Name: Robert McLister

Email: robert@canadianmortgagetrends.com

Biographical Info: Robert McLister is one of Canada’s best-known mortgage experts, a mortgage columnist for The Globe and Mail, editor of CanadianMortgageTrends.com (CMT) and founder of intelliMortgage Inc. and RateSpy.com. Robert created CMT in 2006. The publication now attracts 550,000+ annual readers, is a four-time Canadian Mortgage Awards recipient and has been named one of Canada’s best personal finance sites by the Globe & Mail. Prior to entering the mortgage world, Robert was an equities trader for eleven years and a finance graduate from the University of Michigan Business School. Robert appears regularly in the media for mortgage-related commentary (recent coverage: http://bit.ly/tUjp3Q). He can be followed on Twitter at @CdnMortgageNews


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Andrew-Lo  “There is not digital strategy, only strategy in a digital world.”

Andrew Lo, COO at Kanetix Ltd., shared that maxim at last week’s MPC National Conference. His message: It’s time for brokers and lenders to stop thinking of customer experience online as being distinct from customer experience in general. With the net being embedded in most of our lives, “strategy” and “digital strategy” are virtually the same thing.
 
“I am sure mortgages are ripe for disruption,” Lo said at the event. The mortgage process is full of frustration, and the job of brokers and lenders is to “convert people from frustration to happiness.” Creative technology can help do that.
 
The Big 6 banks are finally waking up to this. I spoke with a high-level bank mortgage executive yesterday who told me the banks are now in a race to build out their online channels. Expect a number of online mortgage announcements in 2017 and 2018, she said.
 
Fortunately for brokers, banks are not in the lender choice business. They’ll pitch only their own products online, but they’ll noticeably streamline the application, mortgage status and document upload processes.
 
In any case, if you’re eager to improve your own online presence, here are a few nuggets from Lo’s talk:

  • Users of smartphones represent the biggest ocean of potential customers going forward. But you need a website built from the ground up for mobile, to engage people’s attention on dinky little cellphone screens. 
  • Realize that for every person shopping for mortgages on their smartphone, the majority will start to fill out an application on the phone and likely complete that application on their desktop. You need to tightly integrate your mobile and desktop experiences to allow for a smooth transition.
  • Lo suggests connecting your website to Google Analytics, which is free. Use Google’s data to design and optimize your online sales funnel. In other words, figure out how your consumers are using your website and remove all possible impediments (where they drop off, or leave your site). “Make enhancements to the user experience based on data, not opinion,” he urges.
  • Focus on soliciting online client reviews because few other efforts can enhance customer trust more. But be careful to nurture 5-star experiences, he warns. As soon as reviews drop below 4 stars (out of 5), no one seeing your reviews will come to your site.
  • Use A/B testing to determine which homepage (or landing page) better converts leads into applicants. Building two pages and tracking their metrics takes a fair amount of effort, but if you aren’t doing it, your biggest competitors are.

 

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National-BankWhen it rains it pours. On the heels of Ottawa’s broker-unfriendly insurance rules comes word that National Bank will no longer sell its branded mortgages through brokers.

National Bank had 2.5% share of the broker market as of last quarter, according to D+H. Brokers represented about a quarter of its mortgage production. This now leaves Scotiabank and TD as the last Big 6 banks to distribute through brokers.

But there’s some good news:

