Kevin O’Leary on O’Leary Mortgages

kevin_olearyCanada’s most candid business personality has a strong view about what’s wrong with mortgages. It’s so strong that he decided to start his own mortgage company.

On Friday, I spoke with CBC commentator, multi-millionaire, Dragon and Shark, Kevin O’Leary. I asked him what makes his new “O’Leary Mortgages” so unique. He outlined a two-pronged strategy: to add transparency to the mortgage process and to help Canadians pay down their biggest debt faster.

Kevin has been scoping out the mortgage business for almost two years. He was kind enough to share his mortgage philosophy and business plan with CMT in his first interview about O’Leary Mortgages.

(Our comments in italics)

First, the basics…

Kevin aims to launch around mid-December. He’s starting in Ontario with one product, a 5-year fixed, branded as O’Leary Mortgages—likely with 20/20 prepayment privileges and standard 3-month interest/IRD prepayment charges. His mortgages will initially be insured only and geared to those with fully qualifying (provable) income.

“This product is very simple. It is a fixed rate mortgage with a very competitive rate and very, very easy to understand documentation…That’s how we’re starting.”

Kevin acknowledges that his mortgage “is not all things to all people. It’s a very, very specific product that probably addresses 95% of the market.” (There may have been some playful hyperbole there. I suspect Kevin knows that 5-year terms aren’t right for 95% of Canadians. His offering seems most geared to first-time buyers.)

Kevin’s goal…

Stacks of coins in front of house architectural modelHis stated mission is to streamline the mortgage process and help people understand the obligation they’re taking on. “That’s where I’m going to be very competitive,” he says. “When I bring a product to the mortgage market…I’m going to try and simplify [the mortgage process] to the extent I can, and I will.”

The second ingredient in his secret sauce is what he calls “the plan,” which he gives every customer. “Everyone who takes on a debt obligation needs guidance and needs to understand what they’re getting themselves into…You don’t go into a mortgage for hundreds of thousands of dollars and not understand how you’re going to get out of it. My mortgage comes with a (written) plan.”

“My whole thing is that a mortgage is part of a long-term asset planning strategy. When I sell somebody a mortgage, I want them to have…the ability and a plan to pay it off. I don’t want it to get in the way of them becoming wealthy.”

(Other lenders don’t provide a comprehensive mortgage plan, he says. And he’s generally right. Most lenders’ mortgage reps don’t provide mortgage planning, apart from maybe a pamphlet or two, a prepayment calculator on their website, etc. Mortgage budgeting, term analysis, and integrating a mortgage with your financial plan is where independent and professional mortgage planners have always added value.)

On the mortgage process…

Over a decade ago when he last had a mortgage, Kevin says, “I remember spending all weekend and then all Monday reading the docs to get that mortgage…with a magnifying glass. It was ridiculous.”

Mortgage-Paperwork“(As a customer), I want to be able to talk to somebody who understands what I’m getting into. To me, understanding the document and making it very simple is the biggest challenge. That’s what we’ve been working on the most.”

“The package that you get from O’Leary Mortgages when you start the process, I believe, is going to be something you’ve never seen before, not in this country…It’s so thin and so easy to understand and accompanied with so much planning. I spent a year writing a book just for this business.”

With intense competition, why is now the right time to start a mortgage business?

“It’s a very confusing time. There’s a tremendous amount of angst among consumers. There’s concern about rate hikes. All of that makes it a great opportunity to launch a brand that I think has clarity, honesty and is very direct.”

“Make no mistake; I understand this is a brutally competitive market…Clearly the banks own this market, or the majority of it…It’s one of the most competitive markets in financial services, no question. That’s what makes me excited to be in this. You’ve got to be good and execute customer service very, very well.”

Why launch with a limited reach and one product?

“This is not my first rodeo launching a business. What I like to do is start in a small demographic and determine my customer acquisition cost, look at my compliance systems and all the back office metrics and make sure that they’re working. Then when I know what I know, I accelerate.”

