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Mortgage Broker News | 19 Aug 2013, 12:00 AM Agree 0
Do you know where your dedicated underwriter comes from?
It could in fact make a difference, argues one broker pointing to the benefits of dealing with former employee of a mortgage insurer.
  • Ron Butler | 19 Aug 2013, 08:15 AM Agree 0
    I am of two minds when hearing that someone has cultivated relationships with executives at an insurer that allow them to "help put a deal through".

    On one level I admire the mortgage broker who has gone to the trouble of developing those relationships to give himself a competitive edge, it proves the point that mortgage brokers can really differentiate themselves from branch people and road reps. It's also a free enterprise thing, everyone has the right to seek a business advantage.

    On another level I wonder what does it really mean? The lenders are the ones who are supposed to have the relationships with the insurers, the lenders are the insurers customers, not brokers. The lenders are the ones pumping hundreds of millions in premium to the insurers. If brokers have cultivated relationships with their lenders based on volumes and quality of loans why can't the lenders sway the insurer to use "common sense" on a broker deals every time a deal is underwritten.

    It begs the question should we all start golfing and dining and schmoozing insurer executives? If we all did that, I guess the executives would never make it to their offices. If these organizations are now under OSFI scrutiny I am wondering how OSFI would relate to this post?

    I get this sounds a bit like sour grapes but I still admire anyone for creating a business advantage.
  • Mary | 19 Aug 2013, 09:46 AM Agree 0
    I agree with the article - the lender's ability to package a deal such that the insurer will quickly understand the risks/benefits of a deal is imperative to the success of any deal especially when working under tight timelines (as is often the case). Developing relationships with the Insurer's representatives is key to understanding how they "see" a deal and why it would or wouldn't work for them. This is not about "pushing through" deals that wouldn't normally be approved - it's about streamlining the process and speeding up the turnaround time.

    If we don't take the time to get to know the view points of all parties involved (client, lender, insurer), then we are all working in silos (broker, lender, insurer) and that doesn't help anybody.

    Employing a former insurer on the lender side is a brilliant move by that lender. Congrats to them for having the vision to see how that will benefit their business and in turn ours!!
  • Paul Therien - CENTUM | 19 Aug 2013, 11:05 AM Agree 0
    I have to agree with Ron Butler on his comments. As someone who has been in the industry now for over two decades, and someone who has worked in all areas, including insurance – I personally don’t like the comment “pushing a deal through.” It creates the impression for me that the deal is not worth approving based on its own merits. Mortgage brokers have a unique opportunity to provide strong advice to the consumer and help them to understand what they do and do not qualify for, and what they can do to align themselves to meet the fundamental guidelines to obtain home financing. If a broker truly understands their clients, then when they package the deal to be sent to the lender, they will do so in such a way that it explains any anomalies and provide notes and documentation to mitigate the risk associated with the application.

    Doing this not only makes it easier for the lender to obtain insurer approval, but also makes the underwriting process faster. There are brokers across Canada that do this today, and they have a much greater closing rate than those who do not take the time to properly package an application.

    The relationship that a broker forms with a lender is a good thing. The mutual understanding means that the consumer can benefit from the experience and perhaps obtain better terms or a better rate. I think however that there is a fine line to be walked – to take advantage of the relationship and push an underwriter to do a deal that should not be done jeopardizes more than just that one relationship.
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