The trend of consolidation in Canada’s mortgage industry continues.
Tango Financial is the latest mega-brokerage. The company is an amalgamation of Paragon Mortgage Inc., Premiere Mortgage Centre and Compass Mortgage Group, which announced a merger agreement last week.
The three firms will remain autonomous under the umbrella of Tango, with Don MacVicar of Premiere Mortgage Centre, Steve Rogerson of Paragon Mortgage Inc. and Dean Larson of Compass Mortgage Group each maintaining their roles as president of their respective brokerages within the group.
The idea behind the merger is to leverage shared technology and scale to drive growth and provide its brokers with a competitive advantage, say those behind the deal.
This news follows other big mergers, like Group Multi-Prêts Mortgage Alliance’s purchase of Invis and its sister company Mortgage Intelligence, M3’s purchase of VERICO and DLC’s acquisition of Mortgage Architects (MA) and Mortgage Centre.
“As our marketplace and industry have evolved over the past several years it has become increasingly important to ensure we have the necessary scale and efficiencies needed to compete and win,” Paragon Mortgage Inc. President Steve Rogerson said. “This merger positions us well for continued growth that will help us reach our goal of exceeding $5 billion in loan originations in 2018 and beyond.”
In terms of the administrative structure of the new entity, Jason Henneberry, current founder and CEO of DocAssist and LenderSpotlight, will become the CEO of Tango Financial and oversee technology and support services development for the organization.
CMT reached out to Henneberry for his take on what this partnership hopes to achieve.
CMT: What are the main economic considerations that made this deal necessary?
JH: “Now more than ever, we feel that size really does matter. We have seen this at the network level and we truly believe the same is true at the brokerage level. This merger will allow us to create operational efficiencies and accelerate our investment into new services and technologies for our agents.”
CMT: Are there any thoughts of Tango leaving the VERICO network? If so, why? JH: “We have no plans to leave the Verico network.”
CMT: What were the mortgage originations (closed deals) for all members of the combined entity in 2017?
JH: “Volumes for the combined entity are $3 billion in 2017 and continue to grow at a phenomenal pace. In fact, we recently added nearly $1 billion in new annual originations from top-producing agents that have joined the group in the past 90 days. We conservatively anticipate volume to be well in excess of $3.5 billion for 2018.”
CMT: How many mortgage agents did all three have combined in 2017? JH: “We have a total of 306 agents in the organization.”
CMT: How hard was it to allocate ownership in the new entity? What was it based on, volume originated in 2017?
JH: “Our industry is now at a place where there are some generally accepted valuation models for high-volume brokerages with a proven track record of performance. We took into consideration the quality of the agents, the consistency of the mortgage volume and the strength of the leadership teams to determine the overall value of the organization. We have an extremely cohesive senior management team and it really wasn’t very difficult to come to an agreement on ownership allocation.”
CMT: How will Tango’s technological offerings set it apart from its competitors? What are a few examples of unique technology that is/will be available to its brokers?
JH: “Tango is unique in its approach to technology in that we build from the ground up, and we test our services in real market conditions before rolling them out to our agents. Put simply, we don’t believe in tech for tech’s sake. It’s about providing tools and services that actually add value and help our agents grow their business and maintain their competitive advantage in the marketplace.”
Henneberry points to LenderSpotlight, developed to help internal agents make sense of the evolving rate environment, and STREAM5 Marketing, which supports brokers with social media content and lead generation, as examples. Both were proven first before being made available to the industry at large.
“We are also really excited about our new CRM / File Management System built on the Salesforce.com infrastructure. This is the first system that allows an agent (or team) to manage all five aspects of their business on one platform: Marketing, Sales, Administration, Payroll & Compliance. We’re calling it ‘S5’ and it integrates directly with our DocAssist Underwriting Team, so agents can scale their business right from within their CRM, by plugging into on-demand support services through DocAssist.”
CMT: Will Tango look to merge with or purchase more brokers? JH: “Our primary focus is on creating efficiencies and enhancing our services & technology for our agents. We’ve brought together some very high-calibre people and we have a lot of work ahead of us to deliver on our promise. That being said, this merger positions us well for continued growth that will help us achieve our goal of reaching $5 billion in loan originations annually in 2018 and beyond.”