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mortgage lenders navigating the new normal after COVID-19

How Canada’s Mortgage Lenders Adapted to the ‘New Normal’

We take a look at the new ways of doing business and which ones are likely here to stay post-COVID


The COVID-19 pandemic and the resulting nationwide lockdown forced the country’s mortgage lenders—like many businesses across the country—to adjust their operations in this unprecedented and brave new world of conducting business.

They were faced with keeping the country’s mortgage deals flowing while adjusting to constantly changing conditions.

Practically entire workforces were told to work from home, which tested the abilities of lenders to keep business operations running smoothly. At the same time, they faced unprecedented demand on customer support when mortgage deferrals were first announced.

This unparalleled global event tested the ability of lenders to adapt and innovate at a moment’s notice, all while trying to provide uninterrupted service to thousands of clients and mortgage brokers.

The early days of the pandemic

Within days of the nationwide lockdown being announced in March, thousands of mortgage employees had already transitioned to working remotely.

Lenders had to execute their transition plans quickly and as efficiently as possible to ensure uninterrupted service for the thousands of homebuyers needing to complete their purchases and get into their homes.

Some, like Home Trust, already had technology and crisis management strategies in place, which allowed them to make the transition quickly and smoothly.

Home Trust’s Ignite Program, launched in 2018, is a “multi-year digital transformation” that included planning and preparing for significant outage events.

“Prior to COVID, we had a well-thought out business continuity plan that we were able to execute against that allowed us to move our staff off-site with no disruptions to service,” said Ed Karthaus, Executive Vice President, Sales and Marketing, at Home Trust.

“What we learned during this whole process is that planning ahead pays big, big dividends,” he added. “Our crisis management plan allowed us to execute exceptionally well without disruption to our clients. And for a guy who’s been in the technology field for 30 years, I’ve got to tell you, it made me very, very proud.”

Canadian government COVID-19 initiatives

At MCAP, most employees had already been transitioned from desktops to laptops several years ago, which, in hindsight, was “one of the better decisions that we ever made,” said Paul Bruce, Executive Vice President.

That allowed approximately 900 of the company’s employees representing three lines of business—single family, commercial mortgages and construction loans—to start working from home within a few days of the lockdown.

“We’re sensitive to the culture of the business because, yes, working at home has actually created a lot of efficiencies for us,” Bruce noted, pointing to the removal of lengthy commutes for some employees as just one factor. “But there are pros and cons to working at home. The trade off to that is you don’t know everyone’s personal situation at home and how much stress they’re dealing with.”

It was for that reason that CMLS implemented some policy changes to encourage virtual “face to face” meetings in order to maintain the human connection.

“We mandated that every meeting we had, we were going to do it via video conferencing because we felt it was important to see one another to keep that relationship alive,” said Dan Putnam, Senior Vice President, Business Development, Residential, at CMLS.

The lender also now conducts regular town hall meetings with staff and publishes a weekly newsletter showcasing employees in their homes to maintain the camaraderie.

“We wanted to keep it light and lively. It was our way of keeping the team connected,” Putnam added. “It was about the maintenance of culture, but it was about business continuity, making sure our customers were looked after. And it was about staying in touch with our mortgage broker customers from a sales and relationship perspective.”

Of course, there were also more complex logistical hurdles to ensuring that hundreds of employees could carry out their duties from their homes without interruption. For Equitable Bank, that included implementing mass-scale VPN, remote access to systems and call recording capabilities for the company’s customer-facing employees, said Brian Leland, Equitable Bank Senior Vice-President, Residential Lending.

Technology to the rescue

Not only was technology employed to support the shift to mobile work environments, but it played an important role in facilitating the rapid adoption of a more digitized mortgage process for clients.

Lenders quickly implemented greater capabilities for things like digital signatures for commitment letters, pre-authorized debit forms, closing documents and a variety of other documents.

In some cases, the digital tools were already available, but didn’t experience maximum uptake until the pandemic made them a necessity.

broker technology war is heating up

In the case of Equitable Bank, it had already launched its online income verification tool, Statement Share, to create a smoother process for exchanging bank statements as part of the mortgage approval process.

“We were really trying to get these digital tools ingrained into the mortgage broker space, and certainly the pandemic has helped us accelerate those efforts and is really allowing the brokers to see the true value in those products or in those technologies,” said Leland. “Certainly, we have additional functionality plans as part of our roadmap that are even more legitimized now than they were at the beginning of the year.”

When mortgage deferrals were unveiled in March, the client inquiries poured in, leading to hours-long wait times to get through to banks and other mortgage lenders.

CMLS realized early it needed to use technology-based solutions to clear up the backlog.

“The lesson learned was that owning our technology stack top to bottom worked well for us because we automated some of the processes for managing mortgage deferrals very early on,” said Putnam. “And being a tech-oriented company in the first place served us well through this transition.”

The lasting legacy of the pandemic changes

It’s clear that the pandemic was a catalyst for some positive changes in the industry. But how many of those will remain in place well after the pandemic subsides?

Speaking with the heads of most of the key non-Big Six bank mortgage lenders, two themes emerged.

First, they expect the momentum in adopting digital solutions for both clients and brokers to continue.

COVID-19's impact on mortgage refinances

“We’re obviously going virtual with our fellow employees and peers but, at the same time, how does that extrapolate out to the consumer, where there’s a lot more virtual interactions and people are just communicating to one another via PCs,” suggested MCAP’s Paul Bruce.  “You’ll see continued investment in technology for sure.”

Home Trust’s Karthaus agrees.

“What the pandemic has done is it has basically ensured that we will continue to make significant investments in technology and to really focus on the user experience of both our employees and our clients, to ensure that we have a highly effective way of communicating via technology,” he said.

Equitable Bank’s Leland points to some adjustments the company made in the face of the pandemic restrictions, such as modified appraisal methodologies, the utilization of other valuation tools, adjusted customer identification policies and document verification, and says there will be more of that to come.

“I think many of these solutions will not only survive a return-to-work environment, but actually become more adopted in the space, not just for ourselves, but others,” he said. “I can certainly assure you we have burning ambitions to build even more conveniences and simplicities for brokers into the mortgage closing life cycle as time goes on.”

The second big change to watch in the industry will be a greater acceptance of working from home due to the positive results seen so far.

“I do think that moving forward, the sales team will probably incorporate more work-from-home and the use of video conferencing for training and relationship development purposes,” Leland noted. “I think we’re going to find that our teams will do that more moving forward.”

Putnam agreed, saying the new work from home culture “is going to be with us for a while.”

“I do think we’re viewing it as an opportunity to grow our business without perhaps the need for more space,” he said. “It’s proven itself to be a viable and productive alternative as long as you have the right technologies in place.”

This piece was originally published in Mortgage Professionals Canada’s Perspectives magazine (Issue #3, 2020).