Broker wants answers from TD on deal reversal

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A Waterloo-based broker has one question:  What changed to make the same bank approve a deal that had been repeatedly rejected when he presented it?
“If the deal had to be tweaked, why didn’t you tweak it with me?” Jason Breau, a broker with Mortgage Intelligence asked the bank. “We appealed this deal twice, so it had to go up the chain at the bank, and it was turned down. Then the client goes to the local branch, and he is approved. What changed?”
It all started when Breau was referred a client living in the Northwest Territories by another one of his clients. 
“He was looking to refinance – another 5-year-fixed mortgage like the one he currently had – on a house with a pressure-treated wood foundation,” he told “Nothing new in NWT, as about 85 per cent of the market there has pressure-treated foundations.
“Anyway, I present the deal and it is turned down. ‘We don’t do that’ I was told, so I went back to the bank representative and they said ‘No’ again.”
During the second appeal at TD Bank, Breau was told the underwriters would approve “if it is CMHC approved.”  But CMHC informed Breau that they do not do “that type of mortgage,” adding that their decision was credit-based.
That is when the story takes a strange twist.
“The client tells me he’s willing to try and go in to his local branch,” says Breau, “and then a few days later he asks for the appraisal. I tell him the bank already has it in their system. Then the deal gets approved!”
Upon hearing this, Breau once again approached the bank’s road rep and asked what had happened.
“The policy is black and white,” Breau told the rep. “I asked him ‘Why did you make us do all that work if it could be done at the local branch?’ I don’t know if it was done through their underwriting department, or if the branch has unilateral approval power. All I want to know is what happened to change the rejection to an approval?”
Breau took his story to his broker of record and to the regional manager at Mortgage Intelligence, and they have forwarded their concerns to the bank.
Although upset that a potential deal was seemingly sabotaged, Breau is glad that the client got his refinancing.
“I’m not going to stand in his way or sabotage the deal,” he says. “I only want to know what happened.”
  • Paolo Di Petta | on 2013-06-17 9:50:56 AM

    I suspect there's going to be a lot more of this happening in the near future...

  • Stella I on 2013-06-17 9:56:58 AM

    This happens a lot and I have seen it working at the big banks and as a broker.

  • Joe Kiefer AMP on 2013-06-17 10:01:49 AM

    This not an unfamiliar story.
    I had a deal declined with TDCT only to have the client get it approved at the branch level. TDCT had changed their policy and the BDM was unaware of this.
    The broker channel is still considered 2nd Fiddle to them.

  • Linda Rausch on 2013-06-17 10:02:20 AM

    Sadly, the branches are allowed more latitude than the Broker channel. Let's all face facts, the Banks deal with us because the public demands they do, not because they want to. I spent many years with Banks, and now that I have my license, I understand what the Brokers have gone through for so long. I am so glad you didn't just let this drop Jason...good for you for standing up for our industry. Please keep us posted as things progress!

  • Elfie Hayes on 2013-06-17 10:02:43 AM

    What I have seen lately is clients are being turned down at their bank. They are told the deal can't be done because of new lending rules.

    They still have a need so they come to an experienced Broker that has lots of options to offer them. Once the broker gets the deal approved and the client has to go to the branch to get bank statements and such, a "Miracle" occurs.

    The tellers often asks why they need the statements and of course a helpful mortgage rep is summoned to talk to the client.

    Next thing you know....Approval Granted!

    Bill B20 is a flexible as an Bank needs it to be once they find out someone else did the job right.

    Sadly often a client thinks it better to stay with the Bank because they have a relationship.

    If this was a marriage the Bank would be a poor spouse given they would discard you but want you back when someone else starts liking you!

    Just like every other experienced Mortgage Professional, I just shake my head at the way Banks do business today.

  • Richard Hendricks on 2013-06-17 10:03:08 AM

    Banks always prefer to originate deals through branches over brokers.

  • James on 2013-06-17 10:04:05 AM

    Simple, everyone quit sending business to TD and problem solved as they will loose substantial volumes from the brokers.Then they might reconsider their treatment of the brokers

  • KJL on 2013-06-17 10:04:43 AM

    You did nothing wrong so I am reading. Just the branches are pretty hungry and they are not being fed, so anything and everything they can get their hands on they will approve - Simply because a "broker touched it" .... Good luck with this one Jason. I hope that our exec team and RSM can assist you, but every time and I mean EVERY time I asked TD peeps about the branch, the answer is the same" We cannot control what they do", IMAC and local TD ans wellas the TD reps will not get in a pissing contest over our deals ! Fingers crossed for you my friend ...

