DLC president bends the ear of Finance Minister

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Dominion Lending Centres president Gary Mauris was one of the participants Wednesday at a pre-budget consultation held in Regina by Finance Minister Jim Flaherty.

 

The following is a summary of the day, submitted by Mauris.
 
 
As most of you know I was invited to attend the 2011 pre budget consultation committee chaired by Minister Flaherty in Regina. The meeting was made up 17 carefully selected Canadians, each of who represented a leadership position in their respective industries. The day consisted of:
 
·         An overview by Minister Flaherty of Canada’s past performance and outlook for 2011 and beyond.
·         A break out discussion into four groups to solicit ideas and suggestions on cost neutral or non-spending steps the government can take in the next federal budget to help create jobs and promote economic growth:
·         Feedback on whether or not the government is on track for a balanced budget by 2015-2016, or is this too ambitious or too unrealistic.
·         Suggestions on ways that the federal government can be more efficient and effective.
·         Suggestions on what Canadian’s priorities should be for the short and long term to encourage private sector growth and leadership in the economy.
 
A plenary session followed with Minister Flaherty and Finance department. Each participant spoke about their specific industry and provided feedback and discussion.
 
Federal Finance Briefing on Canada’s Recent Economic Performance, presented by Deputy Minister Michael Horgan.
 
Highlights
 
·         With strong policy support, an economic recovery is continuing.
·         Economic activity in Canada is back to pre-recession levels (The best performance in the G7).
·         Canada’s solid economic recovery has supported a recovery in the labour market (since July 2009, employment has increased by more than 460,000 jobs, more than offsetting all of the jobs lost during the recession).
·         Real GDP Growth is expected to remain moderate in the near term, Canada is expected to have the strongest average growth in the G7 over 2010 and 2011-01-20 (IMF forecast).
·         Global recovery is expected to be modest led by emerging economies, particularly Asia.
·         Canada has had the highest growth in real income per capita for G7 countries (1999-2009).
·         Although we have many positives, global recovery remains fragile.
 
Risks to the Global Outlook
 
·         Uncertain strength of private demand in advanced economies, particularly in the U.S.
·         High sovereign debt levels in some European countries.
·         Global imbalances and implications for the Canadian dollar.
 
Fiscal Situation and Outlook
 
·         Canada is on track to return to a balanced budget by 2015-2016 (current federal deficit is $55 billion).
 
My comments on behalf of the mortgage industry
 
I articulated our views to the Minister privately, at the roundtable discussions, and then wrapped up with a very passionate overview of our Industry’s perspective, to the entire group. It created great discussion, feedback and support from many other participants including questions and dialogue from Minister Flaherty himself. My main points were:
 
·         We as an industry are sincerely grateful and the Minister’s office along with Bank of Canada’s Governor Mark Carney, should be congratulated on their swift prudent actions including emergency mortgage pricing, when the global debt crisis began. Their actions were significant in helping Canadians avoid the housing collapse that our U.S. neighbours experienced.
 
·         Although we support and encourage household fiscal responsibility, we think a sweeping policy change like the one we saw earlier this week, wasn’t necessary. Mortgage default in Canada is the lowest in the world. Rather than pairing back the amortization term from 35 years to 30, they should have made the borrower qualify at the payments based on a 30 year amortization, and kept the maximum amortization at 35. Qualification and purchasing power just dropped significantly, especially affecting first time homebuyers, making it more difficult for our most valuable assets, young adults and young families, from experiencing home ownership and participating in our real-estate sector.
 
