What Could Have Been

People handshake agreement close deal gapIf there were ever a time that the mortgage broker industry needed to come together, this is it.

Our game is changing. Brokers have decent market share, but agent revenues per deal are dropping, and they may not stop dropping for the foreseeable future. On top of that, regulatory tightening is making it harder to do our jobs, lenders are looking for ways to cut origination costs and the Internet has started to disintermediate slow-to-adapt brokers. It’s not unreasonable to think these trends could conspire against broker networks and cut funding for industry initiatives going forward.

So it was with a degree of disbelief that I watched last week’s developments with Canada’s two national broker organizations —one being the established industry association, the Canadian Association of Accredited Mortgage Professionals (CAAMP), and the other being the upstart Canadian Mortgage Brokers Association (CMBA).

Depending on who you ask, it’s either the best time in history to start a new national broker association or the worst time. But one thing is certain: it would have been so much more productive if the two could have smoothed over their differences for the common broker good.

Why? Well, we as an industry do not need more division. We have bigger fish to fry and enough associations working against each other as it is.

We don’t need more duplication of conferences, awards shows and golf outings. Most sponsors (lenders, insurers, suppliers) absolutely do not have the budgets for it. Most of them would much prefer to back one association, other things equal. But now they’ll have to increasingly choose, thereby diluting their support among ever-more events and affecting event quality.

We don’t need overlapping education. Focusing intellectual power on enhancing existing curriculums, creating one national education standard and leveraging existing learning distribution platforms is infinitely more efficient.

We don’t need more boards and association salaries. Organizations are expensive and time consuming to manage. That money is better spent on direct costs of promoting the broker channel (e.g., advertising, PR, lobbying, self-regulatory enforcement, etc.).

We don’t need more voices appealing to policy-makers and regulators. We need one strong voice that is actually heard through all the noise. The more parties that petition our government, the more we look like individual disorganized special interests.

We don’t need to exclude lenders and leverage broker numbers against them. Without lenders, brokers don’t eat. If lenders feel we’re working against them, absolutely nothing good will come of that long term.

We don’t need two brands and two messages marketed to consumers. Too many consumers are confused enough by what we do.

We don’t need more dues to pay. Many brokers don’t understand the value in paying dues as it is.

We don’t need more diversion of resources. Pooling revenue is the best way to fund powerful widespread marketing campaigns that consumers recognize.

CMBA’s brand (trademark) is strong, and it would have been beneficial for the entire industry to use it, not just regional association members. But it takes more than a good logo to reach consumers, policy-makers and regulators. It takes economies of scale, relationships and industry-wide (not just broker-wide) buy-in. Imagine how much more powerful our industry voice would have been had the association leaders found a way past politics and protecting their turf to find common ground.

Hearing about the CMBA was disappointing to this author, not because the good people involved with CMBA don’t have valuable ideas, but because valuable ideas are rarely implemented as well when key stakeholders don’t work together.

Fortunately, despite two years of trying to work things out, there’s reason for optimism that the two sides will eventually realize the mistake that’s been made. On that subject, one of the best quotes heard last week was from Dan Putnam, Chair of CAAMP: “We’re still open to conversations with all regional associations,” he said. “Never say never.”

In that spirit, may the regionals and CAAMP always keep their doors open to each other because, as CAAMP CEO Jim Murphy rightly noted last Friday, “We’re all in this channel together…We succeed together or we fail together.”

  1. Thanks Rob, for balanced observations on this issue. It’s refreshing to see real thoughtfulness and not partisan rhetoric.There should be only one organization but let’s get it right. Why is there such an angry visceral reaction to CAAMP governance? Why did one small group of mortgage brokers lock down a better designation in a few months while CAAMP has inspired outrage with the AMP designation for so many years? There is a gap that needs to be bridged and people on all sides have to check their egos at the door. I get it: CAAMP has the history, the money, the membership, the support of the lenders, did I mention the money? The fact is that their will always be people on the outside looking in and there will always be disgruntled parties in any organization but having worked in another very similar industry with the same regulator and the same structure of commission based distribution of products provided by massive companies I have never seen the level of anger generated by membership towards an organization that I see on industry blogs within our space. Something needs fixing and that will need real compromise on both sides because Rob is right, there needs to be one legitimate voice and right now that’s not what we have.

