Tuesday, 24 November 2009
A panel of lenders at CAAMP's annual conference said they believe mortgage brokers' share of the market will continue to grow, but also emphasized the need for greater efficiency and speculated that volume bonuses could be scaled back over time.
"There is increasing penetration of the mortgage broker channel because it takes all the grief of getting a mortgage off a person's shoulders," said Stephen Smith of First National, adding the under 40 generation has created a culture of using mortgage brokers as opposed to their parents' generation who turn to banks.
Among the positive outlook there was also critique. Ivan Wahl of Xceed Mortgage Corporation talked about his company's goal to do 80 per cent of volume with 20 per cent of brokers and speculated there are only a small number of brokers who "do what they say they're going to do." John Webster of Scotia Mortgage Authority said he didn't think lenders needed to be "all things to all people" in response to one of Smith's comments about catering to all brokers, not just the ones who send in lots of deals.
On the topic of lender exclusivity, Boris Bozic of Merix Financial said it appeared lenders were after "the same 750 brokers across the country even though there are 14,000", stating brokers can have trouble gaining direct access to a lender. He also stated volume bonuses have a "shelf life expiry" and warned the industry to prepare for changes.
The panel agreed on a trend toward more screening of brokers (such as Scotia Mortgage Authority's mortgage scorecard) focusing on efficiency ratios, number of delinquencies and deal quality. And although the panel agreed the economic recovery is underway, their optimism was cautious.
"The last half of 2009 was much better than anyone expected," said Webster. "But there is still a lot of uncertainty."
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