Interview: Gord Dahlen of Invis

Gord-Dahlen-Invis Canada’s mortgage industry is evolving much faster than many imagined it would. One person who’s had a bird’s-eye view of this evolution is Gord Dahlen.  Gord is a seasoned industry executive and EVP of Invis, Canada’s biggest mortgage broker by volume.

We had an interesting chat with Gord recently and he offered some rather candid insights into the mortgage brokerage business. Gord was kind enough to share those perspectives here.

Interview Link

  1. Good interview. I commend Gord for being so upfront.
    He’s right that lenders should probably try harder to honour the fiduciary obligation brokers have to their clients. Lender programs should never encourage any actions that are not in clients’ best interests.

  2. There should be a disclaimer that the company you work for Mortgage Architects was founded via a lot of former Mortgage Intelligence agents. Also points programs have been around since the 90’s, not sure why this is the new “in thing” to talk about, if you receive money for placing a deal you are in conflict regardless of the amount or where the deal is sent.

  3. Deon: Thanks for the comment.
    Kudos: Thanks you as well, although I’m not sure how MA’s founding is relevant to this particular story.
    Regarding points programs, there is never a bad time to talk about compensation if it impacts the consumer. I would disagree that the mere fact that planners are compensated creates conflicts–any more so than financial planner, lawyer, consultant, or other advice-based professions entail conflicts. At the end of the day, individual integrity and influences on that integrity are what determine bias.
    Cheers,
    Rob

  4. Lender loyalty programs are the current “elephant in the room” when it comes to conflict of interest and disclosure issues with borrowers.
    The complex nature of the relationship between lenders and brokers should never disguise the fact that there is substantial differential advantage to a broker’s financial interests in placing a mortgage with one lender versus another, especially in these days of increasing lender pressure on brokers to send all of their business to one lender to maximize both the closing ratios and the bonus payments from the lenders.
    While ethical brokers make every effort to ensure that their clients obtain the lowest available rates on every deal along with the best terms and conditions, the nature of lender/broker relationships and human nature mean that most brokers send most institutional deals to a handful of lenders from whom they obtain the best compensation for the type of deal submitted.
    The distinctions between lenders are often subtle, and product mixes mean that what is perfect for one client is often less so for another. This is balanced by the fact that the large lenders have a diversity of products which allow a broker to tailor make solutions within the product mix of their favorite (best paying) lender.
    In the future, disclosure rules will likely evolve that require more detailed disclosure of lender/broker relationships and compensation agreements.
    Industry regulation may also evolve to put specific limits on incentives paid to brokers that encourage less than 100% commitment to the client’s best interests.

  5. “If “Lender A” has the lowest rate, do you understand the implications of that?”
    My answer to that would be that most people don’t. People put so much emphasis on rates that they forget the fine print of their mortgage agreement. I can’t tell you how many people I’ve talked to that had no idea they were subject to IRD penalties. Good advice always matters more than a few basis points.

  6. Gord makes a fair point about lack of innovation in the marketplace. It’s hard to remember the last really unique product. HSBC had one not too long ago. That’s about it.

  7. Be nice if someone came out with a low-fee open self-insured BFS interest-only mortgage to 90% LTV. That would be handy for bridging situations. Wells Fargo had one I think but their rates and 4% fee were too high….

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