CMP 8.05 by Key Media

MAY 2013 / ISSUE 8.5 / $6.95

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WINNERS REVEALED The best and brightest in the mortgage industry shine at the annual Canadian Mortgage Awards O’LEARY LAUNCH BROKERS BREAK IT DOWN

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CONTENTS / ISSUE 8.5 MARKET MATTERS

FEATURES

6 | Letters to the Editor

38 | Lauding a lifetime This industry veteran deserves the praise of brokers and got it at the CMAs in May

8 | Reading between the Lines The launch of Kevin O’Leary’s Honest Mortgage has brokers offering their honest opinions

20 | 2013 Canadian Mortgage Awards Here are the winners of the Canadian Mortgage Awards plus your wrap-up of the event

40 | Summit Summation Hundreds of brokers learned and liaised with industry leaders and trainers at The Mortgage Summit. Here’s your re-cap

12 | Dress for Success The question is does that mean brokers have to wear a suit. Drew Donaldson says ‘yes’…

42 | Investor Series Brokers are increasingly shepherding clients into real estate investments, but here’s how they can make their own.

14 | Dress for Success 2 … and Jackson Middleton, AKA ‘Kilted Broker,’ says ‘no.’

54 | Techie time These high-tech services are increasingly a must-have for brokers, including you

16 | Market Matters It’s all about the hookup for their new website focused on getting brokers and private lenders together

issue

License # 10172

8.5

42 Unlocking valUe often reqUires special keys.

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CONTENTS / ISSUE 8.5 MARKETING

NEWS

REGULARS

46 | Secret #3 of superstar brokers They practice educationbased marketing

10 | Product News The MorWEB/OTTO integration; Frank R. Margani joins Fortress

46 | Commercial mining Non-institutional commercial lenders are increasingly flexible thinkers and are helping their broker clients tap future goldmines

62 | Favourite Things 64 | CMP Service Directory

58 | Broker Profile Being a broker might not cut it in 2015. How about a broker/Realtor/interior designer?

50 Twitter.com/ CMPmagazine

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CONTENTS / EDITOR’S LETTER

HAIL THE CONQUERING HEROES Here’s to the winners – and that’s more than the 21 individuals and organizations claiming trophies at this year’s Canadian Mortgage Awards. Oh, that coterie of elites deserves praise and got it at a premier gala in May at Toronto’s Liberty Grand. Indeed, the accolades continue. Turn to Pg. 20 for CMP’s celebration of their success, with a spotlight on each CMA winner and the night of festivities in their honour. But beyond that targeted coverage, this issue of CMP is a celebration of winners across the broker channel. Indeed, mortgage professionals are increasingly moving up the ranks as trusted financial advisers for consumers of all stripes. As agent Drew Donaldson suggests on Pg. 12, it may be time to dress the part. He’s calling for a broker makeover, more specifically, for you to adopt the business dress of corporate lawyers and chartered accountants. Still, to each his own, and Regina broker Jackson Middleton manages to offer a dissenting view (Pg. 14), without giving Donaldson a dressing down. Still, this issue of CMP offers more proof that brokers are winning by using other unorthodox means. Adnan Bashir, a broker/Realtor/interior designer, is one case in point. He lays out his business plan for synergistic success on Pg. 58. He’s convinced it’s the way of the future. What do you say? So read on, and then tell us what you decide. Look for some of those comments in the June issue in our “Letters to the Editor” section. This month’s comments are on Pg. 6. And don’t forget to check out Pg. 61 for your personal invitation to participate in the CMP Top 75 and Small Market Top 20. Both lists celebrate another coterie of elite brokers; namely, those with the industry’s highest funded volume. Submissions close June 21. Cheers,

Vernon Clement Jones

CONNECT

Contact the editor: vernon.jones@kmimedia.ca

4 | MORTGAGEBROKERNEWS.CA

COPY & FEATURES EDITOR SUB-EDITOR SENIOR WRITER CONTRIBUTORS

Vernon Clement Jones Rachel Naud Donald Horne Doren Aldana Paolo Di Petta Drew Donaldson Nick L’Ecuyer Greg P. Shannon Tamer Tarchichi

ART & PRODUCTION GRAPHIC DESIGNER

Alicia Chin

SALES & MARKETING

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

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

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

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CONVERSATIONS / LETTERS TO THE EDITOR

LETTERS TO THE EDITOR Re: What’s your business worth?

Re: The lease of these (CMP 8.4)

Not as much as some think

(CMP 8.4)

Ty Nystrom

I think we brokers have overestimated the value of our brokerages if they are sold to another. Our businesses are based on the personal relationships that we have cultivated with our clients. That can be hard to pass on to another broker if we do not stay involved in the business. What the article points out is the importance of maintaining some connection with the brokerage, maybe keeping your name attached to the business after you’ve sold it.

Jump in

Edgar Roy

The more and more I read about commercial deals in CMP, the more I think that the challenges residential brokers face in doing them are tough. There seem to be many different components to those deals, these lease terms being another layer, but I think you have to jump in and start and know-how will come to you.

vin Ronald Mel

MortgageBrokerNews.ca Reader Poll DID YOU DO YOUR OWN CORPORATE AND PERSONAL TAXES THIS YEAR?

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Re: First National celebrates 25 years (CMP 8.4) Pat on the back

Gary Mauris

Stephen, congrats on 25 years. First National is a phenomenal partner with DLC. Huge kudos to you and all your loyal staff who work so hard. A special shout out to Scott Mckenzie and Ben Kawa; you guys are ROCKSTARS!!! You are an amazing lender and our company is a very proud supporter of your organization!!!!

I second that

Paul Bath, CPMB

Having been in the industry alongside First National for 24 years, it’s great seeing them grow so well and continue with their strong support of mortgage brokers and associations such as IMBA.

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

6 | MORTGAGEBROKERNEWS.CA

FIRST UP / READ BETWEEN THE LINES

ragons’ Den Kevin O’Leary is open for business, with the soft launch of O’Leary Mortgages on April 29. He's busy promoting “The Honest Mortgage… a refreshing new approach to financing your home.” Other products offered include the SecureRate, featuring three- and five-year fixed terms, with an optional no-frills five-year term at 2.74 per cent; and a five-year conventional 2.89 rate with a 20/20 prepayment option. CEO Alex Kenjeev tells CMP that “What we’re really trying to do right now is take a really great brand like Kevin O’Leary and Dragons' Den and see how much we can leverage that in the market.” The website includes a resources and article page that offers the “Top 5 secret steps” to improving a credit score, and “secrets that the banks don’t want you to know.” Most brokers have plenty to say about O'Leary's offerings. Here is just a smattering.

8 | MORTGAGEBROKERNEWS.CA

Tamer Tar chichi,

MCC Mortg age Broke rs

r, Nick L’Ecutgye oup age Wellness Gr Verico The Mor

Nick L’Ecuyer, Verico The Mortgage Wellness Group 1 Kevin O’Leary is not doing anything innovative here. He is offering a few products from one lender, just like a bank would. 4 The only thing he has is the reputation of his brand. This translates into virtually the same value offering as any of the banks – a biased opinion of the few products the consumer has to choose from. 5 If a borrower simply calls O’Leary Mortgages based on its branding, they are doing themselves a disservice. 3 In my opinion, in order to add value to this offering, O’Leary would need to open it to the broker channel. This way a client has the opportunity to select the best combination of rate, term and flexibility from a number of lenders. If this is the case and an O’Leary product is best-suited for the client’s needs, then and only then, is there value in both the product and brand.

Ottawa

FIRST UP / READ BETWEEN THE LINES

Paolo Di Petta, EQRON Mortgage Corporation

Tamer Tarchichi, MCC Mortgage Brokers Ottawa 2 Mr. O'Leary is basically trying to take market share from the mortgage industry without paying a fee to the hand that feeds him. 6 So he's targeting clients with a straight approach; that could only mean that he'll be finding A clients. So how does that help clients with challenging deals? Based on this structure, I can only assume a lot more declines than approvals using this approach.

6 3 1

1 Well, his offering is no different than any other broker. Those rates are pretty much what are offered industry-wide. 2 In terms of value, he's not really providing any, he's no different than any of the rate-posting sites out there. 3 It may provide some more exposure to the broker industry versus a bank, but I don't think it does a good enough job of differentiating our offering on more than just rate. Basically, it focuses on commoditizing instead of providing a premium service, which, in the end, will probably hurt the industry, and, by extension, the consumer. 4 O'Leary's strength, and weakness, is his reputation. While some people will inevitably trust the guy they “saw on TV,” the moreintelligent crowd will remember what kind of character he portrayed. Would I trust the guy that tried to take control of other people's companies with my mortgage? No way. Clients are better off using a local broker who can provide personalized service.

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MARKET MATTERS / PRODUCT ROUNDUP

PRODUCT

ROUNDUP AND INDUSTRY ANNOUNCEMENTS A bite-sized guide to the industry's newest products as they come down the channel PRODUCT NEWS Who: Marlborough Stirling and OTTO What: MorWEB/OTTO integration The facts: Marlborough Stirling Canada is making further enhancements to its MorWEB with the introduction of cloud computing by OTTO. The goal is to provide mortgage brokers with an easier way to manage the entire business process in one system, without the need for a hard connection to IT infrastructure.