  • National will ramp up its funding of Paradigm Quest, which is a huge vote of confidence in the mortgage process outsourcing firm.
    • This will generate billions in new mortgage originations for PQ brands like Merix Financial. “Our goal is to fund a similar volume of mortgages in this new third-party model as we do currently,” the bank says.
    • “It’s a natural extension of a great partnership that we’ve had for several years with National Bank,” said Kathy Gregory, President of Paradigm Quest Inc. 
    • Merix Financial CEO Boris Bozic added, “We’re delighted the bank had this confidence in us. It adds to our list of institutional partners, lets Merix offer new products and lets us support mortgage brokers more than ever….”
  • It’s a testament to the quality of broker-originated mortgages given the bank’s own treasury will continue standing behind them.
    • The bank confirmed that “this is a business decision driven by economics, not by any concerns about the health of the channel or risks in the channel.”
  • Other “balance-sheet” broker channel lenders should immediately benefit from National’s departure, including Scotiabank, TD, B2B and Manulife Bank.
    • We see Manulife Bank in particular as a big winner here since its Manulife One product resembles National’s All-in-One, and since Manulife is reportedly launching key balance sheet products, including a potential replacement for National’s equity-focused “net worth” mortgage.
    • TD could also see soaring volumes if it launches its HELOC in the broker channel. B2B could also be a winner if it makes its HELOC automatically readvanceable. I believe both of these scenarios are real possibilities. And lastly, MCAP and its Fusion HELOC will see more volume, especially if it opens it up to non-top-tier brokers.

Here’s the bad news:

  • No matter how you spin it, it’s never great PR for our industry when consumers hear that a bank has pulled its broker products.
  • Brokers are reportedly losing National’s popular All-in-One, Net Worth and rental programs. We hear the bank will not be funding these products at third-party lenders.
  • I fear that NBC will provide competitive funding mainly for vanilla fixed-rate products (hopefully I’m wrong on this.) Given NBC’s deposit-raising challenges and cruddy variable-rate pricing this year, we’re not overly optimistic about its 3rd-party floating-rate offerings.
  • There’s no telling how long the bank will continue funding 3rd-party mortgages. Once it ramps up its online channel it may need some or all of that funding back.
  • Some of National Bank’s branches outside of Quebec could wither. Many of them relied on brokers for the majority of their new customers (broker-originated customers were typically referred to a local branch). It’ll be interesting to hear if NBC is closing branches on its analyst conference call tomorrow.

What led to this decision:

  • Big Investment: To thrive in the broker space, National would have had to invest tens or hundreds of millions in systems and infrastructure. Its legacy technology and workflow was simply not effective in delivering the prompt service that brokers and customers demand.
  • e-Channel: CEO Louis Vachon wants to shift resources online. He recently stated: “…We feel that in the relative near future that online origination of mortgages will be a fourth distribution segment…We feel that over time, [selling mortgages online is] going to be as attractive, if not more attractive…than the traditional third-party brokers market.” 
  • Compensation: The bank paid brokers too much. When your commissions are double or triple the industry-standard on HELOCs, and 30-50% more on mortgages, what do you expect to happen to profitability?
  • Cross-sell: Brokers don’t cross-sell National Bank’s non-mortgage products, and apparently its branches weren’t doing a bang-up job of it either. Meanwhile, Scotiabank is reportedly quite pleased with its new broker cross-sell strategy. So this factor was clearly not insurmountable.
  • Renewals: National enjoys higher retention of customers at maturity if the customer comes to National directly.

Parting Thoughts

For full disclosure, my firm did over $30 million in mortgages with National Bank last year, so I know them and their service “challenges” well. But the bank always respected brokers and its top-tier management (i.e., Mark Squire), genuinely tried to deliver better rates and service to brokers, despite the tight constraints he was under from HQ.

Our industry will miss National and the amazing people we’ve come to know there. It’s a stinging blow to be sure, but nowhere near as painful as FirstLine’s exit.

“FirstLine took more than $13 billion right out of the marketplace,” notes Bozic. “But NBC is still actively involved in the broker space, just not through their brand.” That’s key, he says, because “Monoline support and growth is vital for mortgage brokers,” as is broker lender liquidity.

As one final note to those depressed by this news. Recall that after FirstLine’s departure in July 2012, it might have seemed like the beginning of the end. Broker share of the mortgage market back then was 25%.

Today, brokers own 30% of the market, five points more.

Our industry has always been good at bouncing back. That can’t be overstated. And it’s worth remembering, because we’ll need every ounce of that resilience in the years ahead.

