Mobile Bank Specialists Good for Brokers?

Many of us have seen the two old men in TD’s mobile mortgage commercial. This ad is but one example of how banks are investing millions to promote their mobile mortgage specialists.

These salespeople, also known as “road reps,” are the banks’ not-so-secret weapon to capture mortgage market share.

Is it possible that the mobile mortgage model could eventually benefit the mortgage brokering industry?

With bank reps being mobile, consumers are slowly being conditioned to get their mortgages outside of branches. The numbers back this up. Just last month, for example, Deloitte said the volume of branch mortgage originations is “steadily decreasing.” More and more people seem to be thinking, “Why spend time fighting traffic to reach a branch when a mobile mortgage rep can come to me?”

In time, a large portion of consumers will take it a step further and do business with no face-to-face contact at all. And if people do that, it’s not a big stretch to do business online with a mortgage broker.

Naturally, it will still be quite a battle for both brokers and banks. Banks have enormous ad budgets and highly influential brands.

Brokers, on the other hand, can differentiate themselves by:

  • Promoting choice (i.e.  access to multiple lenders instead of just one)
  • Promoting the fact that they’re licensed and directly regulated by most provinces (Bank specialists are typically unlicensed because Federal regulations don’t require mortgage licenses for bank employees.)
  • Positioning their AMP designations as a reflection of ethics and credibility.

(As a side note, this might be an opportune time for CAAMP to really make a difference for its members with a very aggressive AMP public awareness campaign.)

Bank road reps are most certainly changing the way Canadians think about getting a mortgage. Who knows, brokers may be thanking the banks as time goes on.

Gina Monaco, CMT

  1. I did my whole transaction with my Mortgage Broker online, Phone, and Fax. To this day I still haven’t met them and they aren’t even in my province. The transaction was smooth as it could be, and there were no hassles trying to get to meetings or altering our day to day routine since everything was done using communication that is up to the discretion of the receiver. I’d recommend doing it that way to anyone.

  2. Does that ‘no face to face’ model not violate a lot of the know your client due diligence though? Seems like if you wanted to commit mortgage fraud, an out of province broker would be my first stop. Part of my company’s fraud prevention says that we have to meet EVERY client face to face, and for that reason, no out of province deals.
    As a side note, it would also seem to promote the rate supermarket type of broker, I’m not sure what other criteria you would use?
    Just my 2c

  3. If CAAMP was truly the broker’s association with lenders being non-voting associate members(as they should be)they very well could promote the advantages of using a broker.
    Why would someone without a license qualify for an AMP designation?
    Many of our clients originally come to us because we use the 5 yr discounted rate to qualify them vs the branch using a less than lowest rate possible. We can get them more money and this opens the door for us to new clients.
    That will be the big 5’s lobbyists next campaign. All terms must qualify on BoC posted not the broker rate.
    Of course with no opposition from CAAMP…
    “just sayin”

  4. Lenders expect brokers/agents to have a face to face with client at a very least. Not to mention that ID should be properly verified. If problems occur before or after funding, unfortunately the broker/agent does not look good in such event. By seeing a customer and taking all the appropriate steps to verify information, and have a proper wallet check, we all benefit. Relationships matter and it hurts the relationship when losses take place, especially if what is expected to be done is being ignored.

  5. Choice is the only thing you have going for you. But many clients are not interested in the various nuances of choice and would rather stick to something they trust.
    How does being licensed differentiate brokers from bank reps? Any yahoo with a few hundred dollars and half a brain can get a license. How does that make brokers better?
    Provincial regulation is pretty lax compared to the compliance required by a bank. As a bank rep, I could never get away with the kind of questionable deals offered up by some brokers.
    I can get AMP designation whenever I want, but I don’t need it. I am not the one with the “used car salesman” reputation in the mortgage lending industry.

