CMP 9.06 by Key Media

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Private lending guide Pg. 32 MORTGAGEBROKERNEWS.CA ISSUE 9.6 | $6.95

OF INFLUENCE 2014

Meet the professionals helping shape the industry

THE BIG 10 HABITS OF SUCCESSFUL COMMERCIAL BROKERS

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CONTENTS

WOMEN

MARKET MATTERS 4 | Editor’s letter 6 | Letters to the editor 8 | Reading between the Lines Rate buy-down trend revs up

NEWS 12 | National picture-ata-glance

FEATURES 32 | Private lending guide 48 | 10 Habits of successful commercial mortgage brokers

10 FEATURES

Erecting Excellence

OF INFLUENCE 9.6 18

Drew Donaldson shares his advice on structuring your business for optimal success

issue

COVER STORY

Women of influence

Some of the industry’s leading ladies share their secrets to success

put our $1.2 billion where your mouth is. Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $1 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $4M to $100M. Blake Cassidy | 800 494 0389 | www.romspen.com

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2014 |8.75” 1 x 4.125 TRIM: 8.25” x 3.625” JUNE BLEED:

CONTENTS

MARKETING

REGULARS

14 | Clients are your best referral sources, writes Doren Aldana. Find out how to ensure they sing your praises

62 | Favourite Things 64 | CMP Service Directory

MARKETING

A good business plan can act like a compass, not only helping you stay the course but also get you to where you want to be

54 | Muhammad Yasin explains how to develop a simple social media plan

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

2 | JUNE 2014

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CONTENTS / EDITOR’S LETTER

MORTGAGEBROKERNEWS.CA

A NOD TO KNOW-HOW COPY & FEATURES SENIOR EDITOR Vernon Clement Jones STAFF WRITER Justin da Rosa CONTRIBUTORS Ad Lakhanpal, Drew Donaldson Doren Aldana, David Mandel Muhammad Yasin, Rebecca Lamarche COPY EDITOR Rachel Naud

ART & PRODUCTION SENIOR 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

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.

It’s no surprise women are underrepresented in the C-suite. According to the latest statistics only 24 of Fortune 500 companies have a female head at the stead. And while many of the women in the mortgage broker channel – including several of those featured in this very issue – believe the “Old Boys’ Club” of yesteryear still exists, all agree an industry professional’s merits play a pivotal role in shaping his or her destiny. Indeed! One-third of the 2014 CMP Top 75 Brokers are women. Still, an imbalance exists and our Women of Influence issue is one way to acknowledge the changes that have yet to come but also the change-makers who’ve already helped to grow and transform the industry. Please, check out that feature, starting page 18. Another must-read begins on page 32, with some of the leading voices in private lending sharing their advice on breaking into this highly lucrative space. CMP is also offering its own Canadawide directory of private lenders to help direct brokers to some of the country’s foremost players in that space.

Cheers, Vernon Clement Jones Editor

CONNECT

Contact the editor:

vernon.jones@kmimedia.ca

4 | JUNE 2014

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CONVERSATIONS / LETTERS TO THE EDITOR

MORTGAGEBROKERNEWS.CA

CMA WINNERS RE: CMA WINNERS (CMP 9.5) We are proud of our association with the Verico network and give thanks to Marty Marshall who was instrumental in Northwood coming on board great work Verico. - Steve Kates, VP Northwood Mortgage

Proud to be part of the Verico Network, National Broker Network of the Year!! - Cheryl Batke

RE: A DRAGON IS SLAYED (CMP 9.5) Kevin O’Leary exits the mortgage biz. Should have used the broker channel. Ego got in the way. - Michael S

Kevin and Don Cherry are in show business we are in a serious business that can change people’s lives. There has got to be a mortgage broker out there who would like to give Dragon’s Den or Coaches corner a try. - Russ Cameron

Maybe, just maybe Mr. O’Leary is anticipating a hefty correction in the housing market??? - James Alexander

Do you think it’s possible... don’t shoot me for throwing this out there but... perhaps he sees the housing market in Canada is too risky? I question too why he left the market. A guy like that already knew the margins going in so it couldn’t be that right? O’Boy was not my favourite at all. I’m just saying maybe there is another angle. - Faye Drope 6 | JUNE 2014

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MARKET MATTERS / READING BETWEEN THE LINES

RATE BUY-DOWNS: A BUSINESS DECISION?

Brokers are divided on the practice, but new numbers point to the prevalence of rate buydowns. Ad Lakhanpal of Mortgage Alliance reads between the lines Letâ&#x20AC;&#x2122;s be clear:

1. Discounted rate is really a market rate for a product. It is called discounting because banks set an arbitrary high rate figure, called Posted Rate, and then lend money at a lower rate, based on competitive conditions created by other lenders in the marketplace. Brokers generally get paid full commission for mortgages done at the discounted rate. Rate buy-down is when a broker gives up his or her commission to reduce the rate from the already discounted, or market rate, in order to win a deal in a competitive situation.

2. Rate setting (discounting) is done by each lender in response to market conditions and their own business objectives. This system is working well and is keeping all lenders aware and mindful of the marketability of their products. It is free market in operation and is good for the consumer.

8 | JUNE 2014

3. Rate buy-down is done at the option of the brokers because they sacrifice some of their commission to secure a lower rate for a client. This is strictly a business decision that each broker or brokerage makes in terms of balancing volume vs. profit. Again, it is free market in operation.

4. Personally, I do not favour buying down rates. In my opinion, if the client does not value the service package that I provide and is focused on rate alone, he or she will continue shopping and will find someone, most likely a bank branch, who will beat even my bought down rate. I have a high probability of losing that deal anyway. I would rather invest my time with clients who appreciate my service and are likely to conclude the deal with me.

5. My final point is that it is not productive for long discussions to be held regarding discounting or rate buy-downs. It is a free economy. Let people make their own business decisions. A good business person learns from his or her own mistakes. The ones who donâ&#x20AC;&#x2122;t, go out of business.

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JUNE 2014 | 9

MARKET MATTERS / BROKER ADVICE

BROKER-TO-BROKER ADVICE:

STRUCTURE YOUR BUSINESS

FOR OPTIMAL SUCCESS

Getting back to basics and taking advantage of three trusty referral sources is the key to growing your business, writes Drew Donaldson, executive vicepresident of Verico SafeBridge Financial Group. Though each has tricks of the trade that should be kept in mind Often, brokers will put too much emphasis on one area of their business, while forgetting to plant seeds by forging relationships in other areas or segments. A prime example is Realtor referrals. While they can be a wonderful source of business, if you rely on only a few Realtor relationships to send you business every month, you may be in for a disappointment. If the purchase market turns and sales drop, or they start doing more listings on the buy-side, you would need to look to alternatives to grow your business. 10 | JUNE 2014

When starting a new relationship with a Realtor, you want to build a strong personal foundation for a lasting rapport, which means not focusing on the immediate need, calling daily to ask where your leads are. During the â&#x20AC;&#x2DC;courtingâ&#x20AC;&#x2122; process, it is beneficial to show them you are busy and successful with or without their referrals. By building the proper lead structure, you should effectively only require one to two deals a month from each segment of your referral business, so as to take the pressure and stress off

MORTGAGEBROKERNEWS.CA

of yourself and your referral partners. For example, if two of your five solid Realtor relationships are slow one month, you should still have three other Realtors sending deals your way to meet your needs in that particular segment. The same concept can be applied to your personal network, including social media. Many new mortgage professionals will say they don’t find social media to be an effective tool for lead generation. It is my belief that the problem lies in the approach. Social media is not a one-time, quick fix for mortgage leads;,and a month’s worth of tweets and posts will likely not affect your business. In order to be successful, social media has to be part of your daily routine, consistently updating your social sites with news and education over an extended period of time. This strategy will go a long way in gaining the respect and confidence from your network as an industry leader. A friend may call you for their mortgage, and their request was not sent directly through Facebook, Twitter or Linkedin. But that doesn’t mean their decision to send their business to you wasn’t a result of you earning their trust over time by seeing your posts and growing their confidence in what you do. The key is to make your social media fun. In addition to posting valuable industry-related news and information, you want your network to see the various social events, conferences and teambuilding you participate in as well. You want your network to see the culture of your organization and of the people with whom you work. A great example would be the Verico conference in Las Vegas that took place in late May and which some of my colleagues attended. You can rest assured that those colleagues posted to their networks that they were there listening to Todd Duncan, one of the best mortgage coaches in North America. Such an event is an excellent opportunity to show friends, family and acquaintances they are educating themselves with world-renowned coaching and that they are taking their business seriously. The result of consistent social media activity like this would

ensure your credibility. A third opportunity when structuring your business lies in bank rep turn-downs. Let’s say you have one strong bank rep as a primary referral source who sends you upwards of five deals per month; these referrals are derived from deals that cannot get done at the bank. What would happen if this rep suddenly decided to go make the transition into the broker world? Your business would take a steep downfall if you didn’t have a few other bank reps in that segment, along with a strong structure supporting all other aspects of referral sources. The message here is clear: don’t rely on one specific source for your business and instead focus on continuing to foster relationships in each segment. Consider this illustration as a business plan; when you know you only desire four to five strong relationships per segment, you will choose your business partners wisely with an abundance -over-scarcity mentality.

3 EASY STEPS TO BUSINESS GROWTH

The message here is clear, don’t rely on one specific source for your business and instead focus on continuing to foster relationships in each segment.

Drew is a Top Producing Mortgage Professional with SAFEBRIDGE Financial Group. He has been in the Mortgage Industry since 2006 and has achieved success because of his passion, excitement and tireless work ethic. Drew specializes in working with Generation ‘X’ Professionals as a result of his own personal experience in buying and selling real estate, his own Professional career and development, and his extensive understanding of the mortgage industry. JUNE 2014 | 11

STATISTICS / RESIDENTIAL SALES ACTIVITY

NATIONAL PICTURE AT-A-GLANCE Sponsored by TM

Sizzling spring sales The spring housing market warmed up with the weather in May as national home sales jumped 5.9 per cent from April to May of this year. “The monthly increase in May activity was widespread among local housing markets, with some 80 per cent of them reporting stronger sales compared to April,” CREA President Beth Crosbie said in an official release. “Over the past 25 years, that widespread a monthly sales increase has been recorded only a handful of times. Even so, the improvement varied by location.” Half of the provinces recorded year-over-year sales activity growth. Overall, Canada saw a 4.8 per cent year-over-year sales jump, which was bolstered by a 169.2 per cent spike in Northwest Territories. British Columbia (13.9 per cent), Alberta (13.2 per cent), Saskatchewn (5.2 per cent), Manitoba (2.1 per cent), and Ontario (4.9 per cent) were the other provinces to record positive year-over-year sales jumps. Meanwhile, New Brunswick recorded the most negative year-over-year sales figures with a drop of 19 per cent. “In markets where supply had become tight, we expected sales to improve in tandem with listings,” Gregory Klump, CREA’s Chief Economist said. “Had it not been for such a brutal winter that delayed the launch of the spring market, the improvement in new listings and sales would likely have been more spread out over the past few months.” As for home prices the national average price rose 7.1 per cent year-over-year, led by Northwest Territories (23.7 per cent). 10 of the 12 provinces saw positive price increases with only Nova Scotia (-6.2 per cent) and Yukon (-8.5 per cent) in the red. 12 | JUNE 2014

A TALE OF TWO CANADA?