The explanation: “We know brokers spend a lot of time out of the office and not necessarily connected to their office IT,” Marlborough Stirling CEO Tim Brown says, “so the added benefits of integrating with the brokers’ go-to operating system

10 | MORTGAGEBROKERNEWS.CA

will be a breakthrough in terms of how quickly and easily they can do their jobs. “It was also important for us to give brokers flexibility with the option to use whichever tools they need to fit their own business models.”

ANNOUNCEMENT

Fortress Builder Who: Frank R. Margani, appointed executive VP of strategy and development for Fortress Real Developments

What: The real estate development company active in nine major markets across Canada brings onboard the longtime finance expert for the development and

construction industry on May 13. Margani comes from within the broker channel; specifically, MCAP, where he was director of its development finance group, managing a portfolio of high-value assets.

Why: “Frank is one of the most soughtafter experts in the industry,” says Fortress President Jawad Rathore. “His knowledge of high-value real estate development projects and underwriting will help Fortress strengthen our developer and builder client relationships and expand our footprint in Canada.” Margani's primary responsibilities will be designing and securing the full capital “stack” and all important bank and lender construction financing for numerous projects.

LAUNCHING A NEW PRODUCT? Want to be considered for inclusion on this page, send the details to the editor: vernon.jones@kmimedia.ca

FINANCIAL LP

“We know our

Jenna Sherritt, Underwriter Garth Ellis, President, VERICO Ellis Mortgages Canada Kristina Morrison, Account Manager

clients will be well

taken care of.” “First National services clients exceptionally well. That makes us look better than the competition.” At First National we’ve spent the last 25 years focused on delivering outstanding service to you and homeowners. And we will continue that commitment towards the next 25.

Behind the scenes

Thank you mortgage brokers for 25 years of shared success.

MARKET MATTERS / DRESS FOR SUCCESS

DRESS FOR SUCCESS, BROKER Some of you have been known to wear flip-flops to a client meeting, but a suit and tie is no less appropriate for brokers than accountants and lawyers, says SAFEBRIDGE VP of Sales Drew Donaldson

hether itâ&#x20AC;&#x2122;s through the content we provide, the consultative approach we bring to each and every new customer situation or, quite frankly, the way we dress, our vision at SAFEBRIDGE is to redefine the traditional customer experience. How we present ourselves in terms of our appearance and dress code is one of the easiest and most obvious ways brokers have of demonstrating our commitment to professionalism. In an industry where the norm is not a suit and tie, why not separate ourselves from the crowd? As mortgage agents, we are helping our clients make the biggest financial decision that theyâ&#x20AC;&#x2122;re likely ever going to make. With that comes a tremendous amount of responsibility, and we believe that we can clearly

12 | MORTGAGEBROKERNEWS.CA

Drew Donaldson

MARKET MATTERS / DRESS FOR SUCCESS demonstrate our commitment and awareness of that responsibility in the way we dress and present ourselves to our clients, partners and colleagues. Last year we hired an executive sales coach to come in for four months of rigorous training with our team and he recommended that even mortgage professionals working from home get up in the morning and dress for success as it has as much of an impact on their mindset as it does the clients' perception of them. We believe once you are looking and feeling better, you live each day with a passion and purpose for what you do and why you do it. It is not all about the dress code, but it is a piece of the puzzle for all of us at SafeBridge. Once your clients and referral partners give you that platform because of your dress code, you show them that you can back that up by your passion, purpose, service and the way you give back to your community! Quite honestly, if we get paid as much – if not

more than – accountants and lawyers, then we should dress and act as professionally as they do. Every industry has a high-end player and we understand that, but what we are trying to do is raise the bar so that the whole industry steps up its game and participates in the responsibility we share when serving the needs of our clients. We talk about mortgage brokers over bank specialists as if the only difference is we have more flexibility and access to various lenders and rates. From a consumer’s standpoint, they also see many in the industry dress casually and not to the level that they would expect from someone handling and advising them on the biggest financial decision of their lives. That, in turn, affects all of us. That being said, it doesn’t matter how well you dress. Unless you deliver exceptional service and bring the right consultative approach to someone’s mortgage situation, you will never gain their trust, confidence and referrals from family and friends.

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Market Matters / Kilted view

Kilt-up for success? There are alternatives to a suit and tie, reports Don Horne. In fact, one Regina broker is getting a (bare) leg up on the competition

he cheek of it — Jackson Middleton concedes that he's "not even Scottish," still he wears his kilt proudly, and loudly, and his attire has garnered him a high profile in the brokering community and a loyal client base. “I was a pants and shirt and tie guy at the office for all of my meetings with clients,” says Middleton, principal broker at Highland Mortgage Partners, but better known as “the Kilted Broker.” “I started wearing the kilt at home and at the office because it was comfortable. I would change into pants before meeting the client – until one day….” That one day was when a client showed up half an hour early for an appointment, and caught Middleton literally with his pants down. “The client caught me in my kilt, and after a brief pause he said ‘That is the coolest thing I’ve ever seen!’” says Middleton. “They made such a fuss about it, wanting me to keep it on during our session, and then referred me to a friend, saying ‘He’s the guy in the kilt.’” From that second meeting onwards, Middleton hasn’t looked back at wearing pants. “Why would you want to wear pants?” he asks. As for whether it sets the proper business tone, Middleton – who best describes his ancestry as covering the entire United Kingdom – says the rewards of being the only broker in a kilt far outweigh the positives of joining the thousands who work in a business suit. “I attended the CMP Summit last year and I was waiting for the elevator, not knowing a single person who was there,” he says. “Suddenly three people

14 | mortgagebrokernews.ca

walk up to me and say, ‘You must be the kilted broker!’ From a marketing standpoint, it is great – but I certainly never planned it. I see a lot of marketing schemes that look contrived or forced – this was totally by accident.” As for whether it affects his credibility or hinders his professionalism, Middleton did do some soul-searching first before casting off the pants forever. “I questioned myself, ‘Is this professional?’ But I found that a lot of my business is first-time homebuyers; and first-time buyers are nervous about the entire process, and a suit and tie makes them even more nervous,” he says. “I meet my clients over coffee, and it is easy for them to spot the guy in the coffee shop who is wearing a kilt. It’s not a gimmick; it’s comfortable.” Born and raised in Regina, Sask., Middleton and his wife and two children still live in the city. Having owned a kilt for almost a decade, he has no plans to ever wear pants again after doing business in the kilt for four years. “The goal is to do business in what I believe,” says Middleton. “If you want to do business with a suit go ahead – there’s a lot of them out there.”

MARKET MATTERS / PRIVATE PORTAL

PORTAL TO PRIVATE

LENDING Why send your private lending deal to one player when several are waiting on this new online app portal?

l Kelly has hit on an idea whose time has come. That, at least, is his bet. Actually, it falls to lenders and brokers to decide the success of his brainchild – an application submission website not unlike Expert and MorWEB, but entirely focused on private lending. “StrategicMatches.com is unique and has generally excited everyone who has been introduced to it,” the B.C.-based Kelly tells CMP. “Its purpose is very straightforward: to bring together mortgage broker applications with private lenders.” The site allows brokers to float an application by any number of MIC's / private lenders, filtering out those whose lending criteria preclude their interest. The broker can then send the application to those for whom the deal fits the bill. Strategic Matches is set to capitalize on real interest in private lending spurred by tighter mortgage rules and the development of more competitive rates, responsible for putting that option on the radar screens of A brokers.

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MARKET MATTERS / PRIVATE PORTAL CMP: Explain a little more about the system. Kelly: The lenders on the Strategic Matches system create and maintain a lending profile based on their lending criteria, effectively creating a set of filters to identify loan files of interest to them. The broker inputs the details of their client application. Once the application is complete, the system identifies those lenders that would be interested in the loan file (based on the filtering process) and the broker submits the application to the interested lenders directly through the system. CMP: It seems that the system could dramatically open up the private lending market for the broker and their client, as the system can identify a number of interested lenders for the broker to work with on any particular loan file. What are some of the other benefits to the brokers, especially the newbies to private lending? Kelly: Given that there are many more lenders in this market segment than in the traditional mortgage market and that most brokers have limited experience in the private lending market, the site provides very simple access for a broker to present an application to the market, without having to know the lenders or their lending criteria. The submission will give their client's application broad exposure to the marketplace, with the obvious advantages that can bring. Even for experienced brokers who know a number of private lenders, the site will relieve them of the need to keep up with changes by the lenders they know, and will likely introduce them to lenders they don't know, or lenders who now have an interest in a loan file that they might not have looked at in the past. For all brokers, the system provides a big savings in time and frustration. CMP: What's the learning curve on using this system? Kelly: Once a broker uses the system a couple of times, it takes only a couple of minutes to complete an application for submission, and the site application (the requested information) is tailored to the private lending market. The application specifies the information to be input, and directs the broker to comment on matters that they might not otherwise think about, - often matters that don't come up when presenting files to “A” lenders. CMP: OK, who pays for this? Kelly: There is no cost for a lender to use the system. I want to encourage every lender to register on the system and create a profile for themselves. The system is currently set up so that the broker will pay a small referral fee when they successfully fund a mortgage arranged through the system.

