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CONTENTS

MARKET MATTERS 4 | Editor’s letter 6 | Letters to the editor 8 | Reading between the Lines CAAMP and CMT: A match made in heaven or a conflict of interest?

NEWS 10 | News analysis 24 | National picture-ata-glance

FEATURES 16 | Broker advice Jackson Middleton poses a compelling argument in favour of specializing in one area of mortgage brokering 18 | Broker debate Brokers sound off on O’Leary Mortgages leaving the mortgage industry 20 | Deal collaboration Is there a better way? 44 | Commercial brokering 101 48 | Meet 2014’s CMA finalists for mortgage broker of the year 56 | Canadian and global housing affordability

26 9.4 issue

COVER STORY

CMP Top 75 Brokers by Volume and Top 20 Small Market This is it – the industry’s number one “it” list. Our Top 75 by volume and Top 20 Small Market brokers paying homage to some of the hardest working, craftiest and most experienced players in the game, and gives 85 individuals bragging rights for another year

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MARKETING 46 | Putting your sales savvy to work in print can help maximize your leads, writes Doren Aldana. When it’s done properly, that is 60 | Strategic networking can be a broker’s best insurance policy, writes Julia Palmer

REGULARS 62 | Favourite Things 64 | CMP Service Directory

2 | APRIL 2014

56 MARKETING

When it comes to delivery service it’s the little things that count, writes Nikki Heald

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APRIL 2014 | 3

CONTENTS / EDITOR’S LETTER

MORTGAGEBROKERNEWS.CA

COPY & FEATURES SENIOR EDITOR Vernon Clement Jones STAFF WRITER Justin da Rosa CONTRIBUTORS Doren Aldana, John Tenpenny, Darren Trott, Nikki Heald, Philip Slen, Jackson Middleton, Lionel Larry 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’RE STARTING TO THINK THIS ISSUE IS CURSED After all, for five years running, the prior year’s top broker by volume has been ousted by a fresh new face; Calum Ross took home top honours in 2010 (with $147,841 in funded volume), Gord Pipkey was #1 in 2011 ($263,461,354), Dan Eisner was top dog in 2012 ($412,827,787), Jim Tourloukis led the pack in 2013 ($218,114,349) and this year’s winner … well … I don’t want to spoil too much. Except that he’s a former top-five finisher and he shattered last year’s mark. One will surely wonder if he (or she) will be another won and done champion. Flick over to page 26 to see who took home this year’s top prize. Don’t worry, we won’t mind if you skip right to it. Make sure to check out in-depth profiles on this year’s Canadian Mortgage Award nominees in the Mortgage Broker of the Year categories (pg. 48). The crown jewel of CMAs was revealed at the Awards show at the Liberty Grand in Toronto on May 9 – along with the winner of our 19 other awards.

Cheers, Vernon Clement Jones

CONNECT

Contact the editor:

vernon.jones@kmimedia.ca

4 | APRIL 2014

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CONVERSATIONS / LETTERS TO THE EDITOR

MORTGAGEBROKERNEWS.CA

TO BE OR NOT TO BE INDEPENDENT?

RE: CMHC PREMIUM PROBLEMS (CMP 9.3) Broker Andrew Young weighed the pros and cons attached to the CMHC move to raise premiums. That change just may impact the all-important spring market, he says.

RE: INDEPENDENT BROKERS (CMP 9.3) “I’m truly independent” – it’s the boast of fewer and fewer Canadian brokers as the industry aligns itself along network lines. But some of the industry’s top players are still saying that loud and proud. WP’s Top 10 Independent Brokerages list shared their secrets. BROKERAGE BRAVERY I’m still of the mind that brokers really need to be independent in order to serve clients as they need to be served and ensure that they are not really dependent on one or two lenders.

2014 CMAs FINALISTS REVEALED DEBUNKED 14 BROKER MYTHS

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-Garry Minns

As a client of an independent broker, I found that he was very proud of that fact. It showed in what he said to me and his willingness to stand up to my bank. I think that more brokers should look to follow this model.

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I was an independent broker but then I decided that in order to properly serve my clients I needed the education and training that is available for my agents through our broker network. It’s just too hard to afford to give them that kind of training without the help of a network. I admire those who can, but it’s probably only until they get to a size where they really need to get to the next level. -Winnipeg Broker

I feel that in the West brokers are more likely to be with a broker network. In fact, I don’t know of any broker who isn’t with one – whether it’s Axiom or Dominion. Maybe it’s different in Toronto where the volumes can sustain independence from the need for volume pooling. -B.C. Broker

6 | APRIL 2014

On a $500,000 home with 5% down this works out to a tax increase (yes, this is a tax) of $2,000. This will only impact those least likely to afford a home. If we don’t keep housing affordable for those that need it most, we will be finding ourselves having to carry these people (financially) to their grave. Treating all levels of the market (family home, investment and foreign investment) the same or equal is what is causing the imbalance. I truly believe anyone that wants to buy a home, or trade up to a bigger home should be exempt from these types of taxes and anyone that is buying strictly for investment should contribute more. We are digging ourselves into financial poverty as a society, a society that will have no choice but to be dependent on the government ... maybe this is what they want. -Omer Quenneville

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MARKET MATTERS / READING BETWEEN THE LINES

QUESTIONING

CAAMP’S SPENDING

CAAMP purchased industry website, Canadian Mortgage Trends, in late March. Michael Lloyd of Dominion Lending Centres Mortgage Experts reads between the lines and explains what the national organization’s decisons will mean for the blog, CAAMP and the industry as a whole CAAMP ENHANCES ITS COMMUNICATION OFFERINGS 1. CAAMP obviously

bought CMT to access a large online community of people who have an interest in the Mortgage Industry in Canada. On the outside from a long way away, this seems like a sensible move. Rob McLister has gone on record saying that CAAMP will have no influence on his editorial duties or messaging...if that is true, then what did CAAMP just buy? A front seat at the show to be sure, but they have no input on the show itself? This seems like a large waste of money! If it isn’t true, then CAAMP may have more influence to this online community, but I would guess that the vast majority of their audience are industry members who are already aware of CAAMP and what it does day to day.

2. Lots of potential for conflicts of interest. Rob

McLister has done an exemplary job as the editor of CMT, and that is likely why so many people enjoy reading the blog. He is honest and fair and treats any subject as objectively as he can... however, he was allowed to do this when it was his blog and he answered to no one but himself. If CAAMP is to get anything out of this, they must have some influence on what CMT’s messaging is, or this is pointless. Answering to CAAMP could at the very least change the perception of what is said on CMT, at the worst it

8 | APRIL 2014

CAAMP is pleased to announce it has entered into an agreement to acquire Canadian Mortgage Trends (CMT). CMT was identified as the number one source of online industry news in our recent member survey and with good reason. It is well-respected and has developed a loyal following of industry professionals over the years. CMT will continue to offer concise, well-written and unbiased information with Rob McLister remaining as Editor. In time, new features and articles will be added. Until then it is business as usual. This collaboration is the result of extensive research and 3 analysis and provides the best solution for streamlining our communication practices. The acquisition also represents a more economical manner of achieving our objectives than a start-up initiative would have allowed. “We are always looking for ways to pass on savings to our 4 members,” says Paul Kozan, AMP, CAAMP Chair. “CMT will enable us to strengthen association communications in a cost-effective manner as we continue to be the voice of the Canadian mortgage broker channel.” “Timely, credible and accurate information is one of the strengths of our organization and we are excited by the opportunity of offering added value to our members”, added CAAMP President and CEO, Jim Murphy, AMP.

Paul Kozan, AMP Chair

Jim Murphy, AMP President and CEO jmurphy@caamp.org

MORTGAGEBROKERNEWS.CA

could ruin it. He will also be CAAMP’s voice to some degree to the public. Does it make sense to have a broker who is a believer in a business model that (is at odds with much of its) membership as their defacto spokesperson? We all know the next five years will bring even more change than the past five years... these will be interesting times indeed.

3. CAAMP has made this decision thinking this will

increase their public visibility and improve their communications with their members and public. The average broker out working hard to engage a public that has 15 years + since the inception of CIMBL/ CAAMP still meets with Joe Canadian who has never heard of or at the very least, does not understand what mortgage brokers do is unlikely to see much of a difference with the purchase of CMT. Clients today

have an eight second attention span, what are the odds they will find CMT and reap the benefits of CAAMP or Mortgage Brokers in general, Likely pretty slim. About the same as they were before CAAMP bought CMT in fact.

4. Who does CAAMP serve? In the end, this is another

step in the consistent march we have seen from CAAMP to build a massive bureaucracy that serves its executive, not its members. For fun, take a look at the CAAMP Financial Statements (www.caamp.org) buried in the annual report... for example, of (the majority of the revenue from membership fees, much is spent on staff, staff expenses & rent, leaving little -- plus the income from events, etc. -- to use) for their actual mandate. The membership at CAAMP need to make change happen or this will continue.

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MARKET MATTERS / NEWS ANALYSIS

REBRANDING IN THE SPOTLIGHT

There are seven key steps every brokerage should follow when it comes to rebranding, it has been claimed. And the consequences of executing the exercise poorly can be drastic. Executing a rebrand must be extraordinarily strategic; not violate the company’s cultural roots; be relevant and consistently supported; and place the customer benefit front and centre at all times. It’s all about them. Here are the steps experts believe brokers should take to rejuvenate their brand successfully: 1. Get clear on what a brand is. A brand is not just your logo. A brand is the sum total of the messages, interactions, and experiences a customer has with your product, services, and people. To a customer, a brand is the promise of an experience. It’s a valuable asset to nurture over time. 2. Maintain control of the rebranding process. Use a third-party guide because it is easy for a renaming effort to deteriorate into likes/dislikes or what your spouse thinks. Ground your brand in a strategy that recognizes not only the brand’s origins but also its ultimate destination in the current and future marketplace. Keep an open mind. Small ideas can get bigger, and seemingly big ideas can diminish over time. Also, identify those equities that cannot change. 3. Understand that a brand has two owners: The marketer owns 50%; the customer owns 100% – yes, that’s 150% in total. The marketer produces messages, products and services. Your customer experiences the brand, and in the digital age they are in ultimate control of the messages they receive. Therefore, check in with customers and, at the very least, include those internal players who have the most customer contact. The worst thing you can do is to decide all branding issues at the top level and dictate to customers and to your brokers who must deliver the brand experience. You risk a loss of relevancy and buy-in. 4. Your logo, tagline, typography and design should tell a single-minded story. Every brand is heroic in some way. Its look, feel, and message should tell one story. Think about what your brand fights for and against what odds. Consider what is at stake for customers in terms of their problems and how you solve those for them. By becoming a hero to your customers, you, in turn, make heroes out of them. That’s truly adding value. 5. Never forget that a brand should always remain fluid. Some will warn you that changing your brand is a major risk. If it fails, it can be expensive and disruptive. Note Coca-Cola’s experience with “New Coke.” However, if you do not violate a brand’s established equities and values, you can still add flexibility into a brand that allows it to not lose relevance. For example, Tide detergent is built on consumers’ trust that it gets clothes clean, yet the brand has found multiple fresh expressions of that proposition over the years, even adding benefits to fend off competitors. Therefore, create a brand positioning that is broad enough to be as relevant today as yesterday and flexible enough to be relevant in the future. 6. Never stop supporting and promoting your brand. Successful brands are a living presence in the marketplace with a tangible relationship with their customers. It’s easy to support a brand in boom times, but much tougher in down times. However, study after study has shown that brands that are consistently supported during a down cycle gain greater sales and share when the economy turns up – compared to those that cut support activities.