“I’ll learn a lot” in the beginning, he says. “You can model this out any way you want on a spreadsheet. That’s easy. I’ve never seen a spreadsheet that I didn’t like until I put it into reality. Then I learn a lot about what we’re doing right and wrong.”

“By the time we’ve done six months of this, we’ll be ready to roll it out nationally and I think it’ll be very successful.”

“If you can service your first 1,000 customers and understand what you did wrong, then the next 10,000 are going to have a much better customer experience.”

On variable rates…

Variable-Mortgage-Rates“This is not the time to take that risk (of a variable-rate mortgage). If you don’t know what your costs are on a monthly basis, I can’t give you a plan.”

“I won’t be playing in that game initially. If you want to roll the dice on variable rates, I’m not your man.”

Will O’Leary Mortgages be a broker or lender?

“We’re starting by providing origination,” Kevin says. “At the end of the day, my long-term plan is to do both and I want to work with brokers as distribution.”

O’Leary Mortgages will begin as a mortgage brokerage licensed by the Financial Services Commission of Ontario, says CEO Alex Kenjeev. Underwriting and back-end servicing are outsourced. (Kevin wouldn’t say who that outsourcing company is, but if it’s who we hear it is, it’s a company all brokers know well.)

“Ultimately right now, I’m helping people get a loan,” Kevin says. “Maybe I’ll do a few thousand that way and then when I expand, I’ll work with brokers because I think the brand adds value there.”

And no, he won’t broker/sell other lender’s mortgages. Says Kevin: “You come to me for an O’Leary mortgage and that’s it.”

On his pricing strategy…

interest-rates“My attitude is, offer a fair and direct—as I call it, an ‘honest mortgage’—with tremendous simplicity…and be competitive with price. You don’t have to undercut competitors.”

“Some people will use a shopping bot…to go get the absolute lowest rate. They’re a more sophisticated customer in some ways, because there is more to a mortgage than just pricing.”

On his market share potential…

“This market is expensive to gain share in. I make the assumption that my brand gets me 2-4% of a market, but not without spending a fair amount of money getting there.”

“In this business, customer acquisition is a big question mark. Everybody I’ve seen going into it has made assumptions that never panned out close to what their forecasts were. You could put a fair amount of money into the ground here, and be unsuccessful if you don’t know what you’re doing. And I’ve seen that many times.”

“People say, ‘Oh, it’s so competitive. You’ll never get any market share.’ If you bring better customer service to any market, you get market share.”

On any tie-in with O’Leary Funds…

O’Leary Mortgages won’t get its funding from O’Leary Funds. “This is a completely different business, different team, different metrics, and different regulators,” he says. “I don’t have a problem raising capital. I have the option to go get capital wherever I want.”

On Dan Eisner’s True North Mortgage…

Dan-Eisner-True-North-MortgageBack in 2007, Dan Eisner went on Dragon’s Den to raise capital for his young brokerage, True North Mortgage. He struck a preliminary deal with the Dragons, including Kevin, but the deal later fell apart.

“The valuation on his business didn’t make any sense at the time,” Kevin says. “I’m all about value. I’ve been doing Dragon’s Den and Shark Tank for 11 years combined. I’ve seen thousands of deals and the mistake that most entrepreneurs make is that they try to get you to buy a future value at today’s price, when the risks are huge.”

“So, there’s nothing wrong with (Dan). He was a really interesting guy and he certainly knew the industry very well. But it’s the same thing in buying a house, don’t overpay. We could never come to an agreement on the value of what he had. That’s not a bad thing. It’s just that I’m a very disciplined investor…”

(In Dan’s defense, he tells us his valuation at the time “was less than cash value.” Since that Dragon’s Den episode, he’s built a national mortgage brand with eight offices across the country and $412 million in volume in 2011.)

On self-employed mortgages…

O’Leary wants to eventually service self-employed borrowers with non-traditional proof of income. These are folks who legally tax-manage their income, pay themselves via dividends or via shareholder loan repayment, and so on.

