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Mortgage Broker News | 29 Oct 2009, 12:20 PM Agree 0
Mortgage brokers who prepare a deal with a lender only to find out their clients have used the rate information to shop around is something that happens "far too often" said paralegal Jeff Greenberg, who recently launched a business to help Ontario brokers collect commissions from clients.
  • Ray B | 30 Oct 2009, 03:53 AM Agree 0
    Get real is this a joke? How can this be a legitimate business? Obviously the brokers using this service don't care about any of their clients or the possible referrals that might come from them or their image in the community. Last time I looked as brokers we needed referrals to make a living. Taking a client to small claims court because they don't proceed with us because they got a better rate some place else is ludicrous and wrong. Having this company ask for it as well is also wrong. If the deal does not go through because the client has decided to not proceed with you then move on to the next one because it's life and that's how things work. I can't see how the courts can let this go on. Makes no sense to me and Jeff Greenberg should be ashamed of himself for calling this a business.
  • Lianne | 30 Oct 2009, 03:53 AM Agree 0
    I think this practice is wrong - if you want to drive clients and people seeking brokers in general away as fast as possible then this might be the route you go.
  • Lianne | 30 Oct 2009, 03:54 AM Agree 0
    You need to think outside the box in order to attract clients who will find comfort and connect with you to develop that "trust" When a client feels as tho they can trust you and they feel a rapport there, then you've got a client plus many referrals for life. If you play your cards right.
  • Rhett | 30 Oct 2009, 03:58 AM Agree 0
    I got no problems when an another instiution beats my rate. But when I consistantly come back with the lowest rate and they take it to a lender and they match it.. Then I feel that I should be entitled to some form of compensation. I was responisble for the lower interest. They would not have recieved that low interest rate had it not been for the work I have done.
  • Dave | 30 Oct 2009, 04:01 AM Agree 0
    I agree with Rhett. If I have done the legwork and ensured that a client has been able to benefit from a lower rate I should get paid.
  • Dave | 30 Oct 2009, 04:03 AM Agree 0
    As to the referrals. Do you really want all their friends and family calling you just to have them go back to their banks? It's just a waste of your time. They see no value and they'll pass that judgement on to their referrals as well.
  • Clayton Carby | 30 Oct 2009, 04:04 AM Agree 0
    If your client is using you just to get the best rate and his FI is willing to provide the best rate the client can nagotiate somewhere else then that is what is going to happen. Stop selling RATE and start selling SERVICE. If you can't prove to your client that your service is better than the Banks then you need to work harder on that.Would you give up a better deal just to stay with the person who may or may not have done his best but knows he will get paid just because came to him?
  • Lianne | 30 Oct 2009, 04:09 AM Agree 0
    You can't say that "the work is done" once the client signs the commitment. What if a frustration of contract occurs? How can you sue someone for something that was out of their hands? If you aren't ALREADY giving your client the best rate, well then you deserve to have them walk out since you're doing them a disservice by not offering them the lowest rate possible. Seasoned brokers have connections with lending institutions to get the best rate and avoid them competing. The day's of the "small volume" brokers are coming to an end. It's a fact.
  • Mark M | 30 Oct 2009, 04:32 AM Agree 0
    Wow, I cannot believe that brokers even consider this avenue. How much do you possibly have to gain?! You lose your reputation, repeat business, referrals, Legal fees, and what, to get a few measly bucks back? This is part of the industry, no different than most other sales...
  • Mark M | 30 Oct 2009, 04:34 AM Agree 0
    And in addition, I heard once in business that if price is your only competitive advantage you will eventually lose long term... Clients will shop rates, but quickly realize that maybe those other lenders with the same rate can't get them approved. Many clients come grovelling back, and the ones who don't, I don't mind.
  • Melissa U | 30 Oct 2009, 04:48 AM Agree 0
    We can't call them clients. They are just customers. This practice for these customers is very rampant and maybe at the back of their heads they cann all the mortgage brokers, suckers!!! They don't respect what we do regardless if we sell them the service or the rate. The customers just think that .05% less in what the other lender has offered will make a huge difference in their mortgage payments. And even if we business owners will consider it as "customer is always right" they need to pay for the time we have spent finding them the right rate and right mortgage. I agree that we have to make them pay!!!
  • Faye D | 30 Oct 2009, 05:07 AM Agree 0
    Well this is sure a wide range of views. My agreement lies on the side of move on. If this is for private financing then yes I believe you have a point but if this is AA business then no I dont believe you have any entitlement. I think if this happens a lot to you then you need to analyse your strategy.I agree with I agree 2.
  • JM | 30 Oct 2009, 05:20 AM Agree 0
    This is the most ridiculous thing I have read in a long time. Many brokers, myself included, have worked for years to establish a good reputation and develop a solid business. I lose very FEW deals a year on rate. Why? Because I provide superior service and knowledge to my clients which we all know our local banks don't do. You are far better learning to identify shoppers up front and use other strategies to earn their business. It's not all about rate for many people. I am embarrassed to be associated with this type of negative behaviour in our industry. Jeff Greenberg should be ashamed of himself for tarnishing
  • Mark M | 30 Oct 2009, 05:28 AM Agree 0
    I think that the majority of the high volume mortgage brokers or well established brokers with a network of referrals think that this is ludicrous. Its only the lower volume brokers who rely on advertising and no referral sources that would even contemplate ruining what little reputation they already have.
  • Jeff G. | 30 Oct 2009, 05:30 AM Agree 0
    I would like to thank all of your for your comments and suggestions and I am not looking to make an argument with anyeone, but you need to consider that, if it is time to take a client/customer to court for lost commissions, then this is done as a "Last Resort".