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Business gift_FBHappily, it’s only taken six hours to update 183 rates and 25 lenders’ policies following today’s default insurance rule changes. I reckon I’ll be done combing through the rate sheets and policy updates by the weekend, just in time to question the grey matter of those responsible for this absurdity.

Here’s some of the results so far of the DoF’s mortgage insurance ban. These numbers are not exhaustive. They’re just from the banks, monolines and credit unions this author commonly uses:

  • Typical new rate surcharge on refinances: 15 bps
  • Number of broker lenders who have terminated prime refinances altogether: 6
  • Typical new rate surcharge on amortizations over 25 years: 10 bps
  • Number of lenders who have terminated amortizations over 25 years altogether: 7
  • Typical new rate surcharge on single-unit rentals: 15-25 bps
  • Number of lenders who have terminated rentals altogether: 6
  • Typical new rate surcharge on properties over $1 million: 15-25 bps
  • Number of lenders who have terminated lending on $1 million+ properties altogether: 5

Some of the lenders who pulled the plug on these products will be back in the game once they’ve arranged new funding. But they’ll be tacking on meaningful rate premiums, like almost every other lender.

But there’s more:

  • Number of lenders who raised all their rates in the last week (and no, not because of bond yields), instead of just raising refi, long-amortization, rental and $1 million+ rates: 4
  • Number of lenders with better rates on higher-defaulting low-equity insured mortgages than lower-defaulting 20%+ equity conventional mortgages: 18
  • Number of borrowers with 20%+ equity who default on their mortgages: Less than 1 in 300
  • Canadian taxpayer losses from a U.S.-style housing catastrophe: $0
    (Insurers’ capital would be drawn down ~$9 billion, says Moody’s. But that’s a fraction of their combined overall capital base, so a taxpayer bailout would be extraordinarily improbable.)

And that brings us to the most upsetting stat of all:

  • Estimated number of mortgagors who will unjustifiably get their pockets picked by those behind this, one of the most costly, reckless, ill-planned, non-consultative series of policy decisions in Canadian mortgage history: At least 6 million (half of current borrowers)…and more to come. 

 

 

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2016 ConferenceMortgage Professionals Canada’s National Conference has wrapped up in Vancouver. It’s the nation’s largest gathering of mortgage brokers and lenders.

One of the best MPC events is perennially the Expo. It’s kind of like Christmas for mortgage brokers because you always discover new products and services to improve your revenue. On that note, here’s some of the news we heard on the show floor:

  • B2B Bank: Is now the only national lender left who still offers a 35-year amortization.
  • Bridgewater Bank: Is reportedly considering re-entering the prime lending market.
  • Eclipse: Is one of the only B-lenders with its own MIC; it’s doing 85% LTV bundles again.
  • Home Trust: Will be announcing a new near-prime product for borrowers adversely affected by the new mortgage rules.
  • Kanetix: Launched a warm lead phone service for $150 a lead.
  • Lendesk: Launched a new broker loan origination system with integrated e-signatures, automated document reminders, APIs for data transfer, customized commitment letters and a borrower portal with a mobile-friendly application.
  • Manulife: Will reportedly be announcing a conventional product to 80% LTV, a BFS product to 65% LTV and an “equity” product to 50% LTV.
  • Mortgage Alliance: Now offers customers free credit scores and personalized property valuation updates (from Brookfield) in its mobile app.
  • MPP: Is working on a solution to help B.C. brokers meet FICOM’s updated guidelines on selling creditor life insurance; is considering launching job-loss insurance in 2017.
  • Scotiabank: Reaffirmed its commitment to the broker space. Is going national with its new cross-selling program, which promotes other Scotia products to broker-originated Scotiabank customers.
  • Street Capital: Is still awaiting its bank licence. Upon receipt, it reportedly plans on launching a new non-prime mortgage product.
  • TMG: Offers a new mobile app that can pump applications directly into D+H Expert.
  • VERICO: Has rolled out its new lender hub, powered by DealAssist, at a promotional rate of $99 per deal submitted.
  • Xceed: At long last has an online portal for mortgage customers.