·         I spoke about the changes regarding refinancing up to 85 per cent loan to value. One of the most effective ways that we as mortgage professionals can eliminate high interest consumer debt and over extension is to retire high interest, unsecured debt by refinancing at today’s low interest rates, sometimes saving the consumer hundreds of dollars per month in throw away interest. What this policy is going to do, is force many homeowners who are experiencing job loss, sickness, separation, divorce, health challenges,  or urgent unforeseen family crisis, into having to sell their homes to get access to their very own equity. Think about this, just under two years ago we could refinance up to 95 per cent on a $300,000 home. That’s a difference of $30,000.00, homeowners cannot get access to. Having access to that money, could be the difference between getting through the tough times, or spiralling into much more dire straits, having to quickly sell their home at a discount, and finding themselves in a much more serious situation.
 
·         I spoke about the unlevel playing field between our Canadian insurers, specifically about the unlevel playing field enjoyed by CMHC. We discussed the need for the government to support our insurers equally. It benefits the consumer and supports consumer choice and fair play.
 
·         My most passionate plea was for the government to have a very hard look at unsecured debt and specifically the credit card issuers. Canadian’s biggest financial struggles, their over extension and record debt levels are not due to their mortgages (again, we have the lowest mortgage default in the world).  They are due to easy access to high interest credit cards, and other unsecured debt. How is it that my very own son, who is 19, attends university, does not have a job, was issued two separate credit cards, on his own? One of them had an initial credit limit of $500 and is now at $3500 in just over a year. The feedback from all the participants in the consultation was remarkable. Several very high profile participants expressed similar stories and recognized this as a very serious pressing issue for Canadians. I explained that we have very strict qualifications for mortgages, including TDS and GDS ratios to ensure that consumers have the financial wherewithal to make the payments, and similar qualifications based on the credit card limits should apply. The Minister took notes, asked for suggestions on how to implement and recognized it as a more important issue than he had initially considered. We did have discussions and I commended them on taking the first step, and a very valuable one at that, by putting the length required to pay off your credit card based on making the minimum payments.
 
 The day was incredibly interesting, and I truly felt that these sessions were much more than a ceremonial photo opportunity and that the Minister’s office was truly listening, and valued the panel’s feedback. I will continue to stand up for what I believe in, and speak for what is right, not what is popular, politically correct, or the easiest. Our industry is under assault, and Canadians are the ones who are most affected. We need to bind together, regardless of our companies, our competitors and speak with a common voice and stand up so that we can continue delivering choice, value, options and trusted advice to Canadians.
 
 
 
 
  • Elfie Hayes on 2011-01-22 3:59:13 AM

    Gary, allow me to thank you so much for this insight. Reading your update and comments gives me have hope for the future of our industry. I have agreed with you from the start, that the mortgage industry is not the culprit in this debt crisis, it's consumer debt through credit cards and unsecured borrowing.

    Today's article from CAAMP showing the strength of the "Mortgage Market" by way of low default and low lending ratios of mortgage debt makes me wonder how changes to mortgage lending were even considered.

    This morning I visited the site for the Superintendent of Bankruptcy and printed off the latest report from October 2010. For my own information, I will re-visit it in a year and I'm sure that the numbers of Consumer Proposals and Bankruptcies will have sky-rocketed because of the new policies.

    Enough said, once again thank you for giving us all such a concise report about the meeting.


    Elfie Hayes (AMP)
    Mortgage Agent FSCO Lic M08001377
    Mortgage Intelligence Oshawa
    www.lowrate.ca
    "Business owner and full-time Workafrolic"

  • Nathalie on 2011-01-22 5:16:32 AM

    This is what is exactly what's needed in the mortgage industry!
    Now let's see if they will be considered.
    Thank you for all the tremendous great work you do, the lives you affect & for protecting consumers.

    From, Nathalie
    Dominion Lending Centres Agent

  • www.trustedmortgages.ca on 2011-01-22 6:34:38 AM

    I completely agree with you on the unsecured credit. Many clients come to us looking for help with their finances, so I hope they would revisit the LTV on refi's.