  • Ron B on 2013-06-17 10:09:01 AM

    Branches do not have the authority to approve loans, regardless of the nature of the loan.

    Branch underwriting limits were pulled in the mid-1990's. Having said that the underwriting of this loan most likely happened in the same underwriting centre that also underwrites broker business. Just a different underwriting team in another corner of the office.

    Somehow that stings even more...

    If you have a decent relationship with the client, ask him/her as to whether any other information was provided that you did not provide.

    If the file is essentially identical, then I suggest you approach the road rep with a claim for commission/compensation as you had submitted the file as it was approved first, before the branch touched the file.

    If it was declined, then the branch is supposed to respect the decline/underwriting decision made by their underwriting centre (they should have checked their system for other applications for this loan, and the status of these applications), before proceeding with it and resubmitting it.

  • Tony...Mortgage Broker on 2013-06-17 10:09:09 AM

    This is nothing new with TD Bank....we have had various issues with TD and we successfully sued the bank...I have a copy of chq to prove it! not deal with this bank...there are many good sources of financing - TD is not one of them!

  • Chandra Neogy on 2013-06-17 10:18:16 AM

    Similar situation happened with me a few years ago , the greedy branch person got the client, I went to my TD BDM and complained and you know what got paid my finders fees for the deals (2), may be you should try the same and atleast get compensated for the hard work you did.

  • Chandra Neogy on 2013-06-17 10:19:57 AM

    Similar situation happened with me a few years ago , the greedy branch person got the client, I went to my TD BDM and complained and you know what got paid my finders fees for the deals (2), may be you should try the same and atleast get compensated for the hard work you did.

  • Chandra Neogy on 2013-06-17 10:20:04 AM

    Similar situation happened with me a few years ago , the greedy branch person got the client, I went to my TD BDM and complained and you know what got paid my finders fees for the deals (2), may be you should try the same and atleast get compensated for the hard work you did.

  • Lilly on 2013-06-17 10:25:27 AM

    I come from the TD world where I couldn't approve clients but those exact types of clients are now getting approved, and with extras appraisal, no income verification and rates that I can't get through the broker channel. They must be hurting for do things that even a lawyer wouldn't approve of.

  • Anthony on 2013-06-17 10:29:28 AM

    nothing new...been happening a long time...TD, BNS, BMO, HSBC...etc.

    I have had many deals declined by the above lenders over the years only to have their internal mortgage team approve the file...

    TD and BNS always paid if broker services could not approve and the deal was eventually funded at the branch level...

    Either the branch reps massage the file or they have pull with their credit teams which evidently are not available to us...

    A matter which will never be admitted to by the banks or their BDM's...

  • Sherry Love on 2013-06-17 10:31:41 AM

    I spent 9 years as a mortgage specialist with TD bank and can tell you branches and brokers and specialists all have different underwriting departments and underwriters. On more than one occasion I had a deal declined at IMAC, that then got approved at the branch when the customer decided to take matters into his/her own hands. I was not alone. The branches do not have approval power, but their approval centre does not have the same due diligence process that the other 2 mortgage channels share.

  • Kent Farnsworth, Meridian Simply Mortgages on 2013-06-17 11:04:41 AM

    Doubtful that you'll find out what happened. What I would do however is go to your BDM and asked to be paid for the deal that was stolen from you by the branch.

  • John Dearin on 2013-06-17 11:20:44 AM

    We had a deal turned down by a bank (in the brokerage circle) as the client did not debt service. Two weeks later the same bank did the deal. As the client explained it, the bank paid off a $60,000 line of credit in the branch, did the mortgage, then put the line of credit back in place. The insurer did not seem to take exception if they ever knew.

    Divorcees come into office, we are doing a mortgage for two of them, one to stay in their house the other to buy. We have no problem with the current house/client, but the husband does not debt service due to child/alimony Three weeks later both clients have mortgages with a bank (non broker circle). They excluded the divorce papers etc. etc. etc.

    this is going to happen all the time and there is not a lot we can do about this.

  • Paolo Di Petta | on 2013-06-17 11:33:23 AM

    Sounds to me like this is another area that CAAMP could make itself useful and apply themselves on behalf of brokers.

    Something tells me they won't, though, considering they represent bank reps as well. I guess that membership money is more important to them than actually representing their members.

  • CS on 2013-06-17 11:55:29 AM

    This happens all the time.

    Branch wants business and there is no GDS/TDS, income verification or even beacon in their channel.

    We need tons of document to get client approved, in branch, client does not need to provide the same kind of document as they provide to us.