10 | APRIL 2014

MORTGAGEBROKERNEWS.CA

CANADIANS SPLIT BETWEEN FIXED AND VARIABLE RATES

56 per cent of Canadians aged 25-34 saying they would lock in to a fixed rate today 43 per cent of homeowners aged 45-54 were among those less likely to lean towards a fixed rate As part of any longterm mortgage strategy, homeowners at all stages are considering their tolerance for fluctuating rates when deciding on whether to choose fixed or variable. - as both have their place,” he adds.

per cent aged 25-34 say they would lock in to a fixed rate today

per cent aged 45-54 are among those less likely to go with a fixed rate

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MARKET MATTERS / NEWS ANALYSIS

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BROKERS NOT UP TO THE CHALLENGE

You brokers sure surprised us, with the majority of MortgageBrokerNews.ca readers believing mortgage professionals lack the “aptitude” to be financial planners. This, of course, pales in comparison to WealthProfessionl.ca’s readers who were even less confident that their mortgage brokering counterparts are up to the challenge.

per cent

MortgageBrokerNews.ca readers believing mortgage professionals lack the “aptitude” to be financial planners

Wealth professionals believe mortgage brokers lack the aptitude

per cent

MortgageBrokerNews.ca readers believe mortgage brokers are up to the challenge

Wealth professionals believe mortgage brokers are up to the challenge

POOR STOCK BROKERS?

The film that paints the ugliest picture imaginable of the world of securities and investment has prompted a rush of jobseekers searching for stock broker positions online. Well, at least they weren’t lining up to be mortgage brokers. Still, The Wolf of Wall Street should, theoretically, have scared people off of that career choice. After all, who wants to be anathema to all that’s decent in the world. But new data from online employment portal Indeed. com, suggests it had quite the opposite effect, with the worst of Wall Street’s excess and corruption on full display actually leading to an 80 per cent rise in searches for “stock broker” surrounding the release of the Martin Scorsese film.

12 | APRIL 2014

CANADIANS KEEP A FINGER ON RATE PULSE AND HAVE THEIR OWN FORECAST

Despite the Bank of Canada holding its key interest rate steady for the 29th consecutive time, a recent CIBC poll suggests nearly half of Canadians don’t think low rates will last forever. Far from it, in fact, most of them expect mortgage rates to be higher in as little as a year from now. The poll also shows that Canadians are increasingly focused on moving to fixed-rate mortgages, something many of the banks have pushed over the last 14 months. “Even though we’ve had a relatively stable rate environment for a number of years, Canadians are being prudent when it comes to mortgage planning and are factoring in the possibility of higher rates in the near future, “ says Barry Gollom, VP of Secured Lending and Product Policy at CIBC. “With fixed rates near historic lows, Canadians see an opportunity to lock in for a number of years in order to reduce the risk of expected higher interest costs.” Brokers aren’t necessarily so bullish. “We haven’t really seen the kind of movement in the Central Bank outlook for the economy that we would need to see in order for the bank to raise rates,” says Edmonton agent Phillip Gruens. “I feel comfortable continuing to put clients into variable rates, especially for shorter terms.” The banks generally have increased hawking fixed product as a way of increasing very thin margins. That reality isn’t likely to change soon, say analysts, suggesting the Big Six will remain focused on promoting fixed rates for at least the next year. That might be the case, but brokers won’t necessarily be the ones leading the charge on their behalf. “I’ll do what’s in the best interest of my individual client,” says Gruens. “That’s my job.”

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MARKET MATTERS / BROKER ADVICE

BROKER-TO-BROKER ADVICE:

HAVING THE DISCIPLINE TO SAY ‘NO’

80 per cent of your business comes from 20 per cent of your clients, explains Jackson Middleton, The Kilted Broker, and in the mortgage industry, that means brokers are best off becoming specialists Regardless of what you call it -- the Paleto Principle, the Law of the Vital Few or the Rule of 80/20 -- the understanding that 80 per cent of the effects come from 20 per cent of the causes should be a driving force behind how you manage and grow your mortgage business. In 2006, I had been operating a profitable delivery company for just over three years; I had eight fulltime drivers and serviced around 50 restaurant clients. My biggest problem: How do you grow a business when you are already working at full capacity? Taking on more restaurants meant taking on more drivers, more drivers meant more headache, more headache meant more stress (and not necessarily more money). I was starting to burn out and was looking for answers when I heard the rule of 80/20 described this way: “80 per cent of your income comes from 20 per cent of your clients.” 16 | APRIL 2014

What have I got to lose, I thought. I decided to test this theory out in a very practical way. I dropped from 50(ish) restaurants down to six and cut my staff from eight down to three, figuring that taking a 20 per cent pay cut would be worth eliminating around 80 per cent of the hassle. As it turned out, after six months of tracking the money, my ability to service my best clients more efficiently actually generated 20 per cent more income! I was making more money, running a tighter team, providing better customer service with less stress in my life. How was this bad idea? I started brokering in 2007 in Regina, a time when the mortgage fairy was liberally distributing mortgage applications to everyone. Simply having a broker’s licence gave you the ability to print money. My first couple years were nice, and then 2009 showed up… a complete market pull-back from the American crash of 2008. The deals were no longer

MORTGAGEBROKERNEWS.CA

flowing like they once were. It was at this time that I decided to revisit the 80/20 rule and figured why not apply it proactively? I did two things. First I looked for a strategic advantage in the marketplace and then I looked internally at my own numbers to see where my 20 per cent was. Most of the advertising being done by other mortgage companies seemed to outline every mortgage product imaginable in a single ad space. I realized that most brokerages wanted to be everything to everyone and took a generalist mindset. This created an opportunity to market myself as more of a specialist. I went back and looked at all the mortgages I funded from 2007 to early 2009 and compared types of funded deals to applications taken that didn’t fund. I found that overall I was funding roughly one-quarter of applications while I was only closing nine per cent of B-deals compared to 60 per cent of mortgages for first-time homebuyers. It was at this time I decided to get really specific and focus all my efforts on targeting first-time homebuyers using social media and content marketing. My experience had already taught me that the key to effectively reaching your ideal client is to make yourself completely available to them while making yourself unavailable to everyone else. To target the right clients, you have to say no to the wrong clients. I stopped doing B-deals, rental clients, selfemployed clients, commercial files and reverse mortgages so that I could work with needy first-time homebuyers. Sure, it was hard to turn away business at the beginning and it was hard to get past the idea that turning away business was a good strategy, but

it actually turned out a lot better than I had anticipated. Here is what I noticed over the next couple of years. By becoming a specialist, I no longer wasted time with the wrong clients; rather I focused all my time securing the right clients. And when I secured the right clients, I was able to spend more time with them and provide an amazing customer service experience which, in turn, led to referrals. Now, the real magic happens when you get referrals from referrals; it’s like pushing a snowball down a steep hill. Growth is exponential. By the end of 2012 I had more than doubled my income and was closing over 55 per cent of applications received (up from 25 per cent) while maintaining a 95 per cent funding ratio at my top lenders. By specializing, not only was I dealing with a more consistent client, I was a more effective broker. How was this a bad idea? In 2013 my brokerage was acquired by First Foundation Residential Mortgages and I took a position as the executive editor of the #OwnGrowProtect blog and principal broker in Saskatchewan. And now in 2014, I am pleased to have recently accepted a position as VP of Sales and Marketing at First Foundation. I have come to believe that we are defined not only by what we choose to do, but also by what we choose not to do. It was when I turned away over 80 per cent of my wrong restaurant clients to better serve my right clients that my delivery business took the next step. It was when I realized that I was effective with first-time homebuyers and stopped doing business with everyone else that my mortgage business doubled in efficiency. What about your business? Are you a generalist or a specialist? The specialist has the discipline to say ‘no.’

Jackson Middleton VP of sales at First Foundation Residential Mortgages

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FORUM / COMMENTARY

A DRAGON SLAYED MortgageBrokerNews.ca provides an open forum for brokers to comment, pontificate, praise, blast and generally sound-off on the issues of the day and brokers were happy to see Kevin O’Leary – the man once feared as legitimate competition – exit the mortgage industry

MORTGAGEBROKERNEWS.CA

It was known that they did very little origination. The margins in the monoline lending business are not that awful but if the top line is very small and does not grow, there is no future in any business. They acted as a broker for a white label mortgage provider so I don’t see it a function of risk avoidance because I don’t believe they took on any default recourse on the mortgages. Online mortgage origination is very hard, it’s a very difficult execution proposition. Most of the folks who try it don’t like it. -Ron Butler of Verico Butler Mortgage The only reason O’Leary left is because the margins were just too thin, and this is a case of a pilot project being shut down because it is not profitable enough. I recently had breakfast with a high net worth private wealth manager, and we discussed whether or not he would ever enter the mortgage business. His answer: I’m interested, but right now the margins are just too far below my target returns given the capital requirements. I believe that he hoped that the O’Leary name/brand would bring in enough business to offset relatively low margins that exist in A mortgage lending. At the end of the day, Kevin figured out that he can simply get better returns on capital elsewhere and pulled the plug. -Daniel McKay of Alberta Mortgage Centre If Mr. Wonderful was truly smart, he would have catered to the alternative market instead where you can create VALUE. When your venture focuses on triple A clients and your pricing does not even match what competing brokerages are offering, what is the value that you are delivering to your customers? Looks like a poorly implemented business plan from a guy who on Dragons’ Den is all about the numbers. -Lior Hershkovitz of Mortgage Edge O’Leary is pragmatic, he tried and failed. Acknowledging defeat is honourable and will cement his credibility as an investor. Respect. -Walid Hammami of Hypotheca

18 | APRIL 2014

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WORKFLOW MANAGEMENT

When it comes to the application process there is a better, more efficient way, writes Philip Slen, creator of Revodoc, who believes the solution is an endto-end collaboration tool

MORTGAGE WORKFLOW & EFFICIENCY A REAL COMPETITIVE ADVANTAGE

Mortgage deal management workflow and efficiency may become a major competitive disadvantage for brokers in the Canadian mortgage industry in the near future. This is in large part due to the current disparate technology systems available for broker use. The technology value chain serving the broker market is made up of different and separate systems: frontend broker systems, a middle origination system such as expert and morweb, and backend lenderâ&#x20AC;&#x2122;s system. The front and middle systems have some integration for deal application form, the middle and backend systems are integrated in the sense that it routes application data to the lender, and the front and backend systems integration are practically nonexistent. A true complete end-to-end system to manage all aspects of brokers business would be one system that integrates all three systems together seamlessly. Unfortunately that is not going to happen anytime soon. So what is the broker to do and why does it even matter? Iâ&#x20AC;&#x2122;ll address the latter point first. It matters because internal and external business factors are forcing brokers to change if they want to sustain and grow their business with real long term equity. The middle origination and backend lender systems are completely out of the brokers control or influence. That leaves only the frontend system where brokers have the opportunity to control and influence what systems they use that maximizes their return on investment. The chosen system must contribute to the improved workflow and efficiency challenges of day to day brokering activities.

BUSI N E SS T R E N D UNDERWRITING MODEL

I N - HOUSE

The days of the lone broker selling, underwriting, administering the deal from start to finish are over. The trend toward collaborating in teams of multiple brokers sharing an in-house underwriter is gaining momentum. In order to grow and scale the business and take it to the next level, one must reduce 20 | APRIL 2014

operating costs by spreading the assistant/ underwriter costs to multiple brokers within a team. This team approach to sharing and collaborating on deals adds another layer of workflow complexity that only innovative mortgage dashboard technologies can resolve. In order to work productively and efficiently, the team must use a system that will help them manage all deals from leads through to mortgage approval to funding. In between, all the mortgage application progress stepsshould be seamlessly integrated into one dashboard.

