“All the lenders are really looking at are your ratios, meaning the ratio of the number of files we send to an institution to the number of (deals) that actually go to the notary or the title lawyer,” John Dunford of Dominion Lending Centres
Centre Ouest told MortgageBrokerNews.ca. “So if you send 100 files in and 50 per cent of those go through, the lender doesn’t really want you to refer them leads because each one of those files costs them about $600 to look at.”
To avoid a glut of rejected deals – and a negative impact on broker/lender relationships – Dunford is having to spend more time meticulously pouring over each deal, ensuring everything is in order before starting the submission process. And when it is ready, he is mindful of which lender he sends it to.
“We try not to send a file to more than one lender so we’re spending more time having to go to the lenders themselves; either the mortgage underwriters or the BDMs spending more time trying to ensure their lender will take that file,” Dunford said. “We’re spending much more time on the phone anticipating whether a mortgage underwriter will accept (a file) or not.”
And this pickiness is another facet of the ever-chaning regulatory environment.
“I think really what’s happening is the criteria that all the lenders are using are similar but not the same and it’s an ever-changing business on a day-to-day, week-to-week, month-to month basis and you either jump in with both feet and learn everything there is to know about each lender or your ratios are going to hurt,” Dunford said. “If, for example, you have three lenders that are lending at a 3.29 per cent for five year fixed, who are you going to send it to?
“Well, because of something in the file you may not be able to send it to two of the three (lenders).”
The push to efficiencies has slowed file processing down, with brokers having to more carefully plan and execute each deal before they even begin the paperwork.