: 10.34%
1: 17.54% 2: 0% 3: 7.02% 4: 1.75% 5: 8.77% 6: 3.51% 7: 7.02% 8: 5.26% 9: 12.28% 10: 36.84%
1: 10.34% 2: 5.17% 3: 13.79% 4: 8.62% 5: 10.34% 6: 10.34% 7: 6.90% 8: 13.79% 9: 5.17% 10: 15.52%
1: 6.90% 2: 6.90% 3: 15.52% 4: 3.45% 5: 15.52% 6: 10.34% 7: 8.62% 8: 10.34% 9: 5.17% 10: 17.24%
MORTGAGEBROKERNEWS.CA
Ads on TV or radio 1: 16.98% 2: 5.66% 3: 9.43% 4: 3.77% 5: 5.66% 6: 3.77% 7: 7.55% 8: 3.77% 9: 9.43% 10: 33.96%
Seminars 1: 12.07% 2: 3.45% 3: 12.07% 4: 13.79% 5: 17.24% 6: 10.34% 7: 12.07% 8: 5.17% 9: 1.72% 10: 12.07%
Rate sites 1: 14.04% 2: 3.51% 3: 8.77% 4: 5.26% 5: 5.26% 6: 12.28% 7: 5.26% 8: 3.51% 9: 12.28% 10: 29.82%
POLL
WHAT PERCENTAGE OF YOUR BUSINESS WILL COME FROM REPEAT OR REFERRAL CLIENTS?
20.63% 0-25%
12.70% 76-100%
Other
1: 20.59% 2: 5.88% 3: 5.88% 4: 8.82% 5: 8.82% 6: 8.82% 7: 2.94% 8: 2.94% 9: 11.76% 10: 23.53%
30.16% 26-50%
36.51% 51-75%
YOUR SOURCE FOR • PERSONAL LOANS • 2 ND MORTGAGES • CONSTRUCTION MORTGAGES
www.tribecca.ca 261 Sheppard Avenue West | Toronto, Ontario | M2N 1N4 Tel: 416.225.6900 | Fax: 416.225.6905 | Licence # 12225
It’s time for a new perspective.™
MARCH 2014 | 37
FEATURE / BROKER SENTIMENT POLL
MORTGAGEBROKERNEWS.CA
POLL
POLL
RATE THE INDUSTRY (LENDERS, ASSOCIATIONS, NETWORKS) IN TERMS OF PROMOTING THE BROKER CHANNEL TO CONSUMERS: ONE BEING INEFFECTIVE; FOUR BEING VERY EFFECTIVE
DO YOU USE ANY OF THE FOLLOWING SOCIAL MEDIA PLATFORMS?
39.68%
INEFFECTIVE
N/A
1.59%
LENDERS
36.51%
58.73%
4.76% VERY EFFECTIVE
SOMEWHAT EFFECTIVE
17.46% EFFECTIVE
25.40% 41.27%
88.89%
22.22%
SOMEWHAT
INEFFECTIVE
EFFECTIVE
ASSOCIATIONS
1.59%
6.35% 22.22% EFFECTIVE
N/A
7.94%
36.51%
14.29%
EFFECTIVE
SOMEWHAT EFFECTIVE
NETWORKS 23.81%
VERY EFFECTIVE
38 | MARCH 2014
80.95%
VERY EFFECTIVE
14.29%
9.52%
INEFFECTIVE
15.87% N/A
31.75%
canada’s premier non-bank Lender We understand your financing needs. We offer fast turnaround and structures that can open new opportunities for your business. Single family homes Condo’s Rentals Investors Bridge and term financing Infill construction financing First and second mortgages
Phil Fiuza Managing Director, Single Family Mortgages
Mobile (416) 561-9224 Office (416) 607-4209 phil.fiuza@atriummic.com
Atrium is listed on the Toronto Stock Exchange ( TSX: AI ) Atrium mortgAge investment corporAtion is mAnAged by cAnAdiAn mortgAge cApitAl corporAtion – lic. 10284
BUSINESS STRATEGY / SECRET #13
A GUIDE TO
SMARTER
MARKETING
Here’s another secret highly effective brokers keep close to their vests, writes Doren Aldana SECRET #13: THEY BUILD A SOLID FOUNDATION WITH MULTIPLE MARKETING PILLARS. One of the most common marketing mistakes I see mortgage professionals make is that they only depend on one, two or three sources for business. When working with consulting clients, I always ask, “What specific strategies are you currently using to generate business?” Invariably, unless they are a top producer, they’ll respond by saying,
40 | MARCH 2014
MORTGAGEBROKERNEWS.CA
“Oh, I get most of my business through referrals.” Now what’s the problem with this picture? Imagine for a moment a table with just one leg. That’s right, one leg holding up the entire table. It looks pretty unstable doesn’t it? Now add another leg to the table. How stable is it now? Now add another. How stable is it now? How about adding five more legs evenly dispersed under that table? What just happened to the stability of the table? My point is simple. The tabletop represents your revenue, sales and profits. The legs represent the lead streams flowing into your business. The more streams or sources of revenue that support your business, the more stable your sales and profits will be. In other words, many streams merged together become a raging revenue river! How do you think the Parthenon has stood the test of time for over 3,000 years? It has endured through the ages because it is supported by multiple pillars. That’s what I want for you and your mortgage business. I want you to build a Power Parthenon of Perpetual Profits. Say that 10 times fast! I don’t care how significant your primary source of business might be; if that is the only source of business you are relying on, you are still a tipsy table with one leg and you’re setting yourself up to fall! That’s why the worst number in business is one. Relying on one lead source, one referral partner, one marketing media, one marketing system, one target market, etc., leads to instability. If you don’t believe me, let me ask you this: what would happen to your income if that one lead source dried up?
Month 1 Monthly direct-mail client newsletter
Month 7
Renewal campaign
Month 2 Annual mortgage review campaign
Month 8
Referral contest
Month 3 Weekly video tips via email to clients
Month 9 Realtor marketing campaign
Chances are you’d be out of business. On the other hand, what would happen to the stability and profitability of your business if you were to systematically add one new marketing leg or pillar to your business each month for the next year? For example: Just imagine the possibilities once you’ve set up all 12 of those lead generation pillars. Imagine how much more stable and profitable your business would be. That’s the power of building a solid foundation with multiple marketing pillars. Diversification builds stability. At this point, you’re probably thinking, “Doren, I’m already crazy busy. I don’t have time to do all this stuff!” To which I would respond, “Stop lying to yourself.” You have the same amount of time as everyone else on planet earth: 8,765 hours a year. The difference between superstar mortgage pros and all the rest is how they use their time; top producers invest it, low producers waste it. It’s not how many hours you put in, but what you do with your hours that counts. So stop telling yourself the lie that you don’t have enough time. Instead, tell yourself the truth: you always have enough time for what matters most. In next month’s 14th secret, you’ll learn why most mortgage advertising doesn’t work and how Superstar mortgage professionals get 200-1,000 per cent higher response rates than average mortgage professionals. Stay tuned for this upcoming article where you’ll learn the secrets to improving your return on your ad dollars.