INSTITUTIONALIZED DATA

Institutionalizing data is really about having full custody and control of borrowers most sensitive and private information. The banks do well here because they have a wide distribution network and customers can be serviced practically at any branch across Canada. The nature of mortgage brokering and the customer relationship is confined to the individual broker dealing with the customer. Therefore, the only way to enhance this customer relationship is data accessibility by other authorized team members to service the customer when situations arise. At present, it would not be hard to find brokers within a typical brokerage keeping data at different locations (physical or online) for deals on the go. The master broker does not really have full control of the data until the deal is complete and handed over for audit, compliance and payroll. Individual broker or teams keeping unorganized and unstructured data in different locations for deals are really behind the 8 ball in efficiency. Efficient data accessibility should always be just a few clicks away and could always be accessible the same way by any authorized team member. How and where data is kept has enormous implications to the brokerage and brokers workflow efficiency. Think of the activities and tasks involved in completing a mortgage deal from lead to approval to funding and after sales. There are so many differents small and large tasks that must be completed along the way. If there is no structured workflow and process in place to track all these tasks, but only relying on email, written notes and memory is very inefficient. Now multiply these tasks by the number of deals on the go at any one time each day, week or month.

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GUEST FEATURE / WORKFLOW PRODUCTIVITY

Philip Slen is an expert mortgage workflow and business process analyst. Co-founded Revodoc Inc., he directed the development and successfully launched their Revo Mortgage Collaboration System platform. His research into existing mortgage systems and platforms included dozens upon dozens of interviews with broker owners and agents from independents to superbroker franchises, lenders, bank mortgage specialists and branch managers and credit unions.

22 | APRIL 2014

SECURED DATA

The other risks that have not been given much attention are data transmission and distribution risks The chain of data custody is only as strong as its weakest link. Email, by far, is the most prevalent method of transmitting borrower’s documents. It is also less secured. Most emails are not encrypted. This is a challenging one for the industry to tackle because practically no lender backend systems are integrated with broker’s frontend systems. The filogix exchange is an attempt to bridge this gap. There are a few lenders with portal to upload documents securely, while others still rely on email and even fax. The workflow efficiency is literally broken right at this point. Without system integration between brokers and lenders, brokers have to work this part of their deal document workflow outside their system. They either email documents to the lender or upload them via lender portal. The upload is more secured but the deal workflow after document submission is still a condition tick sheet from the lender to inform broker outstanding conditions. A broker colleague recently submitted a rental deal to a major bank that was handled in the most inefficient and frustrating way. The deal involves a total of 5 other rental properties. One can imagine the documents needed to satisfy conditions. Due to email limit size, email has to be sent in parts. The lender would print the docs and pass them over to fulfillment clerk. Not all pages were printed even though it can be confirmed they were sent. This archaic process unnecessarily and frustratingly wasted everyone’s time because of lack of system integration with lender and vice versa.

MOBILITY

Brokers need to know when they leave a brokerage, all their deal data including funded deals go with them. A copy of funded deals stay with the former brokerage for future audit and compliance. The challenge many brokers face is the efficient way of extracting all the data from a system and trusting the data would be there in the form they can easily work with again. Filogix does keep the deal data associated with the user’s account; so where the user goes, the Filogix deals would go with the user as well. However, as Filogix Expert is not a deal workflow tool, all other information and data related to a deal may not be readily available if they are not well kept.

BUILD BUSINESS EQUITY

Building a business of value means the next broker taking over your business can generate income in the same and repeatable manner you’ve successfully built your business. Any broker in this business for the long haul is thinking or has thought about an exit strategy. This requires evidence the broker’s business was well managed with a proven track record of repeatable revenue. An efficient and productive mortgage system would’ve helped the brokerage and team keep the business and its process on track year over year. There is no scrambling to pull data together because it was always there with a good system in place.

WHAT ARE THE BANKS DOING? These frontline mortgage specialists have very limited technology to use to manage their business. That is changing for one bank. A major bank has launched their new mortgage application workflow system for its mortgage specialist sales force. It moved away from its traditional origination system provider Filigox and opted to develop its own mostly inhouse with outside consultants. The move is strategic and application workflow deliberate to facilitate customer data collection and mining. The hundreds of millions of dollars spent is a drop in the bucket compared to what it will gain in the long term. My analogy to this is like the google of banking data. In the not too distant future, mortgage preapproval could be automated just like pre-approved credit lines were handed out to qualified borrowers 15 years ago. This would be made possible with the hugh database that can score against the 5 C’s of lending for every customer it has. This will push their mortgage specialists to become hunter gatherers. That is going to put more pressure on the brokers and its market share. The bank is trying to perfect the direct to consumer model for mortgages. For the other remaining banks, currently there is no mortgage process and workflow technology platform for their day to day deal management. Once a deal is submitted via Filogix Homebase or Expert, they deal with their underwriting departing to satisfy conditions. Docs are sent in via email or fax to underwriting. No doc storage is really available. Specialists works from checklist to satisfy conditions until all is met. They keep docs on their hard drives, though files are encrypted. The problem is Specialists would use different tools to manage

MORTGAGEBROKERNEWS.CA

deal progress and pipeline. Many other steps of tracking the mortgage file is manual and cumbersome. Excel spreadsheet seems to be the choice. Ask any Specialist what they do when they go vacation. It become a frustrating activity gathering files and info to handoff to someone else. However, you can bet these banks are rapidly developing their own technology platform for their mobile sales force. If banking history is any indication, they will all develop variations of what the first bank has launched. And why not, they each themselves have millions of customers and their data to mine from. Bank data is digital gold.

MORTGAGEBROKERNEWS.CA

“Having worked elsewhere for many ye a rs, R M A i s t h e b es t b ro ke ra g e by far to work with. Very upfront about your commissions, compliance a n d c o n s i s te n t p a y s c h e d u l e s . N o unwelcome surprises.” Nidhi Thakkar RMA Mortgage Broker Kitchener, ON

WHAT CAN A BROKER DO To maintain competitiveness in the future and maintain business readiness at all times, brokers may need to think strategically about business efficiency. Ask the tough questions: Do I currently have business process pains and what are they?. What are the benefits and costs to enable my business to be as efficient and productive as possible? A self assessment and understanding of your own entire mortgage process workflow and efficiency gap would give a good idea where to start. Is it inhouse underwriting; or institutionalizing and securing the data, business mobility concerns or maximizing future business value. It may seem like a daunting task to wholesale change the way brokers manage their deals and business to gain efficiency and productivity. It would work better for the broker to hone in one area of the business that needs workflow and process improvements and start from there. The main thing is choose a system that your business can grow into and its ability to accommodate that growth when demand for more innovative workflow and process needs arise.

There are “Real Advantages” to joining RMA

CMY

CONCLUSION Mortgage brokers must examine their business process and workflow efficiency as a competitive advantage. The only control and influence brokers have is which frontend system they would choose to manage their business. The middle origination system and backend lender systems are completely out of broker’s control or influence.

Learn more about the advantages of joining our team at

www.rmabroker.ca/join 1.877.677.7778

APRIL 2014 | 23

STATISTICS / RESIDENTIAL SALES ACTIVITY

NATIONAL PICTURE AT-A-GLANCE Sponsored by TM

Two of Canada’s largest markets bounce back in a (not-so big) way Homes sales have started to climb back from a relatively cool winter market, with Canada seeing a 4.9 per cent year-over-year sales increase in March. “Sales in many housing markets continue to recover from winter’s deep freeze,” CREA President Beth Crosbie said. “At the same time, activity softened in some of Canada’s West Coast housing markets. This shows how local and national housing market trends can be very different. Lead by British Columbia and Alberta – who reported a 16.8 per cent and 14.8 per cent sales increase, respectively – March 2013 saw 41,387 houses change hands in March; up from 39,448 a year ago. Canada’s two largest territories also reported major year-over-year sales jumps with Northwest Territories enjoying a 175 per cent sales increase and Yukon reporting an 80 per cent increase. However, despite the slight boom in sales to start the spring season, home buyers did not flood the market. “There’s little doubt that winter’s icy grip prompted many potential home buyers to put off house hunting,” said Gregory Klump, CREA’s Chief Economist. “That said, we’ll have to wait and see what happens in April because while overall sales improved in March, there was little evidence of a flood of pent-up demand being released.” Despite this, CREA believes the sales figures don’t provide a completely accurate snapshot of the overall demand for housing in Canada. “It’s important to keep in mind the distinction between sales activity and housing demand,” Klump said. “Some markets, like Toronto and Calgary, are seeing multiple offer situations for some listings where each ultimately results in a single sale. This means national sales are being constrained by a lack of supply despite strong demand in some markets, since Greater Toronto and Calgary combined account for a onequarter of national activity.” 24 | APRIL 2014

per cent

62.1

per cent

38.5

per cent South Okanagan

South Central Alberta

Portage La Prairie

Swift Current

TOP CITIES

Sales Activity

(year-over-year percentage change)

MORTGAGEBROKERNEWS.CA

SALES ACTIVITY BY PROVINCE (year-over-year monthly percentage change)

+4.9

Source: CREA

per cent

Northwest Territories: +175 per cent Yukon: +80 per cent

British Columbia: +16.8 per cent Alberta: +14.8 per cent

Overall Canadian sales activity

Manitoba: +10.6 per cent

New Brunswick: 8.9 per cent

Nova Scotia: +5.4 per cent

Ontario: +1.2 per cent

63.3

per cent

Quebec: -2.1per cent

25.5

per cent

Saskatchewan: -0.6 per cent

Northern New Brunswick

Cornwall &4/16/2014 District10:53:44 AM 1

Cape Breton

Newfoundland and Labrador: -8.6 per cent Prince Edward Island: -20.6 per cent

D+H CMT Mortgage ad final.pdf

MARCH 2014 | 25â&#x20AC;&#x201A;â&#x20AC;&#x201A;

COVER / CMP TOP 75

TOP

Proudly sponsored by

Could the market be bouncing back? In its seventh year, CMPâ&#x20AC;&#x2122;s top brokers list received a record number of submissions and, more impressively, an increase in funded volumes. We report the 2013 results 26 | APRIL 2014

ÂŽ

MORTGAGEBROKERNEWS.CA

Ontario: 29

Brokers By The Province

Quebec: 2

New Brunswick: 1

Manitoba: 1

British Columbia: 25

Alberta: 14

Total Funded Volume $4.38B

2013

Saskatchewan: 1

Newfoundland: 1

Average number of years in the business

$4.24B

2012

Nova Scotia: 2

12.3

2013

15.92

2012

METHODOLOGY CMP congratulates all the mortgage professionals who took part in this year’s list. Each, as always, had to be employed as a mortgage professional, able to write loans and their deals must have been personally originated. They also provided a breakdown of their deals by lender with contact information, which was verified by the CMP team. All deals were residential, and while back-office support in processing the loans is acceptable, no other parties received commissions on these deals.