  6. TMG
    I must say some rather harsh comments and you show a rather lack of respect for the industry(broker that is).
    I am looking forward in reading some of the replies to your post

  7. Hi Blair and Ace:
    Thanks for the posts. You both bring up a very valid question.
    ID confirmation is absolutely essential in our business. Federal and provincial regulations require that the lender, broker, or their agent verify ID on all deals.
    This hasn’t posed a serious problem, however. Lenders like ING and PCF, for example, have been greatly successful at keeping mortgage fraud minimized, despite never seeing hundreds of thousands of clients face-to-face.
    Fortunately, there are plenty of good solutions for ID verification on Internet-sourced applications including, but not limited to, client visits to local affiliated broker offices, ID validation at the lawyer’s office, validation by title companies, and/or advanced ID verification technology from companies like Equifax.
    Speaking just for ourselves, we do a significant volume of business online and rarely meet our clients. We have never had a deal close that was fraudulent—knock on wood. In many cases we use companies like FCT to meet with out-of-province clients for IDV, in addition to the lawyer meeting with them. In addition, Equifax has a fantastic product to confirm ID electronically using data only the client would know (like they use when you request your credit report online).
    Fraud is no joke, and almost every broker takes it extremely seriously. But you’ll see that the technology will keep up with the small percentage of con artists out there. This will keep the few bad apples from making mortgages inconvenient for the Internet generation.

  8. “Why would someone without a licence qualify for an AMP designation”
    In the Province of B.C. where I work as an unlicenced mortgage advisor, you must have sucessfully completed the Mortgage Brokerage in B.C. course in order to add AMP after your name.

  9. Do you know if brokerages are outsourcing any non face-2-face work to low cost countries? That seems to be a rapidly growing trend in many industries.

  10. Show me a homeowner who doesn’t want to compare terms on a $100,000-plus commitment and I’ll show you someone who is either desperate for a mortgage or way too trusting of their bank. I’m glad you concede choice as a broker benefit because choice saves people money, plain and simple. There is no hope of getting choice from a bank.
    Skill is no less important. Since you’re making generalizations TMG, try this one on for size. Walk into 10 banks and see how many “mortgage specialists” you meet who specializes in mortgages. I’m not talking about a mutual fund salesman who moonlights in mortgages either. Then see how many of those have over three years experience. I think you’ll be surprised how many have recently “moved up” from the teller counter with one week of mortgage training.
    Bankers who claim to be holier than thou are the epitome of hypocrisy. I’ve seen banks fudge property valuations like you wouldn’t believe. I’ve also seen them look the other way on “second homes” that are really rentals. Your bank compliance isn’t worth the cobwebbed policy manuals it’s written on.

  11. You may not be the one with the used car salesman reputation but you certainly seem bitter and overzealous. Have you thought about looking into “that”
    Obviouly you know nothing about this industry. Or you would not so carelessly and callously spill your words out like that.
    The banks are the ones who brought discredit on this industry as well with their unscrupoulous unethical lending behaviour. Different lending criteria for brokers than their reps. Not following their own guidelines.
    It all boils down to the investors who let the banks use their money and don’t care how they make profits.
    Like I said you don’t know what you are talkng about.

  12. Incorrect – To be able to use AMP after your name you must have completed advanced CAAMP courses and continue with advanced training each year to maintain one’s AMP designation.

  13. I sense more than a hint of jealously here.
    I personally have been courted by TDCT and RBC to join their “mortgage specialist” teams.
    Mortgage brokers by law in BC have a fiduciary duty towards their clients…bank reps do not. Bank reps are looking out for their banks best interest – not necessarily the clients very best interest. Here is the difference!
    Smart mortgage consumers use mortgage brokers.

  14. I can’t resist weighing in on this one. I’m from the banking side and I think TMG was a little harsh on this one. There is plenty of ineptitude on both sides of this debate whether there are licenses in place or not. Anybody with “half a brain” and no money can get hired by a bank. Hopefully the best and brightest will float to the top.
    And yes, bank reps are employed to make the banks money, just as brokers are working to make their brokerage firms money and to maximize their own commissions.
    The reputable reps and brokers are also concerned about their customer’s best interests in order to develop a long term relationship.
    As far a quality of service, I have seen some deals from brokers that have so many holes in them that it’s laughable. Mostly I’ve seen deals that are complete, detailed, and well supported that I can approve in 5 minutes.

  15. TMG,
    I don’t know about others but I for one resent your cowardly attack against our industry. I would put my reputation up against yours 365 days a year. As a mortgage agent there is no bank to feed me business. If I don’t service my clients with professionalism and integrity I don’t survive. In my opinion your accusation about reputation is utterly groundless and should be deleted.

  16. We found our broker in Google and must admit I was leery at first. She turned out to be a really big help throughout our mortgage process and we got what seemed to be the best deal at the time. I don’t think I’d go through the hassle again of taking time out of my day and going into a bank, but that’s just me.