Month 4 Weekly video tips via email to realtors
Month 10 Employee mortgage benefits program
Month 5
Month 6
Wow factor formula campaign
Birthday call campaign
Month 11
Month 12
Google pay-per-click (PPC) campaign
Facebook PPC campaign
Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach and has won the “Best Industry Service Provider” award two years in a row at the 2012 and 2013 Canadian Mortgage Awards. Since 2005, he has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions. For a free copy of Doren’s new CD titled, “21 Secrets of Superstar Mortgage Brokers,” visit: www. SuperstarMortgageBroker.com
MARCH 2014 | 41
FEATURE / CMA FINALISTS
AND THE FINALISTS FOR THE
2014 CMA AWARDS ARE...
A challenging market comes with a host of obstacles, but leading brokers and other industry players are still reaching unparalleled heights. This year we honour the best and the brightest - those who have been shortlisted for the industry’s highest accolades. But hold on just a second. Before our winners can be announced, our impartial judges – who will work alongside the ballot accountants, PWC – must consider each of the finalists. Today’s leaders and tomorrow’s greats are all represented across the various categories and although each of the frontrunners deserves to be recognized and commended there can be only one winner. Have a look below and get to know the finalists. The winners will be announced and honoured at the Canadian Mortgage Awards on May 9 at the Liberty Grand in Toronto.
ALTERNATIVE LENDING, MORTGAGE BROKER OF THE YEAR • Gay Andrews, Caplink Financial Corporation • Anne Brill, Centum Metrocapp Wealth Solutions Inc. • Greg Domville, DLC Plan B Mortgage Services • Andre L’Ecuyer, DLC, Neighbourhood Dominion Lending Centres • Shawn Allen, Matrix Mortgage Global • Adam Hale, MCC, Mortgage Centre Canada, Hale Grifa & Associates • Graeme Moss, Verico Fair Mortgage Solutions
BEST ADVERTISING • • • • • • •
Bridgewater Bank Dominion Lending Centres First National Financial LP MCAP Mortgage Architects Verico Butler Mortgage Verico Financial Group Inc.
BEST BRANDING • • • • • • • • • •
Centum Streetwise Mortgages DLC BTB Mortgage Solutions First Foundation Residential Mortgages Invis - Knockout Mortgages MCC, Mortgage Brokers City Inc. (Mortgage Brokers Ottawa) Mortgage Teacher Safebridge Financial Group Verico Dreyer Group Mortgages Verico iMortgage Solutions Verico MBT
BEST LENDER BDM OF THE YEAR • Naresh Thakar, B2B Bank • Nicole Zambito, CFF Bank formerly Moncana • Sam Rizzo, CMLS • Jody Comeau, First National Financial LP • Randy Binstock, Home Trust Company • Gail Temple, National Bank • Camillo Delli Pizzi , Pillar Financial • Alain Rousseau, Radius Financial • Scott Carroll, RMG Mortgages • Brian Mason, Street Capital Financial Corp
Cailin Phillips, Equitable Bank Josie Milanetti, Equity Financial Trust Lou Tavernese, Paradigm Quest Janice Tinker, Radius Financial Mark Agla, RMG Mortgages Tom Wojciechowski, Street Capital Financial Corp
BEST NEWCOMER, INDIVIDUAL AGENT OR BROKER • • • • • • • •
Chris Turcotte, Centum Mortgage Choice Corp Kris Grasty, DLC Canadian Mortgage Experts Sean Smith, DLC Estate Mortgages Jennifer Huynh, First Foundation Residential Mortgages Erin Haiste, Mortgage Architects Epic Mortgage Solutions Jennifer Gaudet, Mortgage Intelligence Karyn Medeiros, TMG Mortgages by Karyn Steven Levine, True North Mortgage
BEST NEWCOMER, LENDER BDM • • • • • • • •
Corey Cox, Equitable Bank Lee Barnett, Equitable Bank Cristina Minatel, Home Trust Company Bart Rygal, MCAP Sarah Rogge, Merix/Lendwise Kamran Daryushnejad, National Bank Ian Tenggardjaja, Street Capital Financial Corp Matthew Lirantzis, Street Capital Financial Corp
BEST NEWCOMER, LENDER UNDERWRITER • • • • • • • •
Angela Froese, Equitable Bank Alan Colby, Home Trust Company Tyler Trompetter, Home Trust Company Nicole Cabral, MCAP Emily McLaughlin, Optimum Mortgage Ashley Shewchuk, Paradigm Quest John Hamilton, Paramount Equity Solutions Steve Sung, TD Canada Trust Broker Centre
THE LIBERTY GRAN
BEST LENDER UNDERWRITER OF THE YEAR • Jim Stamatakos, CFF Bank formerly Moncana
42 | MARCH 2014
• • • • • •
BEST NEWCOMER, MORTGAGE BROKER FIRM
• Centum Concepts Ltd • Trent Glover & Corey Klassen, DLC Powerhouse Mortgage • MCC, Total Mortgage Source 360 • Mortgage Intelligence, L A Mortgage Team • Mortgage Teacher • TMG Orca Pacific Alliance • Verico Definitive Mortgage Group Inc
MORTGAGEBROKERNEWS.CA
BEST COMMERCIAL MORTGAGE BROKER OF THE YEAR
BEST INDUSTRY SERVICE PROVIDER
• Chad Robinson, 360 Best Interest Mortgages Inc. • Mike Chiu, Capital West Mortgage Inc. • David Beckingham, DLC Commercial Capital • Dave Bilton, Dominion Lending Centres • Sandy Harrington, IC Funding Financial • Michel Durand, Mortgage Alliance Commercial Canada
• • • • • • • • • •
BEST COMMUNITY SERVICE EFFORTOF THE YEAR Paul Therien, Centum Financial Group Inc. Graham Reimer, DLC Mortgage Excellence Deb White, DLC White House Mortgages Gary Mauris, Dominion Lending Centres Carman Alpaerts, Invis / Any Mortgage For You Stephen Gregory, Isaix Heidi Dandurand, Mortgage Architects Central Alberta Mortgages • Meryll Dreyer and Jared Dreyer, Verico Dreyer Group Mortgages • • • • • • •
BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE • DLC Geoff Lee Mortgage Group • DLC White House Mortgages • Invis -Team Rob Regan-Pollock • Loewen Group Mortgages • MCC, Mortgage Centre Canada, Hale Grifa & Associates • Verico - MortgagePal.Ca • Verico Gibbard Group Financial • Verico The Mortgage Management Group Inc. / Calum Ross Mortgage
Appraisal Institute of Canada CMLS Genworth HomEquity Bank Marlborough Stirling Canada MortgageMarketingCoach.Com MPP - Mortgage Protection Plan Street Capital Financial Corp Teranet Inc The Lion’s Share Group
