Today saw two notable announcements in the mortgage broker industry.
#1) Mortgage Alliance/Multi-Prêts Was Bought Out
A group led by Luc Bernard acquired all shares of Multi-Prêts/Mortgage Alliance Group, one of the country’s leading mortgage broker companies. The firm’s existing top executives, Pierre Martel and Michael Beckette, were part of that buyout group and will remain with the company.
Bernard is a former high-level executive at Laurentian Bank, which coincidentally owns B2B Bank. Last year B2B Bank became a part owner of the VERICO brand, which competes with Mortgage Alliance.
“I think it’s good news for the broker channel,” said Canadian Association of Accredited Mortgage Professionals President Jim Murphy about the acquisition. “This is prominent ownership who know their way around financial services. Their investment is an expression of confidence in the channel.”
Mortgage Alliance/Multi-Prêts has 2,000+ agents in 160 offices doing over $11 billion in volume. Terms of the deal were not announced.
“I think we’ve added an entirely new skillset,” noted Beckette. “That will help take an $11 billion company to the next level and bring revenue opportunities for brokers via consumer credit products, insurance and other services.”
#2) Select Mortgage Corp. Moves to MCC
Mortgage Centre Canada (MCC) has announced the signing of Victoria, BC-based Select Mortgage Corp. Select Mortgage is a highly regarded broker team doing a reported $400+ million in annual volume. The firm is run by industry veterans Geoff Parkin (former MBABC President and Coast Capital Savings VP) and Don Barr, a duo who have built the firm into more than a half-dozen offices and 80+ agents.
“MCC’s technology platform is ideal for some of the strategies we wanted to implement,” said Parkin, who cited MCC’s customized Nexa lead management system. He’s coming to Mortgage Centre from Canada’s second largest broker network, where he was a founding broker and spent nine years.
“MCC’s model is a touch more expensive than [my prior network],” he said, “but…you have to be able to spend money to generate money.” Select is moving from a flat-fee model to MCC’s royalty-based system, where his firm will pay an average of 3 basis points royalty per deal funded.
In this author’s experience, there are almost always economic incentives that motivate big teams to switch broker networks like this. Unfortunately, despite our curiosity, we may never know what those incentives were in this case. That sort of thing just doesn’t make press releases.
That said, I sense this move might have also been prompted by personal reasons as much as anything else.
Select Mortgage is the biggest broker team to move to MCC since Dan Eisner’s True North Mortgage quietly inked a deal with MCC last year. This plays perfectly into Dominion Lending/MCC’s strategy of aggregating broker volume, which helps it leverage better economics with lenders and suppliers.