Brokers wary of TD consolidation

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TD has moved to consolidate BDM services for its prime and alternative lending divisions – something brokers are worried could cost them future business.
“Currently the two (divisions) are completely divided,” Michael Marini, a mortgage agent with Dominion Lending Centres Funds in Toronto, told “I’m concerned that with the consolidation, we will eventually see TD Broker Services try to bypass brokers and take our TD Financing Services clients once they can qualify for prime borrowing.”
Effective immediately, the sales teams of TD Broker Services and TD Financing Services will come together, forming a group of 22 regional sales managers, according to a letter sent to brokers Monday.
“The newly combined team will represent both prime and near-prime products to the broker community and be well-positioned to provide strong service to our broker relationships by offering an integrated sales support experience through one point of contact,” Mohammed Nakhooda, a senior manager of TD corporate affairs, told last Friday. “TD Broker Services and TD Financing Services remain as separate business lines within TD Canada Trust. Each business will continue to maintain its respective underwriting and process procedures.”
That last point may serve to allay the concerns of brokers who’ve arranged mortgages for Alt-A and B clients at TD Financing Services, but have had  little to no relationship with the bank’s A lending facility. Their alternative business often translates into deals to arrange A mortgages for those same clients, once they're able to qualify for prime loans.
Marini and other brokers counting on that lucrative work are worried TD’s move to knock down the wall between BDM teams at TD Financing and Broker Services will eventually get extended to underwriters.
Their fear is actually twofold: not only are they concerned  TD will poach B clients once they become ready for prime mortgages, but also that brokers using TD Financing will be pressured to send prime business to TD Broker Services in order to preserve their relationship with TD Financing.
TD Financing , itself the product of corporate consolidation, represents a merger of the big bank’s Indirect Lending unit with VFC Inc. –  an alternative lender TD acquired in 2006. Marini wants to see that amalgamated Alt-A/B lender maintain an arms-length relationship with TD Broker Services. Still, he has his doubts.
“I don’t know how long it will stay that way,” Marini told
  • Strategic Move on 2011-10-19 4:31:15 AM

    This is a strategic move. Broker concerns are valid and I'm afraid it will come true. TD Fin is already working with branch & specialist channel. All bank underwriters will eventually be trained to pass declines to their Alt A lending arm. This would be an easy bridge for them to establish and why not. Support the monolines.

  • Jay on 2011-10-19 5:13:27 AM

    If you didn't think they were going to do that you were kidding yourself. Home Trust has set itself up to do the same thing. The key is to stay in touch with your clients through the process and through the life of the mortgage so that you are there at renewal time.

  • Nate on 2011-10-19 8:11:44 AM

    This shouldn't surprise anyone. It's a good business move on TD's part. What does surprise me is the amount of mortgage brokers that continue to support TD and other banks. The writing is on the wall. They want us gone. It's time for those of you that have a strong relationship with TD to start moving your clients toward the monolines. Sure it won't be easy, but you are the reason our market share is showing little to no growth. Establish relationships with the monolines, continue to add value and help our industry thrive.

  • AB Mortgage Broker on 2011-10-19 8:16:07 AM

    TD is in the business of making money and of course they are going to going to poach. From their point of view the client is theirs already.

    If you don't like it, stop sending business to them. In fact, stop sending business to the big banks, period!

    I predict that one day, maybe a year or two away, TD will exit the broker market altogether. The day is coming, mark my words.

  • Angela Wong-Liao, Invis Inc on 2011-10-19 12:55:28 PM

    I agree with AB Mortgage Broker's prediction, TD is certainly moving the direction of subsequently removing themselves from the broker channels. Yes, we have to take pro-active approach and start building relationships with monolines. Our market share is shrinking as the big banks are trying to monopolize the mortgage market. Our industry will be more challenging in the next 5 years and we have to find and develop our unique market niche.

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