Client trust in the Internet has grown, a phenomenon making it increasingly easy for brokers to sell monolines and not just their branch-heavy brethren.
“Five years ago, I used TD Bank and National quite a bit,” says Wellington Cruz, a mortgage agent with Verico Lending Logic in Toronto. “Today, I maybe do 20 per cent of my business with banks, mostly doing deals with monolines. People feel more secure using the Internet for their banking.”
A perfect storm of consumer confidence in the internet, coupled with stricter mortgage rules implemented last year, has only strengthened the role of monolines as lender of choice for many brokers and those looking to buy or refinance.
“Ten years ago, they (people looking for a mortgage) were afraid of fraud using the Internet,” says Cruz. “Today, people are going online to begin their search for a mortgage. There is a definite comfort level there.”
Cruz uses Home Trust and Equitable for most of his mortgages, and the want of an extensive branch network in no way limits his ability to do business.
“The service is better,” says Cruz. “I have found the monolines provide service that is the same or better than the banks; and CMHC and Genworth are still flexible on backing these mortgages. If anything, I find the banks are more difficult to work with, what the tighter requirements on down payments.”
Home Trust is also a popular lender for Cassita Bailey-Hart, a mortgage agent with Verico, Northwood Mortgage.
“They offer a line of credit and a secured Visa, exactly what my clients need when refinancing,” says Bailey-Hart, who deals exclusively with monolines and alternative lenders.
““I get a lot of people who have already done research online, and from referrals,” she says. “People don’t automatically look for a bank branch to get a mortgage.”
Bailey-Hart points out that those who are already established with the big banks usually go back to them for refinancing; but considering the backlash RBC is receiving from outsourcing IT jobs, she is looking forward to acquiring some RBC clients in the future.
“It’s gonna strengthen the argument to use mortgage brokers,” she laughs. “That’s free advertising from RBC right now!”