    If those banks do not want broker channel, they can simply close it, why making us so embarrass in front of the client ?

    Besides this, when the client goes branch fulfillment in Scotia Bank, the bank staff will ask them why not go directly to the branch, branch can offer them tons of benefit that the broker cannot.

    I was with the client that time !!!

  • Mel Gilbert, MI London on 2013-06-17 11:59:23 AM

    This has happened to me on more than one occasion. The latest deal was also appealed via my regional manager but the TD stood firm and, even though I had presented the deal before their road rep, flatly refused to pay any commission on the deal.

  • Blair Anderson on 2013-06-17 12:04:08 PM

    Brothers and sisters, we need to do a better job of supporting ourselves. It's good to have choice, and always put the client first, but after that, don't overlook what choices will better serve you...

    Don't support lenders who show you the minimal amount of support. Don't support "rate sites" that demean your professionalism.

    If we don't stand up for ourselves, who will?

  • Linda Rausch on 2013-06-17 12:15:46 PM

    Amen to that about a boycott? A little radical I know, but it would certainly shake up the status quo. I loved Elfie's comment about it this were a marriage, how long would it last if the spouse only wanted you if someone else showed some interest...LOL!

  • Angela Wong-Liao, Invis Inc on 2013-06-17 12:32:27 PM

    I have a very bad experience with TDCT recently, IMAC turned down my client twice and subsequently my client got approved by her own bank RBC when she threatened to move all her substantial investments from RBC.
    As a former banker and branch manager, I understand the significance of a core bank client relationship, sometimes, bank branch have to keep their core bank client happy if the branch investment portfolio is at risk of transferring out to competitors.
    Food for thought, I think it is only fair to see both sides of the coin prior to criticize and making judgement

  • Ray Rochefort, DLC Forest City Funding on 2013-06-17 12:43:24 PM

    Why are you guys doing business with the Banks? There are great mono lenders who will do these deals.. and many will pay you forever. And what about the enormous penalties clients have to pay to get out of a 'bank' mortgage! It's happened to me too often to have a deal turned down by a bank only to have it approved at the branch!

  • Paul Bath on 2013-06-17 12:46:41 PM

    This happened to an agent of mine here at Centum One. TD Bank was kind enough to pay our agent their deserved commission and more importantly OUR client was happy with the deal. We have it diarized. :)

  • Paul Bath on 2013-06-17 12:47:15 PM

    This happened to an agent of mine here at Centum One. TD Bank was kind enough to pay our agent their deserved commission and more importantly OUR client was happy with the deal. We have it diarized. :)

  • Elfie Hayes on 2013-06-17 12:53:53 PM

    I love when an article gets us all into the forum. Great comments from everyone!

    The Monolines deserve our business and they don't work against us. Supporting them as often as possible is the best way to show the Banks we have options.

    As for CAAMP Paolo, I think we are beating a dead horse. They have proven to be driven by profit from members, not by supporting Mortgage Agents and Brokers.

    As long as CAAMP allows Banks and road reps to be members we have no leverage in these situations. CAAMP is not going to go to bat for anyone against a Bank.

  • Donna D'Amico on 2013-06-17 12:58:26 PM

    I experienced a very similar situation, although it was with the Royal Bank. My client just started as a financial adviser with a private firm had been there less than a year, some of his financials as well will pushing the limits per TDS and GDS. I was rejected by most lenders. He went into the local Royal Bank and they overlooked some of his loans I guess and his lack of employment history. Interesting how this Federally regulated institutions are not fairing as harshly by the new mortgage rules.

  • Angela Wong-Liao, Invis Inc on 2013-06-17 1:11:48 PM

    In view of the size and influence of the big chartered banks, our government have to work with these big banks to control our economy in Canada and therefore, our government gives the big chartered banks more flexibility than the mono lenders.
    It is challenging in dealing with big chartered banks via our mortgage broker channel because we are not the bank's employees while their branch network is employed by the banks. Naturally, the bank's branch network take precedence over us. However, if we establish a very good bank relationship, we can still be treated decently.

  • Joe the Broker on 2013-06-17 1:26:47 PM

    Doesnt surprise me at all....just lost a deal to a bank branch as they managed to somehow close the mortgage without the client paying off $50k in CRA tax arrears first....branches hide all kinds of things that broker lenders wont let us hide.

  • Paolo Di Petta | on 2013-06-17 2:08:38 PM

    @Elfie - I realize we may seem to be beating a dead horse, but you'd be surprised how many agents/brokers will cheerlead for them because "we need a professional organization/designation to represent us".

