Mortgage brokers are worried that one of Canada’s big five banks might snap up ING Direct – its parent company now announcing the review of “strategic options” to sell the broker channel lender.
“News of ING’s possible sale took me by surprise,” Jeff Attwood, mortgage broker at Verico KW Mortgage, in Cambridge, Ont., told MortgageBrokerNews.ca. “They offer one of the best product selections and are real advocates of the broker channel.
“The worst case scenario would be one of the big banks snapping up ING and then cutting off the broker channel.”
Banking community observers reported today that rival Canadian banks were eyeing the Dutch-based online-focused ING, which is considering putting its Canadian and UK operations on the chopping block.
“ING continuously evaluates its portfolio of business, in line with its stated objective of sharpening its focus. Within this context, ING today announced that it is currently reviewing strategic options for ING Direct Canada and ING Direct UK,” the bank said in a statement issued Thursday.
“These review may or may not lead to transactions, and no decisions have yet been made in this regard,” the statement reads.
ING is considered to be a good buy. Mortgages held by the bank are considered very safe because thet are insured by CMHC. However, over the years the ING has marketed itself as alternative to the Big Five. There are concerns that INGs customer who flocked to the bank for this reason might flee once it is bought by a conventional bank.
Mortgage brokers, on the other hand, are worried over the fate of product offerings ING has.
“Many of our clients take advantage of ING’s line of credit product such as the Home Equity Line of Credit which you can’t get from the big banks other than Scotia,” said Attwood.
He also said ING provides brokers with a very helpful tool called the ore-approval rate hold system. It is essentially a website where brokers can enter basic information about a borrower and get an instant rate hold for that client. Attwood said it was a great time saver because normally lenders require brokers to submit a full application to hold a mortgage rate.
“Product diversity is always good for the mortgage industry. If ING gets bought by a big bank, we could lose some of the unique products ING offered,” said Attwood.