Brokers shouldn't despair over the potential loss of ING, but view its success as proof more upstart lenders will enter the channel to replace it, says one leading player.
“If we do end up losing ING, there is no need to fret,” Gord McCallum, president and broker at First Foundation Residential Mortgages told MortgageBrokerNews.ca. “Other lenders are well aware of how lucrative working with the channel can be and another lender in sure to take its place.”
In fact, McCallum said, ING has been instrumental in showing lenders how the channel can launch them into relatively new markets.
When the Dutch-based bank entered the Canadian market in 1997 it knew it could not compete head-to-head with the country’s Big Five so it adopted a different strategy, according to the Edmonton-based mortgage professional.
“The point is ING adopted the strategy of focusing on the mortgage broker channel to build a high quality book of mortgage business,” said McCallum. “Mortgage brokers can take a measure of satisfaction for being responsible for ING’s success.”
This is the same strategy that credit unions across the country employed to break into new markets.
This may be a hard message for some brokers to accept, especially after the recent loss of FirstLine. Many are also concerned that a member of the country’s Big Five might purchase ING just for its book and pull the bank out of the channel. ING’s Dutch-based parent company, which is under financial difficulty, recently announced it considering the possible sale of its UK and Canadian operations.
McCallum said that would be a loss but pointed out that other lenders will step in.
“I think ING’s success is a great example of the power of the broker network,” McCallum said. “Other firms like First National, Merix, MCAP and Street already understand this and are doing a fantastic job.”
There has been speculation that a member of the country’s Big Five banks might purchase ING and decide to the bank out of the broker channel.
There is no need to fear for such a scenario according to McCallum.