  • Tony on 2011-01-22 8:06:30 AM

    Your insight is imperative to the Canadian government, the industry and Canadian people. Often government bureaucracy is blinding to issues that must be addressed swiftly and promptly. In particularly with our industry. I am apprehensive to believe the government will take action in regards to unsecured debt and credit card issuers. Which for many Canadian families is a much greater issue than mortgage debt, as you explained. My question is how can Canadians mobilize to support your insights to make a difference in time to prevent the unneeded additional regulation to the heathy Canadian mortgage industry?. Additionally how can the government support Credit and Debt education across Canada?, rather than continually regulating instead of educating. Educating our youth is the building block to a successful financial future in Canada.

    From Tony
    Mortgage Professional
    Dominion Lending Centres

  • Jon on 2011-01-22 10:33:28 AM

    They already made a change to the credit card rules with companies not being able to increase the credit limits without the clients consent, 21 day grace period, payments made to the principle 1st before new purchases. The problem with lax mortgage rules was people believed they were actually wealthier than they are because the value of their homes kept rising. This created a desire to continually refi to pay off debts, without any regard to what would happen if house prices dropped. By limiting the refi limit consumers will have a safety cushion as prices go down. How will home owners be better off when their mortgage is upside down, if consumers have more equity then they will have an option to move lenders when their mortgage matures. No lender would take on a mortage when the home is worth less than the loan. Home ownership is not a right its a privilege, not everyone deserves to own a home. The new rules are a way to reduce the addiction to debt that Canadians currently have without raising the prime rate. Look how quickly we forgot that it wasn't that long ago that the max amortization was 25yrs anyway.

  • Julian F. on 2011-01-22 3:16:37 PM

    I am not sure where you guys found the statistic about Canadian foreclousres being the at the lowest level in the world. A June 2010 article on Routers showed us at number 2 highest behind the US.

    Also, the governement cannot control unsecured debt. The only reason the Canadian government can pass regulations in the mortgage field is because tax payer money backs up the mortgage insurers (CMHC is a crown corperation, and the other two enjoy government huge support as well). Credit card companies do have that, they simpley charge rates which would allow them to break even on defaults and make some margin in the process.

    Cutting rates on credit cards would tighten qualification rules and make it hard on those who are in the biggest need of credit to access it. This will not solve the problem but simply send them to the next cheapest alternative, payday loan outlets. This is the opposite of protecting the consumer.

  • Concerned on 2011-01-22 5:31:24 PM

    "I will continue to stand up for what I believe in, and speak for what is right, not what is popular, politically correct, or the easiest."

    Maybe Gary needs to stand up for what is going to help Canadians in general and not his own pocket book. I agree that credit card and LOC debt is a problem but Gary is clearly only concerned with a solution to that problem so he can pad his pocket. Let's encourage more spending so people need the help of one of his "experts"........stop the madness. There are solutions to the problem other than his, and the changes start to address that.

    Mortgage Brokers face difficulty everyday and most of it is self inflicted. They are fighting an uphill battle with Canadians in general and people like Gary contribute to this daily. Always trying to get a piece of the action, but doing it all wrong. If one of his mortgage brokers pulled up at my door in one of those cartoon character decaled vehicles I would expect them to try to sell me a set of knives, not a mortgage.

    Thanks for the insight, but no thanks, Mr. Flaherty please invite someone that really cares.

  • Anonymous on 2011-01-23 3:44:55 PM

    What else is new, Gary Mauris always had the attitude of a used car salesman.

  • Gary Mauris on 2011-01-24 8:45:22 AM

    Dear Concerned,
    I appreciate your response because it does truly sound like you are concerned. Your right, there is many other solutions to these problems other than mine and frankly Ottawa has done a remarkable job to date.I am all for Canadians spending less,and becoming more fiscally responsible, and recognize this is a huge initiative way larger than unsecured debt or the current mortgage policies in Canada. As a FYI, we look at thousands of credit applications per year and the constant theme is too much loose credit, particularly in credit cards, auto loans and lines of credit. Yes, than too many Canadians look to their home equity to save the day and bail them out. Then some people repeat the vicious cycle over and over.