Sales Activity

(year-over-year percentage change)

67.9

per cent

per cent Northern Lights

43.2

per cent

233.3

per cent

Grande Prairie Lloydminster

Thompson

MORTGAGEBROKERNEWS.CA

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

Source: CREA

+4.8 per cent

British Columbia: +13.9 per cent Alberta: +13.2 per cent

Saskatchewan: +5.2 per cent

Manitoba: +2.1 per cent

Ontario: +4.9 per cent

Overall Canadian sales activity

Quebec: -5.9 per cent New Brunswick: -19 per cent

Nova Scotia: -10.5 per cent

1.2

per cent

Prince Edward Island: -11.4 per cent

47.1

per cent

26.8

per cent

Moncton Yarmouth

Parry Sound

D+H CMT Mortgage ad final.pdf

Newfoundland and Labrador: -0.6 per cent Northwest Territories: +169.2 per cent Yukon: -20.5 per cent

4/16/2014

10:53:44 AM

JUNE 2014 | 13â&#x20AC;&#x201A;â&#x20AC;&#x201A;

MARKETING MATTERS / SECRET #16

MORTGAGEBROKERNEWS.CA

Your clients will help you break through the barrier of skepticism, writes Doren Aldana. Superstar brokers: get others to sing your praise and your business will grow SECRET #16: THEY USE CLIENT TESTIMONIALS TO BUILD CREDIBILITY AND BREAK THROUGH SKEPTICISM. Let’s face it, today’s consumers are skeptical. With all the marketing hype and sales pitches people receive on a daily basis, it’s no wonder why we’re all becoming a bit jaded. Marketing guru Dan Kennedy reasons that, “This is not a consumer trend, but a societal one, largely supported by the repetitive failures of people we once looked up to political leaders, ministers and pro athletes.” Take that default level of skepticism and add to it the plethora of marketing messages from every Tom, Dick and Harry in the mortgage industry claiming to having the “best rates” and “best service” and now we have skepticism on steroids! People don’t know who to believe any more. It’s like marketing incest – everyone is saying the 14 | JUNE 2014

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same thing with ever-decreasing results! Let’s face it, people don’t like to be guinea pigs. They know pioneers get arrows in their backs! That’s why it’s mission critical that we find ways to increase our credibility and thereby build trust with our prospects, so that we have a better chance of closing the deal. The question is how. Well, one of the most powerful marketing strategies for building trust is the use of client testimonials. You see, it’s one thing to toot your own horn and tell everyone how great you are. It’s a whole other thing when other people just like them, who have nothing to gain from endorsing you, are singing your praises -- your believability and credibility shoots through the roof! Testimonials provide that much-needed proof and assurance that your claims have credence, that you’re the “real deal” and can be trusted. The more relevant your testimonials are, and the more they get your prospects saying to themselves, “Hey, that person is just like me!”, the more compelling and believable your testimonials will be. That’s why Superstar mortgage pros purposefully sprinkle relevant testimonials throughout their marketing materials, especially after making bold claims about the benefits they offer. They know that their prospect’s natural reaction is to doubt their claims, even if they secretly want the claims to be true. So to build credibility, Superstar mortgage professionals will present their prospect with real-life client testimonials and case studies. Where can you use your testimonials? Anywhere and everywhere. Here a few examples: • • • • •

Print ads Radio ads TV ads Website Brochures

• • • •

Free reports CDs and DVDs Business cards Everywhere!

Now, at this point you may be thinking, “OK, Doren, I get the importance of using testimonials. However, how can I systematically capture and collect them without wasting my time?” Good question.

16 | JUNE 2014

HERE ARE 5 SIMPLE STEPS FOR COLLECTING RAVE REVIEWS: Step 1 - Set up your online survey system. There are lots of ways to do this. For example, you could create a short client satisfaction survey at surveymonkey.com. These are a few questions you may consider including: • If there was one thing we could do to improve our service what would it be? • If you were talking to someone who needed a mortgage, what might you tell them about your experience in working with us? • If you used a buyer’s agent to help you with the transaction, we would appreciate your frank feedback on their service. How was your agent? Would you recommend them to others?

BONUS TIP If you want to add more social proof to your Google Places profile, you can direct all your survey respondents to a “Thank You” page that thanks them for submitting their feedback and asks them to post their rave review on your Google Places page.

Step 2 - Set up an autoresponder email campaign that automatically sends your clients emails with a predetermined delivery schedule. Step 3 - Add a message to your email campaign that asks your clients for feedback on their experience working with you. The email might say something like this: Thank you for choosing ABC Mortgage. Since our very beginning, our goal has been to make each client’s mortgage experience as pleasant and successful as possible. We’ve pledged continuance of this service and hope our commitment is working, but it’s not always easy to tell. WE WANT TO GET EVEN BETTER! Any feedback about specific things that we could do to change or improve our service would be greatly appreciated. With that in mind, please take a moment to share your feedback here...

MORTGAGEBROKERNEWS.CA

Step 4 - Send unresponsive clients your client satisfaction survey via direct mail. To increase response, consider including a postage-paid envelope and a $5 Starbucks or Tim Hortons card with a sticky note that says: Dear John, Thanks in advance for completing this short survey. I really appreciate your feedback. Here’s a small gift to show my appreciation. Yours truly, Bob Broker Step 5 - Follow up by phone with all unresponsive clients and ask them if they might have five minutes to give you some feedback right over the phone. Not only can you get some helpful feedback and capture testimonials, this is a perfect opportunity to ask for referrals.

So there you have it. I’ve just given you five proven steps to collect a treasure trove of raving fan testimonials! In my Mortgage Superstar Coaching Program, I provide you with this entire time-tested, easy-touse system for instantly generating powerful client testimonials. You’ll also learn eight different ways to profit from them once you get them. In next month’s 17th secret, you’ll discover how superstar mortgage professionals use the Internet to generate a tsunami of qualified mortgage leads on autopilot. 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 three years in a row at the 2012, 2013 and 2014 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

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COVER / WOMEN OF INFLUENCE

WOMEN OF INFLUENCE CMP’s second-annual Women of Influence issue is highlighting the accomplishments of those professionals reshaping the mortgage industry

What a difference a decade makes. In a few short years, the mortgage broker channel — still in its infancy — has seen a shift to fairer male/female representation. This year’s Women of Influence is testament to those strides. Here, we pay homage to industry professionals who may have started out in a “man’s world” but are helping claim an increasingly large piece of the pie for equity. While full parity may not yet have arrived, this year’s CMP Top 75 saw women earn 33 per cent of those coveted spots — a sizable gain from even five years ago. Progress is just as measurable across all 18 | JUNE 2014

facets for the business. Their myriad accomplishments challenged CMP and its selection panel in the quest to choose but a handful of broker channel veterans to honour with this year’s roll call. It may be inclusive of leading brokers, company CEOs and trailblazing lenders, but the list is by no means exhaustive. There are hundreds of women across Canada making waves in this entrepreneurial industry. But, alas, we have only a limited number of pages. So, without further ado, read on for the insights of CMP’s 2014 Women of Influence.

MORTGAGEBROKERNEWS.CA

KAREN GIBBARD • Where: Verico Gibbard Group Financial Inc. • Years in the business: 23 in lending, with 14 years as an independent mortgage broker

‘MY CAREER MILESTONES’

Who has influenced you? I know this sounds corny, but really my folks have influenced me and made me the way I am today. I grew up in a modest, small-town environment, and I learned at a young age to be very independent. This self-reliance has really served me well as I’m not scared to try anything business-wise and I have a quiet confidence that if I put enough effort and thought into a project, I can do it.

Why are you influential? The main comments I receive from other brokers is that they can’t believe I fund the level of mortgages that I do while maintaining an incredible balance of work and a great family life. With a nine year-old son and a rule that I cook dinner for my family every night (okay, almost every night), I don’t often work long hours but I squeeze out every ounce of work during the regular business hours. I have a busy personal life (taking a nightschool course and teaching two nights a week) but doing activities other than brokering during the evenings doesn’t negatively affect my business because I make sure every deal and every client are looked after before I leave the office at 5 p.m. – clients simply don’t need me at night because they’ve been looked after during the day.

What are some of the challenges that face female brokers? Probably the biggest challenge I faced when I was younger and starting out was to gain credibility as a businesswoman and a good mortgage broker based on my performance; not what a young woman with a big smile looks like.

I don’t have that challenge today, now that I am older and wiser, but when I started in the industry the comments were very cutting as to how I managed to get so much business. I wasn’t given any credit for my educational background, smarts and extreme work ethic. Although, after a few years I proved myself and either I stopped hearing the negative comments or I simply showed them, ‘the proof is in the pudding’ and was managing a pretty successful business with numbers that exceeded a lot of other brokers. I eventually gained a reputation for being the smart, ethical, hard-working mortgage broker that I knew I was way back then.

Is a list like this even necessary today? I hope not! But unfortunately there will always be folks who take a negative view on someone else’s success. I think we all need to support each other and put ourselves in other people’s shoes to appreciate how tough things are sometimes and do what we can to help each other out.

• Opening my own company: This is a very different feeling from just being a broker – it’s exciting and nerve-wracking but at the same time incredibly rewarding. I love the independence and being in charge of my own destiny. • Winning CMP’s Mortgage Broker of the Year in 2012: Wow! What an incredible honour. • Buying and renovating my office space: What better way to feel in charge of your business than to take control of your work space and home for the business? I was able to create the atmosphere and professional look that a home office simply couldn’t provide (although I do miss wearing slippers to work!)

JUNE 2014 | 19

COVER / WOMEN OF INFLUENCE

DEB WHITE • Where: Owner and sub-mortgage broker with Dominion Lending Centre White House Mortgages • Years in the business: 15

Why are you influential? I had trouble with this one so I asked my brokers and co-workers “why am I influential?” Below are the responses that I received. • Whenever I’m working on a quirky deal, I ask myself “what would Deb do.” I would say that if I can answer that question, I’ll be able to get the deal done. You instill confidence in your team, and support your brokers in times of need • You are not only a good leader, but also a fantastic teacher/mentor... especially with ‘green’ people! • You are not afraid to make decisions. • You are clear, concise and confident. • You find the positive in everything. • You are energetic. • You build others’ confidence. • You multi-task like mad. • You have an awesome network of peers. • You are flexible, adaptable and quick-thinking. • You know your stuff! • You are trustworthy. • You are prominent in the community • You are trustworthy and treat everyone with respect • You are tenacious and will stand up for the little guy • You are successful in your ability to make your case • Because you continue to give back in your community. As busy as you are running a successful business, you still take time to give back and be involved!! • I would add that you have true leadership qualities in which you lead by example and people WANT to make a difference in their community because of the example you are setting. • Always willing to help, educate and promote your brokers. • Dedicated to a high level of service

Who has influenced you? In my personal life I would have to say my 20 | JUNE 2014

husband, my kids and my best friend Cali. My kids have always been there to support me and cheer me on; they give me the confidence to know I can handle anything that life has in mind for me. My husband supports me with everything that I do! It is because of him that I opened up White House in 2005. Of course I was nervous and scared but, because of his support, I was able to open the doors with confidence. Cali, well, she has gone through a lot in the past few years suffering a massive stroke in 2009. She was told that she wouldn’t walk or talk ever again … yet she is! Her positive outlook on life and her happy disposition is what has brought her this far. She is a true hero in my books and I could not admire her more. In my business life I would have to say that would be Hali Strandlund Noble. She has always believed in me when I didn’t and she would give me the nudge that I needed to take the next step in my career. She is there for me when I need a chat.

What are some of the challenges that face female brokers? Female brokers are far more compassionate than

‘MY CAREER MILESTONES’ • In 2005 opening the doors of White House Mortgages • When my daughter decided to take her sub mortgage brokers course in 2006 and become a broker and work with me. • In 2010 I was awarded MBABC Community Service Award. • In 2011 I was nominated Woman of the year for Vernon. • In 2012 I was awarded CMA community service award. • In 2013 I was vote MBABC VP. • In 2014 I was awarded Professional service award for Vernon from the Chamber of Commerce. In 2014 I was nominate for Best Customer Service with CMA and Community Service award. • In 2014 one of my brokers nominated me for Women of Worth award where I placed in the finals. • In 2014 White House mortgage built our own office building • Have been in the top 30 brokers for CMP for the past 4 years. • White House Mortgages has maintained being in the top 20 franchises with DLC for the past four years.

