Broker volumes leaped 8.2% in the second quarter (Q2) 2012, versus Q2 2011.
As usual, lenders jockeyed hard for position. This time around, 3rd and 5th place were separated by just 10 basis points of market share.
The following data are snippets of second-quarter performance from our market’s top 10 lenders. The figures come from Davis + Henderson’s latest lender market share report.
The Big 5
1) Scotiabank (SMA)
20.2% market share, +2.6 ppsYOY
Scotia can thank FirstLine for exiting the channel. That makes Scotia the lender to beat. In Q2, the bank re-launched its “Ultimate” 3-year variable-rate mortgage.2) First National
18.9% market share, +6.1 pps YOY
First National can thank FirstLine even more, with a spectacular 4.3 percentage points (pps) share gain versus the prior quarter. Also in the quarter, the company cut its conventional amortization to 30 years and featured an attractive 3.99% 10-year term.3) TD Canada Trust
7.8% share, -5.7 pps YOY
TD backs into 3rd place, gaining little share from the prior quarter. Its pullback in channel volume is definitely making some brokers nervous. It still serves some key product niches but only its top brokers consistently get good pricing. In Q2, TD eliminated its rate premium on equity lending, after significantly tightening equity lending guidelines in February.4) Street Capital
7.7% share, +2.8 pps YOY
Street’s volumes dropped slightly, quarter over quarter. It axed conventional rentals, stated income deals, 35-year conventional amortizations, and CMHC insurance on conventional mortgages. On a positive note, the company launched “Street Options” non-prime lending in April.5) MCAP
7.7% share, +1.5 pps YOY
MCAP picked up 1.4 pps of share since Q1 but remained in 5th spot. It had a solid 3.99% 10-year fixed offer.
The Balance of the Top 10
6) Home Trust
5.6% share, +0.8 pps YOY
With “B” business as its focus, Home shed 80 basis points of share versus Q1.7) National Bank of Canada
4.5% share, +0.3 pps YOY
NBC didn’t seem to benefit from the FirstLine debacle, losing 0.8 pps quarter over quarter. It launched one of the best efficiency programs in the industry, raising the income of brokers with excellent approval ratios and approval-to-fund ratios. It also imposed stricter gross debt service (GDS) ratio guidelines on conventional mortgages.8) ING Direct
4.1% share, +0.1 pps YOY
ING’s 10-year fixed was (and continues to be) the best in the market. Sadly, ING reduced its automated online rate holds from 120 to 30 days, largely crippling this valuable tool.9) FirstLine Mortgages
4.0% share, –10.5 pps YOY
The drawn-out decline of a once-great lender continued. At one time, FirstLine was closing almost 1 in 3 broker channel mortgages.10) Merix Financial
2.9% share, +0.1 pps YOY
Merix re-launched its Lendwise brand with everyday low pricing and four compensation tiers based on volume. Merix also eliminated its niche 40-year amortization on conventional mortgages.
Other Movers
- British Columbia’s Coast Capital Savings was the top credit union in the broker market, vaulting into 12th place with a 219% quarter-over-quarter volume increase.
- ICICI’s market share exploded 931.5% year over year. It’s got some of the best 5-year fixed pricing in the business.
Source: D+H puts out a terrific, non-public report called Lender Insights, which compiles lender market share data in the mortgage broker industry. We receive data from that report via 3rd party sources and have quoted it here. This data is not confirmed, but is believed reliable.
Rob McLister, CMT
Last modified: April 28, 2014
Would you share any approx number about total broker $ origination?
In one year 3 of these top 10 will be gone. Guess who they are.
If First National is gaining all this market share why is its stock below its 200 day average?
http://tmx.quotemedia.com/charting.php?qm_page=22212&qm_symbol=FN
Firstine is gone now. The others like Street and Merix are pushing for more market share. Ing will be left intact for next 18 months. Home should increase by picking up more B business due to recent mortgage changes. Hard to see any of the other top 9 gone in a year.
Because the Ben Bernanke’s QE-induced equity market rally is driving investors to pour money into riskier stocks. FN was a good placed for investors to hide until not too long ago because of its 8% yield. The recent run in the equity markets has shifted the focus away from yield and into growth stocks.
Based on the origination volumes reported by First National, Home Trust and Equitable Trust for single-family mortgages, as well as the market share data published by Davis+Henderson, the approximately total for the industry in Q2 2011 is $21 billion in brokered single-family mortgage origination.