When CMP polled its databases of brokers this past spring the market was still dealing with a lot of the blowout from the economic slowdown. On one hand you had less lenders, tightened credit, and the impression amongst brokers that the big banks were trying to take back market share, but on the other you had lower prices and great rates which, let's face it, make everyone think they can afford a house (which can be good for business, but also frustrating for those not eligible).
Now that things have finally started to turn, it was great to see that the responses to our third annual Brokers on Lenders survey anticipated the good news. Not only did the overall tone remain positive, but the comments were constructive (for the most part at least).
That's not to mention that this year's survey received more response from CMP readers than any other, with over 300 mortgage professionals taking the time to fill out the questions and provide candid feedback on lenders for 11 categories: approval/ loan turnaround times, BDM support, broker support (training, information seminars, etc), interest rates, IT and electronic/technology, overall service level to brokers, product range, satisfaction index on overall credit policy, transparency of commission structure, underwriter support and overall satisfaction.
Grades were given on a scale of one (very poor) to five (very good) for a list of 20 lenders, with an "other" option to manually write in a lender they felt should also be on the list. While this list of "others" included everything from big banks to private lenders and white label, none of them were included on the list you will read here. The overall response was so overwhelming for some lenders - and so underwhelming for others - that the minimum requirement to be included on this year's final tally was that each lender had to receive at least 50 votes. After that we took the top 10 from each category. Not only does this make the final list easier to manage and read, but it ensures that the scores given represent a fair sample of mortgage professionals from all different areas in multiple provinces, rather than being based on only a few scores.
To further clarify the diversity of this year's response in total, mortgage professionals from nine provinces participated. Ontario had the highest response rate, with 44.5 per cent of the answers coming from it. British Columbia was second, with 21 per cent, followed by Alberta with 16 per cent. After that came Nova Scotia (five per cent), Quebec (4.5 per cent), New Brunswick (four per cent), Newfoundland and Saskatchewan (two per cent each) and Manitoba (one per cent). While these numbers may appear to be too weighted towards Ontario, Alberta and B.C., they almost exactly mirror industry reports that show, in terms of submitted application volume, that these are also the top three provinces in that sense, followed by Quebec and Nova Scotia.
And while this year's respondents are a definite reflection of the Canadian demographic of mortgage professionals, they also possess a vast amount of knowledge and expertise in both the lending and mortgage brokering fields. Out of the total number of those who replied, 62 per cent have been brokers for more than five years, while 52 per cent have also been lenders at some point. Of those 52 per cent which were lenders, 79 per cent of them were for more than five years.
What this all means is that this year's responses are coming from a well-seasoned group who understand both sides of the broker/lender relationship, and can be considered a fair representation of the country. Lastly, respondents were asked to provide written answers for a wide range of questions, from what is the most important issue that will affect the broker/lender relationship in the next six-12 months, to what is the most important skill an underwriter can have? The answers were particularly lively when they were also asked to indicate if one lender was outperforming the rest, and to provide reasons why.
CMP would like to thank everyone who participated in this year's survey, and we hope you find the results as interesting (and useful) as we did. Don't forget to check out our next issue when we give the lenders a chance to respond.
Approval/ loan turnaround times
1. First National 4.48
2. MCAP 3.60
3. Equitable Trust 3.58
4. ING Direct 3.56
5. Bridgewater Bank 3.55
6. Home Trust 3.52
7. Street Capital 3.49
8. Abode Mortgage Corporation 3.47
9. Macquarie 3.39
10. Merix 3.33
The importance of approval and loan turnaround times to a mortgage professional has always been second to none in terms of relationships with lenders, and this year is no different. When asked to rank which criteria was most important, 101 out of 303 voted for it. So perhaps it's a bit disappointing that the average score for the category as a whole (beyond just the top 10 ranked lenders) was only 3.28, putting it towards the bottom of the heap.
The good news is that a lot of lenders have slightly improved their scores from last year, even if the overall average is lower. First National scored exceptionally higher than everyone else, which would account for the positive comments that poured in for them.
"No matter whether the market is crazy busy or not, First National Financial's turnaround time is excellent compared to all other lenders. Turnaround time is of the upmost importance in our business," wrote one broker, while another echoed this sentiment, putting it more succinctly: "First National- fast, friendly and efficient," he wrote.
