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Mortgage Broker News | 24 Oct 2012, 12:00 AM Agree 0
Brokers are scratching their heads over comments from a Scotia exec suggesting they view the commission cut as “a growth opportunity."
  • Fred Darlington | 25 Oct 2012, 05:32 AM Agree 0
    We have other lenders that pay higher fee,s
  • len lane | 25 Oct 2012, 06:13 AM Agree 0
    I think he has it backwards, its a growth opportunity for their bottom line. We already get 1.1% from a lot of lenders. .05 bps is a big number when your now the top big 5 lender still in the broker world.
  • long time banker | 26 Oct 2012, 02:04 AM Agree 0
    when the broke rmarket had consistent rates better than the branches and the road reps the compensation averaged about 80 basis points all in for a lender. Now it averages 110 basis points in a much tighter financial market (bigger rate discounts). This 30 basis points difference in finders fee equals about 10 basis points in yield just in the brokers compensation and not comparing it to the other business lines. If the channel wants to have leading rates the reality will eventually be that something has to give and it will be unfortunately compensation. Yes Scotia and First National will save a lot of moneey with the reduction in finders but overall it is only 1 basis point in yield to the lender an dthis channel is at a higher cost to originate that the branch and road rep channels. So either less competitive rates will emerge or the numbers have to get back to making some better sense.
  • James Shinners | 27 Oct 2012, 05:31 AM Agree 0
    I hope Canadian brokers are not not unconcerned about a 5 bps drop in our commission. Let's put this into perspective, this is a 5% reduction in our income! I wonder if the VPs at these lenders are willing to reduce their income by 5% as well to help keep their bank profitable?
  • Mike T | 27 Oct 2012, 05:44 AM Agree 0
    Still scratching my head to this day on why brokers continue to send business to a bank competitor. Can a bank supporting broker shed some light for this mortgage agent??
  • Paolo Di Petta | dipettamortgage.com | 27 Oct 2012, 06:49 AM Agree 0
    Personally, I think that was a petty move by Scotia - is 5bps really worth the backlash? This comment is just more salt in the wound.

    More importantly, through their actions I think Scotia has expressed what they think of the broker channel. Depending on how we react, I wouldn't be surprised if this trend continued across the market. Generally, people only pay you as much as you value yourself.
  • Len Lane | 27 Oct 2012, 07:45 AM Agree 0
    Comparing road reps to brokers is not really a fair compensation comparision, road reps are employees and the extra cost of an employee I'd bet out is a lot more than the 20 or 30 bp's on the average 250k mortgage. If they include health benefits, gov't insurances payroll admin we're probably not as much as a road rep in the long run. Plus they still get the customer for everything else as in accounts, cc and loans.
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