FirstLine sale represents opportunity: Murphy

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Any move by CIBC to sell FirstLine is undoubtedly a business decision, argues the president of the country’s national broker association, suggesting the big bank’s exit would offer the industry real opportunity.

“While CIBC’s decision to exit the Mortgage Broker channel by putting FirstLine up for sale is strictly a business decision, every change in business provides an opportunity,” Jim Murphy told MortgageBrokerNews.ca. “I am confident that mortgage brokers and those that support the channel, including lenders and insurers, will seize that opportunity.”

Few brokers have been surprised by the arrival of that opportunity.

Murphy is one of several leading industry players referencing CIBC’s plans to close off its broker channel conduit by selling FirstLine.

MortgageBrokerNews.ca has also learned from brokers within the MCC family of growing concern the bank will in fact move to exit the broker channel after the sale. That would effectively represent the departure of another big bank.

The loss of FirstLine, which CIBC acquired from Manulife, is something several brokers across the industry had already begun to brace for, with the lender’s decision earlier this month to cut the BFS segment from its product line.

CIBC’s decision to keep those options available to clients of its branches has angered brokers, at the same time it has fueled talk about the bank’s plans to sell the asset.

That sale would likely be completed at some point during the current fiscal year, although it is uncertain whether the sale would be limited to FirstLine’s existing book or if the business would remain a going concern.
 

  • Ron Butler on 2012-02-14 4:02:26 AM

    I think that CIBC leaving the broker channel can only be seen as a bad thing. There is really no good spin that can be put on this.

    FLM was number one for so many years. So many excellent people in that company, such a big broker champion for so long.

    Sure, things have been going downhill for a while now but that was a CIBC management decision that has finally reached it's end game.

    If you are a student of history consider this: the broker channel had its best years when we had the highest number of lenders available.

  • Kevin J. Power, President Power Mortgages Inc. on 2012-02-14 5:08:20 AM

    The decision to sell FirstLine would not surpise me in the least. It may actually create the opportunity to return FirstLine to its glory days of being a great broker, partner lender.

  • Len Lane on 2012-02-14 5:35:31 AM

    I cant say I'm surprised we never used them choosing to make scotia our preferred big bank. I think it opens up great opportunity to show the public that they weren't really on their side. Also should be sending a message to the brokers/associates who put to many of their eggs in one basket and now their points will go south with them...Supporting your true broker loyal mono lines is what we should be doing anyway.

  • GTA Broker on 2012-02-14 9:40:58 AM

    Not going to lose a moments sleep. Perfect example of a well run company, sold to a bank, & then let fall into an absolute wreck,with limited salvage value. Largest number of consumer complaints sent to CIBC's Ombudsman office, were about FL.
    Staff arrogant to brokers & borrowers alike.Every industry needs a good cleansing now & then.

    If we loose too many more FIs, brokers are going to half to learn about private lending again!.....and the circle goes 'round& 'round.

  • Alex.H on 2012-02-14 3:04:32 PM

    I have to disagree with Jim and agree with Ron Butler. Its not good for our industry to lose a funding source of CIBC. Their ability and access to Deposits, Covered Bonds, MBS, CMB gave them the ability of funding $15 Billion dollar per year. Unless a deposit taking entity with a great rating or big balance sheet buys firstline, it will be a massive loss.

    I do however expect this might be an opp for a Foreign Bank, a pension fund or an insurance company and some one will make a play for it.

  • Angela Wong-Liao, Invis Inc on 2012-02-14 3:22:35 PM

    I am not surprise that CIBC will sell off First Line assets as I noticed in the past 6 months that their pricing was not in line with the other lenders in the broker channel. Every cloud has a silver lining, it may be a new beginning for the mortgage broker channel to focus on monolines and other lenders. The only thing that will not change is "Change", we should try to embrace and accept changes as we are moving on with our businesses and our lives.

  • Lou on 2012-02-15 2:26:48 AM

    Not good...not good at all

  • acontento@sherwoodmortgagegroup.com on 2012-02-15 5:55:17 AM

    Although the loss of Firstline may have many wondering who is next ? It does give the brokers and agents in our industry another reason to come together and stay united. With the many mono lenders out there, as well as TD, Scotia Mortgage Authority, ING, Lurentian etc.. We are not short of offerings to our customers. Our value proposition is our service, and competetive rates. Firstline may exit, However, it will be up to each one of us, to be leaders in our industry. We have the Lenders in our network to maintain our market share, and increase it. We need to do a better job of letting the public know Brokers are here to stay!!!

  • Wayne Campbell, Invis - Prince George on 2012-02-16 7:07:20 AM

    Just like in hockey; one player's injury is another player's opportunity to step up. There's never a vacuum for long, and not being hindered by the CIBC connection will be a good thing!

  • Eric Putnam, Debt Coach Canada on 2012-03-09 4:08:27 AM

    CIBC executives acknowledged during quarterly conference call today they are considering sale of Firstline unit. The bank said Thursday the efforts to sell FirstLine are part of a bid to bring mortgage sales inside branches. “Until a strategic decision is made, we will continue to originate new mortgages in the FirstLine channel” CIBC said.

    http://www.theglobeandmail.com/globe-investor/cibc-profit-rises-eyes-sale-of-mortgage-broker-unit/article2362579/

  • Ottawa Mortgage Broker on 2012-02-14 8:14:12 AM

    Firstline was only a broker champion when things went their way and they controlled the bulk of the business. Better stronger broker lenders came along and Firstline has declined year after year. Once a Platinum broker, I haven't used them in over a year. Don't see any issues with them leaving other than the negative press it may bring about our industry. We will do just fine without them.

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