“I’m telling you now, my goal in short order will be to support entrepreneurs in this country by providing them mortgage services. Some people call that subprime. That’s not the case. They’re not subprime people. They’re the ones who create all the wealth, ultimately. I have thousands of emails from those people (about) how frustrated they are, and I’m the ideal guy to help them. They’re my kindred spirits.”

On the declining relevance of branches…

bank-branchO’Leary Mortgages will be a branchless business. “Young people today don’t think in terms of brick and mortar,” Kevin says. “They think about the experience online and the backup service afterwards.”

“I’ve done lots and lots of research on this, talking to my potential customers…I get thousands and thousands of emails…I’ve got 70,000 people following me on Twitter. I ask them what they want and they tell me.”


In the next six months, we’ll follow this story closely. It’ll be interesting to see how many people pay for a simplified customer experience and Kevin’s mortgage planning advice. He’ll certainly have the capital, connections and loads of free publicity to kick-start volumes.

Two side notes:

  • Kevin O’Leary will be a keynote speaker at the CAAMP Conference in Vancouver on Monday, November 26, at 2:30 pm PT. He’ll be met there by his TV partner Amanda Lang, whom he lovingly calls “the most attractive communist on television.”
  • There’s a lot more to Kevin’s mortgage plan. In this week’s Globe column, I’ll analyze more of his views on debt, rate hikes and self-employed borrowers.

Rob McLister, CMT

  1. Interesting how he calls Amanda Lang a communist yet has no problem with large banks getting bailouts from governments. Most North American “capitalists” actually promote socialism for the rich and large corporations.

  2. You’re wrong as usual Xilai. He advocates letting companies sink or swim in the free market, like he did with the automakers.

  3. As many of you are aware, DLC was sponsoring Kevin’s session at this years CAAMP event. We have notified CAAMP this morning that we will not be participating in the sponsorship of Mr O’Leary and have cancelled the meet and greet session we had arranged for our agents.
    I wish Kevin the best of luck but find the concept of sponsoring a session that competes in our industry while bypassing the broker channel altogether to be a disservice to our Industry members who feed their families via the broker channel.
    I find it questionable now that there is pressure to really understand how Kevin’s model will work, he now states he will be working with brokers in the future??
    I admire CAAMP and their good work and will not be cancelling my event sponsorship dollars. I will simply use it to sponsor the Industry panel instead.
    I am incredibly welcoming to anyone in our channel who raises consumer awareness either as a lender or a broker. I just don’t want to be part of anyone who doesn’t support, appreciate and recognize the efforts mortgage agents make to Canadians coast to coast.

  4. To the extent that he detangles the mess in 10 page commitments and 20 page mortgage contracts, his entrance into the market is positive.

  5. My understanding is that Paradigm Quest is the mortgage “outsourcing company” behind O’Leary’s venture. Can someone confirm?

  6. This guy I feel cares only for his own profit (which I guess is normal for anyone doing business).
    Unless he offers better financial deal than others, his mortgage business will be close to zero.

  7. It’s great that he’s counselling people on debt reduction, but I question how consistent that is with his persona, or at least the one he plays on TV. He may find that branding is more challenging that he thinks.

  8. When I watch his show, I have to say he makes my skin crawl and he is not someone that I would want to be involved with in business or have my family home’s mortgage held by him and his company.
    I do not see him offering any value to the consumer and when a lender gets into the market and leaves, it can end up costing the borrower more down the road to switch and re qualify to a new lender when at the end of the term no new offer is available or they offer a high rate to get you off their books. I really don’t think he understands what value a broker brings to the process and I do not think he really understands the market.
    No thanks.