MORTGAGEBROKERNEWS.CA

men, and this can be both a positive and a negative. It gives us the drive to get through those tough deals and get them done; however it can also take its toll on us when we just can’t help them and the clients blame us for their poor credit or income. Also, women have many hats. For instance, I am a mom, wife, grandma and a huge community supporter. I remember when I started in my brokering career my children were aged 10, 12, 14 and 16. It was a handful to work all day and come home to. Luckily I made it through, so now when I go home I can relax ... but I do recall those hard full days. Also, to make it in the industry, you have to be very strong -- you cannot be shy, that is for sure. You must show confidence (even if on that day you are not), otherwise you will not flourish. I really hate to say it, but in some areas of all industries, you will still find the old boys’ clubs. So, as long as you stand tall and let your voice be heard, you will strive in any business.

‘MY CAREER MILESTONES’

RENA MALKAH • Where: Founder, President and CEO of CYR Funding Inc. • Years in the business: 40 – since March 1974.

Is a list like this even necessary today? Is a list like this even necessary today? I believe you are asking if we still need to differentiate between men and women brokers. Should there be an article for men and for women? When I sit here and think about my contacts and supporters in the industry (Realtors, fellow brokers, etc.) the majority are women; however I do have a few really good male friend brokers/ contacts across Canada. I think that the women in the industry are sometimes “short changed” and not given the acknowledgement and credit that they deserve. Saying this, I do see the industry shifting. I see women becoming more prominent and being heard and, most importantly, respected.

Today women are treated as equals in this business. We’ve come a long way from the time 40 years ago when women couldn’t borrow money in most cases without a man’s guarantee.

Why are you influential? I am influential as I was a pioneer for thousands of women to have careers in the mortgage brokerage field and related fields in what was a traditionally male-dominated field.

Who has influenced you? The original members of the Ontario Mortgage Brokers Association who mentored me.

• I am the first female mortgage broker in Ontario • First female President of the Ontario Mortgage Brokers Association in 1984. • In the early 1980s I authored and taught the Commercial Mortgages segment of the Mortgage Broker’s Course along with being the Chairman of Education. • Many brokers have my signature on their Education Certificate which entitled them to apply for their licence. • I also created the first annual mortgage brokers conference and trade show.

JUNE 2014 | 21

COVER / WOMEN OF INFLUENCE

MORTGAGEBROKERNEWS.CA

CINDY FREIMAN • Where: Director of Public Relations and Communications with Dominion Lending Centres. • Years in the business: 9

‘MY CAREER MILESTONES’

WHAT ARE SOME OF THE CHALLENGES THAT FACE FEMALE BROKERS? I think female and male brokers face the same challenges – generating business and successfully ensuring deals end up funded when competing with bank branches and bank road reps. Our biggest challenge continues to be getting our message out about why brokers should be the first choice for everyone in need of a mortgage. That’s why it’s essential that every mortgage company and association across Canada collectively work together to spread this important message.

WHY ARE YOU INFLUENTIAL? One of my strong points has always been helping provoke thought and getting the conversation started. I have a passion for the industry and in working hard to help brokers and agents grow their businesses and thrive. I believe that shines through in everything that I do, and that my work ethic and dedication are contagious. My favourite part of my role is seeing new brokers eager to get started and launch their careers. I will do anything I can to help build upon their ideas and ensure more clients come through their door. I am an eternal optimist who can find the good in every situation and I will work long hours to get each task done to the best of my ability. I am a perfectionist with a keen eye for detail, and I will review every project numerous times upon completion to ensure I have not missed anything. I am always open to lending my ideas and input to anyone who asks me for help. Along the way, I feel successful if others take my creations as their own and raise awareness for their business and the value for consumers of working with a licensed mortgage professional for all their mortgage needs.

WHO HAS INFLUENCED YOU? My Mom was the first woman to ever influence me, and she taught me to never settle for anything. Work hard, love what you do and you will be rewarded. 22 | JUNE 2014

One woman I met when I first entered this industry and who continues to inspire me is Hali Strandlund. She is proof that hard work, passion and dedication can get you far. Although the industry has come a long way, there is still somewhat of an old boys’ club mentality. It is women like Hali that have made themselves be heard and helped change things within the industry, including the associations, to make sure that the industry continues to change and evolve, as opposed to just doing things a certain way because that’s how they’ve always been done.

IS A LIST LIKE THIS EVEN NECESSARY TODAY? I wouldn’t say it’s entirely necessary, but anything that celebrates women – or people in general – across this industry is always welcome. There is very little kudos in this industry for a job well done.

• Starting CMP Magazine in Canada alongside one sales rep on behalf of Australian owner KMI. I didn’t know very much about mortgages at that time when I became editor, aside from having a mortgage. I had worked as editor on a number of publications, but never in an industry with such an extensive learning curve! • Helping to launch CMP’s first magazine in 2006 and the CMP Canadian Mortgage Awards in 2007 • Moving over to DLC in a newly created role as Director of PR & Communications in November 2008. DLC was in its infancy when I joined the head office team (less than three years old), and helping spread the word about the excellent tools and services DLC had to offer brokers and agents across Canada was very exciting.

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COVER / WOMEN OF INFLUENCE

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ATHENA CONSTANTINOU ‘MY CAREER MILESTONES’ • Making it to the top 10 of the RBC mortgage specialists (and going to Cabo!) • Starting Sherwood Mortgage Group in 2009 with nine agents and helping grow it to its current 27 • Winning brokerage of the year (25+ employees), twice in three years (we have the best team!)

• Where: Sherwood Mortgage Group Your Mortgage Architects • Years in the business: 15

WHY ARE YOU INFLUENTIAL? I believe I’m influential because of all my personal and professional experiences in life. As a result of times that were wonderful and going smoothly, coupled with the times I was faced with issues and problems, I am viewed as that trusted go-to source where anyone can get advice. Every scenario from mortgage applications to career directions and life changes comes with decisions and challenges. I truly believe that there is always a solution and, as a result, I have

developed a very open mind to problem solving. When you pair that with a great team looking for direction and support, I get the pleasure of helping move someone past a road block. They get the benefit of looking at their tough situation from a different angle.

WHO HAS INFLUENCED YOU? My first partner at RBC who smiled - all the time. I learned that this put people at ease, even if you are going to deliver bad news. Another positive influence was Eve Lewis at Marketvision who hired me while I was in University and indirectly put me onto my mortgage career path. I was fascinated by the way she navigated her company and balanced her work/family life. Gary Laughlin -- who used to be in my 24-yearold eyes at that time -- a big scary bank executive, has turned out to be a great influence and leader for me, guiding and helping me now that I’m in a leadership role. I’m constantly learning from my business partner, Anthony Contento, who also supports me unconditionally. And I’m very much influenced by my team of agents and my two sons. However, along with all the positive influences, I have also been influenced by seeing others in problems/ issues/negative situations. By being exposed to the ‘bad’, I am driven to never get myself into those situations.

WHAT ARE SOME OF THE CHALLENGES THAT FACE FEMALE BROKERS? Even though the mortgage brokering industry is male dominated, I think women have come a long way in demonstrating that they’re just as capable as their male counterparts of being successful. I wouldn’t categorize challenges as gender-specific. I believe challenges, if allowed, lie within the individual. By being up-to-date with your lender and product offerings, understanding your clients’ needs, and most of all, by being confident in yourself, any broker -- male or female -- can work to overcome every challenge.

IS A LIST LIKE THIS EVEN NECESSARY TODAY? No: Because every female broker, like every male broker, will face challenges. They both have to have the drive and confidence to surpass these challenges in order to succeed.

24 | JUNE 2014

COVER / WOMEN OF INFLUENCE

SABEENA BUBBER • Where: Verico Xeva Mortgage • Number of years spent in the business: 21, with 10 years as a broker

IS A LIST LIKE THIS EVEN NECESSARY TODAY? Absolutely! There are many women in this industry that I look up to that have had to fight their way to where they are. I love to be inspired by other successful women that I can learn from. We, as women, should be here to support each other because we really understand the struggles that we each face as entrepreneurs.

WHY ARE YOU INFLUENTIAL? I honour my commitments and I am always there for those who need me. I am driven to achieve and

MORTGAGEBROKERNEWS.CA

I have been driven to succeed for as long as I can remember. It hasn’t been easy. I am always fully engaged and participating in the moment, whether it’s in work, social or family; I don’t take myself out of the game. I am caring and passionate about life, love and work and it shows! I honour my commitments to instil a feeling of trust. I am compassionate with myself and with others; everybody has a story and wants to be heard. I believe in the best of people. My connections are authentic, honest and with integrity. I am this way with everyone in my life; my clients, my friends, my family and any person I meet.

WHAT ARE SOME OF THE CHALLENGES THAT FACE FEMALE BROKERS? There’s no such thing as balance! I have spent so many years learning to run a business, learning to raise a family and dealing with constant changes in the marketplace. The lines between work and my personal life are blurred … if they even exist at all. Being a mortgage broker is demanding and to find a way to pick myself up after I fall isn’t always the easiest. Having a good support network is extremely important. My husband, my parents, my children and my colleagues are critical to my success. They are there for me.

‘MY CAREER MILESTONES’ • Making CMP’s top 75 Brokers by Volume list for five consecutive years • Being voted best on the North Shore by the North and West Vancouver communities • In 2013 I was selected as a Five Star Professional by Vancouver residents • Last year I merged my firm with three other Verico firms to create Xeva Mortgage which was a great move for my long-term career goals.

FRANCES BLAU • Where: Abacus Mortgages Inc. • Number of years spent in the business: 50

WHY ARE YOU INFLUENTIAL? Because of my knowledge and reputation in the industry, I am respected by my peers.

WHO HAS INFLUENCED YOU? No one.

WHAT ARE SOME OF THE CHALLENGES THAT FACE FEMALE BROKERS? To prove that they can do as good a job as their peers and the men in the industry.

26 | JUNE 2014

‘MY CAREER MILESTONES’ • Education Chairman and President of OMBA • First female broker in the CIMBL Hall of Fame • In 2014 I was awarded Lifetime Achievement Award by CMP magazine

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COVER / WOMEN OF INFLUENCE

CARMEN ALPAERTS

• Where: Invis Any Mortgage for You • Number of years spent in the business: approximately 30

WHAT ARE SOME OF THE CHALLENGES THAT FACE FEMALE BROKERS? When I started in this industry it was known as the “old boys’ club” and there are some who believe it still is. I was in Calgary running my own car reconditioning business and a lot of the major dealerships were my clients. I was in my early 20s so it was much tougher being a young woman with her own business in a man’s world. The owner of the dealership used to bring his friends with their very fancy cars and ask me to give them a quick clean. They were very good tippers. One day the two owners of a mortgage company asked me to go for lunch to thank me for cleaning their cars. At that point I found out the

‘MY CAREER MILESTONES’ • Refinancing of a family-owned award-winning boutique winery in Niagara on The Lake, helping to reduce operating costs and allowing the expansion into health-related products. • Assisted with original expansion Of U.S Stouffer Hotel Chain into Canada by helping arrange financing for seven hotels. • Helped with the Gulf Oil move back to Calgary (worked direct with Human resource manager) • Teaching many Realtors (holding seminars) to learn how to put a transaction requiring financing together. • Holding first-time home-buyer seminars. • Helped to start up a clinic for doctors by arranging their mortgage. They are now in process of building a plaza. • In 2013 was nominated for Queen’s Diamond Jubilee Award and winner CMA Awards for best community service. • I have won many awards from the brokerage firms I work with and from lenders for being top or one of the top producers in my region and in Canada. • I am on the mayor’s Economical Outlook Committee and the small business task force. • I have been published in a few articles one in Our Home magazine on reverse mortgages. 28 | JUNE 2014

MORTGAGEBROKERNEWS.CA

dealership was being sold and the owner did not want to put me out of work so these two mortgage brokers offered me a job to learn how to be a broker. I thought about it and sold my business to my brother and decided to be a mortgage broker. After learning a lot about the business I went on my first Realtor call and they proceeded to ask me what I would give them in return for a deal (in a very sexist manner). One of the brokers I worked with always told me to go home and cook and clean as this was what a women did, according to him, and that the mortgage business is not for women. I lasted because I thought I had as much right to be in this industry as they did. I feel that a lot of women may still look at the industry as the old boys’ club and are afraid to step up. I found mostly in the commercial world that most bosses and managers have been men used to dealing with men. I had to prove myself.