    Facts are facts, clients/customers will shop and they are entitled to do what is best for them - but if they have signed a comittment and a broker or agent has done the work that they were supposed to and a deal DOESN'T close through no fault of their [the broker/agent] own, they are entitled to get paid.

    You are on COMMISSION! No sale, no money, no money, no food on your table - all because a client was dishonest and negotiated in bad faith. I believe that clients and customers should be accountable too.

    Further, I'm not saying taking a client or customer to court is right, nor is it wrong (AND it should only be if the amount owed to you is substantial enough) - that's your decision to make. But don't you as mortgage agents or brokers deserve better?

    As a former agent, I sure think you do.

    As for RAY B., I am a Paralegal and proud of it - I represent my clients with dignity, honesty and respect - this is only ONE aspect of my business.

    Thank you.
  • JM | 30 Oct 2009, 05:44 AM Agree 0
    Maybe the key words in the reply are "former agent" . Enough said.
  • Brian Matthey | 30 Oct 2009, 05:52 AM Agree 0
    Too often we are afraid to explain the relationship we have with a lender and how we get paid.To often we are afraid to ask the client if they are going to use our rate to shop around or make their position better at their bank.
  • Liz | 30 Oct 2009, 05:56 AM Agree 0
    Branches have become very competitive in the marketplace recently. A Mortgage Agent who does not protect themselves from competitive bids once clients have agreed/accepted a Commitment puts their paycheque and their livelihood at risk. That's why we discuss a pro-active method of protecting yourself and your livelihood in a very pro-active way that also retains your relationship with your client as part of the IMBA (Independent Mortgage Brokers Association of Ontario) Mortgage Agent Course. IMBA wants to provide new agents with tools and industry insights to be able to survive in this very competitive environment.
  • Brian Matthey | 30 Oct 2009, 06:02 AM Agree 0
    If I get any vibe from the client that they are a shopper,I send them packing and tell them to contact me again when they have finished their shopping and I will tell them if they have the best rate.If you don't have a relationship with your client from the outset,you never had a client to begin with.If you do the work and they shop you,you obviously didn't make the right impression and didn't spend enough time reading the client
  • Gunther Kaschuba | 30 Oct 2009, 06:07 AM Agree 0
    As one of the 'old timers' in this industry this is not a new concept. In the past brokers have tried to collect commissions this way moreso as a threat to keep a client. Wonder how many referrals they got! Brokers have even tried to get borrowers to sign a form of agency agreement much like the realtors. It does not work. The fact is we as brokers must gain our clients' trust and respect in order to keep them, as was stated in other brokers/agents comments. I know this has been an challenging year where I have had many lost deals to banks. I just tell my client to go for it, let them know I am always available for further advise if they need it and keep them on my mailing list. I can tell you from experience you will get those clients referrals and the bank won't!
  • Jeff G. | 30 Oct 2009, 06:38 AM Agree 0
    For "JM" and others - let me clarify something, not only was I an agent, my role was to hire, train and ensure compliance with quite a "Large" brokerage.