18 | MORTGAGEBROKERNEWS.CA

Otherwise, no cost. CMP: You're betting brokers will pay that small fee. Why? Kelly: As I mentioned earlier, the private lending market is a mystery to many brokers. There is no transparency in the market and there are a lot of lenders (well over 100 in B.C. alone). It is impossible for most brokers to keep up with the “A” market lenders, never mind the “B” or “C” market. Many brokers now send their “B/C” files to “B” lender specialists, but in doing so, they give up control of their file and generally add another substantial layer to the fees that will be charged to their client. This site allows the broker to maintain control of their client/file and the fees associated with the file. Personally, I have been brokering for more than 11 years and have been involved managing small MIC's for more than 12 years. As a broker I have had my share of files that I had difficulty placing because I didn't know the lenders in the market, and as a MIC lender, I often found myself with money to lend and no applications for loans that met my lending criteria. I think these are common frustrations with many brokers and lenders, and this site is the result of my trying to resolve those frustrations, for me and everyone else! CMP: You've already had some deals funded through Strategic Matches in Western Canada. The goal is to move eastward. How are you getting there? Kelly: I have had discussions with a few of the national brokerages about rolling this site out to their brokers, and this is ongoing. I just completed my first webinar on May 7th, for a number of brokers in western Canada (B.C. to Manitoba) from one of the national firms. A few of the B.C. lenders on the system do lend in more than one province, but in order to role the benefits of the site out across the country I am actively looking for partnership arrangements in most markets in eastern Canada. For more info, go to www.strategicmatches.com

The site provides very simple access to present an application to the market

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COVER / 2013 CANADIAN MORTGAGE AWARDS

CMA WINNERS REVEALED The year’s CMAs shone with the best and brightest but also a bevy of surprises TS H G

LI H G

20 | MORTGAGEBROKERNEWS.CA

COVER / 2013 CANADIAN MORTGAGE AWARDS

his year’s CMP Canadian Mortgage Awards went off with a bang at Toronto’s Liberty Grand, with over 600 attendees celebrating the industry players who’ve soared above this turbulent real estate market. The awards cut a wide swath across the industry, with winners in 21 categories drawn from Vancouver and Toronto, but also Halifax and smaller markets. Produced by KMI Media and officially audited by PWC, the awards are the industry’s answer to a tougher mortgage environment. They also speak to the industry’s perseverance, say sponsors such as First National, but also the winners themselves. “I’m still shaking,” said Jeff Cody of MCC Mortgage Brokers Ottawa after claiming the trophy for Mortgage Broker of the Year (25 Employees or More). “I’ve been in the business 27 years, and I hope to be in the business 27 more! I just love it. “I wouldn’t be here without the great team I have in Ottawa. This business is based on relationships – what goes around comes around.” Cody’s counterpart in the Mortgage Broker of the Year (Under 25 Employees) category, Greg Nowik, of Mortgage Architects – Universal, was one of several Westerners to claim trophies. The Broadway-themed gala is known for bringing together an increasingly diverse industry as brokers focus on niche markets and employ new business strategies to make up for a falling number of home sales and refinances. Both are the result of Finance Minister Jim Flaherty’s move to tighten mortgage rules last July. This year marked the first-ever tie in the D+H National Broker Network of the Year category, with Dominion Lending Centres and Verico Financial Group sharing that honour. Each network received an equal number of votes from the panel of expert judges, with those results holding after a second round of deliberations. Alberta claimed rights to the CMA’s coveted lifetime achievement award, sponsored by National Bank of Canada and handed to Douglas Farmer, Calgary branch manager for another mortgage lender. “First National was tenth in market share when I started in 2000, now we are No. 2,” said FNF’s Farmer. “I would not take any recognition for that, but I know that the Prairies have been a big part of that.” While the night of awards focuses on acknowledging

excellence, it also served to provide a pat on the back to the industry as a whole, said KMI Publishing and Events president Tim Duce. “This is our eighth awards, and it continues to attract the brokers, the lenders and the insurers that are driving this industry and setting the course for its growth,” he said. “Still, for all the festivities, the entertainment and the laughs, the event is first and foremost a celebration of the best and brightest in the industry.” The event began with a pre-show cocktail party sponsored by First National where the Broadway theme was in full effect. Manhattans were the drink of the night served up by the Radio City Rockettes! Under the spotlights, comedian host Jessica Holmes opened the show, with her Broadway skits appearing throughout the evening. The night continued into the early morning with live music by Canadian group “God Made Me Funky” and dancing in the historic ballroom on the CNE grounds. Lucky prize winners walked away with $1,000s in prize giveaways, including a shopping spree from Moores® Clothing for Men.

MORTGAGEBROKERNEWS.CA | 21

ward F inalists! A ~ ~

News / 2013 CANADIAN MORTGAGE AWARDS COVER InternatIonaL

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inspectors have found problems; appraisals showed a home was worth less than the bid; a buyer lost a job before the closing. U.S. housing market worse than thought More than two years after the recession The number of Americans who bought previously officially ended, many people can’t qualify for occupied homes rose in October. But the National loans or meet higher down payment Association of Realtors says it overstated more than requirements. Even those with excellent credit three million sales during and after the Great Recession, and stable jobs are holding off because they fear showing the housing market was weaker than Percentage of that home prices will keep falling. Sales are also previously thought. homeownership being hurt by a decline in first-time buyers, who The private trade group says sales rose four per Rob McLister costs, including are critical to reviving the housing market. cent in October to a seasonally adjusted annual rate of Canadian Mortgage Trends mortgage payments, Sales have fallen in four of the five years 4.42 million. That’s below the roughly six million homes utilities and property since the housing boom went bust in 2006. a year that economists say are consistent with a healthy taxes that take a uppassion a “CMT is more than a business. fulfillment comes Declining prices andOur record-low mortgage rates housing market. But it’s ahead of 2008’s revised sales, typical household’s from putting out accuratehaven’t content people cansales. use. The beenthat enough to boost now considered the worst in 13 years. monthly pre-tax At the same home construction The trade group revised its sales from 2007 to 2010 CMA win was a fantastic surprise andtime, we’re grateful for it.has It income in Vancouver begun a gradual comeback and should add to the down 14 per cent, from more than 20.6 million to nearly helpsand confirm that our late nights are all worth it.” Toronto, economy’s growth in 2011 for the first year since 17.7 million. Among the reasons for the lower figures, respectively (RBC the Great Recession began in 2007. Last month, the Realtors group says: changes in the way the Census Economics Housing builders broke ground on an annual rate of Bureau collects data, population shifts and some sales Trends and 685,000 homes, the government said recently. being counted twice. Affordability Report) That was a 9.3 per cent jump from October and The Realtors consulted with government and the fastest pace since April 2010. private housing experts, including the Federal Reserve, Most economists say home prices will keep the Department of Housing and Urban Development, falling, by at least five per cent, through 2012. the Mortgage Bankers Association, the National Many forecasts don’t foresee a rebound in prices Association of Home Builders, mortgage giants Fannie until at least 2013. Mae and Freddie Mac and CoreLogic, a California-based Susan Carter and Reta Coburn The high rate of foreclosures has made data firm that first raised doubts about the annual Equitable Trust Company resold homes cheaper than new ones. The numbers earlier this year. median price of a new home is roughly 30 per CoreLogic has estimated that the Realtors group “The entire Equitable is15extremely cent above the price of one that’s been occupied overstated sales in 2010 byteam at least per cent. pleased and proud of before – twice the normal markup. Investors are changing numbers could how economists thisThe distinct recognition of affect the concerted effort that Susan taking advantage of the discounts. view the trade group’s data. It could also affect companies Carter and her team have invested over the years in building The housing market is struggling even that use the fi gures for hiring and expansion plans. and promoting the Equitable brand to our valued customers, as the broader economy has improved in Sales are measured when buyers close on homes. business partners and stakeholders. Equitable brand is recent months. But many deals are collapsing before that point. nationally recognized and speaks to the organization’s The economy grew at an annual pace of two One-third of Realtors said they had at least one contract relentless pursuitupoffrom providing top-class customer service to our per cent in the July-September quarter. Many scuttled in October, 18 per cent in September. customers.” – Harry Singh, Manager Business Development” economists expect slightly better growth in the Contracts are being cancelled for several reasons: October-December quarter. CMP Banks have declined mortgage applications; home

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COVER / 2013 CANADIAN MORTGAGE AWARDS

The Fortress Real Capital Award for Employer of Choice Graham McWaters, Mark Kerzner and Josh Will TMG The Mortgage Group

“We feel honoured to be the first brokerage to win this award in the past five years. The Employer of Choice reward recognizes the ‘family values’ culture that founders Debbie and Grant Thomas have fostered. TMG is recognized as a caring, innovative, company that strives for mutual success. We continuously value the tremendous brokers, agents and associates who are part of the TMG family. At this time, though, I feel especially grateful to the fantastic employees of TMG. Your hard work, dedication, commitment to our brokers and your passion for our business has not gone unnoticed.” – Mark Kerzner

The Genworth Financial Award for Best Newcomer (Individual) Mark Shendale and Steven Levine Steven Levine, True North Mortgage

“It was an honour to be nominated with the top brokers in the industry! Being recognized as the best newcomer broker by my peers, is truly incredible!”