  2. Wasn’t Mortgage Trends bought by CAAMP
    last year? Failing to make that disclaimer questions the journalistic credibility of your editorial comments. Has Mortgage Trends turned into the Pravda of CAAMP?

    Almost everyone of the provincial associations
    has come into being since CIMBL was formed. Clearly the ongoing leadership of CIMBL/CAAMP has not been responsive to the true needs of the mortgage brokerage industry.

    1)Way too much money spent on bureaucracy & not enough on the membership.
    2) Schizophrenic approach to branding CIMBL/ CAAMP.
    3) AMP. Is that the energy drink or the adult diaper? Oh no. That is a designation for mortgage professionals?

    CMBA is what it says it is. A national association for mortgage brokers. Fed from the bottom up by mortgage brokers/agents. Representing the provincial, regional & national interests of mortgage brokers.
    We will prosper or fail on our own.

    1. Hello “A Mortgage Broker” – A story like this would never be complete without calling the site’s affiliation into question. The thing to remember about ad hominems, however, is that such fallacies never invalidate the merits of an argument. Thankfully, the folks reading this story, most of whom are well aware that CAAMP owns CMT, are more than capable of judging neutrality.

  3. Back at you brother…. You didn’t address my arguments, of money piddled away by an increasingly bloated bureaucracy, a branding direction that changes with the wind, and a destignation brand identity that could not be worse if it was planned.

    As to disclosure, you should not assume anything. This website is open to everyone & anyone. As all licensed mortgage brokers & agents are required to do in writing, you should
    prominently disclose potential conflicts of interest when stating an opinion.

    1. CMT’s search function will provide you with critical reviews of CAAMP and regional associations alike – including the topics you mention. The point of this article, however, is that both associations wasted a prime opportunity regardless of their differences. As for reinforcing who owns CMT, even if extra notation was made to that effect (in addition to the various disclosures already on the site), critics would still impugn the motives of articles like this. But thank you for the feedback nonetheless.

  4. “Internet has started to disintermediate slow-to-adapt brokers” – what dies that mean?
    I hardly see good brokers as a middle man. Have you not heard the horror stories of people trying to deal direct with branch employees? We are needed more than ever. I don’t drive any business from rate sites. Myself and the agents at our firm are making more money than ever before. So not sure what you are doing wrong. Perhaps get of the rate sites and spend some time with your clients face to face, build relationship and trust so referrals will flood in. Be there for your clients not just when they are buying a house but whenever they have a financial question. Say hi to them at the grocery store, congratulate them when they have a baby, So if the “slow-to-adopt brokers” are suffering it must be because we are paying alot more in income tax as the revenues are up and the expenses are down. As a disclaimer I am a member of CAAMP and will never be a member of IMBA.

    1. Hi Mike, How we see ourselves is quite different from how consumers see us. Power is shifting to them because the availability of information is improving, technology is improving and competition/pricing is improving. A key broker threat is that consumers increasingly go direct to lenders. Meridian’s 1.49% and IG’s 1.99% non-broker promotions are just a taste of what’s to come. You couldn’t be more right about the value good brokers bring to the table for a great many people. However, brokers are not created equal and market evolution is putting many in our business at risk. A strong united industry group that publicizes a singular value message to Canadians may be our best chance at mitigating this impact.

      1. Meridian and IG are hardly a threat. Go into Meridian and talk to a rep, if you can and you will be running back to your broker. Just try to get the local IG rep to call you back. The Banks and Credit Unions are my best allies. They make me constantly look good. Comments like the guys at the bank were more interested in selling me a Master Card then getting me a mortgage tend to be the norm. As long as the banks keep cutting costs they will attract and keep very few qualified employs. I love sites like Rate Spy that show these low rates for crappy mortgages. This allows me to prove my worth to clients by explaining the downside of these offer and how they can be trapped by a bad mortgage. Most then consider these brokers scammers.