WHY ARE YOU INFLUENTIAL? By interacting with prominent members of the community, I have built a reputation with major banks , trust companies, lending institutions and clients by being honest, transparent, loyal and ethical. Other mortgage brokers also send me deals or ask my advice as they know I get the deal done. I have done community work throughout my whole career; from sitting on the board of Crime Stoppers, contributing to the Unity Project, the Heart and Stroke Foundation to belonging to Optimist club. I also helped raise $97,000 with golf tournaments, turkey and ham raffles with a small group called John Scott Memorial. We took the money to Sunshine Foundation and we were able to take 76 children on a dream lift to Disney Florida in one day. Under the Angels In The Night umbrella, we are raising the bar and going to the Namarind Friendship Centre to build them a new kitchen as they have a social on every Wednesday of the month and feed over 200 homeless people. This will all be funded and donated by local community businesses. The media seem to follow and show up to all my fundraisers; from CTV and major London news outlets to radio and small local papers. I believe that my business is successful because the community gives to me and it is only right to give back.

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COVER / WOMEN OF INFLUENCE

LISA VALADE • Where: Regional Manager with Invis-Mortgage Intelligence • Number of years spent in the business: 28

IS A LIST LIKE THIS EVEN NECESSARY TODAY?

‘MY CAREER MILESTONES’

It’s always nice to recognize and highlight the best in our industry both male and female. Lists are good: They keep us all on our toes and professional.

WHY ARE YOU INFLUENTIAL? I believe I have some influence with my peers and colleagues because of my experience on both the lender side of the business and the broker side. Working both ends of this business gives you a direct insight into the challenges faced day to day on both sides of the business. Also, it’s not rocket science -- I believe in sharing best practices. To be successful in the mortgage brokerage industry comes down to processes and staying in touch with your clients. I have had the privilege of working with some of the best out there and they all have this in common.

WHO HAS INFLUENCED YOU? Any company I have ever worked for including my first job at McDonald’s in high school where customer service was driven into your head in such a way that it became automatic. I do, however, remember a pivotal moment when I was a BDM for a lender. I met with my Director of Sales Brian Smith for Wells Fargo Home Plan Mortgage and I was explaining how I thought my sales calls went for that week. He said to me, Lisa, you are “selling” instead of “listening.” That day changed my strategy forever and boy was I thankful for that lesson. You learn so much more from listening. We are often too quick to make the “sale” and listen only to respond instead to understand. This is where the true learning begins. Some successful brokers that I’ve had the privilege to work for are John Cavan of Mortgage Architects, Carolyn Callero of Verico- Premiere Mortgage Centre; both of whom are very successful in their businesses and have these systems in place. Kerri Reed/VP – Verico Premiere Mortgage Centre - - a true leader in this industry whom I share the same visions to help others 30 | JUNE 2014

become successful and I thank them all for their influence.

WHAT ARE SOME OF THE CHALLENGES THAT FACE FEMALE BROKERS? Not so much today but when I entered the business it was very much a “boys’ club” with lenders and the like. Not anymore; many female brokers are making the top lists for lenders and industry award functions. At Invis- Mortgage Intelligence we have had many female brokers/agents receive regional and national recognition. In fact we took two awards home at the CMA awards evening in Toronto, one for Top New Comer Brokerage: Ana Cruz/Lisa Pellerin of Mortgage Intelligence LA Mortgage Team and Carmen Alpaerts of Any Mortgage For you –Invis for Best Community Award all of which were women! If anything, female and male brokers/agents today have to be concerned about their safety first and foremost as we are a customer service-driven industry often meeting the public in their homes. Working smart and safe always is the key.

I believe simply my career milestones have been to learn every faucet of this industry from every perspective, from fulfillment, to underwriting, sales & management. This knowledge allows me to appreciate all our lender partners and in my current role to assist others to help them be successful which is my driving force. I believe in crosstraining and the development of people. I am happy to say that some individuals that I’ve had the privilege to be part of their development have gone on to fantastic management and training careers in our industry. Most of my career has been in the B-space or subprime- terms understood depending on when you entered this ever-changing business, which has allowed me to think outside of the box and look for opportunities. I proudly assisted with the implementation and staffing for Wells Fargo Home Plan Mortgage.

MORTGAGEBROKERNEWS.CA

KATHY GREGORY • Where: President and CEO of Paradigm Quest • Number of years spent in the business: 25

WHY ARE YOU INFLUENTIAL? I built an organization where the core values are innovation and change to move forward. We’ve built a very strong and focused culture of a customer/borrower advocacy model in the mortgage industry. I have supported mentorship program for others since 2005 and I’m one of the very few female CEO in the mortgage industry, I founded and Chair the Ontario Women’s Mortgage Industry Golf Tournament eight years running and raised over $100,000 for the Canadian Women’s foundation, helping women and their children out of poverty. I also founded and Chair the BC Women’s Mortgage Networking Summit.

WHO HAS INFLUENCED YOU? My mentors include my father, two of my previous bosses, and one in particular who took a big risk putting me in a role and my business partners today. They motivate and influence me every day.

WHAT ARE SOME OF THE CHALLENGES THAT FACE FEMALE BROKERS? There aren’t enough leadership roles across the broker channel and it is still a male-dominated industry. The lack of professional training , leadership , sales etc. is also an issue.

IS A LIST LIKE THIS EVEN NECESSARY TODAY? YES, YES and yes. In Canada, women still trail behind men in leadership and management roles, particularly in financial services. Men occupy two to three times more senior management roles than women. Women earn 75-80 cents on the dollar in Canada versus men. Canada trails even the U.S. with female senior management, CEOs and board members. Females make up less than 10 per cent of top 500 fortune financial companies, and board of directors members. Women increasing their leadership in Canada has stalled and not increased since 1987. This is why we need this list. Awareness of the above to ensure women have a much more equal voice at the leadership table, driving the industry forward.

‘MY CAREER MILESTONES’ • 2004 Founded and launched Paradigm Quest Inc. and have since grown it to $20 billion of assets under administration and over 250 employees • CMA winner for employer of choice • WXN Awarded Top 100 Most Powerful women in Canada • 2013 Inducted into the Canadian Mortgage Hall of Fame

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PRIVATE LENDING GUIDE

IN THIS FEATURE: • CROSS-CANADA DIRECTORY 2014 P34 • THE LIFETIME VALUE OF A DECLINE P39 • OPENING A MIC: DO YOUR RESEARCH P44

PRIVATE LENDING Get your bearings straight: Here’s a handy broker guide to navigating Canada’s private-lending landscape Brokers are digging deeper and sifting more thoroughly through their lending options to find financing for deals due to ever-changing and – let’s be honest – ever-tightening lending rules and guidelines.

32 | JUNE 2014

MORTGAGEBROKERNEWS.CA

AAA-clients have become A-clients; A-clients are now B-clients; and B-and C-clients … well, they’re having more trouble than ever finding financing for their homes. But the future isn’t entirely bleak, say a number of crafty mortgage brokers, who have embraced the increasingly popular private lending sector. And increased competition with the banks is making alternative lending a much more attractive alternative revenue source for brokers. “We’re seeing more and more mortgage professionals exiting the A-market,” Joe Walsh of Dominion Lending Centres Bedrock Financial Group Inc., tells CMP. “I’m seeing more private (lenders) out there, more B-lenders.” Quite often private lending is used as a bridge to getting clients into a more traditional mortgage.

“Private money will be there all day long and usually when people come in for a mortgage you can put them in private money for a year before moving them to an A-lender,” Allen Cripps of Dominion Lending Centres National says. “It shows that they can make payments.” And while some brokers are knowledgeable about the private lending space others still have questions. For both these camps, we have assembled a handy guide to all things private lending, including a directory and features on timely issues. This guide will outline which deals to send where as well as explain how best to add this other, very lucrative facet of the business to your A deals.

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JUNE 2014 | 33

PRIVATE LENDING GUIDE

1 4 2

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PRIVATE LENDING CROSS-CANADA DIRECTORY 2014 34 | JUNE 2014

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ROBINSON GROUP -PILLAR FINANCIAL

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PRIVATE LENDING CROSS-CANADA DIRECTORY

Cobra Mortgage Services Limited

• Lending markets: Western Canada • Niche/focus: Commercial Development & Construction, specialty niche in hotel construction • Products: Commercial mortgages • Customer type: developers, builders, end users - via broker channel • Property type: Commercial, multi-residential • Purpose: Development, construction, inventory, acquisition • Max LTV: 75 per cent • Min. Beacon: N/A • Terms: 12 months, interest-only, interest reserve accounts funded, renewable • Rate type: 7 per cent – 10 per cent • Max amortization: N/A • Fees: 1 per cent – 2 per cent commitment fee plus broker fee • Preferred loan amount: $1MM - $12MM

VWR Capital

• Lending markets: British Columbia, Alberta, Saskatchewan, Manitoba and Ontario • Niche/focus: Exclusively residential with a lending model that gives brokers the freedom and flexibility to sell the deal how they want. • Products: Specialize in first, second and third Mortgages with Open, Partial-Open and Closed products available • Customer type: resident and non-resident borrowers including operating and holding companies. • Property type: single-family detached, townhouses, condos, serviced land, raw land, multi-family and apartment buildings • Purpose: purchases, refinancing, debt consolidation, equity take-out, bridge financing, serviced/raw land and renovation financing. • Max LTV: 75% • Min. Beacon: No minimum beacon score or income verification • Terms: one-year terms • Rate type: fixed • Max amortization: up to 35 years or interest only • Fees: Basic lender of $750 for a first mortgage and $500 for second or third mortgages. • Preferred loan amount: Any amount from $30,000 up to $2,000,000

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JUNE 2014 | 35

PRIVATE LENDING CROSS-CANADA DIRECTORY 2014

PRIVATE LENDING GUIDE

36 | JUNE 2014

MORTGAGEBROKERNEWS.CA

Atrium Mortgage Investment Corporation

• Lending markets: Southern Ontario, London, Ottawa, Calgary, Edmonton and Vancouver • Niche/focus: Non-bank lender with creative financing solutions. Larger loans, first and second mortgages on residential, mixed-use, construction • Customer type: Owners and investors. Those who are having issues with B-20 documentation • Property type: Single family, multiples, large homes, store and apartments, condos, work/live properties • Purpose: Purchase, refinance, bridge, build • Max LTV: 80 per cent • Min. Beacon: None • Terms: one and two-year terms • Rate type: Fixed • Max amortization: Interest only, amortizing mortgages available • Fees: 1 per cent to 2 per cent • Preferred loan amount: $100,000 to $4,000,000