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COVER / 2013 CANADIAN MORTGAGE AWARDS

The Protect Secure Insure Award for Best Newcomer, Mortgage Broker Firm Marg Green, Steve Heimbecker and Donna Ramsay Mortgage Intelligence - Concierge Mortgage Group

“Winning Best Newcomer Brokerage is a huge honour for myself, Steve, Donna and the brokers we work with. We are so proud of Concierge Mortgage Group and it is fantastic to be recognized by our industry.” – Marg Green

The FDS Broker Services Inc. Award for Best Community Service Effort James Clarke, Tony Popli, Libby Thevarkunnel, Lori Pollice and Glen May-Anderson “Angels In The Night” project by Invis/Mortgage Intelligence

“Winning Best Community Service Effort is huge for all of our brokers, staff and partners who work on Angels in the Night yearlong. We are thrilled to have this fantastic program acknowledged by our industry.” -- Anna Hewstan, Sr. Marketing Manager for Invis/MI

The Vector Financial Services Limited Award for Best Commercial Mortgage Broker Mickey Baratz and Sandy Harrington Sandy Harrington, IC Funding.

“To win Broker of the Year for a second year is quite an accomplishment that reflects our very strong and valued relationships with the major lenders across the country who provided their nominations for this award. The recognition is very rewarding and enhances the IC Funding brand for our team growing the business across Ontario and into other markets in Canada.” 26 | MORTGAGEBROKERNEWS.CA

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COVER / 2013 CANADIAN MORTGAGE AWARDS

The Centum Financial Award for Best Industry Service Provider Doren Aldana, Nadia Mallet and Paul Therien The Mortgage Marketing Coach / Power Of Choice Coaching Inc.

“In 2005, I decided to help mortgage pros close more deals with less effort using effective marketing systems. I started out with just one client, in one province, with one service. Thanks to the hard work and dedication of my amazing team, we now have hundreds of clients throughout Canada and offer dozens of products and services. This award is for my team -- thank you!”

The Safebridge Financial Award for Best Customer Service from an Individual Office Elisseos Iriotakis, Chriss Karram, Sean Widdess and Drew Donaldson VERICO Dreyer Group

“It is such an honour to win this prestigious award. Of course it would be impossible to deliver the best client service experience without the hard work and commitment of all the amazing brokers and underwriters on our team. This award is because of them and for them!” – Jared Dreyer

The National Bank of Canada Award for Lifetime Achievement in the Mortgage Industry Douglas Farmer and Sebastien Kuperhause Douglas Farmer, First National Financial

28 | MORTGAGEBROKERNEWS.CA

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COVER / 2013 CANADIAN MORTGAGE AWARDS

The Home Trust Company Award for Alternative Lending, Broker of The Year Martin Reid and Adam Hale Adam Hale, MCC The Mortgage Centre- Hale/ Grifa & Associates

“I’ve worked alongside a lot of people in the mortgage industry throughout the years and it is an honour to be recognized by the CMA in front of my colleagues. Unlike other brokers, I don’t always help Canadians into their first or second homes, but I keep them in the one they are already living.”

The Verico Financial Award for Best Lender Underwriter Of The Year Melissa Coburn  Melissa Coburn, Paradigm Quest

“It is an incredible feeling to be acknowledged by your peers and industry partners. We have a fantastic team and I am so happy to represent them with this award.”

The KMI Award for Best Newcomer, Lender Underwriter John MacKenzie and Giselle Miranda Giselle Miranda, Street Capital Financial Corporation

“I would like to thank all my colleagues, managers and industry partners for all the amazing support and also-and especially-all the brokers I deal with on a daily basis. It was a huge honour to be recognized for this award.”

30 | MORTGAGEBROKERNEWS.CA

Cover

The Year ahead

COVER / 2013 CANADIAN MORTGAGE AWARDS

reality out there instead of trying

MortgageBrokerNews.ca Award for Best to sell around it, then people will trust us.” Advertising But any efforts the industry may

undertake as a whole will have no Colin effect Dreyer if individual brokers don’t do VERICO Financial Group Inc.giving their parts, which means clients the best value-added service, improving and funding “The ‘Talkeffi to ciencies us’ campaign was created to deliver a clear ratios with lenders, and of course, message to those brokers who wanted to build their own brand placing clients with the right lenders and maintain their independence, all within a network that for their needs. continually them and their business while offering the “Focus onsupports the best interest of the very products, tools, clientbest firstin and foremost,” saideducation, training and technology. Time and“We time we found we that when prospective mortgage Therien. areagain, at a crossroads: either go back take to being person youto learn what VERICO has professionals thethe opportunity Source: Mortgage Insights: go offer to when the banks they say no as it away was impressed and chose to to – inevitably came Highlights from CAAMP’s Fall 2011 25 years ago,are or become truly trusted join us. We delighted that this campaign is making an and industry surveys consumer advisers to our customer and move up (CAAMP/Martiz Research Canada) impact and was recognized by the judging panel of the CMP to the next level.” CMP

71% of homeowners say they are in a good position to weather a potential downturn in the housing market

Awards.” – Colin Dreyer

morTgagebrokernews.ca

MORTGAGEBROKERNEWS.CA | 31

“

Norma Denis Saskatoon & Northern Saskatchewan – Mortgage Intelligence I’m very optimistic that Mortgage Intelligence will add great value to my business, they have just been tremendous so far.

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COVER / 2013 CANADIAN MORTGAGE AWARDS

The Invis/Mortgage Intelligence Award for Best Newcomer, Lender BDM Camillo Delli-Pizzi and Cameron Strong Camillo Delli-Pizzi, Pillar Financial

“I would like to thank all the Mortgage Brokers who took the time to nominate me for Best Newcomer Lender BDM. None of this would have been possible without you and the great team at Pillar Financial. Thank you!”

The Mortgage Centre Award for Best Lender BDM Eddy Cocciollo and Jody Comeau  Jody Comeau, First National Financial

“I was shocked, honoured and so grateful when my name was announced. Without the focus and drive of our underwriting team none of this would be possible. More importantly, without the continued support I have received from my brokers over the last eight years I would not be where I am today. To all of my brokers and First National team that have worked with me over the years. I can’t thank you enough!”

The Canadiana Financial Corp Award for Mortgage Brokerage of the Year (Fewer Than 25 Employees) Get Er Done team Mortgage Intelligence - Get Er Done Girls

“I was completely shocked to win. We went to Toronto happy to be nominated and when they called our name, I was stunned. What an honour to be recognized. We’re a little team from a little town in Alberta – but we have a huge heart!” – Alyson Thiessen 34 | MORTGAGEBROKERNEWS.CA

COVER / 2013 CANADIAN MORTGAGE AWARDS

The D + H Award for National Broker Network of the Year Colin Dreyer and Gary Mauris and their respective network members Dominion Lending Centre and VERICO Financial Group Inc.

“Winning National Broker Network of the Year again is a terrific honour. Our owners and agents strive each day to continually provide value to our industry and our customers. We appreciate the relationship that we have with all our lending partners and suppliers and look forward to working harder than ever to establish Dominion Lending Centres as the default choice to consumers. I’d like to also congratulate all our fellow nominees and winners.” – Gary Mauris “We are extremely proud to have been nominated and awarded with the CMP Broker Network of the Year Award. The quality of our network is a result of the uncompromising dedication to the highest levels of professionalism, excellence and integrity from each of our over 2,300+ VERICO members. ” – Colin Dreyer

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COVER / 2013 CANADIAN MORTGAGE AWARDS

The First Canadian Title Award For Mortgage Brokerage of the Year (25 Employees Or More) Don MacVicar, Michelle Drover and Kerri Reed VERICO Premiere Mortgage Centre

“The entire team at Premiere Mortgage is thrilled to have won the award for Brokerage of the Year at the 2013 CMAs. This is a team award and one that can be proudly leveraged to our clients and referral networks. This recognition reflects the level of professionalism, integrity and perseverance that each of our team exemplifies. Thank you to CMP for the opportunity to be recognized and to our lender, insurer and business partners, who have supported us along the way.” – Don MacVicar

The First National Financial Award for Mortgage Broker of the Year (Fewer Than 25 Employees) Greg Nowik Greg Nowik , Mortgage Architects - Universal Mortgage Architects

“I’m ecstatic. I feel blessed just to be in the same company of those who were nominated. I’ve been flying at 300 feet ever since I got the news.”