 

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On Monday night, two leaders in our business will receive one of the highest honours in Canada’s mortgage industry. Both will join an exclusive group of 40 individuals who can call themselves Mortgage Hall of Fame inductees.

Gary Mauris, co-founder and President & CEO of Dominion Lending Centres and Art Appelberg, president of Northwood Mortgages, will be inducted next week at an awards ceremony during Mortgage Professionals Canada’s 2016 Mortgage Forum.

Both men have each contributed immensely to the growth of Canada’s mortgage industry. Here’s a closer look at their storied careers, and thoughts from each of them on what they learned along the way.

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Art AppelbergArt Appelberg, AMP

President of Northwood Mortgages and an MBA graduate of the Schulich School of Business at York University, Art Appelberg has built a 30-year career in banking, accounting, credit risk, mortgage origination and lending. 

An entrepreneur at heart, Art became an independent mortgage agent in 1989. Seeing its potential, he went on a year later to establish his own brokerage, Northwood Mortgage. Since then, Art has grown Northwood into one of the premiere full-service mortgage brokerages in Canada, winning many industry awards, including CMA’s Lifetime Achievement and CAAMP-IMBA’s Outstanding Contribution to the Industry awards.

In his 10,000 sq. ft. mortgage office, Art also houses a successful mortgage investment company. More recently, he opened an in-house financial centre to offer his clients a one-stop-shop for all their financial, legal, real estate, investment and insurance needs.

At the core of Art’s strategy is his belief in nurturing the concept of a “Professional Community” that incorporates full-time mortgage placement officers, as well as trainers for all Northwood Mortgage agents.

With a passion for fresh industry ideas and a never-ending appetite for continued growth, Art continues down a road of success in this business, one he believes promises tremendous opportunity to come.


Read CMT’s one-on-one Q&A with Art


 

Gary MaurisGary Mauris, AMP

Gary is the co-founder, President & CEO of Dominion Lending Centres, a company he started from nothing ten years ago with partner Chris Kayat. Today, the DLC group of companies accounts for almost 40% of all broker originated mortgages in Canada.

Gary has entrepreneurship embedded in his DNA, having sold two prior successful companies to the public market. He’s been a finalist for Ernst & Young’s Entrepreneur of the Year and earned the 2016 Tri-Cities Chamber of Commerce Business Leader of the Year. His companies have won too many industry awards to count, and DLC has been recognized by Profit Magazine one of Canada’s fastest-growing companies.

As a business leader, Gary is called upon to share his views with media throughout Canada. He was part of the 2011 Pre-budget Consultation process with the-then Federal Minister of Finance, Jim Flaherty; he was selected to be part of CBC’s “Face the Nation” in 2016 and he had an open and frank discussion with Prime Minister Justin Trudeau on topics key to our industry.

Gary has led multiple socially conscious initiatives, including being co-founder and president of I AM SOMEONE Ending Bullying Society. He recently co-founded “Bikes for Kids,” a National program that collects new bicycles for underprivileged children across Canada. Whether it’s in or out of office, Gary is one of the most accomplished recipients ever to win MPC’s coveted award. 


Read CMT’s Q&A with Gary


Story by Steve Huebl & Robert McLister

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Network FBLenders pay a toll to get applications from mortgage brokers. The long-established toll keepers are D+H and Marlborough Stirling. These two technology companies get a slice of every deal lenders receive through their online platforms.

But lenders are growing weary of this expense, which is reportedly as much as 5-6 basis points per funded mortgage in the case of D+H (i.e., up to $180 on a $300,000 mortgage). Lenders resent having to pay more for bigger deals when D+H’s processing costs are much the same regardless of deal size. So they’re taking matters into their own hands.

