While tougher lending regulations have provided greater opportunities for brokers, that window of opportunity is closing for investors eager to use brokers as middlemen for lending.
“These opportunities will not last forever,” says Art Appelberg, president of Northwood Mortgage. “In my opinion, there is a five to 10-year window.”
Those opportunities Appelberg refers to are the “relatively safe and reliable” mortgage lending opportunities a growing number of Canadian investors hunger for. He argues that there exists “both a large supply and demand for these funds with a limited distribution channel providing a profitable opportunity for brokers.”
But demand for that private-money lending, legislatively requiring brokers to act as middlemen, can only last so long, say experts. They point to projections for interest rate hikes and the end of a heightened cycle of home buying.
Appelberg’s guesstimate of a 10-year window is actually more generous than many industry insiders. Still, it may reflect the CMA Lifetime Achievement Award winner’s bullishness on the industry’s future.
“I am optimistic about the mortgage brokerage industry for two reasons,” he says. “Firstly, the tougher lending regulations have provided opportunities to meet the needs of the alternative borrower without competition from the banks. There is a massive amount of investment capital available looking for a safe place to go.”
The second reason Appelberg points to is that of public opinion in regards to the need for mortgage brokers and the growth in their popularity over the last 20 years.
“While the banks have mastered customer retention,” he says, “brokers continue to become more sophisticated in this area.”