CMT: Bryan, Thanks for the time. You spent 22 years at a lender (MCAP). How do you plan to leverage that experience in your new role at a brokerage firm?
Bryan: In my previous role as Senior VP at MCAP, I was fortunate to learn many aspects of the mortgage banking business. I plan to apply what I have been taught during my years in mortgage banking, and use that to create new opportunities for Invis / Mortgage Intelligence.
CMT: One theme in the industry these days is forging partnerships with lenders. How do you view the lender/broker relationship?
Bryan: Simply stated, lenders are our best friends. We are working to foster more communication and collaboration by working together on new products and programs. Lenders have been eager to work with us on many aspects of the business in order to make both sides more successful. A great example is our private label mortgage offering.
CMT: How do you view lender’s current expectations of brokers?
Bryan: What lenders are saying is essentially this: send a deal that will fund, keep it with the lender for the term of the mortgage commitment, and complete files as soon as possible. These are not unreasonable requests. I expect, going into 2010, that brokers and lenders will increasingly work together to ensure that their relationship is efficient and profitable for both parties.
CMT: Lenders are talking a lot about the importance of efficiency and performance metrics. Can you explain for folks how broker efficiency affects lender profit margins?
Bryan: Margins are in many ways a function of spreads on a given day, week or month. Certain lenders have different costs of funds, so efficiency might be their primary business objective to control costs and increase profitability. Ideally, good technology that allows auto adjudication and performance reporting would allow lenders to manage the costs associated with efficiency much better. A few lenders have that functionality and Canadian Mortgage Trends has interviewed them, yet those lenders do not seem to bring up efficiency issues in any of your discussions.
Don’t get me wrong, if a broker is getting three commitments from three lenders, this results in a bad closing ratio for the broker. No technology will solve that. With that in mind, it is that sort of behaviour that lenders are most worried about. No model can make money doing work three times to fund one mortgage.
CMT: Banks were extremely aggressive in 2009. Do you anticipate banks becoming even more competitive as time goes on in an effort to take back share from brokers?
Bryan: Yes. I believe the banks are going to be more competitive–but that translates to increased support for the broker channel. It’s important to note that consumers are driving demand for brokers. For banks to increase market share, they will accept the role of the broker and continue to harvest the opportunities that brokers provide. Lenders will want access to as many of these consumers as possible. That means all channels will be supported in my opinion.
CMT: What can brokers do to gain share in their own right?
Bryan: The past two years have been tough, but sales people are survivors. They learn how to adapt. They find opportunities in places they might not have looked before. This is what I think happened in 2008 and most of 2009. Brokers found new sources of business which, in truth, is the old source of business – namely, their database.
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