    Also, it's not always about gaining the client's trust and determining from the get go whehter or not they are a "shopper" - that's not always somthing that is easily determined.

    Consumers are becoming better educated and more saavy - if you don't think this will happen to you, you're sadly mistaken. They will take advantage of a broker or agent, because they can.

    None of you are "perfect" in respect to being able to read a client and their intentions - so please don't claim you are. If this isn't a common occurance for you, then that's great, but clients are not always honest and there is no loyalty to anyone.

    Enough said.
  • jJOHN M | 30 Oct 2009, 07:01 AM Agree 0
    I agree clients should sued.Most agents don,t realize the client is already bad mouthing you anyhow that he got a beter deal and will not send you any business. I sued several clients who don't even show up in court and you auotamtatically get default judgement high volume established broker
  • Dave | 30 Oct 2009, 07:19 AM Agree 0
    Let's hope one of the Canada news services does not pick up on this post outlining how the Brokerage Community now has a special service to sue clients if they do not go ahead with a commitment.

    The same Brokers that would sue a client for leaving take great pride when they can steal the same deal away from the Bank.

    If your client is talking to another Lender it is only because you the Broker have are not talking to the client enough.

    Know your client, build trust and provide service otherwise you will continue to lose business and it won't be just on rate.

    P.S. Please don't try to justify the whole process by suggesting we are good guys and sueing for just the finder's fee not including the volume bonus.

    Finder fee, less Greenbergs fee, less brokerage company split you are left with nothing but ill will between you and the client rather than acknowledging what is in the client best interest is right thing to do.

    Sorry Jeff you probably thought this was going to be a great business opportunity for you but I am hoping the majority of the Brokers in the community agree with the majority of Brokers that have posted their reply's here today. What is your fee anyway?
  • Jeff G. | 30 Oct 2009, 07:32 AM Agree 0
    Dave,

    I agree, more bad press is not what this community needs - and a small community it is...but I think once you realize the process from my perspective and how I work with the broker community and the clients, you will see it in a different light - Or, if not, you just don't have to use me.

    My fees are VERY reasonable.

    You are welcome to call me at 905-709-7453 with any questions.