36 | MORTGAGEBROKERNEWS.CA

The Bridgewater Bank Award for Mortgage Broker of the Year (25 Employees Or More) Jeff Cody and Stephen Watton Jeff Cody, MCC - Mortgage Brokers City/Ottawa

â&#x20AC;&#x153;I am very honoured and proud to have won the CMP award for Mortgage Broker of the year (25 employees+). We have built an exceptional team at Mortgage Brokers Ottawa and this win would not have been possible without the dedication and hard work of the entire Mortgage Brokers Ottawa team.â&#x20AC;?

COVER / 2013 CANADIAN MORTGAGE AWARDS

It hasn’t taken Doug Farmer a lifetime to make an indelible mark on First National and the Western broker channel …

PERFECTED

PROFESSIONALISM

his year’s Lifetime Achievement Award goes to Douglas Farmer of First National – an acknowledgement of his commitment to building the broker channel in Western Canada. The award could just as easily be a testament to the growing influence of the region, itself, and the economic resilience that marks its mortgage business. Still, more than anything, the award is appreciation for the hard work of First Nat’s Calgary branch manager. “I have a desire to always do the best job possible at everything I do,” he says. “I am shocked, humbled and blind-sided by this award.” Farmer is first and foremost about customer service, something he describes as a healthy obsession. “It drives me to find the best solutions and always put my best foot forward for First National and brokers,” he says. “I understand how important it is to our customers and share that message with the branch. Working and having experienced two recessions have been valuable in that I’ve used those challenges to work through the battles of market ups and downs.

38 | MORTGAGEBROKERNEWS.CA

Douglas Farmer was born in Moose Jaw, Sask., but grew up in Kamloops, B.C. He moved to Calgary when he started university in 1979 and ended up staying there, working at Sun Life Trust for 10 years as a branch manager before it was sold, leaving everyone out of work. “I knew Scott McKenzie and Moray Tawse, and the talk of a Calgary branch for First National came about at the time Sun Life Trust was being sold,” he says. “The day after Sun Life Trust closed, I opened the Calgary First National as branch manager in February 2000.” Farmer brought along three of his staff with the move

I have a desire to always do the best job possible at everything I do. I am shocked, humbled and blindsided by this award.

COVER / 2013 CANADIAN MORTGAGE AWARDS and has been the Calgary Branch Manager for 13 years. “First National was tenth in market share when I started in 2000, now we are No. 2,” he says. “I would not take any recognition for that, but I know that the Prairies have been a big part of that. “I know the region like the back of my hand. We had to start the Calgary branch from scratch, and today the Calgary branch has just under 60 people in office and 40,000 mortgage customers.” Farmer has been just as committed to the personal growth so integral in helping develop Alberta’s monoline business. While he attended the University of Calgary in 1979, he didn’t finish his third year and always regretted not completing his undergrad degree. So in 2003, Farmer applied to the Executive MBA program at Queen’s University and was accepted. At the time, he was working full-time and had family to take care of. “Colleagues said I was crazy to take on so much all at once,” he remembers, “but with the support of my family, I completed my EMBA in 2005.” Farmer has worked 25 years in the broker channel, but takes just as much pride in having been head coach of his daughters’ ringette team the past six years.

“I also have a National Coaching Certificate in softball and coach my daughters’ softball teams,” he says. “They are my priority.” Farmer has been married to his wife, Susan, for almost 20 years, and together they’ve raised six kids – three step-children ages 33, 31 and 29, twin 13-yearold girls and a nine-year-old boy. As he celebrates First National’s 25th anniversary, winning the Lifetime Achievement Award makes it all the sweeter. “First National again has made a large contribution in the broker channel and I am very humbled by the success of the company in its 25 years of business,” he says. “I am proud to share in First National’s success, and know that my contributions have made an impact.” It’s a modest interpretation, says brokers who praise his even-handed, always fair approach to underwriting. “He epitomizes professionalism,” says Gord McCallum, president of First Foundation. “I can’t say enough good about him.”

MORTGAGEBROKERNEWS.CA | 39

FEATURE / SUMMIT SUMMATION

SUMMIT

WRAP UP The 2013 Mortgage Summit made another strong showing this year, providing the more than 600 in attendance with two days of professional development delivered by industry leaders from across the country. The 21 sessions, featuring 40 expert speakers and 38 exhibits, also drew mortgage brokers, lenders and industry professionals from all parts of Canada for what CMP has billed a working conference. Opening keynote speakers Dave Rooney of Google Canada and John D’Orsay of The Mortgage Teacher brought home the power of social media to not only better brokerage branding, but to help the industry develop campaigns that were virtually unheard a few years ago. “Nobody goes to page 2 on a Google search, do they?” was the rhetorical question posed by Google Canada’s Rooney to the packed opening session. “Where you are placed is crucial to how many clients you attract.” While a LinkedIn exec also addressed delegates, the conference encompassed more than SEO. A threeperson panel discussed the requirements of forming an in-house MIC, with Ontario brokers especially interested in the legal ramifications of doing away with the traditional arm’s-length relationship. Returning to the online theme, industry veteran Ron Butler and featured luncheon speaker Greg Williamson discussed how to work with rate comparison sites and generate leads. It was a spirited debate to say the least. The impact of B20 on business was another popular session, with Philip Beer, VP of national sales for Canadiana Financial Corp., speaking before a packed room on the importance of brokers understanding the new rules that not only apply to lenders, but to them.

40 | MORTGAGEBROKERNEWS.CA

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FEATURE / INVESTOR SERIES

QUALIFYING YOUR MIC UNDER THE INCOME TAX ACT Greg P. Shannon of Miller Thomson LLP walks you through how to qualify your very own MIC under the strict guidelines of the Income Tax Act

mortgage investment corporation (MIC) and its shareholders are entitled to special tax treatment under section 130.1 of the Income Tax Act. These special rules were introduced to attract more money to the Canadian mortgage market for residential financing, which is a growing multi-billion dollar industry in Canada. Pursuant to these special rules, the income received or receivable by a MIC is effectively only taxed at the shareholder level by allowing the MIC to deduct taxable dividends paid to its shareholders, other than capital gains dividends, and by treating such dividends as interest in the hands of its shareholders.

42 | MORTGAGEBROKERNEWS.CA

FEATURE / INVESTOR SERIES

QUALIFYING AS A MIC UNDER THE ACT A corporation involved in the Canadian mortgage market will qualify as a MIC if it meets all of the conditions set forth in subsection 130.1(6) of the Act. A MIC must be a Canadian corporation (within the meaning of the Act) and its only undertaking must be the investing of its funds. MICs are specifically prohibited from managing or developing real property. In some instances, mortgagors under certain mortgages held by a MIC will default, resulting in the MIC ultimately becoming the beneficial owner of the mortgaged property by way of foreclosure proceedings, sale agreements or otherwise. These foreclosed or impaired properties may be occupied, either by a foreclosed mortgagor in possession or by tenants under a tenancy agreement, or simply be unoccupied. In these circumstances, it may be necessary for a MIC to provide certain management and

A MIC must be a Canadian corporation and its only undertaking must be the investing of its funds.

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FEATURE / INVESTOR SERIES

The Canada Revenue Agency appears to have adopted an unfavourable interpretation of the Canadian tax rules, which may cause some MICs to be subjected to greater scrutiny on a go-forward basis administrative services and assist with the development or renovation of the real properties at issue. MICs may have to collect rents, make significant repairs to comply with certain residential tenancies legislation and also bring the real properties into a saleable condition for prospective buyers. These management and development activities could jeopardize the MICâ&#x20AC;&#x2122;s status for special tax treatment under the Act leading to unintended and potentially disastrous consequences for the MIC and its shareholders. The Canada Revenue Agency appears to have adopted an unfavourable interpretation of the Canadian tax rules which may cause some MICs to be subjected to greater scrutiny on a go-forward basis. There is a potential solution to this issue provided that certain legal relationships are properly created and maintained. A MIC that may be at risk of being involved in management, administration and development activities may be able to rely on certain deeming rules in the Act which will allow it to remain in compliance with paragraph 130.1(6)(b) in subsequent taxation years. It is essential to closely monitor the various criteria set forth above during the operation of the MIC in order to ensure that the rules are met at all times. A MIC is also precluded from holding certain properties, including debts owing to the MIC that were secured on real property situated outside of Canada, debts owing to the MIC by non-resident

44 | MORTGAGEBROKERNEWS.CA

persons except any such debts that were secured on real property situated in Canada, shares of the capital stock of corporations not resident in Canada or real property situated outside Canada, or any leasehold interest in such property. The MIC must have at all times 20 or more shareholders, none of which may own alone or together with related persons in excess of 25 per cent of the issued shares of any class of the capital stock of the MIC. In the first taxation year of the MIC, these requirements are somewhat relaxed and will be considered to be met throughout the year to the extent they are met at the end of the MICâ&#x20AC;&#x2122;s first taxation year. At all times, in excess of 50 per cent (computed based on the cost amount within the meaning of the Act to the MIC of all its assets) of the assets of the MIC must be invested in Canadian residential mortgages or in deposits held in the Canada Deposit Insurance Corporation, insured institutions or credit unions. Certain debt/equity ratios must also be maintained by the MIC at all times. Failure to satisfy all of the requirements included in subsection 130.1(6) of the Act will result in the loss of the special tax advantages related to the MIC status under the Act.

