ING Direct goes collateral charge

by | has learned that ING Direct will move this month to register all new mortgages as collateral charge, following on the heels of TD and other lenders.

The change is set to take effect on Dec. 10, 2011, with the bank to make a formal announcement to the broker channel later this week. will feature a one-on-one interview with Martin Beaudry, VP of lending for ING on Tuesday.

The switch comes as the bank begins preparing for the launch of its HELOC early next year. That product effectively answers broker calls for their lenders to offer more of those types of offerings as a way of better servicing their clients.

Earlier this year, a CAAMP report revealed the extent to which HELOCs are already being used by Canadians, for a total of $215 billion.

“As far as we know this is the first time anyone has tracked that end of the mortgage market,” CAAMP Chief Economist Will Dunning told “This is the first snapshot we have of the HELOC proportion of the industry, so we’re uncertain how quickly it may grow, although I think it will.”

Of an approximate 9.45 million homeowners in Canada, an estimated 1.87 million hold both a mortgage and a HELOC. About 770,000 have a HELOC, but no mortgage, with the majority of Canadians holding just the mortgage itself.  Approximately 3 million lucky Canadians have no debt at all on their homes.

While brokers continue to attract as much as 30 per cent of the first mortgage business and 20 per cent of renewals, refinances and transfers, their participation in HELOCs is relatively marginal. That has to change, said one Alberta mortgage professional, his brokerage one of the few actively courting that business.

“The difficulty for brokers is, flat out, a lack of available product,” Gord McCallum, owner of First Foundation Residential Mortgages. “There aren’t enough lenders offering it, and many of the lenders that do use a double standard in that they offer HELOCs through their branches and their mobile mortgage specialists, but not through brokers. We haven’t been able to get a clear answer from them as to why that is, but it’s something that really rubs brokers the wrong way.”

  • Margo Wynhofen on 2011-12-06 4:58:18 AM

    So much for ING Direct's "Unmortgage" philosophy they've been advertising to differentiate themselves from the banks these past few years. I'm disappointed in this announcement and it will definitely affect my business with ING Direct going forward.

  • Kevin J Power, President Power Mortgages Inc. on 2011-12-06 5:44:25 AM

    This is not a positive step forward in broker relationships with the brokerage community. Those documents are fine to support a Line of Credit, but definitely not to use them on all mortgages.

  • John Dearin on 2011-12-06 5:44:59 AM

    We always put the product on the table, but we advise of the 100% charge on the property, and the other "difficulties' with a collateral.. It is up to the client to decide, but I would not touch one myself with a 10 foot pole.

  • Steve the broker from burlington on 2011-12-06 6:16:41 AM

    Like TD's collateral mortgage, the hand-cuffs are on... You are right Margo, 'Unmortgage"..? I don't think so... when it comes time to refinance, renew or negotiate a rate, the borrower will have lost their leverage to negotiate for fear of having to register a new mortgage and pay new legals... Like Gail Vaz-Oxlade said about TD Collateral mortgages... this is a mousetrap that will trap unsuspecting borrowers into a product that sounds great but in reality, takes away all consumer leverage and negotiating power... Stay away from ING and TD if you have your client's best interest at heart. Quoting Gail "Would I buy one of these suckers? Not on your life! Do I look like a mouse to you?:

  • Fern Brunet on 2011-12-06 6:36:42 AM

    Yes, sad to see ING go that route but if we gain the power of the HELOC product may be worth the pain. Seems like it is the way of the industry, perhaps the "no fee switch" of the future will cover a lawyer based cost package. Before you crucify ING, remember, Nat'l Bank, HSBC , TD, Scotia, First line matrix, ICICI and most C.U's register collaterals!

  • Ottawa Broker on 2011-12-06 8:15:17 AM

    We will see more lenders go this route becuase as TD and Scotia have proofed, brokers will still blindly sell their mortgages becuase it is an easy sell. If lenders saw a decrease in business due to collateral mortgages, lenders would not be so eager to change to collateral mortgages. But, with the increase in Scotia and TD's mortgage numbers, they have proven uneducated brokers will still sell the product because it is easier to sell the bank brand than a monoline.

  • george on 2011-12-06 8:30:39 AM

    I'm a huge ING supporter (I'm one of their top 5 brokers and give them around $100m a yr. Well guess what? I'm now shopping for another lender to send my clients to. Its bad enough that their rates are at least 30bps above market and have been for a good part of the yr. Now they are pulling this collateral crime? What a bunch of dopes. All they are doing is annoying brokers. They already maintain 90% of the renewals with their agressive pricing of renewals so I'm not sure they know what they are doing here.
    The sad part is that we would present them to our clients as a leader and push our clients away from the TDs and National Banks because of their collateral mtges. Oh well, anybody know of a good lender that wants $100m that will be leaving ING?

  • Max J. Cafissi on 2011-12-06 9:07:37 AM

    I have read all the comments and agree 100% in the rejection of the Collateral Charge. However, it is also a sad fact that all the major Banks, except CIBC (through Firstline) are now utilizing Collateral Charges. The only alternatives that we Brokers seem to have, are First National Financial, MCAP and Industrial Alliance. If I'm missing any, please let me know.

  • Liz on 2011-12-06 10:02:56 AM

    Fern, I have to agree with you. Everyone seems to forget that most people refinance at approx. 3 1/2 years in to their mortgage anyway. Transfers are harder and harder to do and are almost extinct anyway as ALL lenders try to hang on to them with early renewals and great offerings. Even the monolines do this people. One more thing. No-one seems to talk about all the mortgages out there with a "due on sale" clause or are closed and non transferable (not collateral). With the debt in Canada as high as it is, don't you see refinances and ETO's on the rise? If this is SO terrible, WHY is BNS number 1 and TD #2 in marketshare????????????????

  • Omer Quenneville on 2011-12-06 4:36:10 AM

    Why would we want this, they are expensive to discharge, impossible to transfer and impossible to assume. Do we really want our clients trapped in this "collaterial charge". I have always discouraged clients away from these types of non-mortgage mortgages.

  • Omer Quenneville on 2011-12-06 4:36:12 AM

    Why would we want this, they are expensive to discharge, impossible to transfer and impossible to assume. Do we really want our clients trapped in this "collateral charge". I have always discouraged clients away from these types of non-mortgage mortgages.

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