    We as Canadians have to qualify based on our income and ability to support the mortgage payments. I don't necessarily think lowering the rates on credit cards is the answer but making the consumer qualify for them based on the maximum limit/minimum payment as Canadians have to do with their mortgage is a fantastic first step.

    Do i have financial gain when people call us to refinance, certainly! We provide options,information and a unbiased advice on what lender makes the most sense. If they are not using a mortgage professional from any company for that matter, the consumer walks into any bank and they provide the same loan,often at higher rates because the consumer hasn't shopped around.

    I would love to hear your feedback on other prudent options and can be reached at gary@dominionlending.ca

    As for the cartonn character wrapped vehicles, the branding is working brilliantly. Thanks for noticing.

    Now to Anonymous, Corncerned had actual valuable input and articulated his points and concerns well.He used this public forum to express his frustration as it is intended for. You on the other hand used it to post slanderous venom, and than did it under the tag of ANONYMOUS. Why dont you find something in life you can actually contribute to! Why dont you stand up for yourself and get behind your negative , nasty words if that's all the insight you have. I can be reached anytime at 604.939.8777.

  • Jon on 2011-01-25 1:48:12 AM

    the problem with most credit is clients are qualifed on what they make and not on what gets deposited in their bank accounts. I work for a Financial Institution and we have to qualify clients with a term on all unsecured debt with a max TDS. it still does not replace the fact that for every debt we are acutally over stating the income because the client doesn't really have the funds that we are stating. If we really want to make a difference then we should start by qualifying clients on their actually income. So really all debt servicing is based on stated income, not a very prudent way to lend money

  • Penalty Man on 2011-01-25 8:59:28 AM

    Were penalties brought up.....or better yet the lack of continuity within the business ( be it with a broker or branch deal). The Govt had mentioned in last years budget that they would look in to this......Gary , did you ask them why this has not happened. I have no problem with there being a penalty for breaking a mortgage early...my issue is how the lenders are figuring out what IRD they can use . This is an issue that should be brought to the forefront asap.

  • Tamster on 2011-01-26 6:27:49 AM

    Penalty Man, you make a great point. I have seen too many consumers get over penalized by breaking their current mortgage and taking advantage of lower interest rates. At times the banks don't even understand their current IRD rules, even though they are spelled out in black in white in the mortgage documents. There needs to be one rule of thumb for calculating the IRD so that everyone knows what they are dealing with and whether or not it is beneficial to refinance early or stick it out.

  • Vancouver Broker on 2011-01-26 6:50:59 AM

    We do need our voice heard, as the banks have the ear of the government on a daily basis. They won't be the ones suggesting curbs on credit cards when they are making 18% or higher.

    I agree that penalties should be regulated - if we already have a random qualifying rate, the government can certainly ask lenders to price their penalties in a transparent and consistent manner.

    Thanks for your work Gary.

  • Elaine on 2011-01-26 6:53:34 AM

    You took the words right out of my mouth, Gary. And thankful to Gary for speaking the same to Jim Flaherty. We need not put such emphasis on the mortgage situation in this country. Foreclosures will always be there with the same consumers that have these addictions to spending and racking up credit cards. So, lets make these card companies accountable, by demanding they lower their rates, increase their minimum payments and stop them from dishing out all that credit to everyone.

    Mortgage Broker

  • Kevin R/Calgary on 2011-01-26 7:06:12 AM

    You can spin this thing in many different ways & Gary did bring up some very valid points in these discussions. Here is the thing, what is the difference betwwen assisting a borrower in a bad situation beyond their control & addressing care free spending by Canadians & then ultimately use their homes as ATM machines to maintain these frivolous spending ways. We have to have a healthy real estate industry moving forward, I think amortizations are not going to change the spending behaviors of Canadians. Maybe the rules should only impact the refinance side, including the amortization reduction(perhaps cutback insured refis to 25 year amortizations) and leave the home sale side of it alone. Taking buyers out of our market is only going to cause problems. Definitely, these payout penalties are rediculous & you will never get the support of the Financial Institutions to lobby for change in this. We are on our own on this guys & it will only be seeing it spun as greedy mortgage brokers wanting to get paid over & over again. Sad thing is, in some cases, this will be true.