In fact, when asked what one of the biggest challenges have been in the last 12 months, this very category came up over and over again, whether it was to the point ("slow and inefficient") or more precise ("Very poor turnaround time," wrote one Nova Scotia broker. "Four hours in 2007 to 72 hours in 2009.")
Regardless, First National's score in this category was the highest of all categories on the survey, so even if the industry is slipping, at least someone is doing it right. "Turnaround times and underwriter support are the biggest problems," wrote Peter Pasula, a broker with DLC in Coquitlam, B.C. "Lenders continually misplace documents or don't update conditions. They spend too much time chasing things that have been sent, they need to close files quicker and move on. All can learn from what FN is doing - very, very efficient. Well, what is FN doing?" That seems to be the million dollar question.
1. Abode Mortgage Corporation 4.18
2. Merix 3.91
3. Bridgewater Bank 3.89
4. Street Capital 3.87
5. First National 3.76
6. Macquarie 3.64
7. FirstLine Mortgages 3.59
8. Equitable Trust 3.56
9. ING Direct 3.45
10. MCAP 3.44
BDMs play a key role in any mortgage, and as such, having a good BDM was the third most important factor for this year's respondents. When asked what he would like lenders to improve on in the next six to 12 months, one broker wasted no time in cutting to the chase.
"Better training for their BDMS so they know the product and what they can do, instead they just throw enough #$#@# against the wall and something will stick," he said.
Abode Mortgage Corporation, even though this year marks the first time it showed up on the list, seems to have hired the right BDMs for the job.
"Abode is great in terms of the discussion with the BDM," wrote one Ontario mortgage agent. "It avoids wasting time on both ends (i.e. is the deal doable or not?). The response for approvals and declines, the followups of condition updates and the way they keep the agent in the loop really assists with agent/client relationships."
"Bridgewater Bank has excellent BDMs and underwriters," wrote Rob Alkema from Barrie, Ont. "They always respond to phone calls and e-mails and always provide constructive feedback on the deal in question."
But the role of the BDM doesn't seem to stop there, according to one mortgage consultant from
B.C. when asked what the best thing a lender has done for her in the last 12 months was. "The Abode BDM called my client when they messed up on one of my files to explain it wasn't my fault," she said, proving that the ability to take that extra step goes a long way.
Coming in second with a slight improvement from last year is Merix, whose BDMs seem to be leading the way for it.
"Merix ... has stronger business development managers, and as a result, increased service and better relationships with the brokers at my work," one comment read, while Marc Mahoney, a senior mortgage consultant with Mortgage Alliance in Newfoundland, called Merix "an unheralded hero in regard to their service levels. In Atlantic Canada, both their business development and their underwriting are arguably the best in quality and most pleasant to work with in the industry."
Broker support (training, information seminars etc)
1. First National 3.44
2. FirstLine Mortgages 3.42
3. Merix 3.21
4. Street Capital 3.15
5. Macquarie 3.13
6. Equitable Trust 3.04
7. Bridgewater Bank 2.99
8. Home Trust 2.98
9. Abode Mortgage Corporation 2.95
10. MCAP 2.93
Though not as important to this year's respondents as some other categories, broker support, in terms of training and information seminars, are still a valuable asset (at least when there is time to attend them). Perhaps reflective of the decreasing importance of this aspect, overall scores compared to last year dropped significantly, with an average of only 2.95 - the lowest of all categories.
Continuing from its first place finish last year, First National once again comes out on top. And judging from the comments when asked what is the best thing a lender has done in the last 12 months, at least newer agents tend to appreciate the effort.
One agent with five years on the job simply wrote that "training on how to become a better broker," was the best thing he received, while another wrote that it was a lender that "offered me guidance, training and an explanation.
Because I'm new to the industry I need help and some of the lenders' teams are very, very helpful and encouraging."
1. MCAP 3.95
2. Merix 3.94
3. ING Direct 3.87
4. First National 3.80
5. Street Capital 3.64
6. Macquarie 3.64
7. FirstLine Mortgages 3.51
8. Home Trust 3.50
9. Scotia Mortgage Authority 3.43
10. Laurentian Bank- B2B Trust 3.37
Interest rates, surprisingly, aren't as crucial to mortgage professionals as things like BDM support and turnaround times, as only 17 respondents said it was the most important. That said, with rates the way they are today, they definitely get the phones ringing with potential clients looking to save money.
