​Brokers weigh in on market share drop

​Brokers weigh in on market share drop

​Brokers weigh in on market share drop Broker market share has dropped year-over-year and some industry professionals believe regulations are to blame.

“There is a simple reason that broker market share has dropped,” Ron Butler of Verico Butler Mortgage wrote on MortgagegBrokerNews.ca. “Brokers are forced to obey B-20 rules, banks branches circumvent them.”

CAAMP’s annual fall report, released earlier this week, points to a significant drop in mortgage broker market share, a large portion of which was picked up by the big banks.

“For all current mortgages on homes that were purchased during 2014 up to the time of the survey, 61 per cent were obtained from a bank,” the official report states. “Mortgage brokers had a 31 per cent share. Credit unions were the source for six per cent of these mortgages, followed by two per cent from life insurance or trust companies.”

These numbers represent a significant change from the mortgage origination breakdown of just a year ago. In 2013, up until the date of last year’s publication, banks accounted for 42 per cent of mortgage market share, while brokers accounted for 40 per cent.

The tightened mortgage rules, which have sometimes stymied brokers’ ability to place clients in mortgages, have been a constant struggle for industry players. And this, coupled, with the big bank influence has not boded well for the industry, according to the CAAMP stats.

“Mortgage brokering is a relationship business and you can only expand your business by expanding your expanding your sphere of influence,” Clayton Carby of Total Mortgage Management wrote. “The Banks have a greater ability to do this because of all the services they offer. We need to offer education as well as best interest.”
 
15 Comments
  • Ramesh Amin 2014-11-21 12:45:31 PM
    I guess it has also got to do with us home buyers being taken for a ride by some not so honest brokers and thanks to that handful the whole community of mortgage brokers gets a bad name.
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  • Daryl French 2014-11-21 12:54:08 PM
    Banks spend billions on marketing and it is tough to get agents to spend $100 a month on marketing programs. I hear constantly that mortgage brokers hate working with Realtor's, yet Realtor's are involved in a lot more real estate transactions than we are!

    I think we as an industry have to own the drop in market share and change our roll from best rate to best financial solution. We have to start investing in our business and ourselves, instead of just viewing ourselves as sales reps.

    Business people look at ROI from relationships and marketing and invest in what gives them a good return. Sales reps just focus on the next sale.

    I agree that banks are playing on a different field but I also believe we need to up our game as they (the banks) give us more than enough amo to compete very easily with them. We need to consistently get our message out to the public (Don't sign that Mortgage Renewal) and focus on financial strategies with clients, Realtor's, and other industry professionals and then we will see growth, and deserve the growth.
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  • Rod 2014-11-21 12:59:19 PM
    Maybe also to do with brokers sending a large share of their business to the banks ?
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