The other day I quoted a rate to a client. The rate came from a credit union, which shall remain nameless.
To my surprise, the client emailed me later that day to say the rate I quoted him was wrong.
Wrong? “How is that even possible?” I thought. The rate was taken directly off that lender’s most recent rate sheet.
Perplexed, I decided to have a little look-see at this lender’s website.
Low and behold, the lender was publicly advertising—for the world to see—a rate that was nine basis pointsbelow its broker rate. And there was no mention of this lower advertised rate in its broker updates. It was almost akin to saying, “We don’t care about your credibility with clients Mr. Broker!”
To be fair, the lender likely set its rates this way because brokers get paid more per deal than its internal mortgage reps.
But that doesn’t help the client, who is now confused and who, at least subconsciously, probably thought I was trying to rip him off.
Nor does it help brokers in general, who can’t in good conscience sell a rate that’s higher than the rate a lender publicly advertises.
Nor does it help a lender cultivate broker loyalty. We all know that lenders favour their internal sales channel, but they don’t have to make it so obvious.
In this case, the credit union would have been wiser to disclose its branch rate to brokers and offer a reduced-compensation option for agents who want to match that rate. Alas, maybe it thinks that brokers wouldn’t want to sell its mortgages if they had to take a pay cut. That’s sad.