The talk out there is that a consortium of lenders is making a play for Marlborough Stirling’s MorWeb platform. The MorWeb business is rumoured to have been hemorrhaging cash. Its parent, Capita plc, has reportedly been running a process to find a buyer for weeks now, as MorWeb clings on to just 5-9% market share (our best estimate). If lenders are successful in buying MorWeb, their connectivity costs could drop by 50%.

But lenders may have competition for MorWeb. Word is, Dominion Lending Centres and a few other broker networks have been separately eyeing the company. With DLC controlling roughly 40% of broker market volume, it could make MorWeb viable overnight by cutting lenders’ costs (relative to D+H), pumping $30+ billion in volume through the system and charging its own access fees.

If the MorWeb transaction doesn’t pan out, lenders seem open to cutting deals with Canada’s largest superbrokers for direct access. Lenders would then invest some of their D+H savings back into the brokerages (perhaps 1 bp a deal, or a small flat amount per mortgage). That could fund new technology and marketing initiatives for broker firms, among other things.

Case in point is a firm like Mortgage Alliance. It’s decided to build its own direct channels to lenders. Just today it announced a link to First National, Canada’s largest non-bank lender. Last month it hooked in to Paradigm Quest and its brands Merix and Lendwise.

It’s Been a Long Time Coming

Most monopolies don’t last. D+H might have avoided his fate had it restructured its pricing and built in value that end-users (brokers) crave. Brokers have long been underwhelmed by Expert’s functionality, as this sample ILMB Facebook post conveys:

Facebook-on-DH2

 

D+H could have broadly released tools like online application APIs (accessible to tech-savvy broker-owners, not just superbrokers), better links to third-party CRM systems, a native CRM system, a slick mobile app with document imaging (it demo’d this a few years back…where did it go?), secure email document sharing and so on. That might have instilled broker loyalty.

Instead, it’s seemingly opted to milk its cash cow — and despite all of its well-drafted lender contracts, that could cost it long-term.


Here’s to hoping that D+H surprises everyone with innovation at this weekend’s MPC conference in Vancouver. 

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Donald Trump has “blown up” the bond market. That’s CNBC’s depiction after the president-elect’s victory wiped out $1+ trillion of its value in the last week.

Trumponomics, Trumpflation, the Trump Thump, Trumpulus, or whatever you want to call it, has incited fear in bondland. Traders envision 4%+ GDP growth, inflation, massive deficits, a potential U.S. credit rating downgrade and unravelling of the greatest bond bull market of all time.

All of this is conspiring to reshape investors’ mindsets…radically. It’s raising the implied odds that 2016’s bottom in rates won’t be broken for several quarters, at a minimum.

And if the bond market is somehow mispricing Canada’s economic prospects—and yields do fall 55+ bps to new lows—imagine what hideous fate that would portend for Canada. It’s a fate that, given a soon-to-be-robust U.S. economy (the destination for 73% of our exports), now seems less probable.

But make no mistake, we’re staring at much uncertainty through 2018, not the least of which is:

  • How much will a resurgent U.S. economy boost Canadian exports?
  • What kind of trade deal do we get post-NAFTA 1.0?
  • Where does oil go next?
  • How much does a cheaper loonie absorb any trade shock?
  • Will Ottawa keep Canada’s business environment (tax regime) competitive with the U.S.?

These questions and others will have econo-gurus debating interest rate direction for months. Our clients will see their headlines and ask the perennial question: “Should I lock in?” And the answer will be as clear as ever: There is no clear answer.

But here’s something we can tell clients with confidence. The rate paradigm as we knew it on November 7th was transformed on November 8th. In 2017, the economy that we sell three-quarters of our goods and services to will be firing on two more cylinders, and net net, that could help Canadian business, boost Canadian inflation and be rate bullish.

And if we’re wrong, borrowers will have far bigger problems to contemplate than not picking the bottom in interest rates.

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Interview with mic FBNow that FICOM’s B.C. broker compensation disclosure is a done deal, many want to know how it helps consumers make better broker decisions.

We asked the Office of the Registrar of Mortgage Brokers for its take…

CMT: What do you want consumers to do with this new required compensation disclosure?