APRIL 2014 | 27

COVER / CMP TOP 75

MORTGAGEBROKERNEWS.CA ®

Total number of deals

013 was a breeze compared to the storminess of 2012. Still, there was no shortage of challenges thrown in the way, though brokers did more than eke out a living, collecting commissions on $4.38 billion in funded volume, specifically on residential mortgages. When all the submissions were gathered and double-checked, we – once again – crowned a new winner. Recording a whopping $258,615,820 – an increase of $57,610,620 over his tally from 2012. Of course, you’ll have to read on to discover who this mystery broker is. CMP is very proud of the diversity of this year’s list. Brokers from nine out of 10 provinces are represented, including Quebec. Some of those same names appear on CMP’s third Small Market Top 20, which recognizes the successes of top performers in markets where the average home price is $290,000 or less. Together, both lists point to an unmistakable trend, one we have also noticed: The gap is continuing to grow between the very top performers in this industry and other mortgage professionals. The top five this year contributed nearly 20 per cent of the total funded volume for the entire list.

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14,869

2012

14,992

2013

Total number of years in the business

1,194

2012

923

2013

67% Men 33% Women

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28 | APRIL 2014

Calum Ross

VERICO The Mortgage Management Group Member since 2012

#1 in 2010

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

Gord Pipkey

VERICO Real Mortgage Services Inc. Member since 2010

#1 in 2011

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

Jim Tourloukis

VERICO Advent Mortgage Services Inc. Member since 2013

#1 in 2013

“I am thrilled to be back and I’m blown away! 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 5 real deals and another 76 inquiries from leads. Those results speak for themselves.”

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COVER / CMP TOP 75 ®

CMP TOP 75 (1-13) Rank

Name

Company

City / Town

Funded Volume ($)

Funded Deals

Support Support staff who staff who Years as a don’t write write broker loans loans

Collin Bruce

Dominion Lending Centres Mortgage Mentors

Edmonton, Alta.

258,615,820

854

Dave Butler

Verico Butler Mortgage Inc.

Mississauga / Hamilton, Ont.

201,973,043

712

Harman Arora

Dominion Lending Centres House

Calgary, Alta.

126,000,000

388

Christine Xu

Mortgage Architects

Markham, Ont.

120,034,969

304

Michael Noik

Dominion Lending Centres Centura Finance

Montreal, Que.

112,400,000

343

Irina Antipova

Axiom Assured Mortgage Services

Toronto, Ont.

102,196,597

223

Scott Travelbea

Dominion Lending Centres & Travelbea Associates

Victoria, B.C.

99,393,338

286

Christopher Bisson

The Mortgage Centre Complementary Real Estate Services Inc.

Guelph, Ont.

96,448,244

383

Mark Goode

Mortgage Man Dominion Lending Centres

Orillia, Ont.

82,549,712

453

Angela Calla

Dominion Lending Centres Angela Calla Mortgage Team

Port Coquitlam, B.C.

81,732,056

239

Viktor Schaefer

Verico Onelink Mortgage & Financial

Steinbach, Man.

78,277,110

344

Susie Inglis

Dominion Lending Centres Mortgage Evolution

North Vancouver, B.C.

76,211,831

166

Nicholas L'Ecuyer

Verico The Mortgage Wellness Group

Barrie, Ont.

72,678,321

322

No. 5 Michael Noik Like a rocket this broker has shot up in the standings, bringing with him the city of Montreal and strong evidence of that market’s growing strength

Q&A WITH NO. 5 CMP: You did better this year than last. To what do you attribute to your growing success? Y.O.Y. FUNDED VOLUME

Noik: I attribute my growth to our team environment, which really is more of a family. We have an incredible office with outstanding support staff, and I have built excellent relationships with my lending partners. Our team looks to one another to help better understand client files and get them approved. At the end of the day, rate is nothing if you don’t have an approval. Lender product and guideline knowledge is key – especially these days. We work with our key lenders and learn their products inside out. Having the DLC brand behind us also helps in ensuring we’re constantly growing.

CMP: Is there one single opportunity brokers are letting slip through their fingers? 30 | APRIL 2014

Noik: We need every brokerage and association to work together to educate the public on the value of using a mortgage broker. Not enough people understand that broker’s should be their first option for all their mortgage needs. We also have to make it clear that we are licensed professionals who can offer true selection for the client, as opposed to the bank, where their mortgage personnel are not similarly licensed and can only provide one institution’s products to clients.

CMP: Which product was your best performer this year? Noik:I definitely had a lot of clients opt for the 5-year fixed over the past year.

CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Noik: No, I do not use rate sites.

CMP: What is your No. 1 marketing technique that you credit with building your business? Noik: In the 10 years I have been brokering, my #1 success for growing my business has always been word of mouth. You just can’t buy that kind of exposure.

MORTGAGEBROKERNEWS.CA ®

CMP TOP 75 (14-30) Rank

Name

Company

City / Town

Funded Volume ($)

Funded Deals

Support Support staff who staff who Years as a don’t write write broker loans loans

Win Lui

Verico Clear Trust Mortgages

Vancouver, B.C.

72,673,881

230

Skye McLean

Mortgage Architects Atlantic (HS) Financial

Calgary, Alta.

70,445,399

195

Dustan Woodhouse

Dominion Lending Centres Canadian Mortgage Experts

Coquitlam, B.C.

70,267,574

168

Steven Brouwer

Dominion Lending Centres Drake Entrust Mortgage Services

Chilliwack, B.C.

64,534,256

215

Jordan D'Haese

Jayman Financial

Calgary, Alta.

64,482,396

188

Terry Kilakos

Verico North East Mortgages

Montreal, Que.

63,432,457

229

Shawn Allen

Matrix Mortgage Global

Toronto, Ont.

62,000,000

250

Jordi Browne

Verico By Referral Mortgage Corp

Chilliwack, B.C.

59,399,225

221

Debbie Belair

Dominion Lending Centres Smart Debt

Ottawa, Ont.

59,243,000

198

Andre L'Ecuyer

Neighbourhood Dominion Lending Centres

Petawawa, Ont.

58,765,649

279

James Loewen

RMAI Loewen Group Mortgages

Burlington, Ont.

56,487,343

194

Chris Landry

Verico Paragon Mortgage Group

Vancouver, B.C.

56,111,824

135

Nick Kaaki

Dominion Lending Centres The Mortgage Source

Ottawa, Ont.

54,068,075

218

Todd Payzant

Dominion Lending Centres Neighbourhood

Sudbury, Ont.

53,987,768

246

Deborah White

Dominion Lending Centres White House Mortgages

Vernon, B.C.

53,609,317

195

Greg Martel

Dominion Lending Centres Zilla Mortgage Corp.

Victoria, B.C.

53,079,415

144

Ling Lem

Jayman Financial

Calgary, Alta.

52,787,304

145

144

Change

Change Change

APRIL 2014 | 31

COVER / CMP TOP 75 ®

CMP TOP 75 (31-45) Rank

Name

Company

City / Town

David Griffin

Dominion Lending Centres Griffin Financial Group

Peterborough, Ont.

Enza Venuto

Centum StreetwiseMortgages.com

Bernadette P. Laxamana

Funded Volume ($)

Funded Deals

Support Support staff who staff who Years as a don’t write write broker loans loans

52,113,395

231

Vaughan, Ont.

52,000,000

210

Verico Xeva Mortgage LLP

Burnaby, B.C.

51,702,029

155

Narish Maharaj

Dominion Lending Centres Mortgage Mentors

Edmonton, Alta.

51,210,843

175

9.5

John Panagakos

Dominion Lending Centres Home Financial Inc.

Toronto, Ont.

51,000,000

145

Lisa Manwaring

Meridian Southwest Mortgage

Delta, B.C.

49,000,000

170

Max Omar

Dominion Lending Centres Capital Region

Edmonton, Alta.

47,294,256

189

Tammy Pope

Jayman Financial

Edmonton, Alta.

47,093,778

141

Adam Bazuk

Dominion Lending Centres YBM Group Ltd.

Thornton, Ont.

46,369,985

169

8.5

Janet MacDonald

Verico The Mortgage Professionals

Kingston, Ont.

46,154,758

205

Joseph Park

Verico JP Mortgage Services

Toronto, Ont.

45,000,000

150

Ron Lefebvre

Invis Pure Mortgage

Edmonton, Alta.

44,585,773

142

Jeff Attwooll

Verico K-W Mortgage Inc.

Cambridge, Ont.

44,137,751

194

Clinton Wilkins

CENTUM Home Lenders Ltd.

Dartmouth, N.S.

43,810,825

215

Mackenzie Gartside

VERICO Select

Courtenay, B.C.

43,122,995

193

Y.O.Y. FUNDED VOLUME

No. 4 Christine Xu

CMP: Which product was your best performer this year?

Making her debut in the Top Five is mortgage broker Christine Xu of Mortgage Architects in Markham, Ont. Xu funded $120,034,969 in 2013 largely on the strength of residential deals.

CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Xu: I do not use rate sites.

Q&A WITH NO. 4

CMP: What is the No. 1 marketing technique that you credit the most for building your business?

CMP: Is there one single opportunity brokers are letting slip through their fingers?

Xu: A large percentage of my business comes from repeat clients and referrals from past clients even past non-clients. I have practiced my three business principals for years and referrals keep coming: be honest, be kind and be fair.

Xu: I don’t think that I have any secret weapon that other brokers do not have. However, if I have to come up with one thing, I think I am probably more knowledgeable in terms of understanding different lenders’ lending guidelines than average brokers. I love to read lenders’ guidelines and broker packages. Not only I am quite familiar with most of my preferred lenders’ lending criteria, I also remember details such as compounding frequencies, pre-payment limits, etc. So in front of clients, I am a true expert. 32 | APRIL 2014

Xu: B-side equity lending.

CMP: To what do you attribute to your growing success? Xu: I did better than last year. In fact, in the past 13 years as a mortgage agent/broker, my numbers have consistently increased every year. For me, there really is no shortcut for success but hard work, hard work and hard work.

MORTGAGEBROKERNEWS.CA ®

No. 3 Harman Arora Word of mouth is still a powerful tool for mortgage brokers. Just ask Harman Arora, a mortgage expert with DLC House in Calgary, who debuts on the CMP Top 75 Brokers list at No. 4, having $126 million in funded volume without the use of advertising.

Q&A WITH NO. 3 CMP: Which product was your best performer this year?

Y.O.Y. FUNDED VOLUME

Arora: There is no single product that I rely on, but 50 per cent is conventional. My portfolio consists of an almost even split in construction mortgages, income-qualified conventional, B lenders and private mortgages.

CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Arora: I don’t use rate sites.

CMP: What is your No. 1 marketing technique that you credit with building your business? Arora: I have never advertise. My clients have always referred me to other clients and Realtors, so I have always relied on my service to be appreciated by word of mouth.

CMP: To what do you attribute to your growing success? Arora: My business this year is same year after year. I attribute it to consistent effort and a thorough knowledge of the products offered by each lender.

CMP: Is there one single opportunity brokers are letting slip through their fingers? Arora: [Brokers] don’t pick up the phone. Some also take clients for granted and don’t keep them informed throughout the entire mortgage process.

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APRIL 2014 | 33

COVER / CMP TOP 75 ®

CMP TOP 75 (46-60) Rank

Name

Company

Funded Volume ($)

City / Town

Funded Deals

Support Support staff who staff who Years as a don’t write write broker loans loans

Sabeena Bubber

Verico Xeva Mortgage

West Vancouver, B.C.

43,083,280

127

Morris Briglio

Verico The Mortgage Advantage

North Vancouver, B.C.

43,066,700

Sundeep Saggu

Verico The Mortgage Wizards

Toronto, Ont.

42,181,141

Adil Mawji

Invis

Calgary, Alta.

41,826,101

114

Yves Cormier

Verico Cormier & Cormier Consulting

Edmundston, N.B.

41,708,867

309

Jody Henry

Dominion Lending Centres Arrowsmith

Qualicum Beach, B.C.

