“I used to think real estate people were a pain in the butt because they are extremely demanding (and that) they’re only concerned with one thing and that’s their commission,” John Van Driel of Mortgage Shopper told MortgageBrokerNews.ca. “I’m finding myself now with relationships with six or seven realtors and I go out and do that in a variety of ways; usually I get referred or I’ll have to know the managing broker at an office and I’ll explain to them that I do business a certain way and I’d like to do business with some of their, quote, ‘more honest individuals’ and they usually recommend one or two of their people.”
It’s no surprise that mortgage brokers are being forced to find new referral streams, with recent CMHC data pointing to an 81 per cent drop in refinance business
and banks gobbling a bigger piece of the refi pie.
“On the refinance side, banks are becoming more and more aggressive and they send renewal documents out with rates that sometimes I can’t compete with,” Van Driel said. “It’s brutal. I’m pretty sure a lot of brokers outside my area are finding the same thing.”
And of course, mortgage rule changes and tightenend lending requirements aren’t making the broker’s job any easier.
“It seems to me that our government and the people that regulate interest rates and regulate the way that we get mortgages approved are going to get more more and tighter,” Van Driel said. “They’ve probably already knocked the bottom 10 per cent of the market out and when I say that I mean first-time buyers and younger folk and people who don’t have very much in savings.”
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Ever-tightening regulations and ever-increasing competition from the banks are forcing the broker industry to get more creative when trying to chase leads and build business; which, for one broker, includes sharing leads with those in an industry he originally had an aversion to.