Breaking news: Scotia cuts compensation

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Brokers feared this day would come, with Scotia introducing a 5 bps cut to compensation on all its five-year fixed and variable product effective Oct. 18 and following on the heels of First National’s move.

“First Nat had already set the precedent and they obviously felt they could afford to follow suit," said Geoff Willis, a top broker-partner with Scotia and managing partner with Dominion Lending Centres Origin Mortgages. "It’s something they knew that they could effect quickly, I think."

The news formally reached brokers on Wednesday, although Willis and other top performers were given the heads-up.

The cut drops compensation on the five-year fixed and variable mortgages to 75 bps from 80 bps for both owner-occupied and rental program deals.

It's a change that forecast last week in pointing to broker speculation about major lenders and their willingness to follow behind First National.

The Scotia move comes as many brokers openly express doubts about Scotia's dedication to the channel and its decision to acquire ING.

Scotia is likely to experience some pushback from brokers because of the decision, said Willis, but that will likely be limited to the short-term.


  • Joe the broker on 2012-10-18 8:21:36 AM

    Great. So with slowing originations , tighter rules, more declines and basically a whole mortgage business slowing down, we get paid less.

  • JM on 2012-10-18 11:15:47 AM

    You got to love it. We are the lender,you take what we offer now, end of conversation. We don't care in the slightest all the great work and the enormous amount of good business you all as brokers and agents have done for us in the past.
    Here is your reward, let's pay them even less.
    The only way for anyone with any self respect is to return the option. That would be to go with the lender who still appreciates the hard work that the mortgage broker or mortgage agent still does. There is still a few out there. This is an option and arguably the answer, certainly to be considered favorably.

  • Peter on 2012-10-18 1:38:48 PM

    Banks who don't appreciate broker business with lose out in long run. As with an business partners r needed and without them profitability suffers. Good luck Scotia if we sent you any more business and FN too. hahaha.

  • Kevin on 2012-10-19 2:01:55 AM


  • Cam "The Pessimist" on 2012-10-19 2:10:06 AM

    Another one off my list. Not that I sent deals to them anyways. Brokers and agents shouldn't even send deals to any branch fulfillment lenders unless it’s the last resort. They just say things to degrade our profession like “if you came directly to me you could of received a better rate”, then make it impossible for us to remove our client from their slimy grasp by making it impossible to receive a payout statement or undercutting their original renewal rates and our rates after all our hard work has been completed.

    It’s time to boycott . They need to put the money where it counts and stop trying to find ways to receive higher yearly paid bonuses for time spent on the golf course.


  • CD on 2012-10-19 6:15:05 AM

    Scotia is the most poorly managed lender in the industry. Their staff is highly unaccountable and their management team is no better. With no integrity, accountability or foresight AND decreased commissions there is no wonder IF their volumes will slow, it is only a matter of when.

  • KD on 2012-10-20 2:50:20 AM

    I read this site regularly and am somewhat disappointed at the whiny and unprofessional nature of the postings. I rarely see the word client anywhere. Scotia has made their decision, they still have an excellent product with their Step which I will still recommend if it is the right solution for my client. This is an opportunity for another lender to step in with a comparable product. Things are going to get tougher in this business and we need to provide a reason for clients to deal with us not complain about compensation.

  • mortgage guy on 2012-10-20 5:07:02 AM

    This is just the beginning....the thin edge. Banks cut broker commissions in Australia a few years more like 40%...and the industry survived after some thinning out. Brokers have had it good for a long time. But the industry is changing and Banks and monolines both feel they need to make better returns. Reduced commissions will be part of the coming landscape.

  • Terry 1 on 2012-10-20 5:33:43 AM

    KD. I greatly appreciate someone else out there that has exactly my same attitude. Why is every Broker out there complaining about their commissions. I have always said and will say it once again, this: I don't know if I know any one other Broker out there doing mortgages for the clients. Isn't that what we are here to do? All they think about is, how much can I make on the deal. I am not a volume paid Broker, it's just little ole me. My passion is this business, as I was raised to help people and care for their needs. And, I have said time and time again, I do not even place the name Mortgage Broker on my business card for all of these reasons KD is talking about. Sad isn't it. And, thousands of these Brokers went into the business thinking they will do this to makes tons of money. They never actually came along to help anyone consumer out there to achieve their dream of ownership. I am a Mortgage Specialist. We should all be thankful to have a job!!!!

  • Ron Butler on 2012-10-20 5:34:03 AM

    The comments attacking Scotia as a lender and especially the attack on their management is simply vile.

