As lending rules are continually tightened, some brokers may look to diversify their offering by targeting clients who do not fit the typical A-type profile. However, one leading broker in this space believes it takes a whole other skill-set than more traditional deals do.
“The attitude of how to sell has to change; you have to be able to sell a 14 per cent interest rate. Brokers on the B side are used to selling payment as opposed to rate,” Shawn Allen of Matrix Mortgage Global told MortgageBrokerNews.ca. “You have to have access to lenders and product knowledge.”
It’s a trend we noticed in our annual Brokers on Lenders survey, as 40 per cent of those surveyed admitted that the number of non-prime deals they made has gone up year-over-year. For some, it has become a target market that has less competition.
“I’ve started to target that market more because so many people go after the A-business and the competition is more aggressive,” Peter House of Mortgage Intelligence the House Team said. “The banks have started to open up their eyes to what the brokers have been doing for years and they’ve become sharper; we just have to become a little bit more flexible.”
However, it may be a market that not all brokers are ready to infiltrate. And for them, Allen has set up a lending service to help out.
“Brokers should go after B-deals more often but (many of them) won’t because they don’t know how to,” Allen said. “It’s a very niche market – there are less and less A-deals to go around.”
But he’s got a way to help them out.
“We’re on Filogix as a lender, so brokers can register with us via email and they can send us their bad credit, second and third mortgage deals, (as well as those clients with) tax arrears (and) mortgage arrears.”