FICOM: Consumers may use that knowledge in any number of ways. For example:

  • They may ask how compensation paid by one lender compares to that paid by another.
  • They may ask how compensation influences advice.
  • They may use compensation to assist them to judge the value of the services they receive.

CMT: Have you produced any consumer materials to assist mortgage shoppers in interpreting this information?

FICOM: In our April 2016 open letter, we recognize that the development of information for consumers is an important part of the disclosure requirements. Materials will be available for consumers when the guidelines come into force on June 30, 2017.

We encourage industry to explore how it can contribute to our shared goal of an informed consumer, and look forward to ongoing discussions.

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So it appears that FICOM will develop some sort of guidelines to help consumers decipher the raft of new compensation information they’re about to receive. That’s terrific. A key concern about FICOM’s new policy is that some consumers could make bad decisions without compensation data being put into context (as this study has shown).

One obvious example is the borrower who compares disclosures and then chooses the broker who “buys down” rates more, and displays less commission. Such brokers work on volume. By their very nature, they can’t afford to spend as much time advising clients—compared with full-service mortgage professionals. By receiving less analysis and guidance on term selection, interest saving strategies and mortgage restrictions, some discount broker clients could potentially choose mortgages with higher overall borrowing costs. (This is coming from someone who runs a discount brokerage company.) 

This is where FICOM can add value. It can counter some of these side effects by helping consumers understand:

  • What is routine for broker compensation, volume bonuses and status benefits
  • The potential tradeoff between compensation and advice
  • The importance of overall borrowing cost and contract terms, over upfront rates and compensation
  • How the breadth of products a broker can access (or chooses to access) can impact their recommendations
  • How research suggests that brokers save borrowers more (overall), regardless of the lender compensation earned by the typical broker

Ideally the disclosures would focus on differences in compensation (i.e., identifying when a broker is making abnormal reward for facilitating a mortgage). Barring that, FICOM would do consumers a favour by crafting practical information like that above — and tossing in a few examples that borrowers can easily digest. Without this context, comp disclosure could distract many folks from what matters most: overall borrowing cost, not price.

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B.C. mortgage brokers have eight months to prepare for one of the biggest procedural changes ever to hit their industry. The province’s regulator, FICOM, has released its controversial broker compensation disclosure guidelines, and they take effect June 30, 2017.

The new rules make brokers list all monetary interests and benefits they receive when arranging a mortgage. “Any interest which has a monetary value must be expressed as a dollar amount” to consumers, the regulator states.

“…We are disappointed by this announcement,” said Paul Taylor, President and CEO of Mortgage Professionals Canada, in a statement Tuesday. “From the onset, we have encouraged open consultation and dialogue with the regulator and undertook extensive efforts to ensure our collective voice was heard. It is clear that the industry’s concerns and directional evidence on the negative implications were not taken into account.”

FICOM, for its part, believes that broker interests (compensation and incentives) create potential conflicts, albeit it hasn’t received any specific complaints of such conflicts from consumers (that we’re aware of). In a letter Tuesday, the regulator said, “The guidelines encourage industry to think about conflicts, identify conflicts, and describe conflicts in a way that is easy for consumers to understand.”

According to FICOM, a broker’s direct interests in a mortgage include, but are not limited to:

  • Base commissions
  • Known volume or efficiency bonuses
  • Loyalty or rewards points
  • Broker fees.