        1. Hi Mike, Good on you for finding a way to use the competition to your advantage. Markets don’t stand still, however, and I’d caution anyone against judging competitors from anecdotal info. There’s a real chance that most brokers who don’t consider a 50 bps lower rate (that they cannot offer) to be a threat, may eventually be eliminated. Consumers are too smart to be upsold from that kind of interest savings. And while online rate sites have low rates on “crappy mortgages,” as you put it, they also show low rates on full-featured “non-crappy” mortgages. Financing is always about more than the rate, but we have to acknowledge that our opinion of the right mortgage isn’t applicable to everyone. What one deems to be an inferior product, might be perfectly suitable for a certain segment of the market and upselling those individuals is doing them a disservice.

  5. Rob I think your article hits the nail on the head and I hope a lot of people read it and start to look at what we are doing to our industry.

    A committee was formed over two years ago to start negotiations with CAAMP to try to create a National Provincial organization.

    From the inception of that committee we knew it would be a long and hard road to have all the organizations in Canada come under one umbrella, but it has to be done.

    The committee was never set up to create another organization. In the initial meetings people were chosen form the provincial organizations and the federal organization. this had been done numerous times before with no success but this time we tried something different in the initial meetings and we had absolutely no paid people from any of the organizations involved in the meetings. Even the stenographer that was brought into take minutes of the meeting was hired from outside any of the organizations.

    One of the main reasons behind this was that the lenders and major franchises or super brokers for a lack of a better name were getting very tired of supporting to many organizations and events and it was going to come a day of reckoning that they would not support any of the organizations.

    The goal was to have the Federal organization deal with Ottawa and the provincial organizations deal with the provinces with the cooperation of the federal organization as they had the manpower to help in provincial discussions.

    The other goal was to have the highest education standard in the country be the entry level to become a mortgage agent, this in our original goal was to be administered by the provinces.

    As for events they would be reduced and again would be administered by both the federal and provincial organizations in cooperation.
    The biggest question is who will get all the money and am I going to lose my position with my respective organization.

    When I did the numbers I felt that the federal organization numbers would grow and the provincial organizations would most likely remain the same. there would be some shuffling of people from one to the other as we would not need to duplication of jobs as they would all be handled as one organization with provincial wings.
    As for the money it would be easily divided amongst the organizations depending on the needs. The provincial organizations would be able to advertise for the mortgage broker channel as they again would not have the lenders as part of the provincial wings of the organization.

    If we were able to move forward and make this happen the membership for every one would have increase greatly and we would than be able to approach the provincial regulators about making it mandatory to belong to the organization which alone would have increased the membership of both organization by more than 5,000 ion Ontario alone who are not a member of either organization and at that point we could start to negotiate with the provincial regulators about self governance similar to re real estate industry.

    HOW DO WE TURN THE CLOCK BACK OR START THE TALKS HAPPENING AGAIN TO MAKE THIS A REALITY.

    1. Hi Bill, Many thanks for writing in and sharing this background info. The goals behind that task force were both noble and necessary. All parties need to get back in a room with an independent conciliator and just hash things out.

  6. Rob, well said, I totally agree with your comments. The industry is changing so dramatically that we all need to be together in this thing to survive the future. By adding another level of orgs to oversee all the existing orgs just doesn’t make any sense. Where are the benefits for the industry or the individual brokers? Except for another level of expenses and more people doing the same thing, what is the point? Does anyone watch House of Cards? Get past yourselves and quit thinking of the personal benefits and do what is right for the industry, drop the politics or you won’t have a job anyhow!

  7. Rob,

    I’m with you on this article! I am tired of hearing about the problems with this industry and yet no action plan to move forward. I hear you on the costs, lack of accountability, etc.
    Working together as a unified front to promote our business to the highest level of professionalism, is what’s key. There’s no room for egos or personal agendas. It’s a matter of survival.