    If anyone is planning on calling me in order to initiate an argument, save your breath, I won't take your call.
  • TravisRO | 30 Oct 2009, 07:35 AM Agree 0
    If you want to go this route then you should have the client sign an agreement upfront, stating that if you proceed with the commitment and you don't proceed with the mortgage because another lender has matched the rate, I will claim for the commission I would have been paid. If they find a better rate, well that's just the biz, but putting me through all this work just to match my rate, NO. Most clients have no problem signing to that, and the one that don't were shopping you anyway.
  • Jerry | 30 Oct 2009, 08:24 AM Agree 0
    As it has already been noted, losing deals to the banks is not an issue that a well trained or experienced broker should have to worry about on a large scale. Collecting outstanding appraisal monies on deals that go south however is a different story. I try to ensure that NAS or local appraisers are paid COD by clients but that is not always possible. The result being that if the deal falls apart I get stuck with the appraisal bill. It is one thing to lose a potential commission on a deal but another to incur costs for on that deal with nothing to show for it. I know, I know just stop paying for appraisals upfront....the reality of it is though, that we all write some of these off each and every year for this very reason. At $300-350/each I'd rather have the money back in my pocket. As far as the PR goes....this type of customer is knowingly stiffing the broker and gone on with their life - not acceptable and highly unlikley any decent referrals will come them anyway.
  • Jeffrey | 30 Oct 2009, 09:17 AM Agree 0
    Instead of taking the time to build a relationship with the client, explaining the benefits we offer, give them a level of service the client deserves as most career Mortgage Brokers do, this problem is predicated by a bunch of loose cannon new to the business, inexperienced brokers that have done nothing more for the client except take an application and send it in electronically to a lender and somehow think they are entitled to earning a fee for the service. What service?
  • J. M .M | 02 Nov 2009, 06:39 AM Agree 0
    As mortgage agents our livelihood depends on a service we provide to arrange tht best possible financing we can for a client and in some circumstances simply capital for a deal that has proven to be a difficult one in nature for whatever multiple reasons that may exist and unless you are not from this planet, any one in this business I am sure they are fully aware that these circumstances fully and continually exist, it seems here that the focus of this concern is a client who basically INTENTIONALLY wastes the valuable time of the broker who is working hard on their behalf to help them while they in the meantime get on with their lives, Well quess what WE LIKE ANY OTHER HARD WORKING HUMAN BEING HAVE A RIGHT TO BE PAID IN EXCHANCE FOR THE TIME, WORK, AND EFFORT IN PROVIDING WHAT WE HAVE BEEN HIRED TO DO, and it is only right and proper that we should be compensated accordingly for our work and effort, there is way far too much of mortgage agents and brokers alike having thier time and effort DELIBERATELY taken advantage of from certain unscrupulous individuals and we are expected to just sit back and continue to simply except that as part of the job, I SAY ENOUGH IS ENOUGH WE NEED SOMEONE LIKE Jeff Greenberg who has went through these circumstances personally and we as an Industry as a whole should welcome people such as he who is prepared to try and represent us in situations where we the broker after rendering our sevice correctly and professionally and is entitled like any one else in any other service industy are indeed entitled to be paid but in circumstances are not, my children cannot live on fresh air only, that is why I work hard long hours to support them and if some one decides after I have done everything I was supposed to and not pay as they have previously agreed to then I am not going to hesitate to call someone such as Jeff Greenberg to try and help me especially and specifically when I can prove I have evidence to support my cause and I would be grateful that I have this much valued resource. On a final note the mortgage brokers service available to the public is a service that I personally recommend to many people on an everyday basis as a service that saves them their own valuable time along with many other favourable advantages to them, and in return I expect nothing only to be compensated for a service that was deliversd honestly, satisfactory and efficiently and if my reward for that is I am not paying you now then as any other decent human being I am not going to sit back and take it THIS MY COLLEAGUES AND FRIENDS IS THE TIME WE NEED GOOD PEOPLE LIKE Jeff Greenberg because right now as this is being read there are many of you out there that have infact worked very hard on certain deals for prolonged periods of time and were not paid when in fact you had every right to be paid, I say to you, if you don't want to do anything about a situation like that,then that is fine, but for me I say NO MORE, stand up for your rights or be thankfull we have some one such as Jeff Greenberg to turn to for help.
  • Robert/Sue | 03 Nov 2009, 04:13 AM Agree 0
    We just bought a house without a realtor. The realtor ticked us off as every answer towards what he's done for us (or really not done for us compared to other realtors who responded via email and provided us with good and valuable information for FREE) was about MONEY. His MONEY and then gave his speel about "taking food from his kid". We sold our condo through him.. He got a few "referrals" through his "register your name when coming in" but we got no "referral bonus" unlike our friends (who got a monetary bonus for referring him to us).

    We cleaned the house, we "staged" the condo. All he did was stand there and talk to the people coming into the open house. How hard is that?

    Our mortgage broker was EXCELLENT. We used him this time as the last time we bought the previous condo, he said he couldn't beat RBC's rates (at that time) and told us to go with them. This year, RBC couldn't beat the broker so we went with him. He also helped us with figuring out whether it was cheaper to break our existing RBC mortgage.

    He said it was in HIS best interest to be honest to the client if he cannot help them because they will remember him for his HONESTY and could come back to him in future years or refer others to him. This we did because we remembered his SERVICE & HONESTY to really try to help us last time. He also paid/absorbed the home inspection costs on a house that we were going to buy but rejected it because we found so many major repairs to be done.