  • Ian Murray, AMP on 2011-01-26 7:10:47 AM

    It was with great interest that I read this article and the comments.

    I think Mr. Mauris's summary of the meeting was interesting and I happen to echo virtually all the points he made to the Minister.

    I agree with "Penalty Man" in that there needs to be one consistent format for the calculation of an IRD. It has to be simple enough so that the average consumer can understand it and not need a PhD in mathematics.

    I found the point "Concerned" made to be interesting. If we want to clean up the Mortgage Brokerage profession, we need to lobby our respective Provincial governments to legislate the necessary guidelines: mandatory E&O, minimum education requirements, minimum experience levels before being able to fully license being just a few. Those alone would cut out a good deal of the mortgage amateurs.

    There is no quick fix to the issues but as a professional group, we can start to make a difference. In part, it means each of us needs to stand up and be counted.

    Mr. Mauris may have gained a few minutes of fame in participating in the session. Good for him! At least he participated. If someone is not willing to stand up and be heard or as "Concerned" quoted, "speak for what is right, not what is popular, politically correct, or the easiest" then perhaps that person should continue sitting in the back, in the cheap seats, and keep their opinions and thoughts to themselves.

    Mr. Mauris, nicely done!

    Ian Murray, AMP
    The Mortgage Centre - Advantage Financial Services Inc.

  • Cindy Freiman on 2011-01-26 7:33:06 AM

    This forum presents a fabulous opportunity for members of this industry to bring their thoughts to the table and have others further contribute to the discussion. But when people just post garbage and hide behind an alias, because they're jealous of the success of a competitor or they don't agree with one person's views, it's not productive and, therefore, should be something left unsaid.

    I'm not going to talk about how fabulous Gary Mauris is because anyone who knows him is already acutely aware of how hard he works every day to ensure DLC brokers and their clients are happy and well advised. And regardless of whether you agree with what Gary has to say, at least he's not afraid to stand up for what he believes in and try to move this industry forward in a positive light.

    I enjoy reading different views on industry issues because it helps all of us think beyond our own preconceived notions. We are all better working together as an industry than we are as one person or one company. Let's put our company hats aside and discuss what's best for Canadians as opposed to jumping on those who aren't afraid to speak their minds by adding valid information and topics for discussion.

    How can our industry best ensure Canadians have options, but are also conscious of uneccesary debt? Let's all educate our clients and know we've done our part! There will always be those "repeat debt offenders". We can't control how people spend money, at the end of the day, but we can educate them on ways to better manage debt.

  • Jessi Johnson on 2011-01-26 7:40:01 AM

    First off, I am very impressed that the Finance Minister is taking the initiative to listen to mortgage professionals and inviting a representative to provide insight. Ideally, a neutral person from Camp would have been more fair to represent the industry, however it sounds like Gary did an excellent job.

    I personally agree with many points that Gary has presented and can only hope our government does more that just take notes.

    Jessi Johnson
    VERICO

  • David Wagg on 2011-01-26 7:57:15 AM

    I think this is a very short sighted move. It is not mortgage debt that is crushing Canadians, it is the credit card and unsecured debt as Gary so aptly put it.
    This initiative by the government will force more Canadians to declare bankruptcy and force them out of their houses when the mortgage companies go after the equity in the houses to satisfy the unsecured debt. An example would be suppose your house was worth $500,000, but you could only finance under the new rules to 85%. That would mean you would have $125,000 equity the bank would go after in the bankruptcy. The banks won’t negotiate when they know there is equity available.
    Furthermore, it even lowers our ability to negotiate down these debts with the banks because we used to take the equity out to 90% and the clients could keep their homes and pay less on the unsecured debt.
    As usual the banks and their policies continue to keep Canadians down.
    If the government really wanted to do something good they would force the banks to lower credit card interest instead of raising it when people can't afford it and they would make the banks consolidate the unsecured debt into one payment loans.
    You can contact me at DAMM4U.com

