Abode Post Mortem

Abode-Mortgage It’s been a few weeks since Abode Mortgage announced it was shutting the doors.

Ideally we could render a definitive cause of death, but unfortunately not all the details have emerged.  What we can say for certain, is what we saw when dealing with Abode.

As mortgage planners, we sometimes wondered how a company like Abode could thrive.  It was somewhat of a “dime a dozen” lender.  Abode’s products were run-of-the-mill insured mortgages, like those offered by dozens of other lenders.

Yes, Abode had amazing service (truly), but it’s easy to have great service when you’re not overflowing with deals.

Perhaps Abode would have had more business if it weren’t for such mediocre rates.  Abode called its rates “competitive” but they were anything but.  When you’re 20+ basis points out of the market, your rates are usually only competitive in the eyes of customers that don’t know better.

Abode also told brokers that its:

  • Service was “first rate”
  • Compensation was “attractive”
  • Underwriters were “responsive”
  • Model was not to solicit a broker’s clients
  • Etc.

But the truth is, the above are nice for brokers, but not very compelling to customers.  And, since customers drive this business, a successful lender really does need noteworthy products or noteworthy rates—preferably both.

  1. Rob, just curious why you did not bestow your thoughts before Abode went under, it’s easy to express it like it is when the game is over, expressing while the game is in play gives more credibility.

  2. Hi Charles,
    If you peruse CMT’s past posts you will find comments about how certain non-bank lenders are uncompetitive.
    If we choose not to single out a particular lender, at a particular time, it is for good reason.
    If you are ever in a position where you must write about lenders that you rely on–or have a relationship with–you will understand.
    All the best,
    Rob

  3. CM: If we choose not to single out a particular lender, at a particular time, it is for good reason.
    If you are ever in a position where you must write about lenders that you rely on–or have a relationship with–you will understand.
    What is the good reason?
    So you will only write about the bad lenders after they do not pay broker’s finders fees and are out of business?
    [Charles, Where applicable, we would kindly ask that you please stick to using one name when posting. 14 different names have been used to post comments from your IP address. Thank you, CMT]

  4. Charles,
    We report on newsworthy facts when we are aware of their existence and are sure of them.
    We report on our opinions when we otherwise have the time and deem it appropriate. The timing of our opinions may vary for a whole host of reasons, including but not limited to, the newsworthiness of a topic, the availability of story ideas, and our own time constraints.
    If you have read CMT for any appreciable amount of time you will know that we report objectively, and honestly, to the greatest extent we can, while still respecting our relationships with our lenders. We walk a very fine line sometimes and it can get complicated, which is probably why there aren’t a lot of similar websites out there.
    Rob
    P.S. For the record, we do not have any information to suggest Abode was a “bad” lender as you insinuate. We merely did not find their business model attractive. That is our personal opinion only. I know absolutely nothing about their broker fee situation other than what posters on this site have speculated on.

  5. Rates were quite uncompetitive. It’s strange because Carlo Parise was just at our office a few weeks prior to them going under. Seems like a very nice guy. I hope to work with him in the future.

  6. CMT has been a daily read for me since last fall. Since then I have found your opinions (Melanie and Rob) to be a valuable resource. Apart from the occasional agitators like Charles, the comments of readers are typically a fascinating repository of information in their own way. I appreciate the material you provide and merely wanted to convey that to you both.
    Best regards from wintery Edmonton!
    David

  7. Yes, Rob, you are doing valuable work in giving us insight of many different things, I understood National Bank’s all in one only after your blog and just love the product and offered it to many of my clients.
    wow, looks like lot of Edmonton folks read the blog, yes David, we were 2nd highest cold on earth yesterday, looking forward to -2 on Wednesday.

  8. Our office had sent a few millions there way which were closed but our agents never got paid on them. This is very discouraging, especially to our new brokers that really needs their pay checks while they are just starting. It`ll be a Christmas gift they`ll never forget. Anyone heard if there`s any chances on those finder fees getting paid sometimes or should they just forget it?

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