Commercial Mortgage Corporation

• Lending markets: Canada • Niche/focus: Commercial real estate mortgages • Products: Institutional and private lender commercial mortgages and equity placements • Customer type: Institutional and private commercial real estate investors • Property type: Office, retail, industrial, multiresidential, hotels, special purpose properties, land and construction • Purpose: Acquisitions, renewals, refinancing and equity take outs • Max LTV: Up to 85 per cent loan-to-value on a single asset • Min. Beacon: Not applicable • Terms: Up to 25 year terms • Rate type: Fixed or floating • Max amortization: Up to 35 year amortizations on most assets, 40 years for apartments, interest only options are also available • Fees: Fees are based on performance and vary per transaction type • Preferred loan amount: $1 Million +

Robinson Group -Pillar Financial

• Lending markets: All of Ontario • Niche/focus: Construction, self-employed, rural, bruised or damaged credit, bridge financing, commercial • Products: BFS, construction, consolidations • Customer type: Those that fit just outside the traditional bank lender criteria. • Property type: Residential, commercial, mixed-use, vacant land, subdivisions, multiunit, farm, • construction, waterfront, cottage, modular homes • Purpose: Owner occupied, rentals, second homes • Max LTV: 80 per cent (Owner occupied residential) • Min. Beacon: No minimum • Terms: 1-2 year terms, open and closed • Rate type: 6.99 per cent and up (aside from rate sales) • Max amortization: 40 years (prefer 30 year) • Fees: 2 per cent • Preferred loan amount: $100,000 and up

First Source Mortgage Corporation

• Lending markets: Ontario, primary and tertiary markets • Niche/focus: Income-producing, construction, land, retail, industrial, residential • Products: Typically 1st mortgages • Customer type: Experienced builder • Property type: See above • Purpose: Bridge lender • Max LTV: 65 per cent • Min. Beacon: 600 • Terms: one to two years , 2 per cent lender fee • Rate type: TBN • Max amortization: 20 years, typically interest only • Fees: two years • Preferred loan amount: $1-8 million

Credit  Income  Debt Servicing  Title Issues  Down Payment  Immigration Status

Alt A And B comBined for one stop shopping When the property is not the problem, we have the solution. To discuss a potential file to see if it’s a good fit with Magenta’s programs, to learn more about how Magenta can support your sales goals, or to escalate any mortgage issues.

Serving Ottawa and Kingston (and surrounding areas), Gatineau, London and Kitchener-Waterloo. Gatineau Ottawa

CALL: Andrea Haines,

Sr. Manager-Sales & Client Relations

Cell: 613-850-0711

Tel 613-230-5014 ext 307 | PIN: 2AE4858C

Rebecca Griffeth,

Rebecca.griffeth@magentainvestment.ca, 2‎ 26-377-0809-BDM, Southwestern Ontario Toll-free Tel 1-888-267-1744 | Fax 613-267-7644 Toll-free Fax 888-267-7644

Kingston KitchenerWaterloo London

232 Herzberg Rd., Suite 201, Ottawa, ON, K2K 2A1

www.magentainvestment.ca

PRIVATE LENDING GUIDE

PRIVATE LENDING CROSS-CANADA DIRECTORY 2014

38 | JUNE 2014

Vector Financial Services

• Lending markets: Commercial properties in the GTA with and generally speaking, driving distance up to two hours west, one hour north and half hour east. • Niche/focus: Student housing, land development, construction of mid-rise condos • Products: short-term loans; one year to two years. Minimum one million and a maximum of 25+ million • Customer type: Experienced developers, construction companies • Property type: Land assemblies, in-field projects • Purpose: Construction of mid-rise condos, equity takedowns, land assemblies, student housing • Max LTV: Depending on the project, 70-71 per cent • Min. Beacon: No minimum but derogatory remarks will kill a deal. • Terms: 1-2 years; loans are always open after a closed period. • Rate type: Depending on the project, anywhere from 8-9.5 per cent • Max amortization: We don’t charge principle: Interest only. The money you owe on majority is the same owed on commencement • Fees: Lender fees depend on the relationship; anywhere from 1.5 to 2 per cent • Preferred loan amount: six-eight million

Tribecca Finance Corporation

• Lending markets: GTA and surrounding areas • Niche/focus: Alt-A, alternative lending products to the banks • Products: Personal loans, second mortgages, construction mortgages • Customer type: Salaried, self-employed, contract, seasonal, pension • Property type: Residential • Purpose: Purchase or refinances (debt consolidation, equity take outs, home renovations, construction, business investment, etc.) • Max LTV: 85 per cent • Min. Beacon: No minimum beacon • Terms: one or two-year Terms • Rate type: 8.99 per cent to 13.99 per cent • Max amortization: Up to 40 years amortization or interest-only payment option Fees: 2 per cent to 5 per cent • Preferred loan amount: $10,000 to $1,000,000 for mortgages

Magenta

• Lending markets: Ottawa, Kingston, Brockville and surrounding areas, Kitchener-Waterloo, London Guelph and Cambridge • Niche/focus: situational‎ lending, Alt-A, B, construction • Products: First, second, (refinances and purchases) construction and commercial • Customer type: no ideal customer type • Max LTV: 85 per cent (first or second) • Min. Beacon: no minimum beacon • Terms: We price one and two-year terms, open and closed • Rate type: Floor urban rate is 4.99 per cent for a first and 9.99 per cent for a second (all deals are priced individually) • Max amortization: 40 years • Fees: fees are between 2.5 per cent (first and construction) to 5 per cent for a second. We always cap our fees

10 Pentor Finance • Lending markets: Province of Quebec (excluding Iles de la Madelaine & Gaspesie) • Niche/focus: residential 1-5 units, semicommercial. Looking for near-bank quality with a clear exit to either a “B” or “A” or a sale (orderly sale article). 75% of our refinancings end up with “A” institutions • Products: Collateralized bridge loans, interest only, multiple collaterals possible, renovation projects acceptable, orderly sale • Customer type: near-bank quality borrowers that have run into a problem (i.e. Divorce, medical, job loss or starting a business) and need help to consolidate debt (significantly lower cost than credit card debt) and clean-up their credit situation • Property type: 1) 1-5 units, residential and semi-commercial 2) 6-100 doors multi-family. No industrial. • Purpose: debt consolidation, business start-up, equity take-out, divorce settlements, renovations, purchase • Max LTV: 75% • Min. Beacon: N/A • Terms: 1) 3 month term then open, 2) 6-12 month terms with renewals • Rate type: risk adjusted • Max amortization: interest only. We can customize the mortgage to meet the client’s cash-flow needs. • Fees: Risk adjusted • Preferred loan amount: $50,000 – 1,000,000

MORTGAGEBROKERNEWS.CA

THE LIFETIME VALUE OF A DECLINE

Declines from traditional lenders are a gift in disguise, writes Rebecca Lamarche, They can, in fact, net a broker a profit of $32,000 over the lifetime of a mortgage ... if handled properly “Decline, decline, decline,” said that “A” financial institution. Reports from industry associations, the Canadian Bankers Association and economists all suggest the Canadian government’s mortgage rule changes between March 2011 and July 2012 have, indeed, made it more difficult for borrowers to get approved by A lenders. With tighter restrictions those institutions are giving out fewer approvals. Too many brokers go back to their clients saying, “there’s nothing I can do, good luck,” and look for new clients. What a waste; nobody profits from that. Often, the client will lose the property and the equity in

Geared to Handle CONSTRUCTION CONSTRUCTION TYPES:

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• Builders and renovators • Land developers • Real estate buyers

Bring us your exceptional clients and get your blueprint for construction financing: Cam Delli-Pizzi

613 282-1242

Mortgage Administrator Licence #11209

cam@pillarfinancial.ca

MORE THAN 30 YEARS EXPERIENCE PILLARFINANCIAL.CA

JUNE 2014 | 39

PRIVATE LENDING GUIDE

the home. Always, the broker walks away from multiple commissions and the opportunity to expand his business. Declines can be more profitable to a savvy broker than approvals from A banks and insurance institutions. In fact, private lenders — among them Montreal-based Peter Galli at Pentor Finance — have created strategies that brokers can use to save their clients’ homes and the equity in their homes, while making the possibility of three commissions in the first 18 months of a file. Now that’s a win. Here’s how to do it, according to Galli, who has more than $700 million in alternative mortgages under his belt. He, like other privates, has met with countless homeowners who have suffered from personal setbacks. Many times these people are trying to recover from losing their job, a divorce or expensive medical bills that have led to a financial crisis: legal mortgages, unpaid property taxes, construction lien, 60-day notice, the list goes on. The solution is to help these people who have been declined by prime lenders use the equity in their property to clean up their current financial crisis. This is where the broker comes in, with an entrepreneurially minded player able to help guide his client into a long-term financial solution, starting with some, or all, of the following six steps:

CREATE A “POWER TEAM”

The client needs a team of professionals working towards the same goal: saving the client his property and the equity in it. This team can include a mortgage broker, private lender, real estate agent, notary, lawyer and a trustee.

02 03

IDENTIFY THE PROBLEM

The client fell behind on mortgage payments leading to legal action.

IDENTIFY THE CAUSES OF THE PROBLEM

Often this involves a low credit score and the borrowers lack of cash flow, triggered by a personal setback.

CREATE A BUDGET

40 | JUNE 2014

The client needs a long-term plan to

pay off high-interest-rate debts and to improve cash flow.

CREATE A CREDIT REPAIR PLAN

The client, for example, can use an increased cash flow to pay off certain debts, lower the balances on others and obtain a new credit card.

REMEDY THE “FINANCIAL CRISIS”

The broker provides the client with the option of mortgaging with a private lender. This pays off the cause of the financial crisis and consolidates the client’s debt. Step six is the broker’s first commission. The term of the mortgage is six to 12 months. “If the broker can coach these steps, especially steps four and five,” Galli says, “they are setting the client up for the rest of his life.” By clearing up the financial crisis and budgeting for the future, the client can graduate to a more traditional lender. Often this is an alternative lender such as a Home Trust, Equitable Bank or MCAP Eclipse. The term of this mortgage is between 12 - 18 months. That is the broker’s second commission in the span of six to 12 months. Finally the client is ready to graduate to an A financial institution. This is the broker’s third commission in 18-24 months. The broker has worked with the client to save both his home and the equity in his home. The client now has a mortgage with an A institution, lasting an average of 300 months, meaning that the broker now has the opportunity to make four to five more commissions throughout the life of the property. “There’s no easy business anymore. In 2011 / 2012 you could get many deals approved,” Galli says, “Today clients who would have been approved two years ago are turned away by ‘A’ financial institutions because of tougher lending criteria. What savvy brokers are starting to recognize is that declines can equal opportunity.”

LET’S LOOK AT THE NUMBERS According to the Canadian Real Estate Association, as of April 2014 the average resale prices across Canada are as follows: $320,993 in Montreal (MTL); $553,193 in Toronto (TO); $846,978 in Vancouver (VAN). This means that if the mortgage value is at 75% and the broker earns a commission

MORTGAGEBROKERNEWS.CA

of 100 basis points, he will earn $2,407 (MTL), $4,149 (TO), and $6,352 (VAN) per renewal. By working with a private lender and using the graduation strategy a broker can earn anywhere from $7,222 - $19,052 in commission within the

first 18-24 months of a file without; and a total of $12,037 - $31,762, including referrals, over the life of the file.