41,322,374

156

Gert Martens

Dominion Lending Centres HT Mortgage Group

Grande Prairie, Alta.

40,896,633

184

Luisa Hough

Verico Xeva Mortgage

Surrey, B.C.

40,580,689

138

Charlene Elliott

Dominion Lending Centres Mortgage Mentors

Fort McMurray, Alta.

40,113,774

Karen Garrett

Dominion Lending Centres Sea to Sky Mortgages

Whistler, B.C.

39,971,500

103

Sarah Davison

Mortgage Intelligence

Grande Prairie, Alta.

39,028,682

142

Kent Bittner

Dominion Lending Centres Bittner Mortgages

Regina, Sask.

39,021,000

136

Scott H. Bentley

Verico Premiere Mortgage Centre

Halifax, N.S.

39,015,917

163

Jason Georgopoulos

Dominion Lending Centres Estate Mortgages Inc.

Toronto, Ont.

39,000,000

106

Sharnjit Singh Gill

Verico Superior Mortgage Inc

Surrey, B.C.

38,319,195

No. 2 Dave Butler

Y.O.Y. FUNDED VOLUME

Another long-time resident near the top of the list every year is Dave Butler, a broker with Verico Butler Mortgage Inc. in Mississauga, Ont. Over the past four years, Dave has never finished lower than seventh and moved up from third to second this year by breaking the $200 million mark in funded volume for the first time.

Q&A WITH NO. 2 CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Butler: I personally have never used a rate site for business. However my father and brother run a separate division of Butler Mortgage Inc. that focuses primarily on Internet leads and they write more business then I do annually, so the rate sites clearly do work.

34 | APRIL 2014

CMP: What marketing technique do you credit the most for building your business? Butler: As far as marketing goes, it is actually quite simple: Many years ago I decided to go after a segment of the market that I felt was not a segment a lot of other brokers focused on – real estate investors. So I go out to different real estate investment clubs and pitch the fact that I specialize in working with real estate investors, know every rental program in the market inside and out, as well as having tons of value-added services for investors.

CMP: You did better this year than last, so to what do you attribute to your growing success? Butler: We attribute our year-over-year increase to the same factors as our previous years: hard work, working efficiently together as a staff, staying on top of the various product/guideline changes and making sure our clients are our No. 1 priority.

News

InternatIonaL

u.s.

U.S. housing market worse than thought The number of Americans who bought previously occupied homes rose in October. But the National Association of Realtors 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, CMP: Is there onesays: single opportunity brokers the Realtors group changes in the way the Census Bureau collects population and some sales are letting slipdata, through their shifts fingers? being counted twice. Butler: I believe a lot of brokers are fighting The Realtors consulted with government this ever-growing trend of more clientsand getting private housing experts, including the Federal Reserve, their mortgages through the Internet. We all need the Department of Housing and Urban Development, to be open-minded and realize that the Internet the Mortgage Bankers Association, the National is not going anywhere, if anything the amount Association of Home Builders, mortgage giants Fannie of clients whoMac willand beCoreLogic, getting their mortgage Mae and Freddie a California-based through source will continue grow and data firm an online that first raised doubts about thetoannual numbers this year.in that part of our business, if you areearlier not involved that theinRealtors group thenCoreLogic you mayhas endestimated up getting left the dust. overstated sales in 2010 by at least 15 per cent. The changing numbers could affect how economists CMP: Which product was your best performer view the trade group’s data. It could also affect companies thisuse year? gures for hiring and expansion plans. that the fi Bulter: Just like previous years, my team Sales are measured when buyers close on homes. works mainly with real estate investors who are But many deals are collapsing before that point. One-third Realtors said they at least one contract trying to of build a portfolio ofhad rental properties. So scuttled in October, up from 18 per cent in September. if there was a product that was our best performer, Contracts areof being for several reasons: it would be any the cancelled rental programs that are out Banks have declined mortgage applications; home

there.

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)

MORTGAGEBROKERNEWS.CA

inspectors have found problems; appraisals showed a home was worth less than the bid; a buyer lost a job before the closing. More than two years after the recession officially ended, many people can’t qualify for loans or meet higher down payment requirements. Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling. Sales are also being hurt by a decline in first-time buyers, who are critical to reviving the housing market. Sales have fallen in four of the five years since the housing boom went bust in 2006. Declining prices and record-low mortgage rates haven’t been enough to boost sales. At the same time, home construction has begun a gradual comeback and should add to the economy’s growth in 2011 for the first year since the Great Recession began in 2007. Last month, builders broke ground on an annual rate of 685,000 homes, the government said recently. That was a 9.3 per cent jump from October and the fastest pace since April 2010. Most economists say home prices will keep falling, by at least five per cent, through 2012. Many forecasts don’t foresee a rebound in prices 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 30 per cent above the price of one that’s been occupied before – twice the normal markup. Investors are taking advantage of the discounts. The housing market is struggling even as the broader economy has improved in recent months. The economy grew at an annual pace of two per cent in the July-September quarter. Many economists expect slightly better growth in the October-December quarter. CMP

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APRIL 2014 | 35

COVER / CMP TOP 75 ®

No. 1 Collin Bruce It took a few years, but Collin Bruce has finally made his way to the top of the mountain and captured the No. 1 spot on CMP’s Top 75 Brokers list after being in the Top Five each of the last three years. The broker-owner of DLC Mortgage Mentors in Edmonton cracked the $200 million mark in funded volume for the second year in a row with $258,615,820 in 2013. And he continues to grow his business year after year without the help of rate sites.

Q&A WITH NO. 1 CMP: What is your No. 1 marketing technique that you credit the most for building your business? Bruce: I use a number of different kinds of advertising. TV, radio, real estate publications, Internet, brokerage contests, etc. I think it is a combination of them all. When a client sees me on TV and then hears me on the radio the next day and then goes online to look at houses and sees me there, it is so effective. The advertising becomes a warm lead. I could be the worst mortgage broker in the world, but because of all

Y.O.Y. FUNDED VOLUME

36 | APRIL 2014

the advertising we do, it legitimizes our business, especially when we are competing with a bank. The multiple streams of advertising helps make the typical bank client more comfortable using a broker because they see us everywhere

CMP: To what do you attribute to your growing success? Bruce: Our total volume increased 25 per cent the previous year. I brought on a few more key salaried people on my team who have made a huge impact on the business. We are better able to service our clients and spend more one-on-one time. This has translated into more repeat and referral clients. Guaranteed if it wasn’t for the quality of people on my team, I would not be at this volume. Plus I am very confident in knowing our clients are being treated well and are being put into mortgage products that are the best for them. The other reason for the increase in repeat and referrals is just in my own personal business cycle. A lot of our previous clients are either refinancing or upgrading their homes and as long as we continue to deliver great customer service, I expect this part of my business to continue to grow.

CMP: Is there one single opportunity brokers are letting slip through their fingers? Bruce: I was at the DLC conference in New Orleans this past year and had the opportunity to listen to Darren Hardy. I loved his presentation. He let everyone know the big secret on how to succeed in work /health / life was “Hard Frickin Work!” And I believe it. I don’t see any single opportunity that brokers are letting slip through their fingers. But I do see a lot of brokers who don’t realize how much work it takes to be in the Top 75. If you want to be successful at mortgage brokering you have to work at it, and work at it some more.

CMP: Which product was your best performer this year? Bruce: We have done really well marketing to firsttime home buyers with flex down payments. The banks do not have this product available so we do get a lot of calls on this product. When it comes down to it, we actually do not do a lot of flex down mortgages. Clients don’t realize that you can use RRSP’s or a gift from a relative, etc. for down payment. But this is a really effective way to get the phones to ring.

MORTGAGEBROKERNEWS.CA ®

CMP TOP 75 (61-75) Rank

Name

Company

City / Town

Denny Segal

Dominion Lending Centres Origin Home Financial Partners Vancouver, B.C.

Dave McNabb

Dominion Lending Centres Regional Mortgage Group

Anthony Spadafora

Funded Volume ($)

Funded Deals

Support Support staff who staff who Years as a don’t write write broker loans loans

38,000,000

Red Deer, Alta.

37,109,822

116

Verico Premiere Mortgage Centre

Burlington, Ont.

36,972,145

126

James Harrison

Dominion Lending Centres Mortgage Village

Mississauga, Ont.

35,270,567

100

65 (tie)

Lena Ohanjanians

Verico Ultimate Mortgage and Finance Solutions

Toronto, Ont.

34,757,500

112

65 (tie)

Catherine Evel

Dominion Lending Centres Homestead Financial

Waterdown, Ont.

34,757,500

124

Terry Short

The Mortgage Centre Advantage Financial Services Inc

St John's, Nfld.

34,410,802

141

Teague Brinkworth

The Mortgage Centre Dico Holdings Inc./ Mortgage West Brokers Inc.

Kamloops, B.C.

34,265,303

111

Ryan Joseph

Jayman Financial

Calgary, Alta.

34,127,818

Barry Patchett

Dominion Lending Centres Great Lakes

Kitchener/Waterloo, Ont.

34,103,403

175

Liliana Peric

Dominion Lending Centres Capital Region

Edmonton, Alta.

33,710,000

112

Jean-Guy Turcotte

Dominion Lending Centres Regional Mortgage Group

Red Deer, Alta.

33,442,458

109

Pierre J. Blais

Jayman Financial

Edmonton, Alta.

32,940,968

102

Corey Klassen

Dominion Lending Centres Powerhouse Mortgages

Saskatoon, Sask.

32,895,036

115

Ken Lankin

Mortgage Intelligence

Niagara Falls, Ont.

32,780,714

187

Denise Devente

Dominion Lending Centres Mortgage Evolution

Vancouver, B.C.

32,581,893

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

APRIL 2014 | 37

COVER / CMP TOP 75

MORTGAGEBROKERNEWS.CA ®

THE SMALL MARKET

TOP 20 Hard work and community overcame the limits of smaller market for these 20 leading brokers by volume BY THE GROUP

$825M 2013

$802M 2012

3,936

TOTAL NUMBER OF DEALS:

275

TOTAL NUMBER OF YEARS IN THE BUSINESS

15.1

AVERAGE NUMBER OF YEARS IN THE BUSINESS

38 | APRIL 2014

Small-market brokers step into the spotlight this year as CMP introduces its third Small Market Top 20 list in conjunction with the Top 75. The Small Market Top 20 was open to all brokers and agents who did a minimum 80 per cent of their deals in markets where the average home price is at or below $290,000. They must be MLS-identified regions, cities or towns. That cut-off is considerably lower than the national average, which closed 2013 just below $400,000. For this running of the Small Market Top 20, brokers from Alberta, Ontario, Nova Scotia, New Brunswick, Manitoba and Newfoundland & Labrador shared that spotlight, many of them amassing total funded volumes that outstrip their counterparts in much pricier markets. It suggests that they worked harder to achieve it, often doing 10-, 20- or, even, 40- per cent more deals. Add to that a slower market generally, and brokers in smaller communities were challenged to say the least. A strong presence in their tight-knit communities has helped many brokers to grow their books despite the regulatory and market challenges. Mark Goode, No. 1 this year, again advises brokers entering smaller markets is to make a sincere effort to become part of the community they service. For example, Goode and his team are active sponsors and participants in local soccer, hockey and lacrosse teams in Orillia. Many brokers are also members of the chamber of commerce. “Get to know your clients, get involved in the community,” Mark Goode, a DLC broker in Orillia, tells CMP. “People want to know that you actually live and work in the community and are not just driving in to get their business.”