BEST INTERNET PRESENCE • MortgageResource.ca • Canadian Mortgage Hangout TV (CMHTV) • Dominion Lending Centres • Mortgage Intelligence, MortgageSuperHero.Com
MORTGAGE BROKER OF THE YEAR, 25 EMPLOYEES OR MORE • Anne Brill, CENTUM Metrocapp Wealth Solutions Inc. • Dave Trithart, DLC 1st Financial Link • Collin Bruce, DLC Mortgage Mentors • Bill Harries, MCC, Sky Financial Corporation • Anthony Contento, Sherwood Mortgages - Your Mortgage Architects • Dan Eisner, True North Mortgage • Nick L’Ecuyer, Verico The Mortgage Wellness Group
MORTGAGE BROKER OF THE YEAR, FEWER THAN 25 EMPLOYEES • Blair Anderson, Anderson Associates • Vittorio Oliverio, Centum Professional Mortgage Group Inc • Tracey Valko, Dominion Lending Centres Platinum Group • Gord McCallum, First Foundation Residential Mortgages • Rosa Bovino, Invis - Knockout Mortgages • James Loewen, Loewen Group Mortgages
ND | MAY 9 , 2014 EMPLOYER OF CHOICE
• • • • • • • • •
Centum Financial Group Inc. DLC Canadian Mortgage Experts First National Financial LP MCC, Mortgage Centre Canada Mortgage Architects Paradigm Quest Street Capital Financial Corp TMG - The Mortgage Group Verico Premiere Mortgage Centre
th
• Daniel Natareno, Mortgage Intelligence 4D Financial • Jessi Johnson, Verico MBT • Calum Ross, Verico The Mortgage Management Group Inc. / Calum Ross Mortgage
MORTGAGE BROKERAGE OF THE YEAR, 25 EMPLOYEES OR MORE • • • • • • • • •
Axiom Mortgage Solutions DLC The Mortgage Source Neighbourhood DLC MCC, Mortgage Brokers City Inc. (Mortgage Brokers Ottawa) MCC, Sky Financial Corporation Quantus Mortgage Solutions Real Mortgage Associates - RMAI Sherwood MortgagesYour Mortgage Architects Verico The Mortgage Professionals
MORTGAGE BROKERAGE OF THE YEAR, FEWER THAN 25 EMPLOYEES • • • • • • •
DLC Mortgage Excellence DLC Regional Mortgage Group Invis - Knockout Mortgages Jayman Financial Loewen Group Mortgages Verico Excel Mortgage Canada Verico K-W Mortgage Inc.
NATIONAL BROKER NETWORK OF THE YEAR • • • • • • • •
Axiom Mortgage Partners Centum Financial Group Inc. Dominion Lending Centres Invis / MI MCC, Mortgage Centre Canada Mortgage Architects TMG - The Mortgage Group Verico Financial Group Inc.
LIFETIME ACHIEVEMENT AWARD • TBA
THE LIBERTY GRAND | MAY 9th, 2014 MARCH 2014 | 43
FORUM / COMMENTARY
SOCIAL MEDIA
SHOWDOWN
MortgageBrokerNews.ca provides an open forum for brokers to comment, pontificate, praise, blast and generally sound off on the issues of the day. And our readers are at it again, as a major network embarks on a social media partnership with Urbo.me. The ensuing debate is all about the merits of farming out that communication I’ve been using Urbo.me for about a year now, and I really appreciate the timing and content that they have provided to my social media outlets. My followers, potential clients and active clients and friends have enjoyed and appreciated it, which is evident in their communication to me in comments and shares. Urbo.me still encourages you to post as well, which I do all the time for that personal communication. However, when I forget or don’t have time to post for a week they make it so that I don’t look disconnected and the online world doesn’t forget who I am. The social media world needs constant food to stay alive. Online attention span isn’t very long so there is a need for constant communication. To be the top-producing real estate agent, I have to give advice and information and they help by keeping me constant :- ) -Michele Cummins I have to go on record here. Paul, I mean no disrespect at all, but this is one of the worst possible ways you can get involved in social media. You can’t automate authenticity. People don’t want to see autotweets from your agents, they want to get to know your agents. Huge difference. Kilted Broker, Jackson Middleton
44 | MARCH 2014
MORTGAGEBROKERNEWS.CA
@kiltedbroker - I understand your point of view, I had much the same one initially, BUT, I did the research and here is the deal... These are not posts just out of the can, they are posts that are relevant to the consumer in the area which the broker resides. The content is very well written, has impact, and is posted as the agent. Yes, they are not personal posts about their lives, but then that is what they are encouraged to continue doing. The challenge is that there is a lot of information out there, and most brokers typically only regurgitate what is in the news, or make posts about rates, and of course do personal postings. -Paul Therien @ Paul Therien, don’t take it the wrong way Paul, by chatter I meant regurgitation of current news and pretty much the same stuff as most of what I see on
social media is just that, BOC announcement and 17 tweets show up saying more or less the same thing. Sure there may good content but I think Jackson is pointing out is that to stand out I need to see the individual human beings take on a subject: Why I loath moving. Why I hate spam. Why I love the Blue Jays. Seriously the 18th tweet on no change in prime rate does nothing for me. But I clearly said if you are doing nothing jump on this. That’s the smart move. Good is not the enemy of great, so really I am endorsing it for non-users. -Ron Butler Our company has used Urbo now for over six months and we are completely happy. I have had MORE positive comments about our site, content and ranking in six months than I had in six years. -Alyson Thiessen
A SENSE OF...
URGENCY
As a broker, you’re under a lot of pressure. You have to respond to the needs of your clients at a moment’s notice. At Optimum Mortgage, we are dedicated to keeping our brokers informed of the status of their deal every step along the way. We guarantee you a response time within 24 hours of submitting your deal. And for those times where you just can’t wait, pick up the phone and give us a call. We have a no voicemail policy at our underwriting centre and would be happy to help.