What’s a decline worth? Here’s the math 18-24 Months Private Lender with Graduation Strategy

Referral (2xA Deals)

Total Commissions (Client + 2 referrals)

City

Average resale as of April 2014*

Mortgage Value

Mortgage Amount

Commission with Private Lender (100 bps)

Commission with B Lender (100 bps)

Commission with A Lender (100 bps)

Total Commissions

Deal#1

Deal#2

Montreal

$320,993

75%

$240,745

$2,407

$7,222

$2,407

$12,037

Toronto

$553,193

75%

$414,895

$4,149

$2,407

$12,447

$4,149

$20,745

Vancouver

$846,978

75%

$635,234

$6,352

$2,407

$19,057

$6,352

$31,762

YOUR SOURCE FOR • PERSONAL LOANS • 2 ND MORTGAGES • CONSTRUCTION MORTGAGES

www.tribecca.ca 261 Sheppard Avenue West | Toronto, Ontario | M2N 1N4 Tel: 416.225.6900 | Fax: 416.225.6905 | Licence # 12225

It’s time for a new perspective.™

JUNE 2014 | 41

PRIVATE LENDING GUIDE

MORTGAGEBROKERNEWS.CA

A decline is a gift in disguise to brokers and using the graduation strategy is 100 per cent more profitable than walking away from a client. “By using the six steps to solve the client’s financial crisis and working through the graduation strategy, the client now presents a steady revenue stream,” Galli explains. “Why go out and get new clients when you can keep going back to the same one. You’re adding value to the client’s portfolio, helping them with their finances and earning commissions and referrals at the same time.”

HELPING THE CLIENT SEE EYE-TO-EYE WITH HIS BROKER The client is already in crisis mode -- he’s stressed, overwhelmed and in danger of losing the equity in his home along with the home itself. It’s understandable that the suggestion of a high interest mortgage with a private lender can be paralyzing. This goes back to the broker. “Brokers are not typically presenting their clients with a game plan for their crisis. They present a Band-Aid,” Galli says. “The client needs a long-term solution, they need the graduation strategy.” The broker needs to shift his and his client’s perspective from the immediate situation to the prospective 25-year lifespan of the property. If the

42 | JUNE 2014

broker just offers the client a six to 12 month mortgage with a private lender, or in other words a Band-Aid, the client bleeds out. By utilizing the private lender to work through the six-step plan and graduation strategy, the client has a long-term solution and new opportunities. That is what the broker needs to bring to his client. The broker who profits from declines helps their client step back and see their long-term financial strategy. To help pinpoint the numerical value of this perspective Galli has worked with other mortgage experts. “We worked with our ‘A’ lending partners to develop this calculation and when we run the brokers through it everything falls into place for the broker and the borrower,” says Galli. This is why. When looking at the costs of working with a private lender, the broker must weigh and present them to the client against the amount of time he will own his property. This is typically 25 years. By using this solution, the client will have cleaned up and recovered from his financial crisis within the first year. Now in a position to transition to more traditional lenders, the client’s costs for the remaining 24 years are drastically lower. When you look at the cost of working with a private lender against this 25-year period of ownership, the incremental cost is 42 basis points. A successful broker will show his client that for the cost of 42 basis points the client not only gets to keep his home and the equity in it, but also reestablishes his credit. With the broker’s help the client can now see the solution too. The solution isn’t new. Brokers need to adjust their perspective towards declines as an opportunity, and present it as such to their clients. “There’s a lot of negative energy surrounding declines,” Galli says, “but if you take it and convert it into a long-term solution for your client, well you’ve just become the go-to-guy.” A resourceful broker helps their client out of a financial mess. He takes a decline and runs with it; earning multiple commission streams, a host of referrals and bolstering his reputation within the industry.

Sophie Bush

Marketing Manager

1-886-907-5407 sophie@vwrcapital.com Contact our dedicated Marketing Manager today!

Your Private Mortgage Solution

Funding Mortgages In: · · · · ·

British Columbia Alberta Saskatchewan Manitoba Ontario

Lending Features: · · · · ·

No minimum beacon score No income confirmation Competitive rates and nominal lender fees Purchases, refinances, ETO, and renovations Rental properties, owner occupied, raw land, serviced land, multi-family

RE O M D A RE IN R W V T ABOU IVATE THE PR NG LENDI GUIDE

Send all deal inquiries to info@vwrcapital.com Or call our office at 1-866-907-5407 for more information

www.vwrcapital.com

PRIVATE LENDING GUIDE

BROKERS,

DO YOUR RESEARCH WHAT TO KNOW BEFORE OPENING A MIC With the rising number of mortgage investment corporations, itâ&#x20AC;&#x2122;s important that each has a clear plan and a business model that works, writes Rajan Kaushal, president of Tribecca Finance. Here are five key facts LENDING EXPERIENCE In my opinion, it takes at least 10 years of consistent lending experience before you should consider raising investor funds. Until you have been through some fluctuations with the economy and/ or real estate market, you do not know how your mortgage portfolio will truly perform over time. This experience is needed to mitigate the risk of the mortgage portfolio and will assist in determining the right lending criteria. Also key is having a great team, making sure you have enough experienced individuals to manage all areas of the mortgage lending business. That includes third party appraisers, lawyers, etc.

44 | JUNE 2014

MORTGAGEBROKERNEWS.CA

canada’s premier non-bank Lender We understand your financing needs. We offer fast turnaround and structures that can open new opportunities for your business. Single family homes Condo’s Rentals Investors Bridge and term financing Infill construction financing First and second mortgages

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Mobile (416) 561-9224 Office (416) 607-4209 phil.fiuza@atriummic.com

Atrium is listed on the Toronto Stock Exchange ( TSX: AI ) Atrium mortgAge investment corporAtion is mAnAged by cAnAdiAn mortgAge cApitAl corporAtion – lic. 10284

PRIVATE LENDING GUIDE

MORTGAGEBROKERNEWS.CA

ACCOUNTABILITY TO INVESTORS You are accountable to your investors. It is extremely important that you provide clear information to your investors on the mortgage products you are offering and the associated risk(s). This includes geographical lending areas, type and rank of mortgages, loan-to-value ratios, underwriting criteria, range in interest rates and fees charged to your borrowers. Be clear with the expectation of returns to your investors. Make sure you have the appropriate investors who are suitable in terms of risk tolerance and in relation to your business model.

KNOW THE MORTGAGE MARKET & YOUR BUSINESS MODEL Today there is much more competition in the private lending industry. Competition is good; it provides more options and better mortgage products to the public. Be fully aware of the pricing you can charge your borrowers for the mortgage products you want to offer. Raising investor money can be difficult. It is essential that the funds are raised at an appropriate cost or the expected dividends to be paid to the investors must be in line to provide the MIC enough of a spread to cover all the operating costs. One of the worst things a MIC can do is alter their lending criteria to generate higher returns when under pressure to perform. Be very disciplined, do not let greed or pressure influence your lending decisions. If the MIC is not operating at a

46 | JUNE 2014

satisfactory level or sitting on more cash than it can lend out prudently, it should return the funds to the investors.

SKIN IN THE GAME It is imperative that the principal(s) of the MIC have a sufficient amount of their own capital invested. This will provide stability and will give confidence to investors when raising funds.

COMPLIANCE Understand all the compliance and regulatory requirements. You are accountable to the governing bodies and investors. If you fail to operate within the guidelines, there are severe consequences.

SUMMARY Private lending companies and MICs fill a gap in the Canadian market and competition is good. However, my fear is that there may be some MICs opening that do not have the level of experience needed to run a long-term successful mortgage lending business. If investors lose money, it will negatively impact the reputation of the mortgage broker and private lending industry. We have had a 23-year upward cycle in the real estate market, with a couple of short-term bumps in the road. Everyone is a hero in this market; however, when we have a market downturn, it will be a very scary place for some mortgage lenders.

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PH: 1-855-855-5085 FAX: 1-403-309-3505 Email: info@cobramortgage.com *Western Canada Only

FEATURE / CONSTRUCTION FINANCING

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HABITS OF HIGHLY SUCCESSFUL COMMERCIAL BROKERS

There is a lot of truth to the saying ‘You only have one chance to make a first impression,’ writes lender David Mandel. And that’s never been truer than when it comes to presenting a commercial deal It is imperative for mortgage originators to really know their clients as well as the property to be mortgaged. Before you pick up the telephone to discuss the funding feasibility of a potential deal with a lender or to create a loan summary or Confidential Information Memorandum (CIM) you need to have certain key information.

48 | JUNE 2014

HOME TRUST

FEATURE / CONSTRUCTION FINANCING

As a lender, I can tell you that other than for a handful of sophisticated and experienced brokers, originators generally do not have a deep understanding of the key pieces of information lenders need to know. In order to assist those of you who are interested or need help to increase your closing ratio and decrease the number of times you have to pitch the same deal, here are a few suggestions:

KNOW THE ADDRESS AND HAVE A DESCRIPTION OF THE PROPERTY, AS WELL AS THE PROPERTY SURROUNDINGS

Provide enough information for a Google search and to get a street view. Additional details like ceiling height for industrial properties are important as well as the number of drive-in or truck level loading docks. A basic description of an industrial building or commercial condominium alone is often not enough. For example, if a 60,000 square foot industrial building was built in the 70â&#x20AC;&#x2122;s and has a 14-foot clear ceiling height, it will likely be seen as an obsolete building with somewhat limited marketability. This is because similar but newer buildings may offer 22 foot or more clear ceiling height providing greater utility for rack storage warehousing.

CONFIRM WHETHER OR NOT YOU HAVE A MANDATE AND IF THE TRANSACTION IS BEING COBROKERED WHEN SPEAKING TO A LENDER

This is particularly important when you send supporting information with a proposal to a lender. A lender assumes you are calling on a live deal and that you are mandated. If you do not yet have a mandate it is OK but the lender should know. Many lenders are proactive and do not want to waste time on initial due diligence if a loan submission is nothing more than an exercise to gather pricing related information. If you are providing a lender with documentation, the lender will assume you have a mandate. 50 | JUNE 2014

MORTGAGEBROKERNEWS.CA

WHAT IS THE TYPE AND USE OF THE PROPERTY?

If the unit is being used for automotive related services (such as a body shop) or a commercial unit is being used as a gentlemenâ&#x20AC;&#x2122;s club, then environmental or moral concerns need to be addressed upfront. Many lenders do not fund properties involved in a host of uses.

PROVIDE SOME DETAIL ON THE CORPORATE BORROWER AND CORPORATE GUARANTOR

You should be able to speak of the history and reputation of the individuals you are representing as well as their corporate entities. Make sure there are no skeletons in the closet. You need to complete something as simple as a Google search of the individuals and/or companies to avoid surprises. It is not out of the realm of possibility that the individual you are dealing with may have been the subject of a past event which, if not explained, would be enough to kill your deal. In our experience we have had situations where the corporate guarantor was previously convicted of an undisclosed felony. Charges were dropped and the event could be explained. If this was caught subsequent to the commitment stage, the deal would have died. There was a situation in which a mortgage on title was actually disguised as an equity investment by a company affiliated with a particular individual that we and possibly others would not want to do business with or lend to. This event came to light well after spending many hours on the file and became cause for aborting the deal close to funding.

UNDERSTAND THE CORPORATE STRUCTURE OF THE BORROWER

Lenders want to know if the property being mortgaged is being held independently or is a part of a larger organization with or without contingent liabilities. In addition, a lender wants to know how money and lease obligations flow. Always ask for a corporate chart when several companies are held by the beneficial owners of your borrower. There are many reasons for this but one

FEATURE / CONSTRUCTION FINANCING

shining example is that if a corporate borrower and operator are the same and there is no lease between them, a “super Priority” such as HST — if unpaid — could become a liability to both companies. If there was a lease between the borrower (property holding company) and the operator (tenant) the borrower would be sheltered from the HST claim preserving the main security of the property.