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46 | MORTGAGEBROKERNEWS.CA

FEATURE / COMMERCIAL THINKING

nowing where the business will be three years from now is at the heart of commercial brokering, and one Toronto player sees public transit and the Pan-Am games steering a clear course for smart money to follow. “The Eglinton LRT line and upgrades to the York University corridor will have a major, major impact on the Keele, Jane and Downsview areas,” Mickey Baratz, the director of finance and principal broker at Vector Financial Services Ltd., tells CMP. “It is the areas of future growth where investors should be looking to develop.” Vector, like many private lenders, isn’t shy about putting its money where its mouth is. One of its current projects is the retail section of a condominium tower just opposite the future Athletes’ Village for the upcoming Pan-Am Games. It’s an example of how non-institutional lenders are increasingly helping brokers take advantage of big-ticket projects. “The big boys (major lending banks) are bankrolling the Pan-Am Games and all of those projects across the city,” says Baratz. “Our involvement in the retail portion of the condo is a good example of how we are taking advantage of

Our involvement in the retail portion of the condo is a good example of how we are taking advantage of an upcoming major event to broker a deal

Got Plans?

STATS

54,800 - Ontario Housing starts March 2013 Source: CMHC

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

an upcoming major event to broker a deal. The banks will be the major lenders, but we are showing we will be there, too – only offering greater flexibility.” Limber non-institutional commercial lenders can save developers millions of dollars in development charges. “Those charges are astronomical, and can run into the millions,” he says. “In the case of a big bank, it can take months and months to approve a project, and meanwhile the development charges go up and up and up. I’ve seen $11 million allocated for development charges balloon to $14 million or $15 million.” In extreme cases, constant delays in bank approvals can kill a project. “If they (the big banks) are dragging their feet for too long, it will no longer make a development worthwhile once the financing is finally given,” says Baratz, a veteran of private banking. “It may be a successful operation, but you still end up with a dead patient.” Baratz has seen steady activity in the commercial market for 2013, and has a unique perspective after more than 40 years in the channel, pointing out that there is more to Toronto and the GTA than a ballyhooed highrise market fallen on hard times. “Yes, the condo market is a hot topic, and a hot product,” he says, “but the subdivision sprawl in Brampton and Oshawa has created a need for our type of lending – especially for student housing.” In turn, it has also created real opportunities for brokers in and increasingly looking to the commercial sphere. Fuelling Vector’s business is the large segment of immigrants with lots of ready cash, but almost no credit rating – another plus for non-traditional lenders.

Loans from $1,000,000 to $15,000,000+ Financing for projects in southern Ontario Only

Contact Mickey Baratz Lic.# M08000714 (416) 483-8018 ext 233 or mickey@vectormanagement.com

Brokerage # 10160

FEATURE / COMMERCIAL THINKING

Fuelling Vector’s business is the large segment of immigrants with lots of ready cash, but almost no credit rating – another plus for non-traditional lenders “In the past 30 years, the banks have tightened their belts,” says Baratz. “You have immigrants who are trying to start a new business with lots of cash, but are running into borrowing issues from large institutions,” says Baratz. “They face the same dilemma that students face after graduation when they apply for a job and are told they have the degree but no experience – how do they get the experience except by getting a job? It is the same Catch-22 for these immigrant entrepreneurs.” For Baratz, he points to his intimate knowledge

Got Plans?

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

of the Ontario market (Vector only funds projects within the province) as key to knowing which project will succeed and which will struggle. “We were busy with the student housing in the Waterloo area, and I see activity in retail shopping happening with the realignment of Zellers and Target,” he says. “As for condos? The clock is ticking if you’ve started a project, but people are buying land for future condo projects, looking three years down the road.” The condominium market has cooled, Baratz points out, and is seeing a fundamental shift in its pre-sales today compared to just a couple of years ago. That end of the commercial sector has never been the bread and butter of most commercial brokers, but the shift to other types of projects is now accruing to their benefit. “Investors are taking a sideline approach now, as there is a great supply of condos available,” Baratz tells CMP. “It used to be with a 200-unit condo, investors would buy five or 10 units each and the entire complex would sell out in five or six days. Now, you are only seeing the end-users buying one at a time, and it is over a five- or six-month period. “Pre-sales mean a lot more today than they did a few years ago,” he says. “If you have a condo project presented to you with 70 per cent already pre-sold, you have an excellent investment.” One of the great advantages of commercial brokering is the reluctance of fraudsters to risk it all on multi-million dollar deals. “Sure it still happens (commercial fraud), but it is so big, and there are so many title searches and lawyers involved, it is just too much of a risk,” says Baratz. “That’s especially so when you can more easily defraud on a home mortgage loan worth half a million dollars.”

Loans from $1,000,000 to $15,000,000+ Financing for projects in southern Ontario Only

Contact Mickey Baratz Lic.# M08000714 (416) 483-8018 ext 233 or mickey@vectormanagement.com

MORTGAGEBROKERNEWS.CA 49 Brokerage # |10160

BUSINESS / MARKETING

MORTGAGE FOR THE TEACHER Teach to take: It’s a mantra for high-flying brokers, writes Doren Aldana, offering a lesson in education-based marketing

S T E R C E S 21 R

TA OF SUPERS KERS E BRO G A G T R O M

50 | MORTGAGEBROKERNEWS.CA

BUSINESS / MARKETING

SECRET #3:

THEY PRACTICE EDUCATION-BASED MARKETING

ducation-based marketing is a process used to attract and land highly qualified clients by giving them what they want, which is information and advice, and removing what they don’t want, which is a sales pitch. You see, education-based marketers give away valuable free information that positions their expertise in the marketplace. Their message isn’t ME-focused -- that selling-based message and selling-based marketing is a dead horse. And one thing I’ve learned over the years, is when you discover that your horse is dead, dismount. You see, the problem with selling-based marketing is prospects will go out of their way to avoid you and your sales message. This is because

MORTGAGE SOLUTIONS THAT ARE AS SMART FOR YOUR CLIENT AS THEY ARE FOR YOU

anyone who has been around long enough has had at least one negative experience with a pushy, aggressive, unscrupulous salesperson. Once bitten, twice shy. The truth is, people love to buy but hate being sold. Prospects get defensive when you give them a selling-based message because they think you’re going to try and sell them something that they don’t want, don’t need or can’t afford. Another problem with selling-based marketing is that you, as the salesperson, feel scared, timid or uncomfortable because you’re focusing on selling yourself instead of asking questions, listening and getting the client to sell themselves. To be frank, I see this happening all the time at networking events, where people

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TM 2 TM 2 60 deals in the fiscal year. National Bank All-In-One is a trademark National BankofofNational Canada. 1Financing be subject1to the credit approval by National Bank. $2,000 marketing fee is aby one-time rewardBank. for the first National Bank All-In-One is aoftrademark Bank ofshall Canada. Financing shall be subject to the credit approval National $2,000 marketing fee 3 3 trip paidreward for everyfor 125the deals in the65 fiscal year or up to a maximum of 2 in tripthe vouchers. Minimum to fund ratiopaid of 60% fiscal 2013 required be eligible for either incentives payments be $15,000 trip forforevery 125 isdeals orto$40M funded in financial the fiscal year.and The fiscalwill year is$15,000 a one-time first deals $20M funded fiscal year. approve made in February 2014. The fiscal year is from November 1, 2012 to October 31, 2013. is from November 1, 2011 to October 31, 2012.

MORTGAGEBROKERNEWS.CA | 51

BUSINESS / MARKETING enter into the conversation and they start tooting their own horn, talking about how great their product or service is without even qualifying the person for interest first. They just “show up and throw up” with a data dump about their products and services. But in the end, it always leads to frustration because selling-based marketing doesn’t work. On the other hand, with education-based marketing -- the marketing I teach in my Mortgage Superstar Coaching Program -- your message is built around the sharing of valuable information. Your educational message actually replaces your selling message. Instead of overtly trying to sell your services, you look for opportunities to give away valuable information, information that would benefit your target market. Not only does this make your job a whole lot more fun and enjoyable, it positions you as an expert in the mind of your

prospect and enacts the law of reciprocity to work in your favour. In next month’s fourth secret, you’ll learn how top-producing mortgage professionals get most of their leads and how you can too. Stay tuned...

ABOUT THE WRITER: Doren Aldana is considered by many to be Canada’s leading Mortgage Marketing Coach. 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

THE TOP 10 BENEFITS

OF EDUCATION-BASED MARKETING:



You give prospects what they really want, which is information and advice, and remove what they don’t want, which is a sales pitch.

 

You maintain your dignity because you never make any effort to sell.