  • Dmac on 2011-01-26 9:41:46 AM

    One other thing that could have been mentioned by Gary to Mr. Flaherty. Do you realize that the banks are securing credit card debt against the homes of Canadians up to 100% of it's value. If a mortgagor agrees to the "sign here if you would like the 100% of the value of your home" clause in a bank issued mortgage, and has a credit card(s) with that bank, guess what, that credit card debt is secured against the home up to 100%ltv!

  • JS on 2011-01-26 10:29:52 AM

    I appreciate that you are trying to make a point Mr. Wagg, however regardless of whether you are in the Finance Industry or not, a good point in this case starts with good mathematics.

    Equity would be $ 75,000.00 minus Legal and Realtor Fees as well as cost of accrued lender interest. You are correct though as what may be left after unsecured creditors get hold the equity can be nil. Regulation of both Asset secured and unsecured lending should be able to be equally measured. Regardless of whether there is a Taxpayer safegaurd through insuring or not, it is in the best interest for all Canadians to have more measured regulation.

    I would suggest there is a vested interest for all Canadians here ( not just mortgage professionals ) to take the time to suggest options to mitigate the current financial Crisis.

    There is obviously a great need for 2nd chance financing in the Canadian Real Estate marketplace. Accountability and monitored regulation seem to been the most recognizable culprits in this arena Globally. If this was deemed to be important prior, perhaps a more tempered economic growth would have been acheived without Big Bank and Industry Greed being the benefactor.

    Nationally, the position of the Financial Industry, Bank of Canada & Finance Minister seems hypocritical in its statement that Mortgage Insurance was not to allow for the refinance for affordability in regard to boats, cars, TV's and trips. I find that to be an irresponsible statement on the part of Mr. Flaherty.

    Being an Industry Originator, I provided full disclosure for the debts involved in these refinance scenarios which was a necessity and no one was complaining while the economy was expanding / benefitting.

    Some homeowners / Investors / Retirees will suffer a loss of marketable equity merely from the standpoint they will be forced to sell for less in a down market currently in a lending chokehold.

    Equity lending made a more competitive marketplace in terms of predatory, unsecured rates and allowed some great opportunity for growth in a number of different areas of our economies. Now we are all in a position where we need to deal with this while calming the ripple effect.

    A Chokehold is just a thinning of the herd although some measures are prudent, they dont seem to be aimed to protect the average Canadian. I am sure Mr. Flaherty has done some intelligent personal financial structuring, but it takes all walks of persons and employment / jobs to make the whole marketplace sustainable.

    Perhaps decreasing the number of times a person can refinance their mortgage to amalgamate unsecured or secured creditors would be of some merit ?

    Perhaps ultimately unsecured creditors should be constrained by the same guidelines as Mortgage Lenders ?

  • therobcampbell.com on 2011-01-26 2:12:11 PM

    @ Gary : Good for you for being chosen to speak with Mr. Flaherty. Brokers had a voice in that meeting, and why not a voice that is an Industry Leader. And I loved your reaction to the vehicle wrap comment!! Too funny sir, too funny.

    It seems that we all (for the most part) have a commonality here with the issue of credit card debt. I agree that it is a HUGE issue as we all see it on the bureaus. But we do have to remember that at the end of the day, the population has only itself to blame if they allow themselves to get wrapped up in that debt again. "You can lead the horse to water..." as they say.

