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Street-CapitalStreet Capital is now the latest lender to launch a trailer fee program for mortgage brokers.

One can’t help but think that trailers are becoming a trend. Street joins Merix Financial, Macquarie Financial, and AGF Trust who each have renewal compensation models of their own.

That said, none of the major banks offer trailers and sources speculate it may be a while before any of them do.

Trailers compensate brokers when a client renews with the same lender. (Here’s a prior story on Trailer Fees)

Below are key details on how Street’s new “Loyalty Program” will work:

  • Trailers will initially be available only to status brokers
  • Street’s trailer model will have its own separate rate sheet
  • For now, Street is keeping their existing broker program intact (i.e. the model without trailers)
  • On 5-year fixed renewals, for example, status brokers will receive the bulk of their normal first-term compensation. Those trailers are paid in equal installments over five years.

Paul-Grewal-Street-CapitalStreet President, Paul Grewal, says roughly 90% of existing customers who refinance or renew come back to Street. That is based on Street’s 1-2 year term retention history since its prime lending program launched in 2008. For longer terms, renewal rates will likely track industry averages. Industry-wide retention rates are 83% as per CAAMP’s latest stats.

“This is an investment by Street Capital in the broker channel,” says Grewal. “We recognize that as the market gets slower, brokers will look at their existing portfolio more closely. We want to retain that client and build enterprise value for our brokers.”

“We’re looking at this as market-share opportunity on new originations,” Grewal adds. “We want brokers to think twice about doing business with a bank.”

The new Street Capital Loyalty Program officially starts on January 31.


Rob McLister, CMT

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