  8. Nobody in the provincial association that I’m a member of asked if I thought this was a good Idea. Looks to me like a couple of associations wanted their own sandbox to play in. CAAMP is what you put into it – it is our association. I think working together is a better solution. I would hope going forward we see less acrimony.

  9. One of the above comments accuses Mortgage Trends of having been bought by CAAMP last year. It states that failing to make that disclaimer questions the journalistic credibility of your editorial comments. It asks whether Mortgage Trends has turned into the Pravda of CAAMP.

    These are most serious challenges to your independence and credibility as a journalist. If the allegations were not true, you would be expected to take tremendous offence and denounce the allegations in the strongest language.

    Instead you chose to respond in a way which one would expect if the allegations were true. You did not say that the allegations were false. You avoided answering the allegations by being evasive. You avoided answering the allegations by trying to shift the issue. You subtly attacked the person for raising what appears to be very valid points. These tactics are only effective if the reader wears Mortgage Trend or CAAMP tinted glasses. Anyone else would see that by taking these tactics, you have simply confirmed the allegations as being true.

    To maintain any credibility that you are not simply the frontman for your owner’s/employer’s (CAAMP’s) views and a forum for them to channel their vested interests (sometimes at the expense of mortgage brokers) into some mock form of journalism, please state in the clearest language that you and Mortgage Trends have always been and are totally independent of CAAMP and that CAAMP has no financial interest (including ownership) in either you or Mortgage Trends. Anything short of a clear statement leaves one to understand that your writings are really nothing more than the result of marching orders received from your owner/employer (CAAMP). Anything short of a clear statement should cause readers to accordingly conclude that the allegations regarding your total lack of Independence are true.

    P.S. We have on other sites been reading a lot about CAAMP paying kickbacks to brokerages who force their members to join and pay fees to CAAMP and as well about CAAMP’s AMP designation being a similar sham and money grab. Now we have these allegations that you and Mortgage Trends are behind the scene in fact CAAMP. Is their any end? Don’t mortgage brokers deserve fair and full disclosure of matters impacting them, particularly by parties who would claim to have their best interests at heart?

    1. Well done, Jack. A puritan witch hunter couldn’t have put it better.
      For the record, CAAMP has never (not even once) attempted to dictate what we write. And I expect they never will. That would be 180 degrees from the reason they wanted CMT in the first place.
      So forgive me for not taking your unfounded indictment more seriously. Guilt has quick ears to an accusation so I must have slow ears.

  10. Why the aggressive (including name calling) and evasive response?

    I recognize you or CAAMP might prefer that the questions not be asked and that mortgage brokers be kept in the dark but, now that they are asked, why not just respond to them clearly, honestly and completely; particularly given your suggestion that the indictment is unfounded.

    Of course the wording of your response indicates the claims are founded. Your answers appear to be that:

    1.Canadian Mortgage Trends is owned by CAAMP (to be taken from “the reason they wanted CMT in the first place”).
    2.You are contractually bound to follow CAAMP’s directions by contract or employment (to be taken from your subtle answers to numbers 1 and 3 in this list).
    3.CAAMP could, but have chosen so far not to, dictate what you write [to be taken from “never (not even once) attempted to dictate what we write”].
    4. You expect CAAMP never would choose to dictate what you write (to be taken from “And I expect they never will.”

    If these would be you clear, honest and complete answers, why not just state them clearly, honestly, and completely. Unless you are uncomfortable with the truth, why try to avoid or confuse the questions. Why attack the person asking the questions or avoid answering the questions rather than just answering the simple questions?

  11. Multiple voices are great but execution is what counts. On that note how do you launch a national association without a website?? ROFLAO. I pray this is not a sign of the foresight we can expect from CMBA leadership.

  12. Yup. There is no speculation to speak of. Bidding $200,000 over asking price is “normal” in Toronto. Don’t think anything of it. Come to think of it, it’s probably just those darned realtors. They must be underpricing their listings.

    Nothing to see here. Move along people.

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