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COVER / CMP TOP 75

MORTGAGEBROKERNEWS.CA ®

CMP TOP 20 SMALL MARKET Rank

Name

Company

City / Town

Funded Volume ($)

Funded Deals

Support Support staff who staff who Years as a don’t write don’t write broker loans loans

Mark Goode

Mortgage Man Dominion Lending Centres

Orillia, Ont.

82,549,712

453

Viktor Schaefer

Verico Onelink Mortgage & Financial

Steinbach, Man.

78,277,110

344

Andre L'Ecuyer

Neighbourhood Dominion Lending Centres

Petawawa, Ont.

58,765,649

279

Todd Payzant

Dominion Lending Centres Neighbourhood

Sudbury, Ont.

53,987,768

246

David Griffin

Dominion Lending Centres Griffin Financial Group

Peterborough, Ont.

52,113,395

231

Janet MacDonald

Verico The Mortgage Professionals

Kingston, Ont.

46,154,758

205

Yves Cormier

Verico Cormier & Cormier Consulting

Edmundston, N.B.

41,708,867

309

Gert Martens

Dominion Lending Centres HT Mortgage Group

Grande Prairie, Alta.

40,896,633

184

Sarah Davison

Mortgage Intelligence

Grande Prairie, Alta.

39,028,682

142

Scott H. Bentley

Verico Premiere Mortgage Centre

Halifax, N.S.

39,015,917

163

Dave McNabb

Dominion Lending Centres Regional Mortgage Group

Red Deer, Alta.

37,109,822

116

Terry Short

The Mortgage Centre Advantage Financial Services Inc

St John's, Nfld.

34,410,802

141

Jean-Guy Turcotte

Dominion Lending Centres Regional Mortgage Group

Red Deer, Alta.

33,442,458

109

Ken Lankin

Mortgage Intelligence

Niagara Falls, Ont.

32,780,714

187

Dan Sauve

Verico Mortgage Corp. Financial Services Inc.

North Bay, Ont.

28,242,718

193

Beverley Brandl

Dominion Lending Integrity Plus Inc

Wasaga Beach, Ont.

26,020,307

122

Eileen Crosbie

Dominion Lending Centres The Mortgage Source

Smiths Falls, Ont.

25,650,793

143

Dustin James

Dominion Lending Centres National

Lindsay, Ont.

25,510,092

136

Linda Ross

Verico The Mortgage Professionals

Kingston, Ont.

25,191,481

120

Donna Mullen

Mortgage Intelligence

Wasaga Beach, Ont.

24,790,409

113

The Rise and Fall of Small Town Canada The last year has been both kind and cruel to small town Canada and, indeed, its brokers. While some of those markets have seen prices drop others have seen them rise, taking with them the average commission of brokers. Still lower prices have helped, in many cases, to spur on more activity for mortgage professionals. CMP charts the rise and fall of average year-to-date prices in small markets represented in this year’s Top 20, comparing YTD 2014 to YTD 2013.

40 | APRIL 2014

Simcoe & District, Ont. -3.7%

Northern New Brunswick

-8.1%

$220K

$83K

(Mar 2014)

(Mar 2014) Petawawa,

Ont. 2.4% $225K

(Mar 2014)

New Foundland

15% $174K

(Mar 2014)

Kingston,

Ont. 5.7% $285K

(Mar 2014)

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COVER / CMP TOP 75 ®

Q&A WITH NO. 1 CMP: You did even better this year than last. What do you attribute to your growing success? Goode: Yes, I had an increase this year. Due to the changes in the market, as well as government regulations. Mortgage Brokers specialize in tailoring solutions to their clients’ needs, as such we are better able to deliver what they need not just prepackaged products offered by the banks. Our expertise and flexibility is as a result of the time and training and the myriad of lenders we have access to. Meaning that our clients get a wider variety to choose from and are better served than typically having to go place to place and advocate for themselves. In short, our clients trust us and are well educated on the importance of looking for more than just a good rate. We also have to consider penalties, and other terms.

CMP: Is there one single opportunity brokers are letting slip through their fingers? Goode: When the government changes the rules the banks tighten up and I get busier also using ‘the wedge technique’ to get people away from banks and stay with Mortgage Man DLC. Sell more products to keep them out of the banks. Do all of the servicing so clients are calling you not the lender when the need help or information. That way you get the first call when it is time to renew or remortgage.

CMP: Which product was your best performer this year? Goode: It was the 5-year fixed mortgage. It is a great secure mortgage at a low rate, and before that it was the 10-year fixed prior to rates going up. We are starting to sell the variable again. We determine what is best for clients, what they needs are then customize the mortgage to meet there needs.

No. 1 Mark Goode Y.O.Y. FUNDED VOLUME

42 | APRIL 2014

This year’s Small Market Top 20 saw the top two spots flip, with Mark Good of Mortgage Man DLC in Orillia, Ont. taking the No. 1 position, edging out last year’s winner Viktor Schaefer. With 453 residential mortgage deals, Goode topped $82 million in funded volume in 2013, mainly on the strength of five-year fixed terms.

CMP: If you use rate sites, do you feel you could have had those numbers not using a rate site? Goode: Only use rate sites so we can quote a range saying 2.94-3.29 for example. Different rates, different options. You do not want to quote a rate over the phone and then a lose client. Always quote a range from the lowest that way you are never higher than the quote. You do not want to lose client before you can even get them.

MORTGAGEBROKERNEWS.CA ®

BY THE PROVINCE

CMP: What is your No. 1 marketing technique for building your business? Goode: We use our position as the mortgage experts in our area to ensure that our clients are educated on their mortgage decision and feel comfortable asking us any and all questions. They know we can get them the info they need when they need it. Our marketing manager makes sure that our clients are updated regularly with changes in the market as comes available. Through personalized correspondence as well as through our social media initiatives, we ensure we are top of mind.

1 12

Sophie Bush

Marketing Manager

1-604-530-7430 sophie@vwrcapital.com www.linkedin.com/in/sophiebush

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www.vwrcapital.com APRIL 2014 | 43

FEATURE / CONSTRUCTION FINANCING

BUILDING

A CASE

Construction Financing is tough to get these days, writes Lionel Larry of First Source Mortgage Corporation in part one of a three part series. For a residential project, you need a great number of bona fide sales and for a plaza to be built, considerable pre-leasing is a prerequisite. Most financial institutions shy away 44 | APRIL 2014

Private lenders are being called upon more and more to fill this gap. Construction loans are generally considered to be riskier than other commercial financing by most lenders. For a commercial lender, the most significant risk factors for commercial construction financing include:

1 2 3

NO INCOME

until the new building is completed, a commercial property cannot produce income to repay a loan;

LIENS

a substantial risk factor is the possibility for Construction Liens

OVERBUDGET

many commercial construction projects take more time to complete than originally projected and or exceed initial cost estimates called â&#x20AC;&#x153;cost overruns.â&#x20AC;? Understanding the process of construction financing is extremely important.

Cover

The Year ahead

THREE TYPES OF CONSTRUCTION FINANCING

a b c

reality out there instead of trying thearound most basic situation - anwill individual or builder to sell it, then people a home for themselves or for resale trustbuilding us.” But any efforts the industry may undertake as a whole will have no a developer constructing multi-residential effectcondominiums/homes if individual brokers don’t do or rental for re-sale their parts, which means giving clients the best value-added service, a developer constructing improving efficiencies and fundingan industrial, commercial, hospitality or special purpose ratios with lenders, and of course, property its own business use, for others – placing clientsfor with the right lenders for their needs. “design built” -- or for rental “Focus on the best interest of the The “exit” strategy is a key underwriting client fi rst and foremost,” said consideration to a lender when looking at a Therien. “We are at a crossroads: we construction loan. Is the borrower going to have the either go back to being the person you ability to make payments onitthe loan or repay go to when the the banks say no as was the mortgage due? This occurs when the 25 years ago,when or become trulyonly trusted project is to built, soldand or occupied advisers ourleased, customer move up as the case to the may be.next level.” CMP

Construction lending is risky business. If the

morTgagebrokernews.ca

MORTGAGEBROKERNEWS.CA

lender is forced to “take over” a building during construction to protect its loan, in many cases, losses can occur both to the borrower and the lender. There are many moving parts in a construction project which serve to increase lending risk substantially. If a lender acquires an unfinished building through the default of the borrower, then it faces the difficult task of re-assembling the project team or more often getting a new one at additional costs with additional funding requirements. Default is commonly a result of cost overruns and delays caused by labour homeowners say they interruption, liens or material changes in theof cost structure of the project often due to unforeseen are in a good position to circumstances. weather a potential downAs a result of these uncertainties, construction lending commands a greater interest rate compared turn in the housing market Source: Mortgage Insights: to mortgage lending for completed buildings. It is also from CAAMP’s Fall 2011 moreHighlights difficult to acquire. consumer and industry surveys Check back next month for part two of this three (CAAMP/Martiz Research Canada) part series, which will focus on budgeting issues for construction financing.

71%

APRIL 2014 | 45

BUSINESS STRATEGY / SECRET #14

A GUIDE TO

SMARTER

MARKETING

46 | APRIL 2014

MORTGAGEBROKERNEWS.CA

Putting their sales savvy to work in print advertising is another secret of superstar brokers, writes coach Doren Aldana SECRET #13: THEY EMPLOY DIRECT RESPONSE ADVERTISING FOR LEAD GENERATION. What is advertising? Simply put, advertising is salesmanship or saleswomanship in print. In essence, advertising allows you to leverage the same marketing message over and over to tens, hundreds and even thousands of targeted individuals at the same time! When done correctly, advertising can offer a tremendous upside return on your marketing efforts, but done incorrectly, advertising can become a black hole that can suck your bank account dry faster than a vacuum on steroids. The truth is, it usually doesn’t cost you any more time, energy or money to get your ad to pull 100 leads than it does to pull 10 leads. Regardless of results, you pay the same fixed cost. But only superstar mortgage professionals know how to maximize and optimize the return they get on every ad dollar they invest. Superstar mortgage professionals understand and abide by the following 10 principles for successful advertising: Ad Principle #1: Never advertise until you have selected a specific target market. Most mortgage pros waste their ad dollars on generic, untargeted advertising. I call this “spraying and praying.” Ad Principle #2: Understand your target market’s problems, fears and hot buttons as it relates to their financing needs. In other words, what keeps them up at night? What are their unique challenges that you can help solve? Ad Principle #3: Clearly articulate your unique solution to your target market’s unique problem (this is your Unique Selling Proposition). Ad Principle #4: Choose the media type that will reach the highest concentration of your target market. For example, if you’re targeting people for home renovation refinancing, you might place your ad in

a local home renovation magazine. Your media needs to match your market. Ad Principle #5: Define the primary objective of your ad – what is your desired outcome? In most cases, your primary objective will be to generate qualified mortgage leads. Ad Principle #6: Use a bold, compelling, attentiongrabbing headline that communicates the most meaningful benefit of your offer. Why is this important? Extensive studies have found that your headline is responsible for at least 80 per cent of the success of your ad! Ad Principle #7: Prove your solution actually works by featuring client testimonials. This helps to build your credibility and dismantle the skepticism in the mind of your prospect. Ad Principle #8: Have a clear and concise call to action. Tell your audience what specific action you want them to take. In other words, what do you want them to do next? Do you want them to call your number, go to your website, call your 24hr hotline? Don’t assume they know what to do. Tell them specifically. Ad Principle #9: Use education-based marketing to induce the reader to take action by offering a free information product (like a guide, booklet, CD, or DVD) that provides relevant and valuable information that they want, in exchange for what you want: their contact info. Ad Principle #10: Test, Test and Test! Never advertise unless you can measure and track your results. Most mortgage pros use the S.W.A.G. method for analyzing results: Scientific Wild Ass Guess! Remember, you can’t improve that which you don’t measure. In conclusion, those 10 principles for successful advertising are the reason why superstar mortgage professionals consistently generate at least 2001,000 per cent higher response rates on their advertising than the average mortgage professional. How many of those principles are you currently employing in your advertising? In next month’s 15th secret, you’ll learn a powerful marketing strategy that superstar mortgage professionals use to instantly gain “expert” status, build credibility and authority, and get huge floods of leads with little time or effort. Stay tuned...

