ING Direct's move Tuesday to introduce a pooling cap meant to increase efficiency is already drawing positive reviews from brokers favouring those restrictions to commission cuts
“This is absolutely better than getting a commission chop,” said Cameron Mackie, broker for Dominion Lending Centres in Oakville, Ont. “This way if we do the pooling properly we reap the rewards of our labour.”
Early today, brokers working with ING received a letter from the lender outlining a revised set of guidelines on pooling, effectively capping how many agents can submit under one name as well as limiting their geographical area.
“Pooling agents seem to be a hot topic in the mortgage industry these days,” the ING letter begins. “We enhancing our pooling process in an effort to improve overall efficiency and provide consistent service and training to both our accredited broker and the pooling agents.”
Effective immediately, ING will hold its broker partners to the following:
• There will be a maximum number of poolers allowed based on a brokers volume and efficiency ratios with ING. This will be discussed with brokers by their ING regional sales manager
• Registered poolers must fund a minimum of 2 deals per year
• Pooling agents must be within the same geographic region or province of the submitting agent. There will be no cross-border pooling
• There will be a minimum education requirement – new pooler/agents must attend three ING Direct presentations within the first three months of sign up
• Any changes to the pooling list (additions or removals) must be submitted to ING Direct on the appropriate form and all details must be completed. New agents must allow for at least three business days prior to allowing any application submissions by the new agent
ING said they will be sending brokers a form to update their pooling list. The form must be returned to their corresponding ING regional sales manager before November 30.
The lender’s tackling of the inefficiency associated with pooling differs from that of other lenders that have moved to address the issue in recent months.
The broker industry has been sent for a loop by First National and Scotia as the lenders moved to reduce broker finder’s commissions as a way of dealing with so-called inefficiency. MCAP has taken a similar although more limited step.
The ING decision, said Mackie, is clearly a way of defending itself against pooling abuse.
“In the past, many brokers have been careless in their pooling,” he said. “Not enough due diligence was exerted in submitting properly prepared documents to ensure the loan applications were approved.”
He said with the new guidelines, brokers who do their work properly will be compensated accordingly.
Still, the move may help ING more than its brokers by preventing the kind of backlash ING-buyer Scotiabank is now grappling with.