Mortgage Rates & Mortgage Broker News in Canada

One-on-One with First National's Stephen Smith

Canada's largest non-bank lender, First National, got its start 25 years ago from this past Sunday.

Stephen Smith, Co-founder and President, recently spoke with CMT about First National's dramatic growth and the factors behind its success.

He also touched on the vital role of mortgage securitization, the likelihood of seeing Prime minus 0.90% variable rates again, and the future of non-deposit-taking lenders in a market dominated by banks.

In addition to his role at First National, Mr. Smith is chairman and part owner of mortgage insurer Canada Guaranty.

Along with his long-time business partner Moray Tawse, each of them own 24 million shares in First National Financial Corporation. That easily makes them among the most successful individual entrepreneurs in the Canadian mortgage market.

CMT's exclusive one-on-one with Stephen Smith follows here...

Kevin O’Leary on O’Leary Mortgages

Canada’s most candid business personality has a strong view about what’s wrong with mortgages. It’s so strong that he decided to start his own mortgage company.

On Friday, I spoke with CBC commentator, multi-millionaire, Dragon and Shark, Kevin O’Leary. I asked him what makes his new “O’Leary Mortgages” so unique. He outlined a two-pronged strategy: to add transparency to the mortgage process and to help Canadians pay down their biggest debt faster.

Kevin has been scoping out the mortgage business for almost two years. He was kind enough to share his mortgage philosophy and business plan with CMT in his first interview about O’Leary Mortgages.

Genworth’s Brian Hurley on First-Time Buyers & Default Risk

We recently had an illuminating chat with Genworth Financial Canada Chairman & CEO Brian Hurley. Topics of conversation included first-time homebuyers, housing risk and causes of default.

We began with first-time buyers, which account for a large slice of the market. In fact, they comprise a veritable army of buyers, one that's vital to the health of residential real estate.

Hurley went on to share some noteworthy points about mortgage defaults. For example, he noted that default frequency tends to correlate most closely with unemployment. However, the number one factor that affects an insurer’s default losses is when home prices drop more than expected. That doesn’t necessarily cause the frequency of claims to skyrocket, but it does cause the size of claims to balloon, and that can present a problem.

Hurley explains the above and more in the comments that follow…

Top Teams - Origin Mortgages

For the country’s largest mortgage teams, switching to a new brokerage and/or teaming up with a new broker network is no small decision. But it can yield new opportunities.

As part of a periodic series, CMT features short profiles on $100 million+ broker groups that have decided to make a switch.

This week’s featured team is Origin Mortgages, one of the west coast's leading broker groups by volume.

B2B Bank, Coming in July

Pending regulatory approval, B2B Trust will convert to B2B Bank on July 7, 2012. It will be Canada’s newest bank, and a fully-owned subsidiary of Laurentian Bank of Canada.

To get a feel for what this means to mortgage consumers and brokers, we did some email Q&A with François Desjardins, President and CEO of B2B Trust. Here’s some of that dialogue…

One-on-One with Canada Guaranty's Andy Charles

Mortgage default insurer Canada Guaranty is a Canadian turnaround story, and it's starting to get mainstream attention. (This Globe & Mail story is one example.)

Last week, we had a good chat with its president and chief executive officer, Andy Charles. Andy spoke candidly about:

• Why lenders send business to Canada Guaranty
• The impact of CMHC's pullback from the bulk insurance market, and
• How investors should view Canada Guaranty compared to its competitors.

That interview follows here...

One-on-One with Scotiabank's David Stafford

As a man who oversees products and marketing at Scotiabank's real estate lending division, David Stafford is well-placed to monitor shifting market trends.

In the latest edition of CMT's One-on-One series, David graciously speaks with us about rate competition, the purpose of posted rates, and the Internet's impact on mortgage customers—among other things.

Of particular interest is David's explanation of the value that Scotiabank places in its relationship with mortgage planners. Scotiabank is the #1 lender in the broker channel, and a tremendous supporter of it. For the first time, we get a full grasp of why brokers are so vital to Scotiabank's business model.