  9. Longtime listener…first time caller.
    I have a few thoughts to offer;
    Interesting product choice for a fellow I previously thought was an analytical numbers guy.
    First time buyers in particular are poorly served by a 5 year fixed rate product. With ~60% of five year fixed rate mortgages broken at an average of ~38months and nearly all triggering an IRD (as they likely will continue to do for another few years yet) this is perhaps not the mortgage product to start an integrity based business with, let alone a revolution.
    Knowing the little bit that I do about funding sources I suspect this was the only product Mr. O’Leary had the option of offering the market. A call to any of the mono-line BDM’s can clarify challenges in this area. Excellent job with the marketing spin though.
    As far as his ‘first thousand’ mortgages…let me just that we are not selling widgets here sir. I find that as I personally pass my first 600 funded mortgages the level of knowledge I now have demands a 60-90 minute consult up front with the clients. As I am offering answers to questions they did not even know they wanted to ask regarding the lender, the product, the rate, etc. Often an hour later with all the cards on the table there is quite a departure from what the initial request was for.
    Without access to the services of skilled brokers bringing O’Leary mortgage filtered quality deals…I suspect there will be a bit of a shock on the funding ratios over the first 6 months.
    Also interesting was the reference made to self employed clients, in particular ‘Dividend Income’, try and find a lender friendly towards a one time, or even a 2 year history of dividend income.
    Quote from a lender ‘Dividend income is no different than lottery income’ – Wow, really?
    So there we are – a hot button issue, the self employed represent a market both under served and arguably beat down on. Innovative and new would be a return of logical underwriting of AAA self employed files. That would be a meaningful entry into the mortgage market.
    It seems disingenuous to carry on with age old Bank rhetoric and simply herd unsuspecting first timers into a product that for more than half will result in the shock of an IRD penalty.
    Personally my families mortgage security has for 18 years come from making 5 year posted rate payments on either a variable rate product or a short term (2yr or 3yr)fixed product. Always with the maximum amortisation taken at every move to give me a baseline to fall back on should I need it. Much as many other Canadians have done as per the report just released by Will Dunning.
    In a market of shrinking choices a company offering just one thing above nothing, without the benefit of an Accredited Mortgage Professional’s input seems unnecessary, at best.
    In some respects, it is too bad the meet and greet is off. Might have been especially interesting.
    Dustan Woodhouse

  10. If he only cares about profit, then it follows that he’ll do whatever it takes to maximize profit. The only way to do that as a new mortgage lender is to treat customers right.

  11. The funding source is Paradigm Quest. I just find it very strange for a company like Paradigm which has made Millions of Dollars on Brokers back to do a deal with someone Like Kevin, who is going to under cut the brokers, is wrong!
    Brokers in this country have supported Paradigm for years and made them Millionaires and this is how John and his partners are repaying?

  12. Kev’s success and innovative mind will help rise up the standards of our business that it desperately requires if he does it right.
    Competition only drives the best service providing mortgage initiators and squeezes out the once who don’t deserve the privilege of competing for clients business.

  13. @Dustan
    I couldn’t disagree more. Five year mortgages are hands down the best choice for first time buyers.
    Young people are so vulnerable to higher rates, debt accumulation and job loss. The need all the financial certainty they can get. With a quarter point separating fixed and variable, there is no upside in going short.
    I’d also add that if you pick the right lender, IRD can be irrelevant. Any lender worth its salt lets you dodge penalties by porting, blending and/or increasing.
    The only time I’d recommend a shorter term for a new buyer is if they knew they’d likely sell outright in one to four years, and not buy someplace else.

  14. Mortgages as part of a financial plan is not new to Ontario. Canadian First financial Centres Network of 24 Mortgage Brokers and Partners have been combining Mortgages with Financial Wellness Planning for over 3 years now. A mortgage is just on part of a complete financial plan and our Mortgage professionals Do MORE providing acces for Thierry clients to financial planning as well as insurance products. Our research (done by Maritz not the twittisfear) tells us Canadians want one stop shopping for all of their financial needs and we are making that happen. Good luck to Kevin as he competes in this market with only one mortgage product. The big banks are not losing any sleep and will continue to eat more and more of mortgage brokers lunch as they grow market share by offering Canadian consumers access to 3 anchor products.kevin is just taking a slice from an ever shrinking pie. The mortgage industry has always looked like a simple business from the outside looking in…it isn’t!

