"Our industry is changing and government rules and regulations make an impact on the approval ratio; it is more challenging and difficult to get a mortgage approved by a big lender, ie: the bank but the monolines's service level is still requiring improvements," Angel Wong-Liao of Invis the Money Lady said on MortgageBrokerNews.ca. "An independent mortgage broker has a competitive edge to bank mortgage specialists because we can give alternatives and choices to our clients should they declined by the bank."
Two big banks experienced slower mortgage growth than they would have liked but both remain optimistic for the future of that lucrative business segment.
“The 3-per-cent growth that we’ve had in the mortgage business is in line with where the market is growing,” Anatol von Hahn, Scotia
bank’s group head of Canadian banking said, according to the Globe and Mail. “We had hoped that the market would grow a little bit faster than what it has. As you know, it started slow and in the couple of months it’s picked up. But I think, looking forward, we can expect this type of growth.”
Not unlike mortgage brokers, banks have also grappled with 2012’s tightened mortgage regulation changes and Canada’s biggest bank is no exception.
“I think you have seen while the mortgage business has slowed as expected, given the regulatory and consumer change in preferences, I would highlight the agility of our business model as growth in consumer demographics shifts to deposits and investments.” Dave McKay, RBC CEO said on a conference call.
According to CAAMP
’s spring report, banks account for 47 per cent of the mortgages originated during 2013 and up until May 2014 compared to a 39 per cent share for mortgage brokers.
It remains to be seen if brokers can win a larger share. In the meantime, banks seem content to continue duking it out.
“We feel good about our mortgage business,” chief administrative officer and CFO of RBC, Janice Fukakusa told the Globe and Mail. “Our volumes were up just over 4 per cent from a strong Q3 last year and in fact I think everyone knows that we got off to a slower start in the spring housing window because of the weather, but we saw strong June and July and actually our pipelines for the fourth quarter also look strong.”
Banks may be feeling the pinch just as much as the monolines following numerous lending changes, and this just opens the door for brokers to swoop in and win business, says one professional.