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CIBC offers settlement to brokers

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Mortgage Broker News | 20 Jul 2012, 11:00 AM Agree 0
CIBC is now putting a formal settlement before FirstLine Brokers to compensate them for outstanding BasisPOINTS.
  • Kevin J. Power, President Power Mortgages Inc. | 21 Jul 2012, 04:00 AM Agree 0
    CIBC has not been overly generous with their offer to payout the Basis Points. They would have held them on their balance sheet at 8 cent value and indeed that is the value for Basis Points. If you do a mortgage for yourself, you can without tax consequences, get the full value of basis points up to 7% of the mortgage amount. Their policy allows this.

    My gut tells me that part of the reason for Firstline being so out of the market on rates for the past number of months was to create the necessity to bleed down the number of Basis Points outstanding. The less that is there, the less that they have to settle.

    They are paying out 62.5% of the real value established at 8 cents, there is a full and final release requirement and there is no mention of any tax considerations.

    I am not signing anything until I get an answer to my concerns.
  • Ron Beyer | 21 Jul 2012, 04:17 AM Agree 0
    I find it interesting that CIBC is offering a "settlement" as opposed to proper payment in full for these earned Basis Points. If a client of CIBC were to offer the Bank a "settlement" it would haunt the client on their credit file for years. Don't you just love double standards?
  • Ron Butler | 21 Jul 2012, 04:18 AM Agree 0
    I am just happy to see an offer made, on the BasisPoints side of things CIBC did not have a legal requirement to pay us a penny.
  • Former CIBC Mortgages Employee | 21 Jul 2012, 04:39 AM Agree 0
    CIBC has done a terrible job of the entire situation surrounding FirstLine. The poor communication and treatment of brokers shows a blatent disregard for a group that ardently supported the brand for years. It also shows great disregard for the consumer who was placed with FirstLine. In the past decade, under the new CIBC management, the bank has been steadily declining in consumer opinion polls. They have taken what was once a great bank, number two in the country, and ruined what took almost 200 years to build. It is amazing to me how the shortsighted need of an executive to "make their mark" can so quickly damage an organization. With CIBC mortgages in particular, the new team at the top has shown absolutely no regard for the needs of their partners, the consumer, or the people who work in the bank. I feel sorry for the brokers who own an MCC franchise, because they will be next on the chopping block... guaranteed.
  • R Smith | 21 Jul 2012, 04:53 AM Agree 0
    my calculations also. 67% of what they are worth. I also think it is no coincidence that they are not worth a lot at the moment to buy down a mortgage at the current offering rates of 3.74 for a 5 year .
  • Jerry | 21 Jul 2012, 05:14 AM Agree 0
    What amazes me is the CIBC branch by my office is offering 2.99 for a 5 year closed and FLM is at 3.49 for a 5 year closed. Forcing brokers to use their FLM points.
  • truth | 21 Jul 2012, 05:15 AM Agree 0
    I find it interesting that we would ask our Clients to grant us a cash-back. I just read the article on how the Banks satisfaction metrics have deteriorated. What do we think the consequences of this type of behaviour would be?
    Incredible!
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