    While I agree with the sentiment, CAAMP just isn't the group to do it, and the faster we replace them with a group that does, the better off our industry will be.

    The only way to do this is awareness - unfortunately, that means sometimes it appears that we're beating a dead horse.

  • Jim Flaherty is Green on 2013-06-17 2:30:19 PM

    Sending any deal to a big bank is like shooting yourself and client in the head.

  • Jim Flaherty is Green on 2013-06-17 2:30:26 PM

    Sending any deal to a big bank is like shooting yourself and client in the head.

  • kac on 2013-06-17 3:05:31 PM

    i think a big problem with not dealing with the only 2 banks left in our industry is that the monolines who are all back end insured have rules that are becoming harder to satisfy clients. The rates are one thing however pre-approvals are things of the past,rate holds come with an extra 10 to 20bps surcharge with most mono lines,a good majority have now started charging insurance premiums on ltv's that exceed 75% where there is none up to 80% with banks,equity take outs are limited to the insurer guidelines. Prior to starting as a broker the mortgage brokers role was for individuals of private financing,then we had all of the major banks to some extent wanting our business and now that the economy has taken a hit and rates so low that the banks say they are making nothing from Mortgages (OH REALLY?) there is not a lot of interest keeping us as a valuable resource. If and when the economy straightens it self out and rates rise i think a lot of these institutions will re think our value.

  • ON Broker on 2013-06-17 3:52:05 PM

    All these comments prove that nothing will change with TD. They are a terrible lender (collateral loans), there penalty calculations are ridiculous, their branches will steal the client.

    Because it is easier to sell a brank logo than spend an extra 10 15 minutes with a client explaining the pro's and con's of the multiple lenders available, then let the client pick a lender. Isn't that our job, what we are paid for?

    If all brokers did this, and stopped taking the lazy way out by selling the banks, the bankls would leave our industry due to lack of volume, rather than trying to control our industry.


  • DB on 2013-06-17 6:55:17 PM

    This is just the backhanded ways the major chartered banks are trying to catch up after Flaherty changed the lending rules. They are losing out and are now clearing loans and relending after approval, applying all the different strategies to meet the in branch quotas set from the top down to keep "stock and shareholders" getting the dividends.
    They arbitrarily raise the interest rates on unsecured LOC when rates were falling to boost their bottom line and continue to take care of themselves. Watch the ads "personal banking" it is BS.

  • DB on 2013-06-17 6:55:25 PM

    This is just the backhanded ways the major chartered banks are trying to catch up after Flaherty changed the lending rules. They are losing out and are now clearing loans and relending after approval, applying all the different strategies to meet the in branch quotas set from the top down to keep "stock and shareholders" getting the dividends.
    They arbitrarily raise the interest rates on unsecured LOC when rates were falling to boost their bottom line and continue to take care of themselves. Watch the ads "personal banking" it is BS.

  • @kiltedbroker on 2013-06-17 10:00:55 PM

    I am with ON Broker - lets just Boycott TD. Sound good? I have never sent a deal there and I never will send a deal there.

    What we need is a monoline to step up and grant immediate status to any brokerage willing to transfer a their business from TD. The real key here is brokers don't want to lose their precious "status" with TD - they don't want to stop sending deals there because they are at the highest level of compensation.

    If a monoline can match that - problem solved...

  • Brad Currie on 2013-06-17 10:09:19 PM

    Had the same thing occur to me... it was deal I did do via the broker channel 5 yrs ago... tried to do a refi but was told it was not doable unless CMHC insured... branch called client as part of renewal follow up, was able to get the deal done. Frustrating as I brought the client to the bank in the first place. Clearly, branch not fully disclosing. The irony is brokers are subject to higher standards and more severe consequences than bank employees and road reps, yet brokers are the ones who are often labelled as untrustworthy.

  • Ron Butler on 2013-06-18 8:11:24 AM

    These issues have been prevalent at TD since I can remember, so 18 years. Every year or so there is an article like this and there is great crying and chest thumping.

    Folks, TD a huge lender who could care less what we choose to complain about. But let's be clear: TD provides a number of good products and is often a very useful tool to help our clients. Even if we only send them 10 deals a year those are often 10 that NEED to go to TD as it is the right fit.

    As emotional as these things can get, lets be more mature than wanting to boycott a lender brokers are doing $8 Billion of volume with.

    We need to act less like commission salespeople and more like business people, quit crying about one lost deal and understand we need strong lenders in our channel.

