By Justin da Rosa
Brokers are weighing in on the acquisition of MonCana by Canadian First Financial and while opinions diverge many laud the deal as a way to better compete with the banks.
“In the market, it’s so challenging with all the changes and any cross-sell is going to be effective,” said Clinton Wilkins of Centum Home Lenders Ltd. “They are able to increase the product mix which will be positive and it creates more competition with the banks.”
Ron Butler of Verico Butler Mortgage shares similar sentiments: “MonCana supplies the tech, portals, software, hardware; the new bank has some of the top brokers in Canada and they can stop sending their business to the banks.
“It’s a perfect match and (deals like this) may be a requirement for tons of these small lenders to consolidate in a market that is shrinking and has more and more discounting of rates,” Butler adds.
Others mention the industry may take note and partnerships like this will become more commonplace.
“This may incent other lenders to explore this type of model, which to date has likely only been back of mind,” John Bargis of Mortgage Edge told MortgageBrokerNews.ca. “The broker market needs to find ways to bring true value to their business; for the most part brokers simply play the role of the middleman.”
Bargis is among those suggesting brokers who concentrate their business on the old “eat-what-you-kill concept” need to re-think that strategy.
“This is revolutionary,” he added, “and I personally support the multi-product renewal model. This creates true value for one’s business, independent or otherwise.”
Not every broker is as optimistic about the Canadian First-MonCana deal, however.
“With the new rules and regulation,” writes one MortgageBrokerNews reader, “It doesn't make sense to be a bank unless you have $250 million plus in start-up cash; it will take 10 years before this bank can even be considered a small player in the marketplace.”