    If anyone knows the history of our mortgage brokerage industry they know just how big a contribution the people at the top of SMA have made over the last 15 years and I guarantee you the contribution any of these complainers have made will be microscopic in comparison

  • DA on 2012-10-20 5:52:14 AM

    As an agent who only cares about what is best for my clients, I do not submit deals to the big banks. I find their penalty calcuation methods to be off base. They usually don't offer the best mortgage and rate either...until they run up against one of us. As such, this commission cut is unfortuante but not unexpected after FN cut theirs. It is a trend that will likely continue so it is up to us to prove to our clients why they need us. A little concerned about Terry 1's comment that he/she doesn't put Broker on his/her card. If she/he is a Broker, I believe it's the law that her title is on there. If just a Mortgage Specialist, I believe that is the term used for employees of a singular Bank.

  • Paolo Di Petta | on 2012-10-20 6:18:41 AM

    This article hits the nail on the head. I'm surprised it didn't happen sooner.

  • JF on 2012-10-20 6:49:22 AM

    Regarding the comment KD made concerning the "whiny" brokers. I think we would all agree that the client must come first. If a broker does not realize that buy now they won't be around to weather this storm. That said however, let's be honest with one another; mortgage brokers, like other small business' operate to generate a profit. Profit should not be a taboo word. Sorry ND, but if I can place my clients with a lender that offers a product to mortgage to suit their needs, provides me with comparable service AND pays me more then that is who will get my deals. Scotia and other lenders are cutting comp to improve their bottom line, why should brokers be expected to operate differently?

  • Paul Mangion on 2012-10-20 8:06:03 AM

    I didn't comment on this article because it really is not news worthy. This is an open market so if you are upset with Scotia then you have other options. But I agree with Ron Butler, when he says it is vile to see so called professionals atack someone in the business. That is not very professional so lets hear opinions since everyone has one and keep the nastiness out.

  • Paul Mangion on 2012-10-20 8:11:46 AM

    Hey Cam a boycott will never work because too many agents are only out for themselves and really don't care about this industry. This is why they complain about their commissions, they are not successful so every dollar counts. What this industry needs is a cleaning of non-committed agents.

  • JM on 2012-10-20 8:16:39 AM

    When will brokers learn that we NEED the banks on or team as brokers. You think the industry is in trouble, watch it die if all the banks pull out. Scotia is a broker friendly lender, they get the majority of their mortgage business from us as brokers and personally they have been instrumental in my thriving business.

    Lets focus less on how we are paid and focus more on the clients. More clients = more paycheques. 5 bps in the grand scheme of things is nothing. It used to be 75 bps and now its back to 75 bps. Be thankful they don't cut it to 50 or 35.

    With all the "pooling arrangements" that brokers have no wonder they need to cut our commissions. Some people have 10+ brokers signed up under them that tie up underwriters time with BS deals sloppy they have no business sending all so they can make max VB at these lenders. Brokers sending 2 or 3 deals a year and getting max VB when we bust our buns to send them enough and be loyal so we can actually earn that VB, infuriates me. But then again these are the paycheque focused brokers, rather than client focused.

    As for those who have nothing but bad things to say about Scotia, send more volume, stop pulling deals and send QUALITY business to them and you will be the best service you can imagine from their BRMs.

  • Omer Quenneville on 2012-10-20 10:03:03 PM

    While I agree with some of what you say JM, if you truly cared about your clients I don't think you would use Scotia at all. Forget about rate and look at terms, condition services charges these are suicide with Scotia products. I don't want to use the word mortgage when describing what Scotia offers because it really isn't and it’s not being explained clearly to clients. Scotia cooperates with brokers because no one else will sell that crap. As an organization, instead of being an extension to the banks we should be working with and developing good alternatives to the 5 big banks, terms, conditions, rates and ADVICE/GUIDANCE. I remember a day when a mortgage brokers brought a lot more to the table than they do today.

  • JP on 2012-10-23 4:46:13 AM

    Omer, as a valued broker partner with Scotia, I don't know what suicidal terms and conditions you are referring to. How are their products not mortgages?? Please elaborate.

  • Paul on 2012-10-25 3:38:25 PM

    All exceptions through the broker channel received an answer NO, however, Client goes directly to the branch, all exceptions become YES......

    I would not submit to Scotia not because of the 5 bps, it is because the branch staff tried very hard to degrade the broker just like what Cam "The Pessimist" said.

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