Scotia Mortgage Authority (SMA) is the broker division of Scotiabank, and it currently originates more than 50% of Scotiabank’s residential mortgages.
Last week, SMA became the top-volume lender in the broker channel, based on Davis + Henderson’s first-half 2010 origination statistics. It’s the first time SMA has achieved this ranking on a year-to-date basis.
The company is obviously doing something pretty well to attract the business it has. To find out what, we connected with John Webster, President/CEO, Scotia Mortgage Authority. John is an interesting individual to talk with because he truly knows the business inside out. He was kind enough to share his perspectives here:
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Last modified: April 26, 2014
Interesting interview. Scotiabank must have pushed Firstline out of first place by providing much better service. I say that because Scotiabank’s rates are almost always worse than Firstline’s.
Good rates don’t mean a thing when you’ve got three days to lift conditions and your underwriter won’t reply to voicemails or emails. At least with Scotia the BRMs have a stake in pushing deals through. Too many other underwriters put in their 9 to 5 and make no extra effort.
Brokers and Scotia’s internal sales force might be on the same playing field when originating the mortgage but renewal is another matter. Scotia will do whatever it can to retain the customer at renewal. As far as I know, they don’t involve the broker at all and will undercut the broker to keep the client and avoid paying finders fees again.
Any client who receives a bank renewal in the mail and decides, after being presented with a usually insulting rate, to visit the branch rather than their planner obviously was not terribly impressed with the service they received from the afore mentioned planner. Scotia is no different than most other lenders that try and more often than not fail to retain their broker generated mortgage clients without having to pay another finder`s fee.
The term “finders fee” implies that a fee is paid to us for finding someone. Scotia pays us a finders fee (one time pay) for finding the client (over 1% at the top two tiers, volume bonus included). They do not engage in “trailer fees”, in turn they pay a one-time “finders fee” at closing. So expecting them to contact us at renewal time, suggest we send them back the client for another “finders fee” is unrealistic…
in the article John said:
On how SMA can operate side-by-side with Scotia’s own branches:
We’ve tried hard to make sure there’s a level playing field across the institution. There is no advantage to how the pricing is set, whether you’re a broker or part of Scotia’s sales force. Regardless of how the deal is originated, we want to make sure that every customer is treated equally.
One thing that has effected my business is a Scotia Branch will do a rental property in a company name but SMA does not let the brokers do this
Scotia also limits the STEP LOC to 50% LTV for stated income mortgages originated by brokers. I’ve heard that branches don’t have this restriction. This is a major inequity if you deal with a lot of self-employed clients, like we do.
Several lenders pay brokers on renewals. What is unrealistic is for a bank to not pay on renewal, try to cut the broker out of the relationship, and then expect a broker to push clients back to that bank.
I’m very surprised as a consumer that Scotiabank is the volume leader through the broker channel. Much better rates, service, and products are available through other lenders. Scotiabank reports their mortgages to the credit bureau and if preserving your credit score is important then I’d stay away from them. Their STEP mortgage is a huge beacon buster if you’re using the LOC for investments. Have they sweetened the commission structure to entice Brokers who wouldn’t normally refer business to Scotia?