You establish yourself as a credible authority because prospects see you as a reliable source of information and advice.



You don’t have to seek out new prospects -- they come to you. And they’ll often be pre-sold on working with you before they even meet you.



You reach prospects early during the first stage of the decision-making process, often before they call any of your competitors.

52 | MORTGAGEBROKERNEWS.CA

 

You identify lukewarm prospects, who may be afraid to call you, but aren’t afraid to request your free information. You can track your marketing because you know precisely how many prospects respond to your marketing efforts and how many go on to become clients.



You increase your referral business from your prospects and clients because they feel loyal to you, due to your efforts to help them -- even if they don’t hire you.



You gain a competitive advantage because few -- if any of your competitors -- are using education-based marketing in their marketing efforts.



You’re able to leverage your marketing efforts by systematically presenting your best and most powerful marketing messages, even while you’re sleeping. And that’s the beauty of it.

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Back row (left to right):

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Canada Guaranty Mortgage Insurance Company 877.244.8422 I www.canadaguaranty.ca

Front row (left to right):

Casey Archibald, Account Executive (BC) Darren Kirk, Vice President, Regional Sales

FEATURE / INTERNET TOOLS

ScoreUp Team

TECHIE TOOLS Brokers know the Internet, but Don Horne reports on three tools designed to fine-tune its power for you and your clients SCOREUP

dzitis Bill Ru

Brokers know that a bad client credit rating can kill – or at least badly wound – a deal. ScoreUp is a fresh face on the financial scene that stresses credit management – not credit repair. “We help you establish or re-establish a good credit history, and provide ongoing training and support,” says ScoreUp President and CEO Patricia Giankas. “ScoreUp provides you with up-to-date credit education material and your own credit coach to assist in keeping you on the right credit path.” The ScoreUp Credit Management Program is designed for people looking to establish a credit history that will make them eligible for loans from lenders – and more importantly, eligible for better rates. “It is also for anyone that is paying high insurance premiums or that is thinking of applying for credit or even a new job,” says Giankas. The idea for ScoreUp began almost a year ago when Giankas was searching for the right software product. “I bought a couple of software programs, and I wasn’t happy with them,” she says, eventually settling on a product from Georgia – reconfiguring

54 | MORTGAGEBROKERNEWS.CA

it herself for the Canadian market, testing it for a year, and now marketing it with great success. Giankas came to Susan Jamieson of the Josuta Group to help kick start ScoreUp, and Jamieson could see right away ScoreUp was an easy sell. “I started working with ScoreUp by writing to the car manufacturers,” says Jamieson. “I received responses from Ford and Chrysler Canada within a week of first contact. You know it’s a good product when you receive a response that fast.” Jamieson told CMP that she uses her big corporation experience to help better market smaller companies. “ScoreUp is potentially helping thousands make Canada stronger,” she says, touting the possibilities of better credit ratings helping fuel a stronger economy. “Their main market is mortgages and real estate – ScoreUp is helping get more people into homes.” “Centum has just endorsed us,” says Giankas, who had been a principal broker with Centum Metrocapp Wealth Solutions for years in Toronto until she sold the business, going on a three-year sabbatical to take care of some family health issues. “I used to have 16 agents, so I know exactly all the problems brokers face when trying to push forward a deal with clients who have a bad credit history.” Director of Business Development for Centum

1200+ CLIENTS

SERVED OVER THE PAST 7 YEARS

FEATURE / INTERNET TOOLS

Tailor-Made Solutions Results that Matter iToolPro Systems Inc. has been successfully serving the Canadian Mortgage Industry for over seven years, providing web & mobile solutions to excel in today’s competitive business environment.

Website & Application Development Brokerage Websites with Intranet SmartPhone Apps Enterprise Solutions & Services

1-888-500-9514 www.itoolpro.com 205 - 4300 Village Centre Crt. Mississauga, Ontario L4Z 1S2

iToolPro MORTGAGEBROKERNEWS.CA | 55

FEATURE / INTERNET TOOLS Financial Group Paul Therien sees value in ScoreUp. “ScoreUp is a must-have option for anyone who is looking at building a strong business and is why CENTUM has partnered with them,” says Therien. “This takes the customer relationship to the next level, and creates a bond that otherwise would not exist. “Brokers can not only earn additional revenue by selling the program, they can increase the service they provide the consumer and close more deals.” DELTA 360

Delta 360 offers the Lending Management Suite 360 (LMS360) solution for a variety of mortgage products, including HELOCs, multi-component mortgages, along with insured and uninsured mortgages. “We provide an end-to-end solution for lenders from underwriting, advancing through to servicing and securitization of loans,” says Bill Rudzitis, VP of Product Management. “This includes renewals, municipal tax administration as well as additional ancillary products such as reporting, commission management and rewards solutions.” The LMS360 lending software provides configurable workflow and scoring capabilities, along

with integrated document management allowing the client to streamline processes and reduce costs. CMLS Financial, in fact, chose Delta 360’s platform for its ease of integration and technological advances. “We chose the Delta 360 platform for its many new features and how quickly the solution could be brought to market,” says Chris Brossard, CEO of CMLS Financial. “We also were impressed by the technological advances the platform provides and how easily we could integrate it into our existing systems.” Delta 360 is partnered with First Canadian Title, allowing it to offer flexible outsourcing solutions, including IT strategies, infrastructure implementation, custom development and product management. ITOOLPRO

Tech company iToolPro has come a long way since it started in 2006, having served some 1,200 clients over the years. “Long gone are the days when brokers could launch a quickly designed, poorly thought-out website or make do with outdated technology,” says Vik Palan, president of iToolPro. “Having a good-looking website

One partner. One platform. One solution. That’s Delta 360 Delta 360 Inc. is a superior mortgage and lending software solutions provider to the Canadian financial industry. Founded in 2005, Delta 360 provides software to streamline mortgage processing for Canadian lenders. Delta 360 is your source for integrated platforms for:

“ We chose the Delta 360 platform for its many new features and how quickly the solution could be brought to market. We also were impressed by the technological advances the platform provides and how easily we could integrate it into our existing systems.”

u Underwriting u Advancing u Servicing u Tax Administration Chris Brossard, CEO, CMLS Financial u Retention Management u Whole loan & MBS Administration

Looking for an innovative technology solution for your business? Visit delta360.com to learn more today.

56 | MORTGAGEBROKERNEWS.CA

FEATURE / INTERNET TOOLS is not enough; in fact it is just the beginning.” A website today needs to not only offer information for its users, but be easily accessible by and interactive with the rest of the Internet. That’s where his company comes in, says Palan. iToolPro’s niche services include website design and development, custom web application development, mortgage calculators, smart phone apps, search engine optimization (SEO) and social media optimization (SMO). “A successful website is one that can be easily found on search engines, provide useful information to users, and is able to communicate with the user even after the website user has stopped browsing it,” he says. iToolPro Systems Inc. has been serving the Canadian mortgage Industry for over six years, offering online solutions to compete in today’s competitive business environment. “We have in-depth knowledge about SEO to ensure prospects not only find our (clients’) websites, but also connect with brokers on popular social networking sites such as Facebook, Twitter, LinkedIn, Google Plus and Pinterest,” says Palan.

“With the growing use of smartphones, users spend more time on their phones as compared to browsing on computers.” Responsive/Mobile-compatible websites are a great way to keep up with such users, says Palan, and iToolPro specializes in developing smartphone apps for better connection with clients. “Smartphone apps are a great way to educate the user by providing useful information and answers to commonly asked questions,” he says. “iToolPro’s forte being the Canadian Mortgage Industry, we recognize the requirement and know what it takes to deliver. We welcome challenges and have built our reputation on it. We believe in taking a simple approach to the most complicated projects.” iToolPro’s niche services include Website Design & Development, Custom Web Application Development, Mortgage Calculators, Smart Phone Apps, Search Engine Optimization (SEO) and Social Media Optimization (SMO).

Vik Pala n

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

You worked hard on that deal. So why let all that hard work go to waste? Score-Up Inc. has exclusive technology that can get your low score ‘declined’ clients back to you with a higher score.” y YOU HAVE 24/7 ACCESS TO THEIR FILE y YOU RECEIVE EMAIL NOTIFICATIONS OF ALL UPDATES 2

REFER YOUR DECLINES TO SCORE-UP AND GET A REFERRAL FEE

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

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

MORTGAGEBROKERNEWS.CA | 57

PROFILE / BROKER

A DIFFERENT

REVOLUTIONARY A big Toronto realty is planning to leverage the power of a mortgage brokerage to change the world

Cityscape VP Adnan Bashir has a concept for one-stop shopping that could reshape the broker channel. From real estate sales to interior design and now mortgage brokering, the large realty, with its subsidiary Financescape – an MCC brokerage – aims to provide better value through better service. While marrying mortgages to real estate sales and even design isn’t new, Bashir’s plans to effectively use brokering to win unbelievable rates for his realty clients is. Make no mistake about it: The plan is to sacrifice some if not most the firm’s broker commissions in order to grow and secure the firm’s Realtor commissions and interior design fees. There’s real method to that, ahem, mandate. CMP’s Donald Horne spoke with Bashir on his dream and vision for Financescape.

