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Lender Market Share Gets Interesting

market-share-mortgageScotiabank is back on top as the #1 broker lender by volume.

It finished the 2nd quarter with a healthy 3.1 percentage point margin on second-place finisher, FirstLine.

That’s according to a source quoting the latest Q2 D+H lender share rankings.

Despite Scotia’s reascendance to the market share throne, its 17.7% slice of the pie is down from 20.7% in Q2 2010.

Overall, broker channel volume fell 14.8% year-over-year, which largely reflects economic and general market trends.

There were some notable stories in this quarter’s rankings. Here’s a run-through of the key players:

FirstLine:  FirstLine slipped into second place, shedding over three percentage points of market share. That’ll surprise few brokers given that:

A)  FirstLine has priced itself out of the variable rate market;

B)  Variable mortgages reportedly comprised over 60% of its volume at one point; and,

C)  Everyone today wants a variable! (Well, not “everyone,” but many more than normal, it seems.)

TD:  A big surprise is TD’s move up to third place from fourth last quarter. TD’s share rose three percentage points in the last 12 months. Many (us included) figured the odds were good that TD would slip after its controversial move to register all of its mortgages as collateral charges (which forces customers to pay higher switching costs when changing lenders). To TD’s credit, it has successfully:

1) Positioned collateral charges as beneficial—despite the customer not having a choice; and,

2) Motivated its status brokers to submit more deals.

First National:  First National dropped to fourth place but it did gain a half point of market share (compared to Q1).

MCAP:  MCAP stayed put at #5, also growing its share by a half point.

Street Capital:  Street Capital maintained its sixth spot, improving share by 9/10ths of a percentage point. Street has rarely been a rate leader but it has been widening its product options. We also hear repeatedly from brokers that Street’s underwriters work hard to get atypical deals done.

National Bank:  National Bank of Canada (NBC) captured 7/10ths of a percentage point in share and held its #7 slot. That comes after a big leap from 10th position in the prior quarter. National posted the largest surge in volume of any major bank last quarter, up 56%. It’s now knocking on Street Capital’s door for the #6 spot. NBC’s status broker rates currently lead all broker-channel banks. Its products (especially the All-in-One and Made to Measure mortgage) are just as good. Some would prefer bigger lump-sum prepayment privileges (i.e., more than 10%), but you can’t have everything.

ING Direct: ING advanced one position to #8. It has made several underwriting/product improvements in the last year. It also features a strong feature-set (i.e., 25/25 prepayments, no-haggle rates on conversions, online access, “fair” IRD penalties, across-the-board 120-day holds, etc.).The only complaint we ever hear about ING, and it’s a big one, is that its standard rates are above-market.  Stay tuned for ING’s new HELOC, which could be a big winner if it’s automatically readvanceable.

Macquarie Financial: #9. Exiting the channel. Buh-bye.

Merix Financial: Merix rounds out the top 10 with a 91% volume gain over Q1. It’s been strongly competitive on 5-year rates as of late, and may pick up share next quarter with Macquarie hitting the highway.


Other movers…

Equitable Trust:  Soared from 18th to 13th place, with a 136% volume gain year-over-year. “B” lending is back with a vengence.

Coast Capital:  Coast is one of the most-popular credit unions in the country. It leaped from 17th to 14th year-over-year, and it only does BC deals! It may see slower growth in Q3, however, as several lenders have been beating it on rate. Coast had a good run there, leading the Vancouver rate market for months.

AGF Trust:  While a tiny player overall (with just 0.3% market share), AGF’s volume exploded 310% in the last year. That’s due largely to its partnership with Verico.

Rob McLister, CMT