Here is that interview...

One-on-One with Pacific Mortgage Group's Ron Swift

Pacific Mortgage Group (PMG) CEO, Ron Swift, oversees one of two operations in the mortgage industry whereby the same company owns both a brokerage and a CMHC-approved lender. (CIBC is the other, via its ownership of Mortgage Centre.)

As a result, Ron is uniquely positioned to see things from both a lender's perspective and a broker's standpoint. That, and his two decades of industry experience, made us eager to get his take on how he sees our industry evolving.

We asked Ron about topics ranging from consumer loyalty to lenders to the ability of non-bank lenders to compete in the conventional mortgage market.

More on BMO’s Low-Rate Mortgage

BMO launched its Low-Rate mortgage on March 2, 2010 and no other bank has routinely advertised rates as low on a 5-year term.

That makes this product a visible differentiator for the country’s fourth largest bank and, as a result, Frank Techar, BMO’s President and Chief Executive Officer, Personal and Commercial Banking Canada, says BMO continues to see strong demand for it.

“The reaction from Canadians to this mortgage has been fantastic,” he told CMT.

“Over the past two years, we have built a portfolio of $6 billion in low-rate mortgages...and we expect demand to remain strong."

One-on-One with MonCana Bank's James Clayton

With the official arrival of Canada’s newest bank, MonCana Bank of Canada, we went to President, James Clayton, for a rundown of how it will do business and what it'll offer consumers.

Clayton graciously sat down with CMT to explain the Calgary-based bank’s dedication to the brokerage industry, its product types and its future product plans. Clayton also offered up his thoughts on the importance of rates vs. a greater package.

One thing that caught our attention is that MonCana will offer 40-year amortizations on conventional mortgages, a rarity these days.

One-on-One with Xceed's Michael Jones

With Xceed Mortgage Corporation recently returning to the broker channel, it seemed like a good time to sit down with President and CEO Michael Jones and ask some questions.

During this audio one-on-one, Jones talks about the mortgages Xceed now offers, its return to the broker channel, and its growth strategy and roadmap for the future. He also covers Xceed's funding strategies and the status of its bank licence application. (Length: 7 min., 54 sec.)

Click to Play 

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Interview Transcript:  Xceed Mortgage - President, Michael Jones

Prior related story: Xceed Back in Broker Channel

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Rob McLister, CMT

Bozic on Rates, Strategy & Competition

The future of variable rate pricing; value versus rate; and competing to win.

These are topics that Merix Financial CEO Boris Bozic hit on in an informative webinar hosted Thursday by 180 Degrees Coaching’s Greg Williamson.

Boris’s position as head of a major non-bank lender keeps his finger on the pulse of broker performance, lender practices, capital markets and rate trends. He shared several candid perspectives and these were some of the important quotes and takeaways (our comments in italics):

Mortgage Rates

• “We’re going to be in an environment very shortly where we’ll be prime-plus on variable-rate mortgages,” Bozic said.
• “This is the new normal for the foreseeable future.”
• “The days of [prime – 0.60% or better] are behind us.”

1-on-1 With Geoff Parkin

We spoke recently with Geoff Parkin, President of the Mortgage Brokers Association of British Columbia. Geoff is a guy we have a lot of respect for because he’s been a lender, a broker, a brokerage owner, and an industry association head.

He’s also a CFA and CGA and has significant experience in treasury with Coast Capital, one of the nation’s largest credit unions. As a result, his understanding of mortgage market dynamics is second to few.

We threw a lot of questions at him about mortgage competition, rates, and mortgage disclosure. He answered very graciously and shared several meaningful insights.

Inside Mortgage Investment Corporations (MICs) – Part II

It’s a pleasure to present part two of CMT’s series on Mortgage Investment Companies (MICs).