It also seems to be the one area that First National dropped the most on, as it finished first in last year's survey but dropped to fourth this year. It allowed MCAP and Merix, who finished second and third last year, respectively, to move up onespot each, and is also one of the reasons continually cited for both lenders' strong overall finish.
"MCAP is really doing well," one comment said. "They have a great stated income product to 80 per cent LTV, and a great no frills product with low rates."
"MCAP seems to want to work with the brokers," agreed a mortgage associate in Calgary. "They have a good turnaround time, great BDM and underwriter support along with competitive rates and a variety of products." IT and electronic/ technology
IT and electronic/ technology
1. First National 4.38
2. MCAP 3.60
3. Merix 3.52
4. Scotia Mortgage Authority 3.33
5. ING Direct 3.03
6. FirstLine Mortgages 2.99
7. Macquarie 2.91
8. TD Canada Trust 2.87
9. Abode Mortgage Corporation 2.86
10. Bridgewater Bank 2.84
Perhaps the least significant of all categories, technology didn't receive any votes from respondents when asked what the most important criteria is to them. That could also explain why this category posted the second lowest average score (2.99) and, oddly enough, saw First National make great strides from the rest of the pack, even if it is down slightly from last year's score.
However, a majority of the comments in favour of First National cite its technology (it uses Merlin) in the list of things respondents like about the lender. And for some, that seems to make all the difference, such as Lisa Brinson, a manager with Invis in Nova Scotia.
"First National seems to have the best turnaround/back-end support as well as the best technology," she wrote. "Bridgewater and Concentra have the best products, but their technology and turnaround leave something to be desired."
"Scotia Mortgage Authority has really vamped up its program," wrote Cynthia Kelley, a Centum mortgage consultant/broker in Saint John. "Better website, better service & better rates."
Technology was also mentioned several times in response to the question "what is one thing you would like to see lenders improve on in the next six to 12 months?" So while it may score low this year, it could also prove to be more important in the years to come.
Overall service level to brokers
1. First National 4.22
2. Home Trust 3.61
3. Merix 3.60
4. Bridgewater Bank 3.54
5. ING Direct 3.51
6. Macquarie 3.48
7. Street Capital 3.47
8. MCAP 3.45
9. Abode Mortgage Corporation 3.45
10. Equitable Trust 3.40
This was one of the new categories for this year's survey and it ranked extremely high in matters of importance to mortgage professionals. With 84 of the total votes, it was deemed the second most important factor for lenders to consider, proving that rates aren't everything, and customer service is.
It's no coincidence that two of the top three in this category, First National and Merix, also finished in the top three overall. That said, when it came to service in general, the comments were scathing, showing that this is one area that needs a lot of improvement. And with an overall average of only 3.35, there is definitely room for it.
"Attitude," summed up one respondent. "Lenders feel that they do not need to provide service and that we should take what we get or go elsewhere."
"Service levels have slowed to a crawl," wrote another. "Lenders reduced staff and when the market is busy they don't have enough people to process. Staff is stressed and sloppy."
And in the same vein another broker wrote "when times were slower, service was great. But now that it's busy, service levels on pre-approvals are NOT GREAT, nor are turnarounds on real deals with exception of First National Financial." Another simply wrote that with most lenders "service levels have deteriorated and don't exist anymore."
But in all fairness, with the amount of lenders the market lost this year, there are less lenders left to do the work, as mentioned by Mike Comeau, president of Centum Global Mortgages in New Brunswick., who also had a suggestion.
"It's simple percentages. Years ago when I started in the business we had 51 lenders and now we have only 14. So, we have more brokers and agents than five years ago sending deals to less lenders, causing a bottleneck of deals with lenders burning out their staff. They will have to commence to select their brokers in order to provide better service levels," he said. And of course, the comments weren't all bad, like from this agent in Ontario.
"Home Trust has excellent service to brokers and clients," she wrote. "I feel that it is because the individuals that work there seem to take ownership and may be better trained to deal with calls and questions. I also feel that the competency level is higher. "
1. FirstLine Mortgages 4.06
2. Scotia Mortgage Authority 3.85
3. TD Canada Trust 3.52
4. Laurentian Bank-B2B Trust 3.50
5. Bridgewater Bank 3.44
6. MCAP 3.41
7. Home Trust 3.36
8. First National 3.35
9. Merix 3.34
10. Street Capital 3.20
Product range was the one category where being somewhat connected to a large bank proved to be a definite asset, as FirstLine repeated its first place finish last year, even if it was with a slightly lower score. It's also an area where most other lenders seemed to have improved on.
