If you offer it, they will come. Eventually.
Brokers turned off by the 5 bps cut to finder’s fees at First National say they're now willing to return to the fold given what they call the lender's "mea culpa."
“Yes, I'll start using them again, but they'll no longer be one of my top choices,” says Alex Pang, with Verico Clear Trust Mortgages. “I boycotted them because of the commission cut; we can't let lenders do this to us when they think they can. The only way to make our voices heard is to stop sending them business!”
The sentiment echoes that of a handful of other brokers reaching to official news Thursday that First Nat has restored finder's fees on a five-year fixed to 80 bps -- that move following its decision last summer to cut that compensation to 75 bps in consideration of what the lender suggested were pooling abuses on the part of some brokers.
“We decided to cut costs, so we made the decision to cut fees by 5 bps,” says Ben Kawa, Director of Sales and Strategic Relationships with First National. In the intervening months, First National re versed its decision.
“(We) looked at what we were paying, what the competition was paying… and decided to tweak the system” by restoring the finder fees to 80 bps, says Kawa.
Figures quantifying just how many other mortgage professionals moved away from the lender because of the compensation adjustment aren't available, although D+H market share reports are expected to cast some light on the issue.
Still, anecdotally, brokers say they are responding to lenders now moving to enrich commissions, if only on a temporary basis.
Street Capital and MCAP raised broker’s fees an extra 10 bps on high ratio mortgages to satisfy CMHC demand but also to win over ING Direct clients, argue brokers. First National made a similar move.
“I've moved my business to MCAP and Street Capital since then,” says Pang. “I'll use First Nat again, but only if MCAP, Street or TD can't do the deal.”