  15. The only difference being that when it comes to the financial sector he does not find it wrong for the government to bail out. Double standards !!

  16. Discuss all you want whether a 5yr fixed is good or bad for a segment. Its a discussion that’s been going on for 20 years, and from what I have seen it truely is a customer by customer decision with comfort level. But the most interesting fact O’Leary said was the great customer service part. Yet he is using an existing company to manage his back end servicing. Is this company (Paradigm?) the current best service provider? Is he going to give them lessons in how to provide this industry leading servicing? This is where I feel his biggest hurdle to success is with the promises he is making.

  17. So from broker’s point of view we will be competing with O’Leary based on rate, and brand recognition of his name. This does not worry me at all. This business is about personal interaction, high quality service, and a good reputation. Most of my client’s I meet in a face to face setting and they must be comfortable with your outfit before they commit. Over the phone one size fits all approach to me is not the best way to go. The banks know this and so do brokers. Good luck Kevin, I suspect you will be needing our help in 1 year.

  18. If Paradigm Quest is the funding source for this ‘white label mtg’ how will ports & Refi’s be handled (IF) O’Leary choses to leave this marketplace? That goes for common place no-fee transfers. Will they be accepted by the main stream institutional lenders?
    As a “disciplined’ investor, he has said repeatedly that he is not emotionally attached to his businesses and we have seen bigger players with far more expertise in this field have come and go… He is dealing with people who entrust us with their ‘long term’ investments and I for one, hate having to deal with the increased anxiety of those clients with orphaned mortgages and challenging financial issues. Lay-offs, Separations, and job losses do happen!
    On the positive side… Whether he likes it or not, his company is a Registered Mortgage Brokerage and that fact along with his marketing can only help raise the consumer awareness of what and who we are. (Assuming he is successful)

  19. 1. He is offering nothing different that what is available except for price.
    2. If he can “simplify” the mortgage lingo on the documents; good for him. that alone isn’t an advantage that cannot be copied.
    3. he is counting on brokers being fragmented with incompetent arms in CAMP or MBABC to do nothing.
    Therefore…he will end up competing in the same arena – price. This is good for the client and good for great brokers. Bad for incompetent lenders with high cost structures.
    Gary Marius and all great brokers….if you guys are as good as you think you are in the market you have one choice to make:
    When it is announced who their backer is…you SHOULD do what you can to move all business out of it WHEN it good for the client and do not support that brand.

  20. While I respect Kevin and his business analytical skills, I have to wonder how he thinks he’s going to compete in a market with simply competitive rates, not the “best” rates.
    Clients will pay a little more for “comfort” or “trust” by using their own bank. They will not pay more than they have to simply because of Kevin O’Leary’s name, or because there’s a “plan” attached. I’m not saying his mortgage will be a significantly higher rate than other lenders, however I give my clients the option of choosing their lender based on their rates and product features. All else being equal, it’s the lowest rate that will get the business. They get my “advice” for free.
    Having his own mortgage brokerage selling only his mortgage seems to be silly to me. What quality of sales force is he going to get being a brand new name and having only one product to sell…..and no guarantee he’ll be in business a year from now? I suppose this is the only way he could enforce the planning part of the mortgage process.

  21. @Susan, whether its 4 bill or 11 mill he is MUCH more successful than most of us, as such he deserves our respect instead of judgement. We can all learn tons from him. Whether his business with succeed or fail it is worth keeping an eye on and learn from.

