Association membership should have its privileges: broker

Association membership should have its privileges: broker

Association membership should have its privileges: broker

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 “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.

  • A Broker 2012-11-15 5:58:51 AM
    If when the larger provincial associations were formed, they had used the MLS real estate model to work from there would be no need for this discussion. An origination software system linking brokers to lenders would have been developed and owned by the brokers through their provincial associations or an organization owned by the provincial associations, not owned by an income trust that is controlled by parties unknown. Lenders if they wanted access to broker originated deals would have to play by one set of rules, not the arbitrary smorgasbord of rules of each individual FI.
    Is tying yourself to volume commitments to a select few lenders acting in the best interest of your clients? or is it in the best interest of the brokerages & lenders?
    This lender's arrogance about only doing business with "big producers" will die as the real estate market softens & the lender's volumes shrink.

    Why aren't the deals closing? Undereducated agents?origination software that is inefficient & hugely cumbersome(lets face it, we are data input clerks for the FIs). Now we can talk about the "quality & experience" of a significant number of underwriters working for the FIs. By my experience a few would find it challenging to work scopping ice cream at B&R. Before FIs cast aspersions and make demands on brokers & agents, I would respectfully suggest they clean up their own in-house mess that required multiple reviews by OSFI at tax payers expense.
    Post a reply