  17. As a mortgagor (the guy the banks and you brokers are trying to court), I’d like to offer my 2 cents.
    Unfortunately, I’ve had less than stellar experiences with mortgage brokers. Too much promising, not enough delivering.
    My own strategy is to fix my credit then go to a bank. Sorry guys, I’ve lost my faith in brokers long ago…

  18. Hi Bobby,
    I’m always disappointed when I hear that people weren’t happy with the agent they selected. Unfortunately, like any business, your service experience depends heavily on the mortgage professional you choose. Just as you’ll find sub-par bank reps, you’ll find some less than stellar brokers out there. It would be nice if there were a rating system of some sort, but alas, folks need to find someone they can trust via referral or by chance. That said, there are plenty of exceptional brokers and bank reps alike, and there are even stories on this site about how to best select them.

  19. I work for a Big Bank as a Mortgage Specialist. I have over 10 yrs experience as a lender – Residential & commercial. I don’t see what the bickering is about. Let’s just admit that in all divisions there is people who know how to do their job well and ones who dont have a clue.
    I have my own clients for life. But I would also add as much of the “OH BROKERS ARE SO GREAT” comments I read on this website, I just want to say brokers from INVIS, TMG, and Centum call me on a weekly basis for all kinds of info & business & questions about how the banks are running their business and how they can run theirs better. And for your info I hold a BBA & PFP. No need for an AMP, Thanks.

  20. Hi Mtg Specialist,
    Thanks for the post. Just as there are many exceptional professionals in the broker channel, there are many absolutely fantastic bank reps out there. I know because we refer business to some of them.
    The two channels simply have totally different business philosophies. Moreover, feedback on these stories always seems to boil down to a “I’m better than you” exchange.
    Both sides need to take the high road, debate with facts, and leave emotion and insults at the door. We must remember, customers read these forums and form opinions based on how nice we play together.

  21. I also think it’s smart to develope relationships with the road reps, since they cannot always do the deal it’s nice for them to have a broker to send their declines to. I always position it as I’m borrowing your client for 1-3 years, we’ll get their credit or other issues cleaned up and then you can take them back at renewal. It’s a win/win!

  22. Taz, Very wise. You’re totally right and occasionally bank’s do have the best product/guidelines for a particular client. We just sent a deal to RBC for a 1-year rate hold, for example, because no one else came close.

  23. TMG
    That statement about reputation is uncalled for and your motives are dubious to say the least.
    You are sadly uninformed about broker licensing. It takes most individuals six months or more to meet the educational requirements in our province and receive a sub-brokers license. Meanwhile one can walk into a bank and be hired with no license and just a grade 12 education. There is no requirement that bank employees meet any type of government mortgage proficiency standard.
    Bank compliance has almost nothing to do with acting as a fiduciary for a mortgage customer. Our provincial mortgage broker regulations protect customers on a high level. The most important point is that mortgage brokers have an obligation to make suitable recommendations. We are able to use multiple lenders to meet that responsibility. At a bank, customers are only sold that bank’s mortgages.
    Bank salespeople are often well aware that better products exist at other lenders. That doesn’t stop them from selling the only product at their disposal, which is their bank’s. It also doesn’t stop them from quoting 4.04% on a 5 year fixed (today’s advertised special at TD for example) when competitor’s rates are 3.54% or below. I ask you TMG. Who is the “used car salesman” in that case?

  24. Dear TMG,
    Unlike you, I absolutely refuse to bad mouth so I will not insult you or your profession like you did to me/mine.
    What I will say is this. You seam to be a little misinformed on what brokers do. We are not “the used car salesman” in the mortgage industry, we have to work mainly by referral and work very hard for each and every referral we get. If we treat clients with disrespect or don’t act in the best interest i don’t think I would have too many clients referring me to their friends & family now would I?
    Second, the people above me who spoke about regulation were absolutely correct. In the banking industry there is no regulatory requirement (to my knowledge) to become a mortgage specialist. In the broker industry we have to take a specialised course and pass a licensing exam and there is still no guarantee that FSCO will approve your license application. To my knowledge there is actually more red tape and regulation that one must go through to be a mortgage broker than sell mortgages in a bank.

