Bank bars broker from attaining financing for client

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One broker is frustrated by a major bank’s refusal to allow him to work with any client who had previously inquired about a mortgage at the branch level.

“If a client has had any mortgage consult with the bank at all we are barred from dealing with them in any way shape or form,” charges a Toronto-based broker speaking to MortgageBrokerNews.ca on condition of anonymity. “I lost two deals because of it.”

According to the industry player, one of the big banks operating in the broker channel – a preferred lender of his – has recently blocked his efforts to win a mortgage for clients who already have a file open with the branch.

“I’m assuming it’s a money thing; it’s cheaper for them to deal with the client in the branch than to pay a broker for the exact same work,” he said. “We were told the client is already dealing with the branch and that they couldn’t deal with us even though they were willing to sign a letter to say they would rather deal with us.”

MortgageBrokerNews.ca contacted a number of brokers who also deal with that bank.

“I do know the policy is that if you do go into a branch and then subsequently to the broker, the broker won’t be able to do anything until the branch relinquishes the file,” Bill MacDonald, a Halifax-based Invis mortgage broker said. "The bank is not going to have two applications at the same time."

On these files the bank has advised MacDonald to speak with the client to determine if he or she prefers to work directly with the bank or through the broker.

For his part, Rick Dumas of Mortgage Architects Duet Financial hasn't hit a brick wall regarding clients who initially had gone into the branch. Though he says he would understand if it was the bank’s policy.

“I haven’t had any experience like that with them, myself, but I assume that that would probably be true just if they’ve started the process at one end,” Dumas said. “I expect the reverse to be true as well: I assume if a broker starts the application and then goes to a branch, the bank will suggest the client work with the broker.”

That isn't necessarily what other brokers believe. Over the years several have complained to MortgageBrokerNews.ca that files they've submitted to banks have been rejected only to then be accepted through the branch system.
 
 
 
 
 
  • KJL on 2014-04-30 11:51:34 AM

    Your problems can be solved very quickly - STOP sending the deals to the banks. This has been a known fact for the 42 years I have done this ! They play the "bully's" - just like the school kids. There are 21 mono line lenders and majority have a better package than any of the banks and/or credit unions. Stop feeding the fire !

  • Silly Rabbit on 2014-04-30 11:54:06 AM

    Why do you deal with a bank in the first place? so they can steal your client on renewal?

    You deserve to lose money if you're that blind to what banks do for a living....

  • Kevin Duffy on 2014-04-30 11:54:32 AM

    Just another example of brokers not realizing that the Bank is not your friend. I really fail to see why brokers deal with Bank lenders at all. I don't

  • Banks on 2014-04-30 12:34:19 PM

    I have had this happen that the underwriter informed me that they can't post an approval until the branch cancels. So the client just has to call the branch cancel the deal on their end and my underwriter can then proceed.
    I haven't lost one yet because of it.

  • John Bargis on 2014-04-30 12:38:33 PM

    Whether the lender is a bank, or a monoline, it's all about the client in the grand scheme, and no lender is the exception.

    We as proprietors need to keep in mind first and foremost when assessing who to partner up with, which lender is actually interested in partnering up with us long term. Renewal and Trailer models are a great option with some lenders, which should be explored further if one wants to build future value for their business. That's not to say that lenders who don't pay residual comp don't partner well with brokers.

    A word of caution, when considering renewal/trailer models, make sure you obtain in writing that the residual compensation offered is paid perpetually and cannot be retracted. Otherwise, you may be unpleasantly surprised.

  • Mario on 2014-04-30 12:42:24 PM

    "The times they' re a changing".
    Valid points about NOT using the banks ( the few that are left in the broker channel). But... let's face reality; there are deals that Monolines can't do due to the nature of their funding sources & structure. As well, I have been finding that more & more Monolines are getting Super aggressive at client retention offering even lower rates to the client than they offer to us in order to retain clients.
    On top of that more & more Monolines are applying for bank status. Are we seeing a trend here?

  • A Broker on 2014-04-30 12:55:14 PM

    TD Bank is famous for this trick. I've lost deals back to the branch after securing a commitment through Filogix and the client signs and accepts and takes it to the branch, they better the rate and they call it their loan. My TD rep absolutely no help.

  • banker on 2014-04-30 1:34:49 PM

    Why would a bank pay on a deal it already had in the pipeline?,

  • Deborah on 2014-04-30 2:06:17 PM

    Ahh competition is alive and well!!! NOT!

  • Jivan on 2014-04-30 2:53:17 PM

    I had a very similar scenario where a client was extremely dissatisfied with a certain broker channel bank that also has road reps and a branch network. I was told by their Manager straight up, that they will lose the deal but there is no chance they will allow it to be transferred to me. His quote was "that would be really bad politics" last i checked this was about getting clients the best value not "politics"

  • Troy Resvick on 2014-04-30 2:57:54 PM

    I'm surprised that no one has asked "Why did the client return to their FI"? It happens for a number of reasons, all of which are due to an unmet customer need or a failure to create an enduring relationship...
    Provide better w/ service, value and expertise with a client-centric approach and you'll build lasting relationships with your clientele.
    As for the Rate Shoppers, they are out there, deal with it...find a way to meet their needs or do a better job pre-screening.

  • OkanaganBroker on 2014-05-01 11:29:39 AM

    When this has occurred I just have my clients sign a letter withdrawing ALL applications/dealings with that lender/branch...then they are my client and the deal gets done...and lets not get into bank vs monoline stuff here...the banks are not evil, they provide many benefits to the client and us that monolines don't, and they pay us! Each clients needs should be considered instead of just placing them with the lender that will benefit the broker best...(sorry...got off on a rant now!)

  • Zoltan M Padar MortgagePRO Ltd. on 2014-05-01 12:11:12 PM

    TD has punted us, we did not make the quota. Yet when we have sent deals to them, they turned everything down or conditioned the deal into death. Same time they are paying Realtors referral fee and when client goes to the branch they are to still them. Happened to me few times. They are wanted on both sides, yet pay you peanuts. The first 5 years they only collect almost entirely interest, most likely the fee they pay you comes back in a month or the most two. We are only slaves.

  • keith on 2014-05-05 2:54:23 PM

    HOW IS THIS ANY DIFFERENT THAN WHEN THE BANK BARS A BRANCH FROM DEALING WITH A CLIENT WHO IS ALREADY DEALING WITH A BROKER?

    Whine whine whine. That is a broker's tune.

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