    There's no point in doing something that will screw yourself out of a business or have someone bad mouth you & your practice.

    Our mortgage broker said to us: "Just think long ago what kind of reputation mortgage brokers had previously. They were linked with clients who had poor credit ratings & almost mafia-type lending practices".

    Doing something like suing in the above is going backwards. If you're going to ask for commissions up front, you'd better tell your potential client ahead of time. I'm sure this will make people avoid your business.

    My advice. If you're a client, go elsewhere. There are many other reputable, honest, and service-oriented brokers out there that know the costs of running such a business. If you're a good business person, you would have already been educated on these matters.
  • John D | 06 Nov 2009, 02:37 AM Agree 0
    I have had clients come here for a refinance and I obtained a substantial rate reduction for them. I worked to get this. They then take the commitment back to their bank who then MATCH my rate. Not beat it, but MATCH it. I have an upfront disclaimer that my clients sign, it is the only time I charge a fee. If they go back to their lender and they BEAT my price so be it. If they only MATCH it, then they got the rate reduction because of my hard work. I deserve to be paid for my services.

    Pay my broker fee for services rendered or I will sue.

    Fortunately, I have only had three people pull this stunt on me in seven years; I was paid by two, and sued one successfully. I have received multiple referrals from the first client who paid, non from the one I sued, thankfully as I don’t want his kind in my office.

    I see no problem with this, I don't see how it brings disrepute to our industry, I am only getting paid for services rendered. And like any smart businessman, I will sue if someone tries to stick me.

    There are a heck of a lot of other things happening in the brokerage business that brings disrepute to us as individuals and to the industry as a whole. Hopefully, we can concentrate on eliminating those as well.
  • jpatrick | 25 Nov 2009, 12:52 PM Agree 0
    A legal and binding agency agreement spelling out performance indicators from the associate as well as the client is reasonable. If your client won't sign acknowleding that you expect to get paid....then don't assume you will. Stop being a bunch of weaklings. No other professional service providers in our world accept being abused....why should you?
  • Paul | 05 Dec 2009, 12:42 PM Agree 0
    As to whether the mortgage broker should be paid for completing their job, well that depends:

    1. Has the broker explained clearly to their clients, their responsibility to pay for the servce? Unfortunately in most cases the answer is NO, otherwise law suits would not be necessary.

    2.Has the broker done his/her job in finding the lowest rate? NO, if the client has found a much better rate elsewhere from a reliable lender.

    3. Has the broker provided a level of service that is worth paying for? No, if it is, "Sign these papers and I will get back to you about the mortgage rate."

    Paul
  • Ron Butler | 15 Dec 2009, 09:56 AM Agree 0
    This is a bad idea in all cases but a good idea in some cases.

    The groundwork must be carefully laid with very plain language disclosure and perfect documentation approved by the applicants at the commitment signing stage. If the broker's work was done in a totally fair manner and the applicant makes use of your efforts to secure a better deal elsewhere; why should you not be compensated?

    The key issue is did the broker do the best job possible or is the broker using the paralegal lawsuit system to purposely abuse the public? If the answer is latter then it should never be accepted in our industry.

    We should all try to understand that while many mortgage brokers conduct a business based exclusively on client and realitor referral and repeat business some of us spend huge sums on advertising. If those expensive advertising leads turn into an army of abusers trying to develop rate quotes to help them get a better deal with their existing F.I. then those abusers should expect some consequences if they waste our time all the way to the signing stage.

    We don't all fall under the same business model and for some brokers in a limited number of cases and with proper documentation up front Jeff's service makes sense.
  • Velibor Perisic | 27 Dec 2009, 01:48 PM Agree 0
    I did lost some clients to the banks, but also won some over the banks. those that left still end up sending me referrals, so I think I break even there.
  • Velibor Perisic | 27 Dec 2009, 01:55 PM Agree 0
    Taking the client on court for something like that will just give us a bad reputation and it will make look us like bunch of crooks looking for few easy bucks in public eyes, Something that we DO NOT need.
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