With the Ontario regulator now releasing its final tally on relicensing casualties, a leading broker is arguing the high losses will help cut the pressure to buy down rate.
“It’s one of the positives that should stem from so many agents and brokers leaving the business,” Chris Bisson, principal broker for The Mortgage Centre in Guelph, told MortgageBrokerNews.ca. “Those marginal performers who were buying down rate in order to do any business at all have likely left the business and that means that other brokers will face less pressure to buy down their own rates in order to keep from losing clients to those agents.”
It’s another positive spin on what FSCO numbers suggest is the single largest cull of mortgage professionals in five years.
As of April 1 – one day after Ontario’s final deadline– some 21 per cent of the province’s 9,707 agents had failed to renew their licenses. That’s a loss of 2050 agents alone, although nearly 200 mortgage brokers also missed the renewal date, representing a 12 per cent drop in the number of those licensees.
While the numbers represent a bump-up from initial FSCO relicensing stats, they exceed industry estimates for a total loss of 10 per cent to 15 per cent.
The bloodletting was likely self-inflicted, said Bisson, suggesting most of those exiting mortgage professionals had simply failed to survive the conspiracy of increased bank competition and shifting payout penalties that made it harder to woo clients away from their existing lenders.
Still, their loss may ultimately be the industry’s gain, if their departure improves the collective skill level of mortgage professionals in this country, said another experienced broker.
“The net benefit is the client will be better off in coming to the experienced broker first off before an inexperienced agent who works at it part-time has had a chance to make a mess of things,” said John Panagakos, principal broker at Dominion Lending Centre Home Financial. “The trick in this business is to go it full-time and learn from a team.”