  22. Sorry, neither choice is ‘hands down’, each is case by case and likely greatly influenced by the market the client is in.
    My business, and thus my experience and sentiment is based in Vancouver BC. Our property ladder has many incremental rungs and the majority of buyers in their 20’s and 30 ‘s make a move less than every 4 years.
    General statements suggesting ‘younger people are more vulnerable to job loss’ are not supported by the data. Employment rates are extremely high in BC among the under 40 crowd. A grey hair is far more ‘vulnerable’ to the actual effects of unemployment as it tends to be far more prolonged and recovering earning power lost is difficult for a 50 something.
    Youth tend to have rising incomes as they work their way up the ladder.
    IRD is never irrelevant, feel free to clearly define the ‘right lender’. Methods of calculating IRD simply go from bad to worse.
    Young buyers almost never Port, as young buyers are typically move up buyers. The more intelligent certainly would lean away from a blend, and even more so would run, not walk, away from a blended increase. Run the numbers. There is no free lunch.
    There is no ‘dodge penalties’ maneuver, there is only; pay a clearly defined penalty now, or pay a blended/increased penalty with interest added on to it over time.
    I submit that we are all far more ‘vulnerable’ to the general conditions of Modern Western Life.
    We buy a studio, then we meet somebody and move into a bigger place, then we have dogs together, add in a few kids, get a promotion or three, move from downtown to the suburbs, get transferred to another province for a few years, return to the original city, refinance to invest the equity in starting a business, and for 50% divorce perhaps enters the picture, one more 3 bedroom place until the kids are gone, meet a new partner and move back downtown, then tap into the equity to help the kids with a down payment due to stringent new lending guidelines…etc.
    Each comma above represents a material change in the finance structure. For my clients it will not represent an IRD if I can help it.
    I often advise my clients to look at their lives in 3 year increments – things change pretty radically. All agree, whether they are 25 or 82 none expected 3 years earlier to be talking to me about the topic at hand.
    It is also well worth looking at a 40 year history of interest rates to supplement the argument that a 5 year fixed is for 60% of folks a very poor choice.
    How do you tease out whether your client is more likely to be in the 60 or the 40…with a couple o=hours of getting to know them.
    Not with a 38 point online application.
    Not with a great big brush labeled ‘first time buyer’.
    With attention to detail, personal interaction, and experience monitoring your own clients mortgages on an annual basis.
    OK, time to get to work – over and out.

  23. First of all: Congrats Rob!! The first one to get the correct info right from the source. Great scoop,well done.
    To the mortgage brokers who have commented, many good insights, Dustan, you should comment more often, very good ideas.
    Here’s the big take away for me: more consumer direct marketing of mortgages to the public may be coming. Whatever Kevin is: he’s not dumb, he has studied this enough to think his version of consumer direct has a shot. We will see how well this works out. My thoughts are he will find the conversion rate of the leads is much lower than he wants it to be after the initial blush of the launch.
    Conversion rate is what kills you in direct marketing and it may kill his business.
    It likely won’t stop with Kevin, ING proved that mortgages are a product that fits web based commoditization (sorry if that’s not a popular idea with brokers but facts are facts) and others will be drawn to this model. The next players may not follow Kevin’s precise approach but there will be others who want market mortgages over the web.

  24. First to DLC, why pull out a little competition never hurts and I always love to listen to my competition, might learn something. Besides I am sure Don Cherry could take Kevin O’Leary. Come to think of it that would make a great battle on the stage. You can have Kevin explain how he plans to educate first time buyers over the phone on how to pay their mortgage off faster. Then Don Cherry can explain that he knows hockey and you better find yourself a good professional who has an office so you can go and see him and build a long term relationship with, who understands you and will be there for the long haul so if you screw up or get confused they can help you out. Although maybe getting a book in the mail with a mortgage plan is so much better than having a real life professional.
    Secondly, they have no product, 5 year insured mortgage only, they will probably piss off more callers than they help.

  25. Great reply, I always like the fact Dustan pulls “life” issues into the numbers game. That’s the true professional.

  26. He’s not funding the loans initially:
    “We’re starting by providing origination,”
    He’ll be a broker/brokerage, just like you, accessing industry funding sources, just like you, and marketing direct to the customer… (wait for it)… Just like you!