"Each lender is better in one area or another," wrote one broker. "With FirstLine it was easier to get approval and it has a great product range (HELOC), GVS system and Points to buy down rates to compete with banks."
Satisfaction Index on overall credit policy
1. First National 3.87
2. Abode Mortgage Corporation 3.54
3. Bridgewater Bank 3.45
4. Home Trust 3.43
5. ING Direct 3.42
6. Merix 3.38
7. Street Capital 3.35
8. MCAP 3.31
9. TD Canada Trust 3.27
10. Equitable Trust 3.26
With the lending landscape being particularly challenging right now, CMP was interested in finding out how well lenders had communicated their policies to their broker partners. While the category ranked low in overall importance, the average score was the same as approval and loan turnaround times (3.28), showing that this is yet another area that lenders need to improve on.
Transparency of commission structure
1. First National 4.26
2. ING Direct 4.13
3. Abode Mortgage Corporation 4.08
4. Bridgewater Bank 3.90
5. MCAP 3.83
6. Macquarie 3.74
7. TD Canada Trust 3.73
8. Home Trust 3.73
9. Street Capital 3.73
10. Scotia Mortgage Authority 3.68
Commission structures were another new category from this year, and it comes in light of the trend towards efficiency bonuses over volume. Based on the high scores (the average was 3.77) it seems that a lot of mortgage professionals are satisfied with lenders' treatment of this issue. In fact, 58 per cent of respondents, when asked if the move to efficiency bonuses was a good thing, replied that they were, and only 15 per cent reported that current commission structures are confusing.
1. First National 4.22
2. Home Trust 3.72
3. Equitable Trust 3.68
4. Street Capital 3.55
5. ING Direct 3.54
6. Merix 3.51
7. Bridgewater Bank 3.51
8. MCAP 3.45
9. Macquarie 3.44
10. Scotia Mortgage Authority 3.33
Considering they are on the front line between lenders and brokers, underwriter support ranked extremely low on the overall importance chart. And while it may have ranked low there, it also provided some lively commentary from some very satisfied and some very dissatisfied respondents.
"The most important skill an underwriter can have," wrote one broker, "is to be completely forthcoming with an agent. We know every deal cannot be done, but being frank with an agent at the outset can save a lot of time for all parties involved."
That was just one of the hundreds of responses CMP received on what makes a good underwriter, which ranged from the simple and straight forward ("Acting like he/she cares about your deal when they have 25 more on their desk.") to the more exact: "Experience!" wrote John Pasley, a mortgage specialist with DLC Capstan in Kentville N.S. "With no experience or having worked on the 'front lines,' they rely solely on computer models and statistics, which any seasoned lender will tell you doesn't always cut it. That means the lenders will eventually have to pay for good underwriters instead of the call centre people they have approving deals there now. When I have had the good fortune of speaking to a seasoned underwriter they are only there for a matter of weeks because they are promoted and now don't deal with the brokers any longer."
"First National I think is head and shoulders above the rest," wrote another. "The BDM (Tom Taylor) is extremely helpful when called upon (rarely) and our underwriter (Robert Sanita) is magnificent - efficient, gets it done and without fighting us."
1. First National 3.98
2. Merix 3.54
3. MCAP 3.50
4. ING Direct 3.45
5. Street Capital 3.42
6. Bridgewater Bank 3.42
7. Abode Mortgage Corporation 3.41
8. Home Trust 3.39
9. Macquarie 3.37
10. Equitable Trust 3.28
Once again, the overall performance leader this year was First National, with MCAP dropping one spot to third and Merix moving up two spots from fourth last year.
And, as such, the praise poured in from mortgage professionals across the country. One sub-broker from Victoria, B.C. actually said she "enjoyed" sending her applications to First National, while an agent from Ontario wrote that it had "unmatched turnaround of applications, documentation review and a streamlined cohesive process for addressing underwriting and documentation issues."
"Sometimes the performance of the lender comes down to two people," wrote one Ontario agent. "The underwriter and the BDM. If you have a great underwriter as I do at MCAP then all is good."
And to dwell on the fact that one of the most important things for lenders to consider is service, an agent in Saskatoon wrote, "I do a significant percentage of my business with Merix based on rate leadership and service," she said, before adding that "at the end of the day, it's about the banker, not the bank, and my underwriter takes very good care of me and for that I'm grateful."
Good words to live by.