It may be the ultimate in big-sky thinking, with one veteran suggesting brokers should ultimately be able to access preferred status with lenders based on their membership in CAAMP or any other industry association. It’s something that could dispense with the need for pooling and, ahem, broker networks.
“I don’t know that it would happen anytime soon,” Steve Garganis, a broker for The Mortgage Centre, told MortgageBrokerNews.ca. “But it would be a way to encourage more independent brokerages by reducing their reliance on pooling through an (aggregator) to be preferred status with lenders.”
The thinking answers the growing concerns – among lenders as well – that pooling has, in some cases, retarded efficiency in underwriting. ING Direct is the latest to set new, tighter limitations on the practice.
But while the industry has increased its push to efficiency ratios as a key barometer, minimum volume requirements remain in place, making it tough, wagers Garganis, for independent brokers not focused on three or four lenders.
His plan would see lenders rely on a broker’s membership in a professional association as a basis for awarding preferred rates and underwriting support. Garganis also suggests that individual efficiency ratios would remain part of their decision-making process.
As groundwork for any move in that direction, associations would have to beef up their own vetting and qualifying standards for membership. They would become more like a pseudo governing body or college.
The idea has been tossed around by others looking to see the industry move to a self-regulating model, although even Garganis sees it as a long-term development, rather than a quick one.