KNOW THE DETAILS OF THE EXISTING FINANCING AND BE ABLE TO PROVIDE A DETAILED USE OF FUNDS

Lenders want to understand deal economics and where the money is being used and for what purpose. Confirm that the loan amount is adequate to both meet the goals of your client and provide 52 | JUNE 2014

your lender with confidence as to where the money is being used. If funds are being used for another project, the lender needs to know.

SET REALISTIC BORROWER EXPECTATIONS

If a borrower is coming to you for institutional rates on what you see as a private deal, you need to address deal pricing in advance of speaking with a private lender.

GET THE FINANCIALS AND CREDIT REPORT UPFRONT AND REVIEW THEM FOR POTENTIAL PROBLEMS

Know if the borrower has the ability to service the debt or not. If not, simply knowing this can assist you in building a solution into your funding proposal.

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IF YOU HAVE AN APPRAISAL, YOU NEED TO READ IT

Does the valuation represent a current “as is” value or does it represent a value based on a certain set of forward-looking assumptions? What information was supported through third parties and what information was provided and relied on by the borrower? If the appraisal was completed for the borrower, was it for financing purposes or for management purposes? It matters because a lender is likely going to be looking for an accredited AACI signed appraisal report with a letter of reliance for “mortgage purposes.” How current are the comparable property sales and are the adjustments reasonable? How recognizable is the appraiser and how widely accepted is the appraisal firm? If the appraisal is older than six months the borrower should be informed that a new or updated appraisal may be required.

MAKE SURE YOUR BORROWER IS FAMILIAR WITH THE COSTS AND TIMING

Costs associated with required third-party reports which may be required including but are not limited to include; an appraisal report, an environmental report, a building condition report, a planner’s report, a quantity surveyor’s report, and a third-party insurance consultant’s report. All of these reports can be costly and timeconsuming. Finally the closing process including syndication if applicable and legals will take additional time. These are important to remember when setting client expectations.

David Mandel has been a mortgage broker and lender since 1989, is a past-president of IMBA and is a principal at First Source Mortgage Corporation; a Toronto-based private commercial lending company serving mortgage originators all over Ontario.

Before your client puts this on, they should Underwriting real estate backed Construction, Bridge and Equity Financing for over 35 years. talk to us. Loans from $1,000,000 to $15,000,000+ Contact Mickey Baratz Lic.# M08000714 (416) 483-8018 ext 233 or mickey@vectormanagement.com

Financing for projects in southern Ontario Only

www.vectorfinancialservices.com JUNE 2014 | 53

BUSINESS STRATEGY / SOCIAL MEDIA

HOW TO CAGE THE BEST

SOCIAL MEDIA PLAN

Donâ&#x20AC;&#x2122;t be intimidated by the idea of developing a social media plan right for your brokerage. Muhammad Yasin is presenting a simple guide for capturing leads via social media

54 | JUNE 2014

Feeling overwhelmed by the world of social media is easy, especially if you have yet to take part in it. Many businesses use it, have amassed hundreds of thousands of followers, built brand loyalists, and even generated sales leads. Yet without any prior experience with social media, it might get frustrating as you ask yourself the many questions necessary to start up your social media plan: Where do I start? Which social media platforms are right for me? What is the right balance? Social media is a cog in your marketing plan and should align with your other marketing goals, your branding, and with the way you engage your customers offline. You must have goals you want to reach before you actually begin the process.

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News

InternatIonaL

u.s. U.S. housing market worse than thought The number of Americans who bought previously FIRST STEPS occupied homes rose in October. But the National

Reserve your accounts Association of Realtors says it overstated more than An obvious but important first the step, register the three million sales during and after Great Recession, name your business the names showingofthe housing marketand was weaker than of your previously thought. products. Consistency is important through social Theas private tradebut group says sales rose four per use media a whole, here particularly. If you cent in October to a seasonally adjusted annual rate of an anagram or a shortened spelling of your business 4.42 million. That’s below the roughly six million homes on one account, you should use it on others as well. a year that economists say are consistent with a healthy Use a handle will allow peoplerevised to find you housing market.that But it’s ahead of 2008’s sales, when they go searching. When you start registering now considered the worst in 13 years. accounts, sign up for every socialfrom media you The trade group revised its sales 2007site to 2010 down 14 cent, from more than 20.6 to nearly know of.per Start with well-known sitesmillion like Facebook 17.7 Twitter, million. Among thenot reasons for the or but do neglect thelower sitesfigures, such as the Realtors group says: changes in the way the Census YouTube, Pinterest, LinkedIn, and others. You Bureau collects data, population shifts and some sales likely will not produce content for all of these being counted twice. accounts, but itconsulted is a good idea to secure The Realtors with government and your company/brand namesincluding to ensure that others do not private housing experts, the Federal Reserve, register, and use, forand negative the Department of them Housing Urban purposes. Development, the Mortgage Bankers Association, the National Association of Home Builders, mortgage giants Fannie Monitor conversations Mae and Freddie Mac CoreLogic, California-based Imagine yourself at and a party. How alikely are you to data firm that first raised doubts about the annual jump into a conversation between two people numbers earlier this year. without knowing what thethat conversation about? CoreLogic has estimated the Realtorsisgroup Hopefully, not very likely. same should overstated sales in 2010 by atThe least 15 per cent. be true for social media numbers conversations. Know what is being The changing could affect how economists view the trade group’s data. It could alsobefore affect companies discussed through social media jumping that use the figures forMonitor hiring and expansion into conversations. what othersplans. are talking Sales are measured when buyers homes. about. Use the search functionsclose of on the social But many deals are collapsing before that point. networks to find out what people are saying about One-third of Realtors said they had at least one contract your industry keywords and and scuttled in October, up from 18 peryour cent inbusiness September. products. Contracts are being cancelled for several reasons: Banks have declined mortgage applications; home

90.6% 52.1%

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 Percentage of that home prices will keep falling. Sales are also homeownership being hurt by a decline in first-time buyers, who costs, including are critical to reviving the housing market. mortgage payments, Sales have fallen in four of the five years utilities and property since the housing boom went bust in 2006. taxes that take up a Declining prices and record-low mortgage rates typical household’s haven’t been enough to boost sales. monthly pre-tax At the same time, home construction has income in Vancouver begun a gradual comeback and should add to the and Toronto, economy’s growth in 2011 for the first year since respectively (RBC the Great Recession began in 2007. Last month, Economics Housing builders broke ground on an annual rate of Trends and 685,000 homes, the government said recently. Affordability Report) 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. Create benchmarks Many forecasts attracts don’t foresee a rebound in prices Your marketing plan brings in customers, until at least 2013. people to work for you, and says a lot about your The high rate of foreclosures has made business. Social media is part of your marketing and resold homes cheaper than new ones. The public relations. Any goals that are set asofpart of home a median price a new is roughly 30 per social media plan should cent be relevant your above the to price of one that’s been occupied marketing and PR, as well as your customer service before – twice the normal markup. Investors are taking advantage of the discounts. and sales initiatives. Once you begin interacting, market is struggling even check your performance againstThe thehousing benchmarks as the broader economy you have created. Using analytics tools, measure has improved in recent months. the engagement of your content, your brand The economy grew at an annual pace of two consistency, and return on investment (ROI). You per cent in the July-September quarter. Many can adjust your plan as necessary. economists expect slightly better growth in the October-December quarter. CMP

Your social media plan should align with your other marketing goals, your branding and with the way you engage your customers offline

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THE CANADIAN NATIONAL ASSOCIATION of REAL ESTATE APPRAISERS CALL 888-399-3366 or FIND AN APPRAISER at WWW.CNAREA.CA

JUNE 2014 | 55 mortgagebrokernews.ca

BUSINESS STRATEGY / SOCIAL MEDIA

5 TOP SOCIAL MEDIA TIPS

Reserve your social media accounts Register your business name and any brands that you own. There is no need to produce content right away, but do not let a competitor snap up your accounts. Start with the well-known ones (Facebook, Twitter and YouTube) and expand from there.

Monitor social media conversation It is to your advantage to monitor what others are saying about your brand and industry. Search your company names, brand names, and industry keywords using search functions. This is what you will need to talk about.

Set goals Planning is vital. Social media should be integrated into your marketing efforts. Make a plan that supports the existing marketing

REACHING OUT Find your following Different people prefer to interact using different types of social media. If you know that your customers focus on specific sites, go to those first. Spending your time and content on Pinterest while all of your customers are on Twitter means you will lose valuable time in front of your audience. Search for the platforms with the most interaction, and go to that audience. Never completely neglect the smaller audience from the other sites, but spend your time where you stand to gain the best ROI.

Muhammad Yasin is a public speaker, e-book author, and director of marketing for HCC Medical Insurance Services. In his role, Yasin is responsible for the brand building and lead generation strategy of several dozen social media accounts with over a quarter of a million followers.

56 | JUNE 2014

Valuable content Content is one of the most important parts of social media. While a large part of social media is interaction, another large part is learning. People take to social media and follow different people because of their expert status. As a business, you are the expert, and the content you share should reflect that. Blog your expert ideas and share them via social media. Remember, though, that sharing information via social media is not for the purpose of making sales. Instead, you are sharing information to establish a relationship with your followers. If your followers value your insight and expert opinion, they will come back to see you as a customer. Response Again, social media is about building relationships, and your main goal when using social media should

goals, and set benchmarks. Your actions in social media should support those goals, and the goals of the marketing plan overall.

Interact! Creating and sharing relevant and interesting content is very important, but it is also very important to interact with your followers. Social media is about building a community on a personal level and building relationships. Building relationships can help your business’s bottom line.

Measure performance As with any part of marketing, measuring your performance is vital to becoming more efficient and better overall. Set checkpoints to measure growth. Divide tools into four categories: Content, Diagnostic, Monitoring and ROI. Each will help you improve and adapt your social media plan overall.

be growing those relationships. People reach out via social media because they want a response, so you should provide them some kind of response in return. Any reply from you will strengthen the tie between you and the customer. Once you have loyal customers and brand evangelists, reward them through promotions. Mention and thank anyone who blogs about you. Keep track of your followers and note who is and who is not a customer. Remember that every person who interacts with you is a potential customer. Generating leads Just like you use marketing to generate leads and help the sales team, social media should be used to drive revenue as well. Unless you are bringing in, or at least learning about, potential customers, then the time you spend on social media is wasted. However, when you generate leads, different tactics are required for different social media platforms. Facebook With over one billion users, Facebook is a powerhouse in social media platforms. Share your expertise on Facebook by linking to blog posts, articles, or other relevant information that your followers would find interesting and pertinent. Customers can ‘Like’ you and your business, and then your posts will appear in their feeds. Be careful about the amount you share, though: share too much, and you will bog down newsfeeds, which may lead to you getting ‘Unliked’. If your

MORTGAGEBROKERNEWS.CA

customers like your content, they can share it and make it appear on their own pages, and link back to yours, expanding your network into theirs. Facebook is a great medium for contests and other promotions, and that is a great way to reward your following. Twitter Yes, the 140-character limit on each Twitter post is not a lot to work with, but used correctly it can capture the attention of your reader for just long enough to drive them to content or even to your website. Describe yourself well in your bio to give a better idea of who you are. Your Twitter icon should be an up-to-date head shot of you or your branding, so followers can identify you or your business. Stay relevant to your industry when you tweet. You should share a variety of content, but also engage in conversations. Make your tweets public, and use keywords and hashtags that will

allow customers to find you. Twitter should be a natural conversation. Pinterest Many people think that Pinterest is full of recipes and home decorating ideas, but there is so much more to it than that. If you leave out Pinterest, you are missing out on a world of potential followers. Create boards that are relevant to the many aspects of your industry, and find great content you can pin to them. With Pinterest, you can gather some of the most creative pieces of content in the world all in the one place. As you generate leads, ensure that you continue to engage your current customers. Focusing on leads is certainly important, but your established relationships will pay dividends if you keep them solid. Social media boils down to building relationships, and if you give it the right attention, your business will soon see great results.