PH 1.866.441.3775 www.OptimumMortgage.ca
YOUR SENSIBLE LENDING PARTNER
MARCH 2014 | 45
SOCIAL MEDIA / BLOGGING
BLOGGING FOR
BUSINESS
Brokers are more comfortable reading balance sheets than writing blogs, but the latter is increasingly key to generating organic leads on the Web, writes industry expert Maggie Crowley
46 | MARCH 2014
MORTGAGEBROKERNEWS.CA
A great website isn’t really that great if no one visits and uses it. One key indicator of performance is the amount of traffic and engagement it receives. I get a lot of questions from brokers asking how to create a website that really maximizes its potential. My answer? Blogging. One of the most effective (and economical) ways to increase the number of people visiting and using your website is through financial blogging. On average, we know that about 90 per cent of the traffic a broker’s website receives can be broken down into two groups: prospective clients who visit your site to learn more about your firm and your services and; existing clients who want to access their account information and get updates on your firm. From a web marketing perspective, your website can—and should—cater to both of these groups. A blog gives you the ability to maintain client relationships while answering questions and nurturing prospective clients. Just to be clear, here’s a quick definition of what a blog really is according to Oxford Dictionaries: ‘A personal website or web page on which an individual records opinions, links to other sites., etc. on a regular basis.’ Simply put, a blog is a section of any website that is updated with valuable information on a regular basis. The most successful financial blogs offer a variety of content (articles, video clips, images, infographics, white papers, etc.) that is targeted towards a specific audience. Maintaining a financial blog requires the time and effort necessary to publish original content but the rewards of blogging offer brokers a pretty hefty return on the investment. From a marketing perspective there are two primary benefits. The first and, arguably most important, reward of blogging is all about search engine optimization. By now, you’ve probably heard of the term (SEO) – at its core, SEO is the process of improving the visibility of a website in a search engine’s results. The earlier and more frequently a site appears in the search results list, the more visitors it will receive from the search engine’s users. SEO isn’t that big of a deal until you consider the number of Canadians who turn to Google for help when making a buying decision. Director of Google Canada Chris O’Neill pegs that number at upwards of 86 per cent. Canadians seeking a new mortgage broker begin looking for more information online first.
WHERE DO BROKERS GET CUSTOMERS?
Q. Has your company ever acquired a customer using a lead from the following sources? (*graph illustrates ‘Yes’ responses) 80% 70% 60%
Banking/financial advice services
50%
Marketing agency
40%
Other professional consultants
30% 20% 10% 0%
Blog
Google+
Search engines such as Google really love the fresh and original content that is published on a blog, so websites with a blog regularly rank higher on a search results page. What does that mean for you as a broker? Basically, blogging is a great tool to help the people who are looking for you online (ie, potential clients) find you. Besides the technical side of SEO and creating fresh content for your website, blogging allows brokers to connect with their clients and prospects and build a unique rapport that is incredibly costand time efficient. Financial blogging provides a platform for you to position yourself as an expert in the industry. Picture this scenario: a broker who specializes in creating retirement plans publishes a blog article entitled, ‘Six steps to a worry-free retirement.’ A well-crafted, informative article will answer reader’s retirement questions and, the broker who authored this post automatically becomes an expert in the eyes of the reader. The impact on website traffic is remarkable for mortgage brokers who blog. According to Hubspot, companies that blog receive 55 per cent more website visitors. The results don’t stop there; Hubspot also reports that 57 per cent of those companies have acquired actual paying clients from their blog. Although the benefits are tangible, the majority of brokers have yet to take advantage of a financial blog. Last year, Advisor Websites ran a poll with WealthManagement.com and asked questions about financial web marketing. The results reveal a huge opportunity: Only 5 per cent of financial professionals are blogging for business. MARCH 2014 | 47
SOCIAL MEDIA / BLOGGING
MORTGAGEBROKERNEWS.CA
Ready to get started with you financial blog? Based on trial and error from my own blogging experience, here are four ideas to make sure every piece of content you publish on your blog is successful:
IRRESISTIBLE TITLE Maggie Crowley is the Vancouverbased marketing coordinator for AdvisorWebsites. com, a global leader in website software for financial services. She educates industry professionals on how to maximize the potential of a strong web presence.
There is a saying that those who write for an online audience should spend 10 per cent of their time writing the body of an article and 90 per cent of their time creating the perfect, irresistible title. While I don’t necessarily agree with that theory (if the title is that great, surely readers will be disappointed with the actual writing, right?), it does get the point across: the title is important. A few tips for creating an irresistible title: • Use action words • Explain what the article is about • Know your audience
CREATE QUALITY CONTENT Quality content is 100 per cent based around your audience. Write with your readers in mind. Get into the mind of your readers: what are their problems, what do they do for fun, what’s interesting to them, and mostly, how can you help? As a broker, use your blog to share your knowledge and expertise. The Internet provides a world of opportunity to present yourself as a thought leader in the mortgage brokering community. Use this to your benefit by explaining current events or answering frequently asked questions.
BE REAL Online readers generally appreciate not being sold to. Be real, speak from the heart and don’t be afraid to show flaws. Another tip? Instead of talking about your audience, talk to them. The easiest way to do this is to use words such as “you, we, and me.” If you treat writing more like a conversation than a textbook, readers are more likely to enjoy the experience. And actually read it.
SHARE ON SOCIAL Don’t assume that your ideal target audience is reading your blog just because you are publishing awesome blog content. First, you need to let them know your blog exists. Don’t be shy about spreading the word – especially if your blog is new. By using a tool like Hootsuite, you can streamline your social media efforts. Hootsuite offers a free service that allows advisors to create and schedule social media posts in advance.
MEASURE YOUR SUCCESS Measuring the number of views your blog receives can be really insightful. Here’s the simple truth: tracking the performance of your financial blog is vital to identifying whether it’s actually doing its job of generating traffic to your website. If not, then you know it’s time to make some changes. Two of the most important metrics that determine the success of your blog are individual post views and traffic sources.
48 | MARCH 2014
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BUSINESS STRATEGY / SURVIVAL
BUSINESS
SURVIVAL: THE BATTLE FOR
RELEVANCE
Even some of the greatest brands are becoming obsolete, but it is possible to avoid their fate. Michael McQueen outlines the 10 keys to winning the battle for relevance in the years ahead
50 | MARCH 2014
MORTGAGEBROKERNEWS.CA
Recent years have seen scores of iconic businesses and brands fall by the wayside. The demise of Kodak, SAAB, Borders and Blockbuster leaves us with little doubt – a shift is happening and no organisation or brand is immune to extinction. As once-lucrative revenue models increasingly come under siege and distribution channels that have been stable for decades crumble before our eyes, it is becoming apparent that the rules of business have changed; the goalposts have been moved. In the financial services sector, a raft of shifts are disrupting the status quo in profound and fundamental ways. These include: Technological shifts
As consumers have greater power and access to information than ever before, the role of the gatekeeper is more threatened. Simply providing a transaction interface as a broker, agent or adviser is no longer enough.
