One big bank denied a broker client’s deal only to approve the same client when he walked into a bank branch.
“We sent a deal to [one of the major banks], waited for a couple of days, the bank came back and [said] they would decline this deal,” Joseph Park, principal broker of JP Mortgage Services, told MortgageBrokerNews.ca.
Park then lined up a mortgage with another lender. However, the client decided to visit a branch to inquire about a mortgage and was then approved for a loan at a better rate than Park had arranged, according to the broker.
Park has asked that the name of the bank be withheld.
When asked about the unfairness of the process, Park was told by the BDM that “life has never been fair.”
“I was told ‘Joseph, it is much cheaper for our branch to do a mortgage because then we don’t have to pay you [a commission],’” Park said.
This isn’t the first time a broker has complained about an uneven playing field when it comes to dealing with big bank lending partners.
Last year, broker Walid Hammami criticized a lending partner for offering certain products in-house only.
“Lender banks are our partners and they compete against us and it’s just not fair,” Walid Hammami, a Montreal-based broker with Dominion Lending Centres
, told MortgageBrokerNews.ca last August. “They offer certain products in-house that they don’t offer us.”
One bank denied him the ability to offer a home equity line of credit that the bank limited to its branches and road reps.
“And there is no reason for that; the only reason they do this is to give themselves an advantage,” he said.