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JUNE 2014 | 57

BUSINESS STRATEGY / SOCIAL MEDIA

HOW TO CAGE THE BEST

SOCIAL MEDIA PLAN

Donâ&#x20AC;&#x2122;t be intimidated by the idea of developing a social media plan right for your brokerage. Muhammad Yasin is presenting a simple guide for capturing leads via social media

54 | JUNE 2014

MORTGAGEBROKERNEWS.CA

News

InternatIonaL

u.s. U.S. housing market worse than thought The number of Americans who bought previously FIRST STEPS occupied homes rose in October. But the National

90.6% 52.1%

Your social media plan should align with your other marketing goals, your branding and with the way you engage your customers offline

THE BEST APPRAISERS IN CANADA ARE CERTIFIED AND REGULATED BY

LOOK FOR THE PROFESSIONAL DESIGNATIONS

DAR & DAC

THE CANADIAN NATIONAL ASSOCIATION of REAL ESTATE APPRAISERS CALL 888-399-3366 or FIND AN APPRAISER at WWW.CNAREA.CA

JUNE 2014 | 55 mortgagebrokernews.ca

BUSINESS STRATEGY / SOCIAL MEDIA

5 TOP SOCIAL MEDIA TIPS

Set goals Planning is vital. Social media should be integrated into your marketing efforts. Make a plan that supports the existing marketing

56 | JUNE 2014

goals, and set benchmarks. Your actions in social media should support those goals, and the goals of the marketing plan overall.

MORTGAGEBROKERNEWS.CA

30-Day Risk Free Trial

“What you have is very impressive!” Super franchise system trainer

“I strongly recommend this system to any individual or brokerage!” Anthony Stennett VP Operations Matrix Mortgage Global

www.revodoc.com Have questions? Contact us at

1-403-616-1954 info@revodoc.com

JUNE 2014 | 57

BUSINESS STRATEGY / BUSINESS PLAN

Plan to succeed

58 | JUNE 2014

MORTGAGEBROKERNEWS.CA

A good business plan can act like a compass, not only helping you stay the course but also getting you to where you want to be For mortgage brokers a business plan is an essential tool in helping you realise your goals. “Without a business plan, you have a dream with no stepping stones,” says Michael Griffiths, small business coach and CEO of Michael Griffiths & Associates. “A business plan ensures you know where you’re going, what you want to achieve and the action steps required to get to your goals,” Griffiths says.

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BUSINESS STRATEGY / BUSINESS PLAN

“Business owners without a business plan usually find themselves not growing or taking the required steps to move the business forwards. Their heads are usually stuck in day-to-day routines rather than business growth strategies.” Even veteran business owners often fail to recognise the importance of creating a business plan, adds Michael Altenburger, Small Fish business coach. “In my experience, only very few SMEs have a formal written-down business plan. Not many know exactly what a business plan is or what purpose it serves. Those who do know often feel overwhelmed by the daunting task of creating one. Lack of experience adds to the problem.” Altenburger adds that having a plan, especially in written form, helps quickly determine that things are heading in the wrong direction (hence ‘not going to plan’) – not when it is already too late.

PUTTING IT TOGETHER Simply put, a business plan is a written description of your business and your business goals. It can be used to help you describe your business to potential investors, attract employees, or prospect for new business. The structure of your business plan will reflect who is using it. If you’re looking for finance, your business plan might be slightly more detailed than one that will be used internally for staff.

So step one in creating a plan is to determine who the plan is for. Deciding whether the plan will be used internally or viewed by third parties will help you target your answers.

“Remember, a goal is no good unless it has action steps to get you there” Michael Griffiths According to Griffiths, it doesn’t need to be pages and pages long. There are many variations of business plans, but a basic business plan typically includes: Description of the business: This is your management plan. It typically covers information regarding the structure and premises, staff, your relevant experience and services. Market analysis and strategy: This section includes an analysis of your industry, your target market, and your competition. It should also outline your key marketing tactics to reach your target audience.

5 REASONS TO UPDATE YOUR PLAN

1. Market changes If there has been a significant change in the market, you might want to revisit your plan and figure out how this affects you.

60 | JUNE 2014

2. Regulatory changes All industries undergo changes due to new regulations. You need to ensure your business plan is in line with the regulatory demands of the current market.

3. Personnel changes Perhaps you are in the process of adding new brokers, or maybe the business has lost a partner – the business plan should be revised and each person should be aware of the management structure.

4. Diversification One way to grow your business revenue is to look at how you can incorporate diversification into your strategy. Your chances of embracing new opportunities will increase if you visualise how it will fit into your business.

5. New financial period There are no hard and fast rules on how often you should update your plan, but a new financial period – annually, quarterly, monthly – can be a good time to update if your goals are being met and your plan is realistic.

MORTGAGEBROKERNEWS.CA

COMMON BUSINESS PLAN MISTAKES Too vague

Part of the value in putting together a business plan is to help you visualise and focus on your objectives. A plan that fails to clearly identify tangible and realistic goals misses the point.

Poorly written

Maybe this is not a huge deal if the plan is for your eyes only, but if it is to be viewed by third parties, you want to ensure that there are no mistakes in spelling, punctuation or grammar.

Stops short of being a guide

It’s great to outline your goals, but to get real value from your business plan you need to clearly identify how you intend to reach them.

Inadequate research

Failing to properly identify and research your target market can lead you to make foolish marketing choices. Get some facts. Find out as much hard information about your target market as possible. Do they read the local newspaper, are they mums and dads of the local footy team, and/or are they tech savvy?

Going solo You may be a one-man show, but there is no reason why you have to create your business plan in isolation. There are tons of resources available for small businesses. Get professional help. The right business coach can help you turn what may seem like a daunting task into an invaluable tool for your business.

Future planning: You might want to include your business’s vision statement, your plans for the future, your business goals (short- and long-term) and how you intend to reach them. Finances: This includes how you’ll finance the business, and outlines the operational costs and earnings, and projections. Executive summary: This can be short and sweet – just a one-page overview of your business. When it comes to outlining your goals, Griffiths suggests: “Start with 12-month goals and ask yourself, what outcome do you want in the next 12 months? Set three to five goals you want to achieve, then break it down to three months, six months and the next 30 days. For example, if you want 100 customers in 12 months, how many do you need in the first 30 days? What stepping stones or action tasks do you need to be doing to ensure that your goal comes true? Remember, a goal is no good unless it has action steps to get you there.”

AND AGAIN There are no hard and fast rules regarding how often you revisit your plan, although Griffiths suggests business owners check at least on a quarterly basis: “We revisit ours every month to ensure we focus on the next 30 days and what needs to be achieved.” According to Altenburger, a formal review of the plan should be conducted annually. “On these occasions the goals would be re-evaluated based on new information available,” he says.

Unrealistic

If your goals are over-ambitious and rely on too many forces that are out of your control, then perhaps you need to scale back your expectations. Creating a 10-page plan with world domination as the end goal can only lead to disappointment.

Underestimating the competition

Failing to recognise that there are other brokers operating in your space is foolish. You need to look at their business and figure out how you can offer a point of differentiation.

putting it off

Don’t wait to write a plan until you absolutely have to. Too many businesses make business plans only when they have no choice in the matter. So get cracking!

JUNE 2014 | 61

PROFILE / FAVOURITE THINGS

Favourite things

Mandy Szucs Real Mortgage Associates

Favourite Place to Be: I’ve recently become a first-time mom and my favourite place to be is at home. I look forward to the warmer weather, putting up a swing set in the backyard and just hanging out making my little guy laugh. Favourite Book: I can’t say I have one favourite book, rather favourite authors – John Grisham, Dean Koontz and Stephen King. I’m drawn to thrillers – the ‘what will happen next’ novel where you just can’t put it down.

Favourite Sport: Without a Favourite Movie: My favourite movie is Gladiator; I’ve seen it a dozen times and it never gets boring. Guts and glory! Favourite Mortgage Product: The New to Canada product always makes me feel good. Moving in itself is a hassle but to move from one country to another must be even more stressful. To make that ordeal painless and stress-free for someone ‘new,’ at least the mortgage part is really rewarding.

62 | JUNE 2014

doubt, the official national winter sport, hockey. Even though the Leafs have yet to break out of this drought, it is fast-paced and exciting to watch... when they win at least.

Favourite thing about working in the Mortgage Industry: I like the social aspect of being a mortgage broker and the fact that every deal is different, every client is different. You could be working on two mortgages that essentially have the same common factors but they aren’t the same. Keeps things interesting!

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Favourite Vacation Spot: I like the peace and tranquility of cottage country. Being surrounded by large trees, wildlife and a lake – perfect!

Favourite Food: If I had to choose a favourite it would be crab cakes. Scrumptious little morsels of goodness! I could eat crab cakes every day of the week. Favourite Music: Alternative, simply because of the wide range of music sounds; different genres within anywhere from indie to the more popular bands. There is always something to like.

Favourite Drink: Gin martini with three olives, no more, no less, straight up shaken and not stirred. It’s simple and to the point.

Favourite Celebrity: My favourite celebrity is Matt Damon. He’s a good actor, producer and philanthropist. He seems to have it all together and hasn’t let Hollywood corrupt his sense of self.

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JUNE 2014 | 63

SERVICE / DIRECTORY

MORTGAGEBROKERNEWS.CA

Banks

Optimum Mortgage A Division of Canadian Western Trust www.OptimumMortgage.ca Ph: 866 441 3775 Page 33

HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 27

Commercial Lenders

First Source Mortgage Corporation www.firstsourcemortgage.ca 416.221.2238 Page 17

Non-Bank Lenders

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

Tribecca Finance Corporation www.tribecca.ca Ph: 416 225 6900 Page 41

Atrium Mortgage Investment Corporation www.atriummic.com Ph: 416 867 1053 Page 45 Cobra Mortgage Services www.cobramortgage.com Ph: 1 855 855 5085 Page 47

Commercial Mortgage Corporation www.commercialmortgagecorporation.ca Ph: 1 800 237 0388 Page 35

V.W.R Capital Corp www.vwrcapital.com Ph: 1 866 907 5407 Page 43 Insurance

First National Financial LP www.firstnational.ca Ph: 416 593 1100 Page 29

Vector Financial Services www.vectorfinancialservices.com Ph: 1 866 483 8018 Page 53

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

Technology & Softwares

Home Trust www.hometrust.ca Ph: 1 877 903 2133 Page 49 Magenta Mortgage Investment Corporation www.magentainvestment.ca Ph: 1 888 267 1744 Page 37

Axiom Mortgage Partners axiommortgagepartners.ca Ph: 1 866 504 0516 Page 15 & Outsert

D+H Limited Partnership www.dhltd.com Ph: 1 866 345 6449 Page 13

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

MCAP www.mcap.com/brokers Page 23

Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page IBC & 51

Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 21

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

Revodoc Inc. www.revodoc.com Ph: 403 616 1954 Page 57 Real Estate

Pillar Financial Services www.pillarfinancial.ca Ph: 613 282 1242 Page 39

Mortgage Architects www.mortgagearchitects.ca Ph: 1 877 802 9100 Page 7

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

RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 9

Appraisal Institute of Canada www.AICanada.ca Ph: 613 234 6533 Page 59 Canadian National Association of Real Estate Appraisers www.cnarea.ca Ph: 1 888 399 3366 Page 55 Services

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

64 | JUNE 2014

Score-Up www.score-up.ca Ph: 416 479 9585 Page 25

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