    But then again, we do live in an era where it's easy to buy an $80 microwave on a FS credit card and not have to pay for 90 days. They are so gracious to not charge an annual fee as well!.....just 29.9% on purchases as of Day 91. A shame really that all of these department stores and banks can get away with it.

    Hats off to you Brokers with great insight!!

    And Gary, keep up the good work eh!

    Rob Campbell
    rob@therobcampbell.com

  • Michael Goss on 2011-01-27 1:44:58 AM

    I find it hard to believe that Mr Flaherty is preaching Fiscal Responsibility when he is in charge of a budget that is currently standing $55 billion in the red.He continues to spend money he has'nt got on White Elephants like a) Gun Registery b) G8 security which has no benefit to Canadians.
    Is this a case of "Don't do as I do, Do as I say"
    His best guess at balancing it is 2015-2016 when he won't be in the job anyway!
    Had he been the Financial Director in any private or public company he would have been fired.

  • vittorio oliverio on 2011-01-27 5:22:59 AM

    I had a chance to read the comments on this posting and it amaze me that, while I may not agree with everything that Gary says, I do agree that the government took a step backward when they changed the rules and it will hurt Canadians.

    I believe in the next 2 to 3 years you will see a spike of bankruptcy because of these new changes.

    Plus the government has given more room for the private companies to come in and charge higher rates and fees in order to make the short fall, which leads to people getting in more debt because of higher interest 2nd or 3rd mortgages.

    I agree with Gary, the credit cards and the ease of getting a car loan is more of the issue. Lets have people qualify for the car loan and credit cards as they do for a mortgage and than you will see a big difference. But that will never happen because the government knows that it needs people to get credit cards and spend money in order to have our economy rebound.

    other industry depend on the house industry, if you take housing out of the equation you will see a slower economy growth.

    Final thing, the requirements for an approval of a mortgage should be harder, these can be achieved through a higher qualification not reduction in amortization or l/v ratio

  • Concerned on 2011-01-28 8:51:05 AM

    Let me clarify my position on a couple of things.

    First, the more representation the masses can have with the ear of those who make big decisions is nothing but positive. For that I think it is great that Gary was able to bring some representation that falls outside the normal representation (those of the big banks and insurance companies who clearly stand to reap the largest financial reward). We are all aware of the economic environment most Canadians live in yet the big banks continue to post near record profits so it is clear the system is largely stacked in their favor. So to have a representative from the Broker Community is good.

    Second, I think many people can only see a few feet in-front of them. We all agree that credit cards are an issue, but here is my point clarified. You can ad all sorts of regulations to the credit industry (taking months to implement), people are still going to use credit to its fullest and continue to receive additional credit because the "big guys" make millions from these forms of credit. I realize this borders on capitalism and it is not going to change. Many of you wish to tackle economic issues by heading down the path of trying to change this credit juggernaut we live in, I chose to see it differently.

    In cutting the LTV back to 85% consumers are faced with decisions and the point will be very clear in the coming months as people will realize that their at home ATM machine is no longer operable leading them to have to face credit card debt the correct way = pay for it (call it tough love if you will). And I commend the Canadian Govt for this change because they are clearly looking out for the interest of our economy and not their own pocket book. Remember by cutting LTV the insurance companies (namely CMHC, a government entity) will bring in substantially smaller premiums, so good on ya for not trying to increase premiums to offset other deficits.

    The other thing to think of is this. While I am opposed to the capitalist banking system one thing is clear......these big players are responsible for the creation of most of the unique product being offered, which is the number one reason many people (I think most) are even able to be home owners. If the system is not protecting these lenders and insurers (sometimes you even need to protect them from themselves), forcing them to deal with loss due to bad debt then they will most certainly change the platform from which they lend. Long amortizations, stated income packages, rental property packages, 5% down, cash back programs, etc are all unique and relatively new to the mortgage world, they simply would not exist if lenders are faced with loss. (When I say loss I mean loss from a particular piece of their portfolio, we all know the large lenders will never show a loss, but keep in mind close to 50% of their revenue is from fees, mortgage profits are not the top revenue producing product for them.)