  27. Love to see more discussion on self-employed mortgages.
    As a consumer, simplification of mortgages and planning are of interest. Having been burned by even an employee mortgage with respect to penalties and a rate hike upon departure, I’d welcome more transparency. I know that a mortgage needs to provide revenue and manage financial institutions’ risks but as a consumer, they are particularly frustrating to research and differentiate.
    And as someone who has recently begun consulting work, discussions with brokers regarding selling a present home and buying up are even more frustrating than the standard discussion. At the very least, I appreciate Mr. O’Leary’s comments regarding self-employed mortgagees not being subprime.

  28. You are correct on all accounts, however the consumer’s impression and marketing will be that of an O’Leary mtg. You and I don’t offer our own named white label mortgage… That I feel will be the difference.

  29. People… Kevin is cutting out the broker channel and buying down rates to undercut the industry.
    This is not good. People will be sent directly to the underwriter and will likely get no service or proper guidance.
    Much like RateSupermarket and these other rate sites, this will cause more issues for our industry including uneducated clients.

  30. Are you kidding me? Exposing a first time buyer to rate risk is better than an increase and blend at discounted rates with NO penalty?
    If you truly give people this advice, and you don’t deal with lenders who have good port and blend policies, then you are doing a major disservice to your clients IMO.
    PS – The average move-up buyer adds maybe $50,000 to their mortgage in my experience. If you do the real numbers you will see that it is idiotic to pay higher rates in the later years on your WHOLE mortgage, just so you can avoid blending and get a better rate on that $50,000.

  31. After 20 yrs, I’m embarrassed to be part of this broker industry. For anyone who views O’Leary and a threat, versus an opportunity for more lending choice is niave. Does anyone think this financially successful entrepreneur is launching a broker firm as his business plan? Typically the most unprofitable entity in the financial services sector? In this very thorough interview did he say he would compete on price and never deal with brokers? We should embrace new high profile entrants and look to ways I which we can partner. Or….maybe not and let him source other alternative distribution sources. Frankly , if I were him , following this childish, short sighted ranting, I would look elsewhere. And we can continue to live with the dominance of the oligopoly that will ultimate error our compensation.
    Furthermore, to suggest CAMMP and those hard working individuals (who mostly volunteer for organizing the event) were in anyway culpable for known a speakers business plans when they booked him (probably 6 months ago) is absurd. Only people who sit back and watch others do ….would suggest something to ridiculous. I for one am disappointed O’Leary won’t be attending our conference, I for one will be reaching out and seeing if there is any possibility of expanding my business with new relationship with O’Leary and his people.
    I will also be extending an apology on behalf of the unprofessional blogging.

  32. I agree Alex… although Kevin expressed he didn’t plan on using brokers to originate mortgages at this time, you think this bitching and whining will change his mind? If anything we should of embraced this chance to convince Kevin how brokers can actually benefit his mortgage business. We should of picked his brain as to where he thinks the mortgage industry is going and what he plans on offering that is sooooo much different than the rest of us. We should of done this to learn and possibly duplicate in our own business practices. Remember, we are losing lenders at a fast pace people; we need to make friends, not enemies — “keep your friends close, your enemies closer and your inlaws as far away as possible”.

  33. I read that Moshe Milevsky now recommends 5-year fixed mortgages for newbie buyers. That says something. He’s the guy who did the study showing that variable rates cost less over time.

  34. I agree as well … nothing is cut and dried to an individual party…. Life happens and we can only prepare and anticipate… Personally I have always taken a 3 year term for my own mortgages… and when a client wants a recommendation we walk thru their lives and what their goals are.
    We cannot always avoid an IRD but we can educate the client on different scenarios and ultimately the choice is up to them .

