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DLC Buys MCC to Become #1 Broker Network by Volume

DLC-MCCWith the stroke of a pen, Dominion Lending Centres (DLC) has solidified itself as the largest mortgage broker network in Canada. That’s thanks to its acquisition on Thursday of Mortgage Centre Canada (MCC) from CIBC.

The purchase price was undisclosed but estimated in the mid-single-figure millions. Sources guesstimate that MCC’s net income was somewhere around a million dollars a year, but that may be off.

With this acquisition, DLC gets a company boasting 160 storefront locations, 1,133 mortgage professionals and $6.9 billion in yearly mortgage volume.

This now puts DLC a shade under $20 billion in annual production, says company President Gary Mauris. “We’ve always felt that with volume comes opportunity,” he told CMT.

$20 billion is a dominant number that every lender and supplier in the industry should respect. It translates into 26-27% broker market share, DLC estimates. That gives the company significant bargaining power—something that could translate into special deals for DLCers down the road. (It’s getting harder and harder to be a small independent in this business.)

Up until this point, DLC and Verico had reportedly been neck and neck for the title of top broker network by volume. Now DLC has that crown for itself. Verico reportedly looked at the MCC deal but passed.

Gary-MaurisMauris seems intent on winning the hearts and minds of his new colleagues. “MCC agents don’t work for us, we work for them,” he says. “I promise you, we are going to hit it out of the park for them.”

DLC has offered to retain all MCC management, including its President Eddy Cocciollo. DLC will keep both brands and run them side-by-side, à la Invis and Mortgage Intelligence.

All in all, given that MCC brokers won’t see a change in their splits (royalties), it seems like a win for all brokers involved. If there’s one downside, it’s that MCC brokers may lose the ability to route deals to CIBC. But Mauris says that loss would be offset by new lending products available only to DLC brokers.

The entire deal reportedly took DLC two-and-a-half months to negotiate with CIBC.

Sidebar: Despite selling MCC, CIBC says it has no plan to make any changes at its in-house brokerage (Home Loans Canada).

Rob McLister, CMT