Wayne Strandlund, founder and CEO of $250 million Fisgard Capital Corporation, is once again our guide through this unique investment class.

In our second chat with Wayne, he shares his thoughts on how MICs work, their investment potential and management fees, and how to improve the MIC structure going forward.

Here is the conclusion of that interview…

Interview—CAAMP’s Joe Pinheiro

There is always something changing in the mortgage brokerage industry. As Chairman of the Canadian Association of Accredited Mortgage Professionals (CAAMP), Joe Pinheiro is keenly aware of how change is shaping our business.

We had the pleasure of chatting recently with Joe about a variety of current industry topics.

Below is that interview…

The Bank Threat

Coast Capital is a credit union that makes banks look over their shoulder.

It’s one of the few financial institutions that “get it” (i.e. realize what customers want and deliver it without games).

As a result of management’s mortgage strategy in 2010, Coast Capital posted $6.2 billion in mortgage volume, a 10.7% jump from 2009. During the same period, membership surged by 29,000 to 454,000.

That is thanks in part to rates that are among the best in British Columbia, and flexible products like the popular You’re the Boss Mortgage.

For a deeper look at what makes Coast tick, we spoke with President/CEO Tracy Redies…

Inside Mortgage Investment Corporations (MICs)

Some believe Mortgage Investment Corporations (MICs) are one of the best undiscovered income-producing investments in Canada.

We wanted to investigate that a bit, so we took the opportunity to chat with one of the pioneers of the Canadian MIC industry, Wayne Strandlund.

Wayne is the founder and CEO of $250 million Fisgard Capital Corporation. Fisgard is one of Canada’s larger MICs. Over the past 16 years, Fisgard has placed over $50 million in mortgages each year, and paid dividends averaging 10.79% net per year to its investors.

Wayne is also the author of this very practical checklist of what to look for in a MIC before making an investment. See: Pic-A-Mic

Here’s part one of our two-part interview…

True North Mortgage’s Dan Eisner

In 2007, Dan Eisner appeared on Dragons' Den. His idea was to expand his well-branded, high-traffic retail mortgage outlets, and staff them with salaried mortgage advisors. The Dragons thought it was a great idea and made him an offer.

That deal didn’t end up working out (more on that) but Dan’s firm, Calgary-based True North Mortgage (TNM), has come a long way in a short time.

The company presently has four storefronts. On February 28, TNM will open its fifth and sixth locations in:

• Vancouver, BC: On 1055 West Georgia Street
• Halifax, NS: On 1949 Upper Water Street

This expansion is further validation of TNM’s model, which is a fair bit different than the industry norm. More on that below.

In speaking with Dan, it’s clear he’s a laser-focused entrepreneur. He’s got an Ivey MBA and an acute understanding of branding and service. In the interview that follows, Dan shares some atypical insights about TNM’s model and Canada’s mortgage industry as a whole.

On The Record With Andrew Moor

We recently chatted with Andrew Moor on a variety of issues that included the subprime market, competition for deposits, and prospects for mortgage brokers.

Andrew is President and CEO of Equitable Trust, a federally regulated lender in the alternative mortgage market since 1970. Prior to joining Equitable, Andrew was President and CEO of Invis Inc., one of Canada's largest mortgage brokerages, as well as Chairman of the Canadian Association of Accredited Mortgage Professionals (CAAMP).

Andrew’s diverse experience and industry prominence always make his viewpoints noteworthy.

More…  On The Record With Andrew Moor

Interest Rate Catalysts

We’ll likely see no further Bank of Canada rate hikes till spring, and probably no more US rate increases "before 2012..."

That summarizes Desjardins’ interest rate call from its latest Economic and Financial Outlook.

Yves St-Maurice, Desjardins’ Director and Deputy Chief Economist, elaborated on that view, and provided some excellent background on factors which shape the direction of Canadian interest rates.  If you’re a student of interest rate behaviour, this interview is worth a read.

See:  Yves St-Maurice Interview