Market shifts
As the financial services sector becomes increasingly crowded with non-traditional players, incumbents must adapt to the new competitive environment rather than assuming their historical success will guarantee future survival.
Demographic shifts
As a new generation of consumers and clients known as Gen Y make their presence known, it is critical that businesses and brands take steps to understand and engage this group. After all, they are a massive cohort (9 million in Canada) who are buying different things in different ways and for different reasons than older generations.
Legislative shifts
The final major shift disrupting the financial services industry is that of regulatory change. While governments continue to move the goalposts as they have in recent years, financial services brands and organisations have little choice but to respond.
Amid these disruptive headwinds, the words of Charles Darwin ring true: “It is not the strongest that survive, nor the most intelligent. Rather, it is those who are most responsive to change”. The challenge for every financial services business today is to evolve in the face of rapid and widespread change. Simply relying on conventional wisdom or assumptions that have held true in the past will set any brand or organisation on a collision course with obsolescence. Below are 10 keys to winning the battle for relevance in the years ahead:
1
Change before you are forced to Most businesses wait to innovate until their hand is forced. As Steve Jobs once observed, if you are not willing to cannibalise your own business, someone will do it for you. Consider how Blackberry and Nokia have done just this in recent years. Rather than recognising the seismic shifts afoot in their industries, both of these tech giants essentially relied on their historical size and market positioning until the writing on the wall was too dire to ignore. In contrast, look at how Encyclopaedia Britannica started preparing for the post-print age as far back as the mid-1990s and therefore had shifted entirely away from their reliance on paper-based products by the late 2000s.
In the financial services sector, a raft of shifts are disrupting the status quo
2
Become clear about the business you are actually in Many businesses fall into the trap of defining themselves by the products they sell or the markets they are operating in – all the while losing sight of who they are and why they exist. Consider how Kodak did this and veered off track in the 1970s and 1980s. Rather that remaining focused on their core DNA as a memory preservation company, Kodak started to see themselves as a film company – a paradigm that left them unwilling and unable to embrace the post-film world.
3
Prune dead wood Any gardener knows that restoring vitality to a garden requires pruning away the old in order to make way for the new. It is the same in business. Consider how global scientific company DuPont have MARCH 2014 | 51
BUSINESS STRATEGY / SURVIVAL
The old marketing adage is true: it is better to be different than better
consistently stayed ahead of the curve by being willing to prune away even their most successful past cash cows, such as Nylon, Lycra and Teflon. Sony have also recognised the importance of this in turning around their flagging fortunes. The end of their decade-long marriage with Ericsson and the spinning off of entire business units is an attempt to restore the tech giant’s agility and innovative flair.
4
Question everything The moment any business or leader thinks they have made it, they have passed it. Never fall into the trap of feeling that you are too big to fail or that what has worked in the past will work in the future. Question everything and spare no sacred cows. Consider how IBM did this in the early 1990s and saw one of the most dramatic turnarounds in recent corporate history.
5
Re-engineer outdated systems and processes There is a big difference between being in a groove and being in a rut. Many businesses need to evaluate their internal systems and processes honestly. Which of them is outdated, inefficient or simply the ‘way things have always been done around here?’ Harley Davidson realised the importance of this in 2009 amid a severe sales slump and set about re-engineering their internal systems. This exercise saved them $275m in annual running costs and resulted in the business regaining its nimble responsiveness.
Michael McQueen is the author of the newly launched book, Winning the Battle for Relevance. He is a leading social commentator and three-time bestselling author. Winning the Battle for Relevance is available in bookstores across the country and through Michael McQueen’s website: www. MichaelMcQueen.net
52 | MARCH 2014
6
Beware of biting off more than you can chew While adopting new products and services is a key way of regaining relevance in a flagging business, beware of trying to change too much too quickly. Consider how Billabong fell into this trap in the late 2000s by acquiring a long list of other brands in the marketplace – a fateful step that has played a key role in their loss of focus.
7
Become ruthlessly customer-centric It is critical that you stay focused on how the needs, desires and preferences of consumers are changing. Your strategy can never be a ‘set and forget’ one. Geoff Bezos has a novel way of doing this at Amazon. At every board meeting he leaves an empty chair, which represents Amazon’s customer.
MORTGAGEBROKERNEWS.CA
No decision is made without the active consideration of how it will impact on the person in that empty chair.
8
Look to ‘imovate’ The term coined by leading business thinker Oded Shenkar highlights the values of innovating through imitation. He suggests that others may be doing things you can learn from. What practices and ideas are competitors using that you could incorporate and do differently or better? Consider how Lego did this in embracing video games; how Samsung did it in the development of their smartphone range; and how even Apple did it by not inventing the MP3 player but rather making it sexy.
9
Encourage dissension within the team/organisation The most valuable source of innovation in any time is the individual who has fresh eyes or a dissenting view. Are you allowing and encouraging those views to be heard? IKEA did and the whole basis of their flat-pack business model came about as a result.
10
Seek a point of difference The old marketing adage is true: it is better to be different than better. Rather than trying to outdo the competition in your market, how can you pursue a new market in a new way? Consider how Cirque du Soleil did just this and managed to build a flourishing business in a dying circus industry.
EYES ON THE HORIZON Setting up a brand or organisation for enduring relevance involves a principle every experienced surfer understands well. In order to catch the perfect wave, a good surfer knows the importance of keeping their eyes firmly on the horizon. While a wave is still forming a long way off in the distance, surfers know that this is the time to move – to paddle out and get in position. Move too late or not at all and you’ll simply get washed up as the wave crashes over you. In much the same way, winning the battle for relevance is about anticipating, preparing for and embracing change, no matter how uncomfortable or confronting it may be.
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ANALYSIS
14
BROKER MISCONCEPTIONS
We all tell ourselves white lies but in the mortgage broker business it’s best to set aside your misconceptions writes Michael Sjerven of Verico Vivid Mortgage who presents 14 fallacies brokers should forget.
“I’ll get the renewal” Many brokers believe they will be able to retain clients at renewal, when the reality is that client retention among most lenders is upwards of 90%.
