IRD calculators gaining popularity

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Brokers can warn clients about the pitfalls of IRDs and penalties, but it is a bit like leading a horse to water.

“Brokers should show the client what will happen before they sign anything,” says Brent J. Morgan, director of sales & systems for MMI Mortgage Mentor, a provider of online software for brokers.

“With our IRD calculator we do more than simply come up with one penalty figure,” adds Rick Robertson, president of the company. “We provide the broker with some additional numbers to help present alternatives to the consumer.”

Probably the best endorsement for the software is that it is available to MBABC members at an annual discounted rate, although it is gaining popularity with brokers beyond the borders of B.C.

“We agreed to let brokers purchase the product out here in B.C., just prior to the CAAMP conference,” says Morgan. “And the (B.C.) membership offered a discount on the software. We have brokers and agents in Ontario who are taking advantage of this.”

Mortgage Mentor’s Pre-Payment Penalty Calculator can break down the numbers for IRD, interest lost, and includes the formula if a cashback is taken.

“We provide a number of software tools to brokers across Canada,” says Morgan. “I enjoy reading the daily posts (on MortgageBrokerNews.ca) and noticed the one on penalties. Our software provides calculations, alternate lender comparison rates for the ‘what ifs’ along with direct links to major lender calculators.”

The software provides a link to 10 or 12 of the larger financial institutions in the country, provides data on eight common penalty results, and offers the option to have the results saved and recalled.
“A report can be faxed or a pdf sent to clients as well,” adds Morgan. “No more penalty surprises for the client.”
 

  • A Broker on 2013-02-27 12:57:57 PM

    I see many problems here The broker pays for the software, calculates their IRD and advises the client who goes to close and the bank gives them a different number. Is it not the broker's responsibility to get the figures from the lender or at least have the client get an approximate number. C'mon guys do your job.

  • Paul Therien - CENTUM on 2013-03-02 5:03:28 AM

    There is some risk associated with brokers giving the client a specific number as there are unknown variables that the broker does not have access too. We all know that the banks are not aligned in how IRD is calculated, CIBC is a prime example. CENTUM took a hard look at creating an IRD calculator, and we consulted with our lawyers carefully before we proceeded. In the end, it was deemed to be simply too much risk for our network. If they (brokers) quote an incorrect penalty they open themselves up to potential liability if they are wrong, regardless of the disclaimer attached. Add to that the reputation risk associated with providing the client with wrong information, and it becomes an unattractive proposition.

    We understand why some brokers would want to have this tool, so that there is a lower chance of losing the customer to the bank when they ask for a payout quote. If the relationship with the client is strong and the broker is providing valuable and sound advice, that chance is minimized far more than being able to provide a penalty quote could accomplish.

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