    As for the comments about getting along, working together, being jealous, etc, etc. the fact is we all have opinions and mine is based on viewing the big picture and not from the position of a mortgage broker that might miss out on a mortgage or two where clients would like to refinance to 90%. We can all get along, if the rest of you are willing to listen to an opinion that differs from yours. These changes may lead to increased bankruptcies (I dont think so however) but they will most certainly decrease home foreclosures and will further keep home prices in check, and that is a good thing.

    Keep in mind that 90% LTV refinances (presumably taken by a client that is bordering on financial issues) in a flat market, legal fees, real estate fees, etc all adds up to many customers being under water and if, if, just if they cant make a payment that lender and insurer are under water which leads directly to the point I made earlier.

    Good on you Gary for sharing a voice that otherwise would never have been heard, I have merely taken one point of your report and disagreed with how you presented it to us. In my opinion you are wrong. A reduction to 85% LTV is a good thing and will allow lenders and insurance companies to minimize loss on that portion of their portfolio, allowing them to continue to provide cutting edge product. So if your company is not looking at things in this manner then clearly you are not presenting the unbiased position you speak of.

    P.S. You may feel your vehicle wraps are working brilliantly, in your mind you can feel good that your marketing dollars are working well, maybe they are but that form of branding really cheapens the industry. I would rather my mortgage broker show up in a suit and be prepared to show me something great, rather than show up in his decaled truck and tell me what is wrong with the Leafs. Just my opinion........and when choosing who I will use as my mortgage broker my opinion is the only one that matters. I will not be using a DLC rep.

  • BC DLC BROKER on 2011-01-29 12:35:48 PM

    Well said Concerned. The part I liked the best is:

    We can all get along, if the rest of you are willing to listen to an opinion that differs from yours.

    As a DLC broker I quite frankly did not join because of Gary Mauris. I joined because of the advantages and benefits of the "systems" they have in place. I have had to actually remove my Don Cherry signatures and marketing promotions because of the negative impact it was creating with my clients and my referral sources.

    At the end of the day it is my business and I make decisions daily that make my company as profitable as I can keeping the focus on one thing-my client. Just because I don't have a DLC tattoo on my ass doesn't make me not believe in the "system" and how the company benefits me- not the President of the company. I have to admit seeing some of the comments on this thread I feel some DLC brokers are sheep and toting the company line. I feel I can have my own opinion but still enjoy the benefits of my company without drinking the Kool Aid.

  • Alberta DLC Broker on 2011-01-29 6:33:12 PM

    I fully agree with all you wrote, I am in the same boat.

    I wanted to further add that the Don Cherry deal is costing all of us a great amount of money while a lot of brokers not happy about it and its direction, at least behind closed doors. I think such big sponsorship deal should have been brought up for voting with the brokers rather than being decided by management. After all it is mostly our money that is paying for it.

    To be fully frank, I also love DLC, the systems we have in place which are second to none in the industry and all of our back office support and trainings are great. I been in a different national brokerage before joining, and it is not even close. BUT nowadays the marketing direction that the company took is far from being fit to a group of financial professionals. These ads don't put us in the same light as bankers or bank mortgage specialists. What the hell does Don Cherry has to do with mortgages and why are we paying him that much !???? Next thing you know, we will sign up Pamela Anderson.


    My prediction is that by 2014 DLC is going be huge beyond believe, further than anything even Gary can imagine. Or not be around at all.

  • Jon on 2011-02-01 5:52:01 PM

    When I 1st became a mortgage associate I was told by the broker the Golden Rule, which is:
    "He who has the Gold makes the rules" as brokers you can bitch and moan but you can never make a difference because the Big Banks have the money and the leverage to change the mortgage rules throught CMHC. The banks are in the broker business for the extra banking sales not because they value the mortgage broker industry

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