“I need the approval quickly in order to keep the deal” With some lenders offering a 4-hour turnaround time, many brokers feel they need to get same day commitments in order to compete with the banks or other brokers. The reality is that if you set client expectations upfront that it may take a few days to get approval then this should not be a major issue.
“I need to send to a bank to comfort the client” If you give clients the option of a lower rate/penalty vs bank, most would opt for the lower rate and many have no preference about who the lender actually is. All it takes is a little explanation and guidance to help your client decide which product best suits his needs.
54 | MARCH 2014
“I don’t believe in trailer fees” With most renewals going to the lenders, how would you like to keep originating new business year after year just to stay afloat? Taking upfront commission only is very short-sighted and may affect your business for many years ahead. A great new option some lenders are offering is full compensation upfront with a fee also paid on renewal.
“Refinancing is key to my business” Refinancing is getting more difficult to do with lower LTV’s, higher bank retention, and more stringent qualification standards. Also, most people now have low mortgage rates and/or HELOC’s utilizing their home equity already set up. Brokers may need to look at other areas of business in order to prosper moving forward.
“Homes are a good investment” A primary residence (home) was never supposed to be an investment, and should be viewed as more of a place to live and build long term equity. Benjamin Tal recently stated that he sees the housing market flat in the next 10 years, meaning homeowners cannot expect to see home values rise in the next decade.
MORTGAGEBROKERNEWS.CA
“I don’t sell rate”
“I only want to do A-business”
With rates sites and the commoditization of mortgages becoming more prevalent, brokers are now having to focus more on rate than ever before. Many high volume brokers are buying down the rates and taking half the commission, along with paying $80+ per online lead, just to get the business. Good or bad, this may be more of a trend moving forward.
With the banks competing more than ever, B and private business are the primary advantages brokers have over the banks. If you are unsure how to do B-deals you can always co-broker to learn the process. B-business will be a staple for many long-time brokers for many years to come.
“My business is based 100 per cent on referrals” This works for many brokers now, but with technology rapidly changing brokers may want to add some different marketing strategies to the mix.
“Large brokerages have a competitive edge” Although lender status is important, many smaller brokerages have access to all the same rates and products as the larger brokerages. If you are looking for the lowest rate, there are always lenders who step up the plate to get you the deal (i.e. 2.99 per cent 5 year fixed). Some advantages of smaller brokerages are closer agent relationships, lower overhead, niche branding and more of a family atmosphere for newer brokers.
“Network advertising can compete with banks” The networks simply do not have the advertising funds necessary to even come close to marketing themselves as well as the Big 5 Banks. Instead, Brokers, lenders, networks should look at joining forces and start marketing together with a unified brand.
“Brokers have the lowest rates” Banks can easily match --and sometimes beat -- broker rates so this may no longer be a competitive advantage. Also, banks can often approve deals directly, which brokers cannot do.
“Brokering is my other job” It is very rare that a broker can be successful at the business while working at another job. The industry requires a lot of focus and time in order to get it right.
“I want the best split” With brokerage profits being squeezed by agents, look for the trend to start reversing with full service and flat fee models being introduced.
CMHC & Conventional Mortgages for:
Single Family Alternate Equity Lending:
Multi-Family Rental Properties Senior’s Housing Projects Commercial Properties Construction Projects
Toronto CMHC/Conventional Financing Phone: 416-368-3266 Email: toronto@peoplestrust.com
Equity Take Outs Purchases/Refinances Homeowner or Rental Flexible Income Verification
Calgary CMHC/Conventional Financing Phone: 403-237-8795 Email: calgary@peoplestrust.com
Vancouver CMHC/Conventional Financing Single Family Financing Phone: 604-685-1068 Email: vancouver@peoplestrust.com
MARCH 2014 | 55
STATISTICS / RESIDENTIAL SALES ACTIVITY
GLOBAL HOUSING AFFORDABILITY Edmonton, Ab
Thunder Bay, ON
WORLD RANKING: 198 COUNTRY RANKING: 18 MEDIAN HOUSE PRICE: $336,000 MEDIAN HOUSEHOLD INCOME: $87,200
WORLD RANKING: 80 COUNTRY RANKING: 5 MEDIAN HOUSE PRICE: $187,500 MEDIAN HOUSEHOLD INCOME: $61,800
Trois Rivieres, QC WORLD RANKING: 80 COUNTRY RANKING: 5 MEDIAN HOUSE PRICE: $145,500 MEDIAN HOUSEHOLD INCOME: $48,700
Fredericton, NB WORLD RANKING: 36 COUNTRY RANKING: 3 MEDIAN HOUSE PRICE: $165,700 MEDIAN HOUSEHOLD INCOME: $64,600
Calgary, AB WORLD RANKING: 232 COUNTRY RANKING: 28 MEDIAN HOUSE PRICE: $392,400 MEDIAN HOUSEHOLD INCOME: $91,800
Vancouver, BC Canada WORLD RANKING: 359 COUNTRY RANK: 35 MEDIAN HOUSE PRICE: $599,450 MEDIAN HOUSHOLD INCOME: $58,130
Sudbury, ON WORLD RANKING: 117 COUNTRY RANKING: 9 MEDIAN HOUSE PRICE: $216,300 MEDIAN HOUSEHOLD INCOME: $64,900
Another year, another International Housing Affordability Survey from Demographia. So how did Canada fare in this year’s rundown of the developed world’s most and least affordable property markets? A total of 360 metropolitan markets were compared from nine countries (Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, the UK and the US), and no Canadian city cracked the top 10 most affordable markets. However, the one bright spot was eastern Canada, which recorded the three most affordable markets in Canada. No surprise that Toronto and Vancouver rank as the least affordable major markets in the country.
