Four out of five borrowers who come up for renewal stay with their existing mortgage lender.1 That’s why trailer fees are popular with some brokers.
This week, Street Capital made a change to its trailer fee program for the better. Whereas previously a borrower’s mortgage would be restricted if a broker elected to be paid trailer fees, now those restrictions are completely eliminated.
Before this week, the fine print on Street Loyalty Program mortgages included:
- a prohibition on paying out the mortgage in the first three years (unless due to a bona fide sale)
- reinvestment fees for early termination
- a nonstandard and potentially disadvantageous penalty based on bond yields
- an 18-year minimum amortization (it’s now been reduced to 16 years)
These limits were clearly unfriendly to consumers and created conflicts for brokers, so many brokers simply refused to sell Loyalty products. Street rightly recognized this and found a way to do away with them.
Now, all prime products at Street offer two straightforward options to brokers who sell them: Upfront compensation (the “Street Program”) and a trailer based model (the “Loyalty Program”), with no downside for Street customers either way.
Note: These improvements also apply to the “upfront” model offered under the Street Loyalty Program.
1 Source: Confidence in the Canadian Mortgage Market, May 2012, CAAMP
Rob McLister, CMT
I would like to thank Street Capital and their leadership team, because it took real courage and smarts to come up with their The Loyalty Program. Everyday, a large majority of mortgage agents wake up and start their day at $ 0.
Well, this helps program helps the mortgage agents by paying a residual. Additionally, Street was able to offer the agents a great commission plan and at very competitive rate to the customer. Win-Win.
A Hundred Years to Street Capital. Ummm, sounds better in Italian…Cent’ anni.
These were serious limitations of the Loyalty product. I would never recommend a fully closed mortgage or one with reinvestment fees. Why would you? There are so many other products at the same or better rates, without those strings attached.
Please be aware that Street has made numerious changes in the Loyalty product line in the consumer’s favor that makes their program as good or better than any offering in Industry.
This is no longer a restrictive mortgage program and Street is also consistantly offering competitive rates. Its a win for the consumer and the broker.
Could someone tell me if Street is actually changing their same-day restrictions on porting? Also, what is the “non-standard and potentially disadvantageous penalty based on bond yields”?
I’m considering a mortgage with them. Thanks.
If you’re considering a mortgage with them clearly you’re using a mortgage pro to get it for you. Thus, my answer is, ask them.