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

APRIL 2014 | 47

FEATURE / CMA FINALISTS

CMA STANDOUTS Our Mortgage Broker of the Year Candidates – along with our Top 75 – stand atop the mortgage brokering world in Canada. Read more for details on how some of them do ‘it’

48 | APRIL 2014

MORTGAGEBROKERNEWS.CA

Mortgage Broker of the Year, fewer than 25 employees

TRACY VALKO GORD MCCALLUM

of Dominion Lending Centres Platinum Group

Tracy Valko may have started on the “other side” in 1999 when she joined MCAP in the mortgage retention department and underwriting for ING Direct, but in 2003 she joined the brokerage side to become an independent broker in the Kitchener-Waterloo area. In 2009 she joined Dominion Lending Centres before opening her own franchise, DLC Platinum Group, in 2012. And she brought with her a family approach to mortgage brokering. “My approach for generating referral business is very simple. My clients are not just ‘a client,’ they are extended family to me,” Valko tells CMP Magazine. “During the year, I host annual client appreciation events where all my clients and their families can attend.” An avid hockey fan, Valko takes advantage of Canada’s favourite game – as well as other events -- to better connect with her clients. “I support our local hockey association and I have season tickets to OHL games and concerts that come to the local arena. I invite clients and referral partners to enjoy various events during the year,” Valko says. “Showing my appreciation to all my clients and business partners for trusting me to assist them with their personal finances, and together with my business partners trusting me with their clients, establishes a stronger connection with each and every one of them.” Valko values her clients and shows that appreciation by always being no more than a phone call away. “Honesty, integrity and sincerity are the best approach in dealing with all my clients and referral partners that work with me,” she says. “Being straightforward with any questions my clients may have, is my approach to establishing the trust between both parties.”

of First Foundation Residential Mortgages

As the founder, president and CEO of First Foundation, Gord McCallum has followed a simple business strategy from the start. “My p e r s o n a l business philosophy is to find something that someone needs or wants, and help them get it,” McCallum says. “If you serve that way you’ll always have something to do.” First Foundation is known for its innovative Internet presence, blending a number of social media strategies to connect with clients and those in the industry; a strategy McCallum picked up earlier in his career, though he realizes mortgage brokering is his bread and butter. “I try to think of the mortgage business from a business first, mortgage second point of view,” McCallum says. “I have a broad business and IT background which helps me to innovate in some ways; but if I don’t keep it in check it’s an easy way to get distracted and lose focus.” Operating a truly diversified business model, First Foundation Residential Mortgages’ slogan is “Own, Grow, Protect,” something that is embodied in its philosophy. “We work hard to innovate and lead online. In addition, our focus is on differentiation and offering a complete suite of services -- all brokered independently -- with the purpose of making a bank branch unnecessary for many people,” McCallum says. “We’re one of the only mortgage brokerages that I know that is fully committed to line of business differentiation; some are doing it as an add-on but our whole business is dependent on it.”

APRIL 2014 | 49

FEATURE / CMA FINALISTS

MORTGAGEBROKERNEWS.CA

BLAIR ANDERSON JAMES LOEWEN of Anderson Associates

Blair Anderson looks to another industry entirely for inspiration for running his mortgage business. “The late Leo Burnett, famous advertising executive once said, ‘what helps people, helps business,’” Anderson says. “It’s a simple philosophy, but one I try to perfect every day. It requires a consumer-centric approach to running your business; creating a positive consumer experience at the point of sale, and post-sale.” Founded in 1998, Anderson Associates was recently featured in CMP’s Top Independent Brokerages issue and Anderson endeavours to earn the trust of each and every client. “There are lots of good mortgage brokers; I don’t have to be the best, and I’m certain I am not,” Anderson says. “It’s about earning people’s trust so that they know I am looking out for their best interest. After that, I just need to prove my ability to get the job done. “That, and that alone, keeps clients coming back, and will earn you referrals. How do you earn people’s trust? Make them feel more like a friend than a customer. You also need to manage their expectations.” While he commends certain companies for their innovative marketing strategies, Anderson employs a much simpler approach. “I would love to have been the creative genius behind Samsung’s “Next Big Thing” advertising campaign, which frequently poked fun at people standing in line outside of Apple stores for product launches -- who wouldn’t?” Anderson says. “Or with much less money, created a video on YouTube that went viral. The reality is I should stick with the better odds of keeping in touch with my existing clients. “The repeat and referral business generated is reliable, and maybe not as gratifying, but still a good sense of accomplishment.” Looking forward, Anderson hopes to “get with the times” and become more socially active, while also adapting his website for mobile use. And while A-business currently accounts for 75 per cent of his business, Anderson has plans to branch out in the near future. 50 | APRIL 2014

of Loewen Group Mortgages

When it comes to Loewen’s philosophy, it’s all about providing comfort and education for his clients. “We want clients comfortable (enjoying their favourite beverage, for example), stress-reduced, educated on the process and knowing we are servicing them up to and after the purchase has been made,” Loewen says. “The key message as well is that our value is not in being the “cheapest,” but being the best in education, service and showing that long-term service of managing a mortgage (such as small annual payment increases) can be of far greater value than the small difference of 0.10 per cent between one broker and another.” Speaking of favourite beverages, Loewen Group Mortgages also has a unique strategy to help clients feel at home in his office. “Besides having a fully stocked spirits cabinet for clients, we have a fulltime “Strategic Mortgage Manager” (Licensed agent) with the sole purpose of ensuring the strategies we decide mutually with our clients are in fact executed as planned and promised,” Loewen says. Despite its somewhat unconventional means, the Loewen group is no stranger to conventional mortgages, with A-lending accounting for 80 per cent of its business. And most of its business is attained through traditional referrals.

VITTORIO OLIVERIO

of Centum Professional Mortgage Group Inc. “I have a saying that I use, Oliverio says, ‘Good service should be given when sailing in smooth water, but good service should be expected when sailing in rough water.’” “We do not sell mortgages, we create relationships that is why we have one of the highest retention program in the market,” he continues. “We have clients who have been with us from the very beginning.” When it comes to a point of differentiation between him and his competitors, Oliverio says it’s not all about rate. “It is not always about the rate,” he says. “I offer a service that is better than most and my clients see the value in that, I may not always be the lowest rate, but I know that the client has the best mortgage solution.” And when it comes to his brokerage, Oliverio fosters a team-like environment among his agents. “All associates are encouraged to ask questions about their deal, and before any turn it down, each associate is required to ask for a second opinion from another associate,” Oliverio says. “Our meetings are a sharing experience; what works for an associate in reference to marketing or getting deals approved may help another associate.”

FEATURE / CMA FINALISTS

Mortgage Broker of the Year, 25 employees or more

ANNE BRILL COLLIN BRUCE of Centum Metrocapp Wealth Solutions

Anne Brill, the broker/owner of Centum Metrocapp Wealth Solutions, believes providing mortgages is just one part of a larger financial picture. “I do more than just get financing for my clients,” Brill says. “I believe it is also just as important if not more important to educate them so that they have the skills necessary to make the right financial choices.” 100 per cent of Brill’s business comes from referrals, proving this industry really is about the relationships you forge and the service you provide. “To be honest, I do not do much marketing. I have no need,” Brill says. “All my business is referral business due to the high level of service I provide to my client both during the deal process and well beyond.” Brill says she taps into her knowledge and experience in all facets of financing to provide her clients with more than just mortgage advice. “I am a Score-Up Licensee as well and am able to provide services to my clients who need assistance increasing their credit score,” Brill says. “We also have strong connections with financial planners, lawyers, real estate agents and insurance agents to refer our clients to. We also have in-house access to lease financing for our clients.” 52 | APRIL 2014

of Dominion Lending Centres Mortgage Mentors

When it comes to marketing, the No. 1 broker on the Top 75 finds great success in more traditional media. “We do a lot of different marketing -- TV, Internet, real estate publications, radio. Radio is my favourite,” Bruce says. “I have become friends with most of the DJs and sales staff over the years. And we have done a lot of their mortgages. When the DJs talk about me on the radio and tell people to use me, it is so effective.” DLC Mortgage Mentors reaches the community through various media for reasons completely unrelated to its mortgage business as well. “We have also partnered with a local Edmonton charity; we have been running TV and radio commercials for the charity and also sponsor and host numerous fundraising events throughout the year,” Bruce says. “It really helps bring and keep our brokerage together.” And that isn’t the only way Bruce and his colleagues reach out to the community. “We are currently working with a NASCAR race driver putting on a contest where people can win rides in the Nascar,” Bruce says. “All the proceeds are going to the Youth Empowerment Service in Edmonton. We feel this will be a huge contest and provide a lot of benefits for our agents and YES.”

MORTGAGEBROKERNEWS.CA

ANTHONY DAN EISNER CONTENTO of True North Mortgage

of Sherwood Mortgages Your Mortgage Architects

Contento spent 25 years in the banking channel before making the move to the mortgage industry, but his brokerage is anything like a big bank; instead, he prefers to run a small and intimate office. “It truly is a boutique environment where we all help one another,” Contento says. And when it comes to marketing, Contento prefers to engage with his customers over social media and in person; both with the goal of creating lasting relationships. “We attend and host events where the atmosphere is laid back and where we’re not in ‘business mode,’” he says. “You get to know people outside of work mode and that’s how relationships are built.”

Dan Eisner’s True North Mortgage may employ a unique model – that relies on upscale storefronts and salaried brokers – but that doesn’t mean it can’t be compared to more traditional mortgage businesses. “I believe having a strategy consultant background taught me to look at our business from a competitive point of view. We constantly benchmark ourselves against our competitors,” Eisner says. “We focus on creating a brand that is defined by providing very competitive mortgage rates. You are defined by what makes you different from the next guy and we take that to heart.” The top producing broker in CMP’s Top 75 by volume for 2012, Eisner has now tabbed on a new subsidiary to complement the mortgage business. “We recently launched a Real Estate Brokerage to exclusively support clients that receive mortgage financing from True North Mortgage,” Eisner says.

APRIL 2014 | 53

FEATURE / CMA FINALISTS

MORTGAGEBROKERNEWS.CA

NICK L’ECUYER DAVE TRITHART of Verico The Mortgage Wellness Group

100 per cent of Nick L’ecuyer’s business comes from referrals – a great deal of which come directly from close relationships with Realtors. “Our Realtor relationships are always built on a friendship first basis; every one of our referral sources trusts our business model and respects our effort to create the best client experience possible,” L’Ecuyer says. “It is for this reason that we work with the top agents in each real estate office in our community.” When it comes to breaking down his business by volume, L’Ecuyer has traditionally focused on A-deals but it has realized the times are changing and are willing to adapt with them. “Our main focus is and always has been on building strong, long-lasting and mutually beneficial relationships with our clients. Rather than focusing on a specific niche, we aim to provide solution-based advice to every client,” L’Ecuyer says. “Historically the majority of our business has always been A, but we will never turn away the opportunity to assist a client when they are faced with tough times such as job loss or financial hardship.” 54 | APRIL 2014

of Dominion Lending Centres 1st Financial Link

Dave Trtihart has worked in the banking and finance industries since 1972 and has spent the last 20 years working as a mortgage broker. “This experience has included both commercial and personal finance, management experience, sales experience…basically all facets that are required to be successful in the banking/finance world,” Trithart says. “This experience and knowledge enables me to express a high level of confidence when discussing options with clients, which in turn provides the client with the comfort and confidence that I am truly acting in their best interest and have the ability to deliver.” And within his brokerage, Trithart takes time to help his agents grow and develop with the company. “My business philosophy has always been one of openness and fairness for all,” he says. “As I have grown our team, I have always treated everyone with the utmost respect ensuring that they were fully aware of all of the various levels of compensation we receive and providing them with whatever tools and mentoring that we had available.”