56 | MARCH 2014
Windsor, ON
Toronto, ON
Ottawa, On
WORLD RANKING: 41 COUNTRY RANK: 4 MEDIAN HOUSE PRICE: $160,200 MEDIAN HOUSEHOLD INCOME: $60,200
WORLD RANKING: 323 COUNTRY RANKING: 33 MEDIAN HOUSE PRICE: $453,900 MEDIAN HOUSEHOLD INCOME: $65,000
WORLD RANKING: 184 COUNTRY RANKING: 15 MEDIAN HOUSE PRICE: $303,900 MEDIAN HOUSEHOLD INCOME: $79,400
MORTGAGEBROKERNEWS.CA
Source: 10th Annual Demographia International Housing Affordability Survey: 2014
Saint John, NB WORLD RANKING: 27 COUNTRY RANKING: 2 MEDIAN HOUSE PRICE: $154,400 MEDIAN HOUSEHOLD INCOME: $62,200
Waterford Ireland WORLD RANKING: =4 MEDIAN HOUSE PRICE: $126,300 MEDIAN HOUSHOLD INCOME: $64,000
Bournemouth & Dorset UK WORLD RANKING: 352 MEDIAN HOUSE PRICE: $369,250 MEDIAN HOUSHOLD INCOME: $42,720
Hong Kong China SAR WORLD RANKING: 360 MEDIAN HOUSE PRICE: $518,120 MEDIAN HOUSHOLD INCOME: $34,765
Charlotteown, PEI Moncton, NB WORLD RANKING: 18 COUNTRY RANKING: 2 MEDIAN HOUSE PRICE: $141,800 MEDIAN HOUSEHOLD INCOME: $62,300
Montreal, QC WORLD RANKING: 264 COUNTRY RANKING: 29 MEDIAN HOUSE PRICE: $264,000 MEDIAN HOUSEHOLD INCOME: $56,300
WORLD RANKING: 80 COUNTRY RANKING: 5 MEDIAN HOUSE PRICE: $187,300 MEDIAN HOUSEHOLD INCOME: $63,200
Sydney, NSW Australia WORLD RANKING: =354 MEDIAN HOUSE PRICE: $631,110 MEDIAN HOUSHOLD INCOME: $70,300
Melbourne, Vic Australia WORLD RANKING: 351 MEDIAN HOUSE PRICE: $520,030 MEDIAN HOUSHOLD INCOME: $61,830
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MOTIVATION / PRESENTATION SKILLS
PRESENTATION
SKILLSand the art of persuasion If you want to make a compelling case to a client or business associate and persuade them to do what you’re asking, it’s vital to hone your communication skills and use them to support your case. Cindy Tonkin offers seven essential strategies for making a world-class professional presentation
You probably spend a large chunk of your life getting others to do things for you: persuading your boss to give you time off; influencing your spouse to spend time with you; convincing the kids to go to bed. But right now we are talking about major deals. You have to stand at the front of the room, take a deep breath, and make such a compelling case that they can’t say no. Here’s how you can do this:
1
Take a breath First off, it is important to start breathing. When you’re nervous you can hold your breath. This makes your brain stop thinking. It triggers a fear response in the brain: you retreat into defensiveness. You just want to run away or punch someone. So breathe. Practice deep breaths right down into your belly as you rehearse your presentation. Unclench your fists. Move your elbows away from your rib cage. If you find it hard to breathe, here’s a tip: speak lower and slower and your breath will slow down. 58 | MARCH 2014
MORTGAGEBROKERNEWS.CA
2
Prepare the words Begin as you mean to end—calmly. Prepare the first two sentences. Practice them until they sound natural and normal. Then the rest will flow. You should also prepare the rest of the presentation, of course!
3
Use images and props If you stand up and use visual aids, your audience is more likely to be onside. And, according to research, they will spend 26% more on your product. Examples of visual aids include posters, photographs, PowerPoint images or actual props. If your audience tends to fiddle with pens or rubber bands or phones, give each person a prop; it will keep them focused as they listen. And if the prop promotes your business, that’s even better.
4
Practice what you will say It may seem obvious, but practice what you will say. It feels silly, but the more you do it the less it becomes so. Practice not just the words but how you will say them. People read your intention from your gestures. Consider what gestures you want to use, and choreograph your presentation. If you want to come across as open, open up your gestures. If you want to be seen as thoughtful, adopt the pose of the thinker. But you must practice this so it comes across naturally, not like a kid doing show and tell at kindergarten.
5
Don’t read to me In case you haven’t heard, there is an epidemic of death by PowerPoint. Your PowerPoint slide is not a substitute for palm cards. Do not put every word you will say on the slide. Choose an image that prompts you to remember what you need to say, or an image that intrigues the audience. If you must read to me, then read me something significant. If you feel you must have all the words on a slide, then pause so people can read the words for themselves. Then say what you want to say.
6
Focus on them, not you Working with hyperconfident, powerful people, I am constantly surprised to find how much some of them dread public speaking. Consistently, they focus on themselves and their shaking voice, their wobbly knees and whether someone will find out that they are fake.
To calm your nerves, focus on the audience. The old advice of picturing them naked is just one device for doing this. I suggest you pay attention to the small signs that tell you they are listening and interested. When your focus is on them, the room and its energy, then you can give them what they want. As an aside, know you always have the option to say: “I don’t know—I’ll get back to you.” You don’t need to know everything. In the age of the internet most information is available with a quick Google search. People do not expect you to be the internet. Take a moment upfront to clarify the audience’s ‘WIIFM’ (what’s in it for me). When you know what they want out of it, you know how to sell them rather than tell them.
7
Tell stories People will forget facts. They remember stories. Tell a ‘once upon a time’ story or a ‘funny thing happened on the way to the forum’ story—like a case study. Make it relevant and follow the three-step formula:
1. Incident (what happened) 2. Point (the punchline or payoff) 3. Benefit (why I am telling this story) Telling a story alone has an impact. Telling an enjoyable story and then making it relevant to the audience (the benefit) lifts you to professional level. If you can read, illustrate, and engage your audience, you’re well on the way to convincing everyone. MARCH 2014 | 59
MARKET TALK / PREDICTIONS
5
These ‘outrageous’ predictions may not come true in 2014—but they could
MORTGAGEBROKERNEWS.CA
outrageous economic predictions for 2014
Online multi-asset trading and investment specialist Saxo Bank’s annual set of ‘outrageous predictions’ for the year ahead reveal some interesting views on where the global economy is headed. Although the probability of any of the predictions coming true is low, they are deduced strategically by Saxo Bank analysts based on a feasible—if unlikely— series of market and political events. Outrageous predictions for 2014 EU wealth tax heralds return of Soviet-style economy Panicking at deflation and lack of growth, the EU Commission will impose wealth taxes for anyone with savings in excess of EUR 100,000 in the name of removing inequality and securing sufficient funds to create a “crisis buffer.” It will be the final move towards a totalitarian European state and the low point for individual and property rights. The obvious trade is to buy hard assets and sell inflated intangible assets.
1
4
2
5
Anti-EU alliance will become THE Largest group in parliament Following the European parliamentary elections in May, a pan-European, anti-EU transnational alliance will become the largest group in parliament. The new European Parliament chooses an anti-EU chairman and the European heads of state and government fail to pick a president of the European Commission, sending Europe back into political and economic turmoil.
