Brokers lambast IG offering

Brokers lambast IG offering

Brokers lambast IG offering News broke Tuesday that Investors Group had launched an unprecedented mortgage product but brokers have already poked holes in the offering.

“Please note: not so ‘minor’ stipulations: fully closed, arm’s length sale. No transfer, no port, no nothing,” Ron Butler of Verico Butler Mortgage said in the comments section of MortgageBrokerNews.ca. “Need to refinance in year three, job transfer in year two, need to do anything with the mortgage? No matter what your equity is in the house always the same answer: sell your house.”

The product in questions is a 36 month closed variable-rate mortgage rate at 1.99 per cent (Prime minus 1.01 per cent).

Investors Group’s website lists a number of stipulations but, as Butler pointed out, there are many others that also need to be taken into consideration by clients.

“If applicable, you may be responsible for legal and administrative fees or prepayment charges. Not available for renewals or internal refinances,” the fine print for the product reads. “These promotions are closed terms that are not eligible to be paid out, refinanced, early renewed or extended prior to maturity of the term (except upon the bonafide sale of the subject property).”

Other brokers drew attention the product as a mere means to drawing clients in for cross-selling opportunities.

“I know how Investors Group works, and this product will be tied to cross selling of other IG products that most people don't want,” Daniel McKay wrote in the comments section. “Brokers won't lose out on much business over this teaser loss leader offering.”
 
21 Comments
  • Victor Simone 2014-05-14 11:27:26 AM
    Yum, lambasting is so very good. I wouldn't say that us brokers are afraid of this type of thing, because some have been in business so long now that this is just a recent challenge that we spin into an opportunity for ourselves. "We got this."

    Am I worried ? No, but when the dust settles over the next few weeks we will have found a way to deal with this new rate of 3 yr 1.99%, and you can take that to the bank....or perhaps not a bank ?

    Although I truly respect Power Financial and it's ability to serve the market with it's various products and channels of distribution, I have my doubts as to whether IG can actually carry this football without dropping the ball. IG has mortgage underwriters ? Sure, but can they really perform at the type of level required for this type of promotion, is my question. Time will tell.
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  • Zhanna Krupnikov 2014-05-14 11:38:01 AM
    4 The 36 month Variable Rate mortgage has a guaranteed rate of Prime – 1.01% for the 36 month term of the mortgage. The interest payable is calculated based on Our Prime mortgage rate and is subject to change at any time. Payments are based on the 3 year fixed posted rate at the time of funding. The Annual Percentage Rate (APR) for the Variable Rate Mortgage term listed above is 1.997%. The APR was calculated based on the Mortgage Prime Rate of 3.00% set on September 9, 2010, which is subject to change.
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  • George Christopoulos 2014-05-14 11:44:14 AM
    Good comment Victor. Underwrinting is more complicated than ever.
    From what I have seen of IG advisors, good luck getting anything completed.
    This will come and go but it just shows little regard financial instituitions have for mortgage people, they still think all you need to do is offer the lowest rate to attract clients.
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