For some brokers, it reads like a "Dear John" letter, but on Wednesday, ING Direct announced it will cease accepting new applications from brokers on Feb. 16, at the same time recommending its new parent company Scotia to mortgage professionals.
"I wish to share with you some important news regarding the future of ING DIRECT’s mortgage business," writes Kim Luxton, director of broker sales for ING Direct Canada, in a letter to brokers. "Following the recent acquisition of ING DIRECT by Scotiabank we have completed a thorough evaluation of our mortgage business and have come to the decision that ING DIRECT will concentrate its origination efforts on its DIRECT channel and transition its broker business to Scotiabank."
The news has come as a shock to some brokers.
"It is sad to see a great lender leave the space," said Chad Robinson, owner of Verico Best Interest Mortgages. "ING has a been a great partner over the last decade."
Still, others are viewing Wednesday's announcement as the other shoe they've been waiting to drop since Scotia announced it would buy the upstart lender. At least one high-volume broker with ING told MortgageBrokerNews.ca that he started to wean himself off of the lender in November.
Regardless, Luxton is billing the decision as a way of streamlining the operation.
"We determined through our review that there was considerable overlap between Scotiabank’s and ING DIRECT’s broker businesses in terms of broker partnerships and product offering," she writes. "We felt that both ING DIRECT’s and Scotiabank’s objectives would be better served by allowing each entity to focus its efforts on its own relative strengths."
Additionally, she tells brokers, the organization is confident "Scotiabank has the capacity to meet your needs and your clients’ needs, providing you with the level of service you have become accustomed to with ING DIRECT."
Luxton is also reiterating Scotia's commit to the channel that ING is now preparing to leave.
As it makes that transition, she says, "We will continue to accept new mortgage and HELOC applications up to 8:00 pm EST on February 16, 2013."
Also, effective immediately, ING Direct will no longer accept new rate holds and new pre-approvals, although they will honour existing 30-day rate hold certificates up until their expiry date.