60 | MARCH 2014
3
Tech’s ‘Fat Five’ wake up to a nasty hangover in 2014 While the US IT sector is trading at about 15% below the current S&P 500 valuation, a small group of technology stocks are trading at a huge premium of about 700% above market valuation. These ‘fat five’ (Amazon, Netflix, Twitter, Pandora Media and Yelp) present a new bubble within an old bubble, thanks to investors oversubscribing to rare growth scenarios in the aftermath of the financial crisis. Desperate BoJ to delete government debt after USDJPY goes below 80 In 2014, the global recovery runs out of gas, sending risk assets down and forcing investors back into the yen with USDJPY dropping below 80. In desperation, the Bank of Japan simply deletes all of its government debt securities, a simple but untested accounting trick, the outcome of which will see a nerve-racking journey into complete uncertainty and potentially a disaster with unknown side effects. US deflation: coming to a town near you Although indicators may suggest that the US economy is stronger, the housing market remains fragile and wage growth remains nonexistent. With Congress scheduled to perform Act II of its ‘how to disrupt the US economy’ charade in January, investment, employment and consumer confidence will once again suffer. This will push inflation down, not up, this year, and deflation will again top the Federal Open Market Committee’s (FOMC’s) agenda.
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PROFILE / FAVOURITE THINGS
Favourite things Mark Goode AMP, President & Principal Broker, Mortgage Man Dominion Lending Centres
Favourite Food: Thai or Chinese
Favourite Book: Who Dares Wins by Chris Ryan. It is a great and inspiring book about daring to succeed, having the willingness to try, the courage to push past the fear of failure and achieving your goals as so few do.
Food. The spice and variety allows everyone to have a little bit of what they want. And it’s a little out of the ordinary compared to what we may make at home.
Favourite Music: Nickelback. They’re a great Canadian band. I love that anthemic, powerful music.
Favourite Drink: Coors Light or rye & ginger.
Favourite thing about working in the mortgage industry: All the great people I Favourite Movie: Chasing Mavericks. It is an inspiring story about a young boy overcoming the odds, and through dedication and persistence he becomes a world champion in surfing.
62 | MARCH 2014
get to work with and for. There are so many amazing people we get to help achieve their dream of homeownership. You feel a real sense of accomplishment when helping a young couple buy their first home, helping someone to save their home through strategic remortgaging or helping people start over.
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Favourite Sport: Hockey. I have always loved hockey. Whether it was out playing as a kid, coaching a team or playing out on the pond like we did last week. It has always been part of our family life.
Favourite Vacation Spot: Dominican Republic. I love to spend time with my wife staring out at the ocean and soaking up the sun, followed by few rounds of golf at Ocean Blue.
Favourite Place to be: We have a family cottage on the Ottawa River. I truly enjoy spending time there unwinding with the family.
Favourite Celebrity: Sandra Bullock. She’s fun, athletic and she reminds me of my wife, Vicki: The killer laugh, great smile and passion.
Favourite Mortgage Product: 10-year fixed mortgage. It is a great strategy when the rates are low. With the majority of our clients, their main concern is consistency and stability and this product allows us to help stabilize a client’s debt load and provide a more predictable financial path.
Richard Earles
Business Development Manager 1-866-907-5407 richard@vwrcapital.com Twitter: @VWRCAPITALCORP
Your Private Mortgage Solution Funding Mortgages In: x x x x
British Columbia Alberta Manitoba Ontario
x Competitive rates and nominal lender fees x Purchases, refinances, ETO, and renovations x Rental properties, owner occupied, raw land, serviced land, small multi-family x No income qualification x No minimum beacon score
Your Underwriting Team: Dimitri Kosturos: VP Underwriting Richard Earles: Business Development Manager Leah Wilson: Underwriter
Send Deals To: info@vwrcapital.com Or Call:
1-866-907-5407
www.vwrcapital.com MARCH 2014 | 63
SERVICE / DIRECTORY
MORTGAGEBROKERNEWS.CA
Non-Bank Lenders
Insurance
Commercial Lenders
Atrium Mortgage Investment Corporation www.atriummic.com Ph: 416 867 1053 Page 39
Genworth Financial Canada www.genworth.ca Ph: 1 800 511 8888 Outside Back Cover
ROMSPEN Investment Corporation www.romspen.com Ph: 1 800 494 0389 Page 1
Home Trust www.hometrust.ca Ph: 1 877 903 2133 Page IBC
Axiom Mortgage Partners axiommortgagepartners.ca Ph: 1 866 504 0516 Page 15
Vector Financial Services www.vectorfinancialservices.com Ph: 1 866 483 8018 Page 57
MCAP www.mcap.com/brokers Page 23
Centum Financial Group Inc. www.centum.ca Ph: 1 604 257 3940 Page 5
Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 55
Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 25
Radius Financial www.radiusfinancial.ca Ph: 1 877 369 6398 Inside Front Cover
Home Loans Canada www.hlcmortgages.com Ph: 1 866 452 1821 Page 3
Broker Networks
Technology & Software
Marlborough Stirling Canada www.morweb.ca Ph: 1 877 626 2022 Page 2 Real Estate
Optimum Mortgage A Division of Canadian Western Trust www.OptimumMortgage.ca Ph: 866 441 3775 Page 45 Tribecca Finance Corporation www.tribecca.ca Ph: 416 225 6900 Page 37 V.W.R Capital Corp www.vwrcapital.com Ph: 1 866 907 5407 Page 63
64 | MARCH 2014
TM
Appraisal Institute of Canada www.AICanada.ca Ph: 613 234 6533 Page 49 Canadian National Association of Real Estate Appraisers
www.cnarea.ca Ph: 1 888 399 3366 Page 19 Services
Mortgage Architects www.mortgagearchitects.ca Ph: 1 877 802 9100 Page 12 & 13 RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 11 VERICO www.verico.ca Ph: 1 866 983 7426 Page 7
Best Points Travel info@bestpointstravel.com Ph: 1 800 551 8786 Ph: 416 251 9944 Page 9 Score-Up www.score-up.ca Ph: 416 479 9585 Page 31
We are dedicated to you, the mortgage professional. A partnership you can rely on. Home Trust’s promise to you, our broker partner: • Devoted Business Development Manager • Direct access to your underwriter • Understanding and professional staff
Armando Diseri Senior Vice President, Mortgage Lending
HOME TRUST M OR TGA GES
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V ISA I
R E TA I L C R E D I T
hometrust.ca
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DEPOSITS
HELPING YOU DELIVER. Purchase Plus Improvements | When your client’s perfect home is only a reno away, Genworth Canada can help you deliver on their dream and close the deal with tailored improvements immediately after taking possession, one manageable mortgage and only 5% down.
800.511.8888 | Genworth.ca | Homeownership.ca | Genworthsmartshopper.ca Helping Canadians Achieve the Dream of Homeownership. Sooner.