“About 75 per cent of my work is alternative mortgages and these deals don't come from cyberspace,” Lior Hershkovitz of Mortgage Edge wrote on MortgageBrokerNews.ca. “Typical online "B" deals would be people who have 450 beacon and $5,000 in the bank looking to buy a $400,000 home. Not exactly promising -- you need alliances with people who actually have access to those types of clients.”
Earlier this week, RateHub CEO Alyssa Richard discussed the company’s plans to open an online mortgage brokerage and suggested it might focus on alternative lending.
36 views in an hour and a half“(James) had joined afterwards but we did have several conversations with him about joining RateHub and have just firmed up what his role will be,” Richard said at the time. “We also considered him looking at originating B-mortgages as well.”
However, it’s a strategy that some brokers continue to question.
“This is a very hard thing to do, in my opinion, and not a good strategy with respect to a site like RateHub, which has made its money on shopping rate only,” Jake Abramowicz of Mortgage Edge wrote on MortgageBrokerNews.ca. “I'll let Alyssa and her team figure out why this is the case, though.”
The industry might soon see B-deals introduced to rate sites but the idea has mortgage brokers questioning how successful a business model it would be.