CIBC’s Two Broker Exceptions

CIBC-BankWith the closure of FirstLine Mortgages, CIBC has dramatically cut back on mortgage distribution through brokers.

But CIBC is still dealing with brokers. It does so through two wholly owned broker subsidiaries: Home Loans Canada (HLC) and Mortgage Centre Canada (MCC).

So far, CIBC has not publicly announced changes to either of these companies, despite its clear preference to distribute mortgages through its internal sales force. (See: CIBC…FirstLine Sale)

HLCIn the case of HLC, it provides CIBC an important outsourcing option when a mortgage client doesn’t “fit the box” for a CIBC-branded mortgage.

HLC receives mortgage applications from all levels of CIBC including referrals from branches, Mortgage Advisors (road reps), Imperial Service Advisors, online channels, and call centres. CIBC Mortgage Advisors are even compensated for referring deals to HLC. From what we understand, all they have to do is flip a client’s CIBC application to HLC internally.

This one-stop service option gives CIBC Mortgage Advisors an edge over other banks’ sales forces, who don’t have a full-service internal brokerage to refer to.

(RBC has a somewhat similar model with its Alternative Mortgage Solutions [AMS] operation, which routes deals to a variety of non-bank lenders when RBC can’t approve a client for credit or pricing reasons.)

Mortgage-Centre-Mortgage-BrokersIn the case of Mortgage Centre, from the information we have, it appears that MCC was offered for sale earlier this year in connection with the FirstLine sale. But we haven’t heard any indication that it’s on the block currently, despite numerous overtures from interested competitors.

For now, it is business as usual and CIBC says that MCC brokers will continue to be able to sell CIBC branded mortgages after the July 31 FirstLine closing. As long as MCC is part of CIBC, that’s not expected to change.

According to MCC President Eddy Cocciollo, “Starting August 1st, MCC is the only broker offering three of Canada’s (five major) banks. Everyone else can only offer two.”

MCC has other initiatives on the go as well, including:

  • Full-scale rollout of an unsecured CIBC line of credit product
  • Launching of the MCC Client Communicator (automated client communications emails)
  • Launching of MCC Client Connect (a new CRM program)
  • A new website in September
  • New status clubs for recognition of volume achievements
  • A January 14-17, 2013 National Conference in Riviera Maya, Mexico


Rob McLister, CMT

  1. Just wondering, do Mortgage Centre brokers and CIBC mortgage specialists have access to the same CIBC mortgage rates?

  2. If CIBC roadies are being paid for referring B deal to HLC should they not have to be licensed especially in Ontario? If it is only considered a soft referral then technically the referral fee back to the CIBC rep would be subject to HST. Maybe you could inquire with CCRA as to the rule??

  3. so what does this mean to us firstline folks who will be losing our nice rates at firstline when our current contracts run out and we have to look around for a new mortgage broker

  4. Not to worry, I am sure that CIBC could always make available and forward your contact info at renewal to the closest MCC agent/Branch to service the renewals if it turns out their internal retention dept does not have much success…
    Love those so called Chinese walls and before anyone gets started,’No One’ has broken any PIPEDA rules as FLM clients have already signed the consent to share information to CIBC and their subsiduaries.

  5. That was mentioned in the article.
    My question is, do RBC mortgage specialists get paid when an AMS broker does the deal for their client?

  6. can someone answer me this?
    why was cibc allowed to buy out one of their biggest competitors in the mortgage game (and other banks) and then be able to just deep six the company.
    cibc agents are offering rates that come no where near what firstline was giving. not even close. firstline was a fab company with fab rates
    I guess in canada we dont have competition rules in the mortgage game. strange since we have so many other rules..dont we have a competition bureau?

  7. A good mortgage agent will be able to find you the best rate for your situation when your renewal time rolls around. I used First Line for most of my clients including myself but lately the rates they were offering were not competitive.

  8. One question – I had renewed my mortgage in April 2011, variable, at a discount of 3/4 of a percent below prime.
    I get that I won’t have to re-qualify when renewal comes up in 2016 for me, but… When I originally qualified for my mortgage in 2008, I qualified for 40 year ammortization.
    I have been paying double payments all along and won’t need the 40 year amm, but have always liked that I have it, as a “just in case”.
    When I have to renew outside of firstline in 2016, and if I choose to go with CIBC for renewal…will the 40 year come with? With firstline, I was told it would stay in place even with changes in the mortgages rules overall. Will this still be the case with CIBC?

  9. In reply to Mari
    My understanding it that you can transfer your mortgage as is and keep your current amortization.
    However if you change the amount of your mortgage or port the mortgage to another property than you will need to qualify under the new amortization rules.

  10. Yes, your 40 year am will go with you even if you switch to another lender as long as you don’t refinance and add funds to the mortgage. This also applies to those people with 35 year amortizations.

  11. Yes mortgage specialists are paid for deals they send to AMS. The RBC and CIBC models are very similar

  12. By 2016 you will have used up 8 of the 40 years. If you renew with CIBC we assume that your terms stay the same and theoretically you have 32 years to go to pay off the mortgage. If you go to a different lender and your LTV is greater than 80% it will be 25 years. If your LTV is less than 80% it will depend on the lender if you get 25 or a 30 year amortization.

  13. Thank you. This is what I had thought. Although, would it surprise you that I called Firstline today and was told by the person who took my question that when I renewed it would automatically be 25 years because that is what the new rules are. This didn’t sound right to me – not from what I had originally understood, but I didn’t push it with her on the phone.
    I’m not an expert, but I like to know my full range of options. I don’t think I’ll need the full 32 years at renewal, I just always like that if things ever got really tough with cashflow, that I had some options to stretch things out through lean times.
    I’m a single mom, a professional, making good income, and I have excellent credit so was able to secure a good mortgage when I was looking. But being the sole caretaker and income source for myself and my kids – I recongize my own potential financial vulnerability and wanted to make sure I kept as many options open as I could.
    I resent getting misinformation from my own lender.

  14. HLC has terrible customer service, and has no interest in keeping in touch with their customers once they’ve had a CIBC mtg broker “flip” or sign a person onto HLC insurance. They don’t do any annual statements or service calls. After setting up a mtg with CIBC in 2007 with a first time mtg and finding out 10 years later that they were still withdrawing money out of an account even though the mortgage with CIBC had ended in 2012, I’m told by CIBC that the insurance should have ended, but am told by HLC it’s 100% my own fault that I never contacted them to cancel. No reimbursement, no apologies for lack of customer service. In my opinion a scam for people to sign up and be left for years with no notices, and easily overseen. Would never recommend this company, and warning to others to be careful what you sign on for with any broker.

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