FICOM says typical indirect interests include:

  • Expected trailer fees, if the borrower renews the mortgage with the lender at maturity
  • Expected trailer fees or other compensation payable during the term of the mortgage
  • Potential volume or efficiency-based bonuses
  • The amount of volume-based compensation paid by a lender to the mortgage brokerage (firm)
  • Lender compensation paid to the corporate head of any network or franchise entity to which the mortgage broker is related or associated, based on aggregated volume for the network
  • Fees paid by a lender to a network, franchise or mortgage broker for any purpose related to mortgage transactions being directed by that firm or associate or related party to that lender (including but not limited to access fees and fees paid by a lender to be identified as a preferred lender)
  • Reduced desk, franchise or network fees, or similar, payable by mortgage brokers based on achieving certain targets, such as volume, with a preferred lender of the firm
  • The ability to offer preferential pricing to borrowers in future mortgage transactions based on volume or efficiency-based targets being met
  • Any benefit arising from achieving a certain status or designation with a lender
  • Beneficial ownership interests in the lender or the borrower

Other notable points:

  • Commission splits between sub-mortgage brokers and brokerage firms must now be disclosed
  • Fees paid by technology providers, like D+H, to broker networks do not have to be disclosed
  • Sub-mortgage broker salary (paid by the brokerage) does not have to be disclosed

We’ve talked about the pros and cons of these changes before, but in a nutshell we expect:

  • Savvy consumers will use this new information to negotiate better deals (i.e., ask for some of the broker’s now fully disclosed compensation, by way of rate buydowns or cash rebates)
  • Many consumers will be confused by the disclosure since there are limited benchmarks to compare a broker’s interests to what is “normal”
  • Some borrowers will choose the wrong provider based largely on a broker’s compensation, and not the broker’s service, advice and product recommendation (U.S. research supports this)
  • Some deep discount brokers will invite consumers to contrast their compensation to that of “full-service” brokers—and use that as a competitive edge
  • Lenders may not be thrilled as their confidential brokerage compensation agreements (which predate these new rules) become industry knowledge  
  • Lenders will find it harder to keep preferential broker compensation and rate deals secret from other brokers
  • Broker networks may be under increased pressure to share the newly disclosed incentives that lenders pay them with agents.

I’ve spoken with superbroker bosses who feel these guidelines could ultimately harm the broker industry, and consumers, by shrinking margins to a point where it’s unfeasible to provide in-depth advice and service to consumers. Other brokers brush it off, maintaining that most consumers won’t see the disclosures until right before they sign, and/or know how to interpret them. 

With respect to timing, FICOM says the “Form 10” (which contains these disclosures) must be given to borrowers “at the earliest opportune time before they sign:

  • the mortgage; or
  • any ancillary agreement with the mortgage broker or lender, including but not limited to an agency agreement with the mortgage broker, that commits the borrower to the mortgage transaction.”

Here are the full guidelines and FAQs.

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Survey FBThe value of a poll question depends heavily on how you ask it. Take this “finding” from Forum Research, as reported by the Toronto Star:

“Ottawa’s tougher rules for…mortgages are a good idea, according to 63% of Canadians.”

That’s an interesting conclusion given the question that Forum Research asked:

“The Liberal government has tightened mortgage-lending regulations, and cancelled the primary residence tax exemption for foreign real estate buyers. Do you approve or disapprove of this decision?”

As written, the question combines two distinct rule changes: the new insured mortgage rules and the banning of the primary residence tax exemption for foreign real estate buyers. Combining the two has likely impacted the responses because a majority of people (rightly or wrongly) strongly support curbing foreign buyers. Even if some folks were not necessarily supportive of “tightened mortgage-lending regulations,” the grouped-in foreigner question could lead many to say they “approve.”

What’s more, the surveyor does not explain how “tightened mortgage-lending regulations” will reduce affordability, a big pain point for young buyers. Nor does Forum Research explain how such restrictions might jeopardize an existing homeowner’s equity. Nor does it touch on the potential economic ramifications of the rules, or even the future potential benefits for housing stability.

“We generally do not provide ‘context’ for fear of biasing the question and for fearing that we are providing information to respondents that the general population does not have,” says Forum Research President Lorne Bozinoff. But that cuts both ways. Had more people understood all of these points, and had the questions been asked separately, the “approval” numbers (for the mortgage changes specifically) might have looked rather different.

Knowing Canadians’ true feelings on one of the most impactful mortgage rules of all time would have been valuable. It’s too bad these pollsters dropped the ball.