Credit union facing renewal fee concerns

Credit union facing renewal fee concerns

Credit union facing renewal fee concerns

A credit union in B.C. is now fielding broker concerns about the “full-commission” renewals of a discontinued program – an offer that was nonetheless in play at the time of funding.

“I can confirm that Northern Savings paid renewal fees up to December 31, 2010, at which time this practice was discontinued,” Ken Doleman, president of Northern Savings Credit Union, told MortgageBrokerNews.ca. “The renewal fee program has undergone several iterations with varying terms and conditions (and) this may have created some uncertainty.

"A provision is now in place to automatically pay renewal fees to brokers who have attained Tier 1 status – determined by business volumes.”

That remedy hasn’t necessarily satisfied brokers who sent deals before the initial program’s end in 2010 and are without status, past or present.

“Northern Savings Credit Union PAYS FULL COMMISSIONS ON ALL RENEWALS FOR LIFE OF MORTGAGE,” reads a July 8, 2009, rate sheet obtained by MortgageBrokerNews.ca.

A Vancouver broker who sent several deals to the CU before the program expired says he received at least one renewal under the plan and was surprised to hear about the cancellation. With another client’s mortgage approaching renewal, he reached out to a BDM at Northern Savings for clarification.

“I was told that I wouldn’t be getting renewal fees on that deal even though it closed when the program was still in effect,” the brokerage head, a big supporter of lenders with trailer fees, told MortgageBrokerNews.ca, speaking on condition of anonymity. “Though I understand why they wanted to discontinue the payments, I believe they are still obligated to pay renewals on deals submitted under the program.”

Doleman, who took the helm of the CU after the renewal program ended, says he’s personally prepared to deal with any broker “who feels he or she has not been properly treated by our credit union with respect to this fee issue – and could provide additional information.”

“I will personally have this matter adjudicated,” he told MortgageBrokerNews.ca. “Integrity and equitable treatment are fundamental values that guide Northern Savings’ business dealings.”
 

10 Comments
  • Ontario Broker 2013-01-31 6:34:24 AM
    Trailer fees are only as good as the lender offering them. If the lender changes policy, closes down or is bought up, bye-bye TFs.
    The other issue with this is what lots of brokerages are finally discovering, they rely too heavily on one lender. FirstLine is gone, ING is gone & the list will get longer. Spread you business around. You might lose 10 bps on the volume bonus, the franchises won't like that because thats what they live on, but you have built relationships with other lenders. Business is built for the long run, not from deal to deal.Build your business on the false premise that trailer fees are forever & you build your busiess on sand.
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  • Ted Jones 2013-01-31 7:55:15 AM
    I placed $2.7 million with Northern Savings for the 12 months between 2009 and 2010 before they went through their reorganization and changed their underwriting. These files were funded with the knowledge that if I serviced the clients and if in their best interest were renewed, a trailer commission would be paid. I worked closely with my Northern clients to renew and in some cases early renew when it was in their best interest. The issue of renewals hit me this past year. I worked with one of my clients in March 2012 to negotiate a June renewal. No mention was made that a renewal fee was not forthcoming. I followed up for payment for 5 months to only hear in January 2013 that they stopped payments on renewal and have not been paying trailers since 2010. I received my last trailer in January 2012 on an early renewal that I negotiated in late 2011. I have never been advised of the termination of the program and from discussions I have had with other brokers who have also indicted that they too were not informed of changes. To be told now that I have to become a Tier 1 broker to get paid trailers on my previous files is an insult as I was a Tier 1 up until they made their changes. This is a sad example of brokers who try and build their business relationships with a lender to be only shoved aside without notice. I am so disappointed with Northern Savings.
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  • Ted Jones 2013-01-31 9:24:58 AM
    For the record, Northern Savings were promoting "NSCU pays full commissions on all renewals for Life of Mortgage" up to the August 6, 2010 Residential Mortgage Rate Sheet. The first time that the phrase was absent, was on their September 27, 2010 Rate Sheet.
    I understand that policies change, and that sometimes it is impossible to notify every broker who dealt with an organization, however Northern Saving's executives should implement a grandfathering of those files and pay renewal fees for the Life on the mortgages that were originated prior to September 27, 2010.
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