  • Frustrated in Alberta on 2013-06-18 8:45:58 AM

    Ron: I think the "immature" comment was really uncalled for. If you, as a business owner, continue to deal with a supplier that constantly undermines you and steals your clients, than that says far more about you then it does your supplier. This isn't about ONE deal, this is about many deals, and we have all been affected. And...if you think the broker channel has no power to make changes, then perhaps you might check out the hiring page on TD's website. Throwing in the towel because there is a lack of courage to stand for what is right is not an option. Many brokers continue to deal with TD, however the best applications will go elsewhere. They will only be used when the "fit" doesn't "fit" anywhere else. History has proven that the mighty do indeed fall, it is simply a matter of timing....

  • Ron Butler on 2013-06-18 9:13:32 AM

    @ Frustrated, you actually validate my point, we need TD where they are a good fit. Frankly your talking about "the mighty falling" also illustrates my point about maturity, are we so silly as to think TD bank needs us? I mean really.......... seriously? TD funds half the monolines. That is a fact, so they close Broker Services and just amp up what they take from monolines? How did that help us?

    BMO and CIBC chucked us and as much as we like to think "wow, did they ever make a mistake" believe me when I tell you those CEOs never give it a second thought.

    So lets act like adult business people. The biggest part of our selling proposition is CHOICE, lets not lobby to reduce the choices.

  • Blair Anderson on 2013-06-18 10:03:42 AM

    Well said frustrated in Alberta. Unfortunately myopia is alive and well in the mortgage brokerage community. Do what ever you have to do, to get the next deal and don’t worry about the consequences, right? Whether it’s supporting bad lenders like TD, or using rate-sites, neither of which care about the professional reputation we are trying to advance.

    This disconnect is a good example of the leadership and unity that is missing in our industry today. Sadly, we still don’t have the collective organization to help where it is sorely needed. It’s pretty much a free-for-all.

    I still believe most of us care about the professional work we do beyond getting someone a good rate. For those of you that wish to jeopardize the long term viability of our profession, do so at your own peril. As for every one else, keep fighting the good fight!

    Oh and Ron, stop and ask yourself why TD funds monolines. Is it because they don't have the resources to lend the money out themselves? If they did, they would.

  • Ron Butler on 2013-06-18 10:22:53 AM

    Okay Blair, but "bad lender" TD is actually the second logo you use on the front page of your website????? I guess you don't mind trading off the cache of J.D. Powers ranking of TD as #1 consumer brand in Canada when you want to inspire confidence in the Anderson brand but they are a "bad lender".

    Oh, you want to know why TD funds the monolines? RBC does the same. Its because they are so incredibly rich and successful they need other means to shovel out their money.

    Come on, let's grow up.

  • Paolo Di Petta | on 2013-06-18 11:41:08 AM

    I think the biggest point being missed is where TD is a "good fit", there's often another monoline that would be an equally good fit. In those cases, we should avoid TD like the plague - I think that's the point that the other posters are trying to put forth.

    The fact is, the big banks don't particularly value us - in fact, most have policies and procedures that are outright hostile toward us. Alone, we can't defeat them, and even as a group, we won't shut them down, but we certainly shouldn't give them business as they continue trample all over us.

    I tell all my friends/family/clients to vote with their wallet and to choose product/service providers that align with their morals. It's about time we as brokers did the same with our clients. It certainly isn't in our client's best interest to put them in a collateral mortgage with a big bank when many monolines offer more favourable terms and keep the market competitive.

    The time has ended to push a deal through quickly because a big comfortable logo is behind it. Real brokers educate clients and offer them real choices. Time to step it up and demonstrate our true value.

  • Linda Rausch on 2013-06-18 11:52:29 AM

    Beautifully said Paolo!

  • Lior, Mortgage Edge on 2013-06-19 12:28:35 PM

    Perhaps it's just me, but I notice that the headline stories in this place are increasingly dominated by individual brokers whining and complaining about being bullied by the big banks.

    Seriously? Are you guys sales professionals or what? You do know that you have other places where you can send the deals to. It is obviously a publicity stunt by some agents and brokers to get their name in the news.

  • Linda Rausch on 2013-06-19 4:07:33 PM

    Oh jeez Lior...chill...we are having a discussion here, and we have all been affected by the situations mentioned. Doing this for self-promotion isn't in anybody's best interest. I happen to learn a lot from many of those that post comments to different articles in Mortgagebrokernews, and your accusation doesn't contribute a thing of value. If you don't want to read this stuff, then don't...

  • CS on 2013-06-19 5:14:40 PM

    I totally agree with you Linda.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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