58 | MORTGAGEBROKERNEWS.CA

PROFILE / BROKER CMP: What is the concept of Cityscape, and what is one driving Financescape? Bashir: The concept is we at Cityscape want to do business in a different manner. We believe that in the typical real estate brokerage model, the value of “brand” is not present. An example of good branding is McDonald’s – you get the same Big Mac, the same quality, everywhere you go. Wal-Mart is also a brand. Essentially, you have the same product everywhere, and like McDonald’s, they have these huge economies of scale, allowing you to save on price and offer better value. That is our concept. CMP: How does this apply to brokering? Bashir: In real estate, unfortunately, there is hardly any standardization of service. You can have agents offering different levels of service, based on their experience level, based on how hard they are working and how much access they have into the marketplace. You have agents from the same office that each provide a very different service level. Also there are no economies of scale, and hardly any savings passed on to the client. We would be looking

There is hardly any standardization of service. You can have agents offering different levels of service, based on their experience level, based on how hard they are working and how much access they have into the marketplace for strategic partnerships with companies that can help us achieve economies of scale and a standardization of service. We have gone and secured a Mortgage Centre (brokerage) from CIBC, called Financescape. Through Financescape, we are serving the AAA clientele. At Financescape, the team is approximately 10 brokers and agents, including a

UP TO

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It’s time for a new perspective.™

MORTGAGEBROKERNEWS.CA | 59

PROFILE / BROKER CMP: For those mortgage agents looking to join, will there be commissions, or flat rate? Adnan: It will probably be a flat fee. All we want to do is offer rates that are unusually good. If we can develop a stream of this AAA business then we may be able to actually achieve this low rate regardless of having to buy-down the rate on the commission structure. We have a long-term vision – and we are confident that we can get to that stage. We want to get to a stage where we can create a high volume of AAA business; then we will be in the position to negotiate with an A lender without having to give up our commissions.

broker of record. CMP: Buydowns are an integral part of your strategy. What do you see buying down to? Adnan: That depends obviously on whatever level is available, and what our ability is to utilize this strategy. It might be as much as utilizing literally 90 to 100 per cent of your fee to buy-down to whatever level it can be taken down to. Certainly we don’t want to compromise on the core real estate income. CMP: So mortgage aren’t going to be your big money maker. What is? Adnan: Interior design and home staging is obviously a big money maker for us with DesignScape. DesignScape is a design and hosting company. They maintain an in-house presence, and are able to offer a very high quality of service at a subsidized rate; a higher service level at a lower cost.

CMP: How do you see brokers reacting to this? Adnan: We are only targeting AAA business. A lot of our business we will be doing already goes to the bank. All we are looking for is AAA business. What I’m saying is we’re not looking at the whole spectrum of business; we are looking for a very niche market. CMP: Is this model the future of brokering? Adnan: There’s obviously an aspect of pressure on competitive levels in the marketplace. So how do you counter that? You can offer your services at a cheaper and cheaper price; or what you can do is increase your value proposition, and at a more profitable rate. One can have a more integrated business model, which provides a higher level of service and increases your synergy by adding value for your client. Your competition level will not be under pressure as under the conventional model.

Home staging is obviously a big money maker for us with DesignScape

CMP: Do you feel others will copy your model? Adnan: I would expect so. To do something on this scale requires a lot of energy to integrate. You really need to believe in this vision. If somebody tries to copy it, maybe they can. I can’t speak for other people; maybe it will be even better than we are. But if one works hard and has the right vision and has the headstart, they will always have the advantage in the marketplace.

STATS

26,000 - British Columbia Housing starts March 2013 Source: CMHC

60 | MORTGAGEBROKERNEWS.CA

CMP: You’re not stopping at realty, design and brokering. What other products will you be offering clients? Adnan: We have initiated a synergy with a marketing company, to do in-house marketing, and we have a home inspection company. We have already initiated a relationship with a legal real estate closing centre to ensure our clients will be getting two things: A competitive closing cost and a personalized service, with an option for in-house service for those who cannot make it to the law office to sign documents.

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PROFILE / FAVOURITE THINGS

Favourite things…

Murray Groen, Mortgage Brokers Ottawa, Orleans, Ont. NEW Mortgage Product:

Five-year fixed – especially with the rates today!

Sport: Golf, Hockey & Surfing Activity: Chilling at the lake

Drink: Guinness Hobby: Cooking Food: Chicken Parmigiana with Pasta

Book: The 100-Year-Old Man Who Climbed Out The Window And Disappeared By Jonas Jonasson Movie: Braveheart Vacation: A tropical beach, please!

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SERVICE / DIRECTORY Banks

RMAI Financial Group www.rmaifinancial.com Ph: 1 866 955 7624 Page 37

RMG Mortgages www.RMGmortgages.ca Ph: 866 809 5800 Page 29

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

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

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

Tribecca Finance Corporation www.tribecca.ca Ph: 416 225 6900 Page 59 Commercial Lenders

Technology & Software

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

HomEquity Bank www.homequitybank.ca Ph: 1 866 522 2447 Page 15

National Bank www.nbc.ca Ph: 1 888 483 5628 Page 51

Vector Financial Services www.vectorfinancialservices.com Ph: 1 866 483 8018 Page 48-49

Delta 360 www.delta360.com Ph: 905 475 2360 Page 56

iToolPro

iTool Pro www.itoolpro.com Ph: 1 888 500 9514 Page 55

Insurance

Non-Bank Lenders

Canada Guaranty Mortgage Insurance Company www.canadaguaranty.ca Ph: 1 866 414 9109 Page 53

Capital Direct www.capitaldirect.ca Ph: 780 868-0550 Page 25

First National Financial LP www.firstnational.ca Ph: 416 593 1100 Page 11

Marlborough Stirling Canada www.morweb.ca Ph: 1 877 626 2022 Page 39

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

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

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

Real Estate

Appraisal Institute of Canada www.AICanada.ca Ph: 613 234 6533 Page 41

Argentum Mortgage and Finance Corp www.argentummortgages.ca Ph: 1 888 402 7436 Page 47

MCAP www.mcap.com/brokers Page 27

Optimum Mortgage A Division of Canadian Western Trust www.OptimumMortgage.ca Ph: 866 441 3775 Page 13

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

Canadian National Association of Real Estate Appraisers www.cnarea.ca Ph: 1 888 399 3366 Page 24

Dominion Lending Centres www.DominionLending.ca Ph: 1 888 806 8080 Page 22-23

Teranet www.teranet.ca Ph: 1 866 237 5937 Page 35 Services

Peoples Trust www.peoplestrust.com Ph: 1 800 663 0324 Page 43

Pillar Financial Services www.pillarfinancial.ca Ph: 613 282 1242 Page 9

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

64 | MORTGAGEBROKERNEWS.CA

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

INVIS Mortgage Intelligence www.invis.ca â&#x20AC;˘ Ph: 1 866 854 6847 Pages 32-33

Mortgage Architects www.mortgagearchitects.ca Ph: 1 877 802 9100 Page 17

Best Points Travel info@bestpointstravel.com Ph: 1 800 551 8786 Ph: 416 251 9944 Page 31

Fortress Real Calpital www.fortressrealcapital.com Ph: 905 787 9266 Page 45

Score-Up www.score-up.ca Ph: 416 479 9585 Page 57

Help your clients get more out of tHeir Homes.

[ Like a genie granting wishes, but without the whole lamp thing.[

the B2B Bank Homeowner’s Kit is a flexible financing solution that helps brokers build their business. By combining mortgages and home equity lines of credit (Helocs), the Homeowner’s Kit provides access to up to 80% ltV1 with a single collateral mortgage charge, giving your clients more financial freedom. plus: •

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Customize the Homeowner’s Kit to your clients’ needs with 6 flexible options via a single, one-time application

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Enable access to a larger credit line as the mortgage portion gets paid down

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Deliver well-structured, well-priced deals for your clients with the help of our dedicated team of underwriters

b2bbank.com/mortgages

1.800.263.8349

for BroKers ™

65% LTV HELOC and 15% amortizing portion. Mortgages and lines of credit are subject to credit approval by B2B Bank. Some conditions apply. All mortgages are funded by, and registered in the name of, B2B Bank, and administered and serviced by B2B Bank. ®B2B BANK is a registered trademark of B2B Bank. TMBANKING THAT WORKS FOR BROKERS is a trademark of B2B Bank. ®HOMEOWNER'S KIT is a registered trademark of Laurentian Bank of Canada. 1

Weâ&#x20AC;&#x2122;ve got the strategy for your success. Genworth Canada makes homeownership easier by providing a complete suite of mortgage planning tools and homeownership education resources at Genworth.ca. The recently redesigned website is loaded with new features to help mortgage professionals access and share information quickly. Find useful tools like home buying calculators, marketing programs and accredited training to help you grow your business.

Find out more at Genworth.ca

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