Other finalists: Mortgage Broker of the Year, 25 employees or more

Bill Harries

of MCC Sky Financial Corporation

Mortgage Broker of the Year, fewer than 25 employees

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FEATURE / BUSINESS STRATEGY

How to deliver

EXCEPTIONAL SERVICE It’s the little things you do that create a great customer experience, explains Nikki Heald Often we’re so intent on making the sale that we have a transactional view of our clients, rather than taking time to build relationships or demonstrate service excellence. We use them (to increase our profits), abuse them (by giving them inferior service), and then treat them like a one-night stand — attentive today, neglectful tomorrow! Sounds silly? Well, complaints such as “you never call,” “you’re always too busy,” and “why were you late?” are legitimate gripes made by disgruntled clients. In today’s competitive market, client service expectations have increased. Clients are savvy, realize they have a multitude of choices, and expect to be treated exceptionally by their mortgage brokers. 56 | APRIL 2014

MORTGAGEBROKERNEWS.CA

DID YOU KNOW? It’s

6–7

So what is exceptional service? Exceptional client service is about going beyond what is realistically expected of you. It’s about surprising and often delighting clients, turning them into enthusiastic referral sources who will stick with you not only because you do great work but also because of the value you bring. Imagine if you could get existing clients to tell others about how wonderful you are. It would certainly save on many of those marketing and networking costs. Great service is not about just doing your job, it’s also about establishing connections on an emotional level. It’s about adding value and finding ways to be unique. Interestingly, research suggests that emotion influences purchasing decisions six times as often as rationale. Think about it: when something makes us feel good, we are more inclined to buy.

Exceptional client service is about going beyond what is realistically expected of you. It’s about surprising and delighting clients, turning them into enthusiastic referral sources Unfortunately, many businesses believe that delivering standout service will cost them too much in staff time, in training and in developing service standards and procedures. These in-focused

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

times more expensive to gain a new client than it is to retain an existing one It’s not safe to work on the premise of “no news is good news.” Chances are, if your client is not happy they’ll walk, and won’t even forewarn you of their departure

RESPOND AS SOON AS YOU CAN

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

LISTEN TO YOUR CLIENTS

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

93%

KEEP PROMISES

One of the biggest gripes in business today is that people simply don’t do what they say they are going to do. If you say you’re going to do something, then make sure you do it. It enhances your professionalism and personal brand, and demonstrates that you value your client.

of customers indicated that quality customer service was vital to maintaining brand loyalty

APRIL 2014 | 57

FEATURE / BUSINESS STRATEGY

MORTGAGEBROKERNEWS.CA

If you say you’re going to do something, then make sure you do it. It enhances your professionalism and personal brand, and demonstrates that you value your client DELIVERING EXCEPTIONAL SERVICE • Lower cost to manage and service client base — higher profits • Increased customer loyalty — raises revenue, lowers marketing fees • Increased staff loyalty — better service culture

SERVICE EVALUATION What systems do you have in place to determine whether your clients are happy? Try to gather feedback — but remember, feedback is only useful when acted upon

58 | MARCH 2014

KNOW YOUR STUFF

GIVE A LITTLE

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

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

USE YOUR KNOWLEDGE

Once you’ve built an emotional connection with your client, you will have figured out how they prefer to communicate. Some clients are not detail driven and won’t require excessive information. On the other hand, some prefer to know every step of the process. Learn to gauge your client’s preferences and use this knowledge appropriately in the service experience. Finally, within the mortgage and financial services professions, brokers really should view their book of clients as their most valuable asset and take good care of them. More than that, they should take the time to develop long-lasting relationships by keeping in touch regularly, both in good times and bad. It’s not sufficient to wait until renewal time to contact your client; instead, the communication should be ongoing. Remember, you’re not just selling a product but providing expert advice that can significantly impact on people’s livelihoods. So, if you haven’t given much thought to your service levels, then perhaps it ’s time to conduct a self-audit. Remember, if you don’t make the client feel valued, respected and important, your competitors will!

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DIGITAL

DISRUPTION

Your restaurant doesn’t farm its own beef, or grow its own lettuce and tomatoes

60 | APRIL 2014

Digital disruption is changing the world around us – but has the mortgage industry really grasped the extent of the impact? The topic of technological change and its impact on the mortgage industry is a hot one. We continue to read articles about the need to get ahead of the curve and “embrace the change,” yet it seems so hard to actually do something about it. Why? I remember the days when only senior managers were given access to the Internet. It was thought that staff members could not be trusted to use it for business purposes. Would you believe this was only 15 years ago? Even in today’s world, many companies won’t allow employees to access social media, such as Facebook, despite its power to put their products and services before a potential audience of millions. I know of one brokerage that doesn’t even allow staff to access mobile phones, for any reason, during office hours. Will the last disgruntled employee please blow out the candles when you leave? Disruptive technologies have transformed many industries. A decade and a half ago, three young guys developed the Napster MP3 file-sharing network.

Within three years Napster had more than 80 million users and seriously threatened the major music industry distribution companies, who responded with legal action rather than embracing the technology. This disruptive technology was ultimately the forerunner to iTunes, which has since become one of the world’s largest distributors of music, movies and television. Many of those traditional music and movie companies no longer exist. There are other examples, too. When was the last time you purchased a roll of Kodak film, or popped into a Chapters bookstore? My local video store is long gone, replaced by a DVD vending machine in the supermarket. Did I mention I can also buy my car insurance while doing the grocery shopping? Advances in technology are providing an environment in which brokers and supply-chain providers have access to more data than at any time in history. If you need to know how many galvanized-

MORTGAGEBROKERNEWS.CA

iron roofing nails were used in the aftermath of Cyclone Yasi, and the actual labour costs of hammering them into new roofs, by specific street location and house number I can give this to you in less than two minutes. The trick is accessing and extracting this data. Most brokers still struggle with legacy mainframe systems, which have become expensive to maintain and make brokers slow to respond to innovation. Their mentality has been “we must build it ourselves” or “go find one system that does everything.” Eventually this leads to other cost-cutting measures, such as centralization or offshoring entire sections of their business. I find myself scratching my head and asking, “Why do something your customers don’t like when there are alternatives out there?” A truly customer-centric business carefully analyzes customers’ wants and needs and then

sources business processes and systems to make that happen. But you don’t need to invent it or build it yourself. Your restaurant doesn’t farm its own beef, or grow its own lettuce and tomatoes. It assembles the right ingredients, in the right order, and delivers a personalized customer experience. Sadly, there are many players in our industry still trying to make customers squeeze into their antiquated processes. How many times have you heard: “But our procedures require this form to be completed? A rethink is needed, and it’s needed now. It’s time to embrace technological advances in social media, mobile applications, analytics and cloud storage, and become part of the revolution. Combining these key components, in a unique way to suit your customers’ needs, might be the difference between future success and future redundancy.

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PROFILE / FAVOURITE THINGS

Favourite things Sherisse Hume, Mortgage Associate, TMG Alberta

Favourite Book:

Favourite Food: Chilli chicken with saffron rice (The hotter the better!) - all the flavours of this dish are like a party in my mouth.

Favourite Music:

Favourite Sport: Football! NFL, CFL, minor

Anything that I can dance to. I love all music that I can vibe to. Currently I’m on a 90s kick!

leagues, whatever. I love football. I have three boys and all of them play various levels of football. Football is one of those sports that require so much more than athleticism. It requires heart, dedication, focus, passion ... I just simply love everything about it.

Favourite Drink: Gin

Favourite Movie: 12 Years a Slave - Such a great movie. It was extremely tough to watch, but well worth the time.

62 | APRIL 2014

My Sister’s Keeper Jodi Picoult- I loved this book because it was written from all the different viewpoints of the main characters in the book. The author had me crying with every page that I turned.

and Tonic with a slice of lime - it’s a clean and refreshing drink. It is an acquired taste, but I love it nonetheless.

MORTGAGEBROKERNEWS.CA

Favourite Vacation Spot: London, England - there’s so much to see and do. While the weather is a little gloomy, it’s an exciting place to be.

Favourite Place to Be: Anywhere with my family. They’re the reason I started working in this industry. I have a career that I love, which affords me freedom and flexibility to be with them whenever they need me.

Favourite thing about working in the mortgage Industry: My favourite thing is that every deal is different. I feel like I get to sharpen my skills with every deal that doesn’t fit inside of a box perfectly. It’s like a puzzle.

Favourite Celebrity: Leonardo Di Caprio he’s such a v football ersatile actor. He just gets better with age ... like a fine wine.

Favourite Mortgage Product: New to Canada - sometimes these deals are a little tricky, but it’s such a great feeling to help a newcomer enter the ranks of homeownership. For many folks, this is something that they could never have in their own country.

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SERVICE / DIRECTORY

MORTGAGEBROKERNEWS.CA

Insurance

Banks

HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 43

www.canadaguaranty.ca Ph: 1 866 414 9109 Page 55

Non-Bank Lenders

Commercial Lenders

First National Financial LP www.firstnational.ca Ph: 416 593 1100 Page 13

First Canadian Title www.fct.ca Ph: 1 800 307 0370 Page 39

First Source Mortgage Corporation www.firstsourcemortgage.ca 416.221.2238 Page 61

Home Trust www.hometrust.ca Ph: 1 877 903 2133 Page 19

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

Broker Networks

Technology & Software

Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 37

Axiom Mortgage Partners axiommortgagepartners.ca Ph: 1 866 504 0516 Page 7 & Outsert

D+H Limited Partnership www.dhltd.com Ph: 1 866 345 6449 Page 25

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

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

Marlborough Stirling Canada www.morweb.ca Ph: 1 877 626 2022 Page 2

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

Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 14,15 Inside Back Cover

Revodoc Inc. www.revodoc.com Ph: 403 616 1954 Page 33

Optimum Mortgage A Division of Canadian Western Trust www.OptimumMortgage.ca Ph: 866 441 3775 Page 9

Real Estate

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

Canadian National Association of Real Estate Appraisers

www.cnarea.ca Ph: 1 888 399 3366 Page 35

Tribecca Finance Corporation www.tribecca.ca Ph: 416 225 6900 Page 63

Mortgage Architects www.mortgagearchitects.ca Ph: 1 877 802 9100 Page 11

Best Points Travel info@bestpointstravel.com Ph: 1 800 551 8786 Ph: 416 251 9944 Page 45

V.W.R Capital Corp www.vwrcapital.com Ph: 1 866 907 5407 Page 41

RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 23

Score-Up www.score-up.ca Ph: 416 479 9585 Page 51

Safebridge Financial Group www.safebridgefinancial.com Frank Uithoven Frank@safebridgefinancial.com Ph: 416 466 5858 Page 21

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VERICO www.verico.ca Ph: 1 866 983 7426 Page 29 & Outsert

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