  25. As a regional lender, I value the road reps’ business (which comes to me directly or indirectly via their B specialists or alternate channels) over deals coming from a national or out-of-town brokerage because they know the area: they’re working in the local market, have regional knowledge of properties, employers, appraisers, and lawyers, and they have more a specific understanding of lender and insurer guidelines in that region. This knowledge enables them to manage borrower expectations.
    I also enjoy the more direct access we get to the branch, thanks to the road reps. A first mortgage rating and statement, a postponement approval, or account statements seem much easier to come by when the deal comes from the road reps.
    Finally, I appreciate the quality of business they bring to the table. Very often, the road reps are the first people (after the branch loan officer) to touch a file. This means that the beacon is better due to fewer inquiries–and because the deal is faster to market. Low beacons–due to current R3’s resulting from a long approvals process with other insurers or lenders that resulted in an eventual decline–seem to be more common through the broker channel.
    And due perhaps to the banks’ “reputational” concerns, I tend to see less default on mortgages placed by the road reps, versus loans originated by 1-800- or online brokerages.
    The other thing I like is that the bank road reps cannot sell my commitment (my underwriting and conditions, not to mention rate) to a private lender. This means their funding ratios are better and it’s more efficient for our company to support them. It`s also to their advantage (when getting a customer to sign on) that they are with the bank: it lends credibility when they are dealing with borrowers who have that “used car salesman” perception of brokers.
    Churn continues to be a problem for the banks, though: when a road rep leaves or switches to brokering, it slows the funnel and branches can lose confidence in the system.

  26. In response to AL:
    I wish I knew which lender you were with, if you really are one. I would encourage every broker to stop sending you deals.
    Mortgages are not a kindergarten project but they are also not quantum physics. Give professional brokers a little credit. I’ve been doing this for a long time. Knowing the lending area is straightforward if you do your research and an appraisal is being done. I can do a Google drive-by, talk to an appraiser and realtor and know the area as well as I need to for lending purposes. Lender and insurer guidelines don’t vary much by region. If we have a question we call CMHC and get all the local background we need in five minutes.
    Our office does $110 million a year and 1/4 of our business is out of province. The quality of our clients is as good as any bank specialist. 83% of our clients have Beacons over 700 and 91% of our clients get approvals in 24 hours or less, with ONE credit hit. We’ve had two clients (count them, two) default in our last 1320 closings. I meet less than 10% of my clients. Our funding ratio is 68.5%.
    We are not the only brokers who take pride in their integrity, efficiency and service. For you to project your bias and make a generalization about the broker industry shows ignorance and frankly, a lack of class.

  27. You say -> “I tend to see less default on mortgages placed by the road reps, versus loans originated by 1-800- or online brokerages”
    What are your sample sizes used in making that determination? 20 road reps and 2 online brokers?
    It sounds like you don’t attract the best brokers, probably because of your attitude.

  28. Why are people making such a big deal out of the AMP designation? It’s useless. At the end of the day we’re in sales.
    My boss is one of the best mortgage brokers in Canada and he has no designations at all, not from CAAMP or IMBA. After more than 20 years in the business he’s got business coming out of his arse! People didn’t come to him because he flashed an AMP or CPMA/B. Those didn’t exist back in the days. They came to him because he knows what he’s doing and gets the job done.
    Designations in our business count for **** because the educational requirements to become a broker are easy. Make it hard to obtain as a CFP or CGA and watch the number of yearly applicants to become brokers dive. And why not make the educational requirements harder? You’re advising people who are about to INVEST a couple of hundred thousands if not millions in the theoretical value of a given property. A mortgage is not just a loan, it’s an investment (and it can be used for investing in other assets as well).
    Very good thinking, Taz! Having an arrangement with a bank rep to send you their turn down deals is a great way to build up business. Many banks have restrictions that forbid the practice and some institutions (TD, for example) would send the deal to TDFS who specialize in more difficult cases.

  29. Totally agree with you, Rob. All this bickering and back and forth insults get both sides nowhere.
    Bank reps are limited with the kind of mortgages they can do. Brokers have a lot more flexibility. Bank reps enjoy the backing of great brand recognition while a lot of brokers don’t. It doesn’t mean they’re any less competent.
    Instead of arguing and throwing insults at one another let’s put the b.s. aside and think how we can help each other make some mullah because ultimately that’s why we’re all doing this.

  30. Easy is relative. It took me 4 months to get my broker license. My friend got hired as a bank mortgage specialist with just 3 days training.

  31. James and Doubt It:
    Thanks for the feedback. Without sarcasm or prejudice, I will take it fairly and apply it in a considered fashion to my everyday operations.
    I neglected to make it very clear that my comments applied to local road reps vs. online or 1-800 brokerages, only. The local mortgage brokers that we deal with are excellent, consistent, and diligent and account for 90% of our business. I hope this clarification helps to clear up my position on the mortgage brokers vs. road reps debate.

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