  35. There’s a shift in the way that people are dealing with their lives and businesses: a shift back to staying local and building relationships rather than realizing that saving 5 cents through a big box store that doesn’t have your back or offer service when it’s needed. The more I meet people in my community, the more I realize the importance of “community” and building relationships based on trust and expertise. I digress…
    Kevin O’Leary doesn’t know what community is. I’ve watched Dragon’s Den and Shark Tank for many years and his attitude only gets more disappointing as time progresses. The only importance thing “is that he wakes up richer than when he went to sleep”. So now after years of portraying this kind of belief and mentality, he thinks he can convince the public that he’s got their best interests in mind by helping them with a financing plan to pay their mortgage down faster?! HA – where’s he going to make money in that? I don’t buy it for a second.
    Where’s the history in him saving his clients’ money to build that trust and establish the relationship? His celebrity won’t go very far with the general public and I hope people don’t choose their mortgage based on this alone.
    Work with a Broker, who experience, local and can honestly sit down with you and converse about all aspects of your life and goals to determine the best product. Choose the term, product, lender based on what’s best for YOU rather than being dictated to and having no choice or say in the matter. O’Leary may think he’s got something different in his offering, but a Broker that is willing to review your mortgage and financial plan on a regular basis is something to seek out. Working with a Lender and Stranger over the phone long distance won’t help you achieve your goals.

  36. Yup, that’s what capitalists do… cut out the middleman out of the equation… BTW, that’s you. Paradigm has no allegiance to you or your profession, just its shareholders. That’s Raw Capitalism 101.

  37. Kevin O’Leary has been a disaster in the asset management business. Investors have been running away from his funds in droves as their performance has been abysmal. Mr. O’Leary is just looking for another bunch of dupes to be astonished by his media presence… Do business with him at your financial peril.

  38. Crowded space, weak timing and too late, not a balance sheet lender to be cost effective, and supplying mortgages alone is not a profitable business anymore under the new federal reguirements. This plan is “behind the curve” and Wane Davis (CFFC) is way ahead of the curve! As Gretzky say’s “Knowing were the puck is going is how you become a great hockey player” My two cents.

  39. Thanks for the compliment Peter, but it isn’t me that is ahead of the curve it is our management and board who have seen the changes in our marketplace coming! We have industry leaders on our board from both the FI side and Broker side working on a “Game Changer”…hang on to your hats!

  40. This isn’t apple computers, or oakley sunglasses… nobody is going to pay for an “O’Leary” mtg… and yes while customer service is important, we are living in a very rate concious environment, so unless you offer a better 5yr rate than the next guy, this thing will sink fast! There is minimal loyalty when it comes to peoples mortgages these days, with the exception of small towns/communities…

  41. I can only suggest that your experience’ and my experience’ are not aligned with each other.
    Interest rates have generally trended downward over the last 20 years as far as the data shows. considering this, I am not sure that very many people have been happy with their five-year fixed rate product over the last 20 years.
    the mathematics on a blend and increase generally reflect the prepayment penalty on the existing mortgage amount being covered off by the blended rate, and the artificially higher rate now being paid on the new money – bonus for the lender. Not so much for the client.
    At the end of the day I only advise; my clients instruct.
    I do not make choices for my clients, I present a variety of options and ensure that they understand the various ramifications and potential risks involved with each product.
    I am not an A to B solution, rather I try to be an A to Z solution. Meaning that I am not out to make the maximum commission on one mortgage per client. Over the past three years there have routinely been to year fixed ~2.50% options available.
    In an environment where interest rates are clearly not moving up significantly, and in fact have been trending downward, the two year fixed has been an excellent product.
    I suspect over the coming 18 to 24 months the conversation that I have with clients will shift to longer-term product more often than not.
    However I think we’re off topic – the bottom line is clients should have individual choice.
    I will choose tailored shirts over one size fits all every time.

  42. O’Leary just made the case about dealing with brokers when he said he spent the whole weekend trying to figure out his first mortgage’s documents. With help of a broker, that’s cut down to 1 hour with some questions in between. His call centre is not equip to have the kind of indepth, eyeball to eyeball, kitchen table conversation that the majority of clients want and like. That’s service!

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