The spring season has seen rates drop to record lows and while the trend has bolstered broker business, it has also caused a back-log of files at a number Canada’s lenders.
“Lenders are dropping their rates and they become five days behind on files,” Bruce Smith of Centum Future Mortgage Group told MortgageBrokerNews.ca. “They don’t have the staff to handle the increase in business; they’re short-sighted.”
With several lenders dropping their rates below 2.99 per cent for a five year fixed rate, May saw a sales uptick of 5.9 per cent year-over-year.
For his part, Smith understands the backlog that has been created but he prefers transparency from his lenders and believes time limits should be set on each deal.
“I give credit to lenders who tell us they can’t handle the deals because I can look elsewhere for funding,” Smith said. “A lender should respond within 24 hours to say whether or not (they will fund the deal).”
It’s a problem one broker says he has to deal with on a daily basis. Though he readily admits certain lenders are better at handling the influx than others.
“Deals go into a queue and then you’re left waiting; sometimes it’s a case of waiting for the lender and BDM to discuss the deal,” Brad Herd of Verico
Select Mortgage Corp. told MortgageBrokerNews.ca. “It’s also a seasonal thing.”
Herd applauds First National for its dedication to giving brokers a decision on a file within four hours of receipt but knows that forming relationships with the other lenders is key to expeditious deals.
“As long as you know the BDM … they can ride the underwriter and get the deal done,” Herd said. “If the underwriter makes me happy it makes the BDM happy as well.”