Xceed has extended its bonus offer of an extra 25 bps for brokers until the end of June despite criticism from brokers that it is unsustainable.
“Friends of Xceed” receive 115 basis points for each three-year deal and 135 bps for a five. The offer, which started in December, coincided with the company’s return to the broker channel in September 2011 and was originally intended to end on February 29. The company tweeted yesterday that it was being extended until June 2012.
President and CEO Michael Jones said the decision to extend it was based on the positive reactions from brokers and the business they were sending the company.
“The quality of the business we have been getting through the front door has pleasantly surprised us,” he said. “We’re happy to be establishing new relationships with brokers.”
He answered some brokers who charge the offer is unsustainable.
“There’s nothing gimmicky about paying more money to brokers who bring us good business,” he said. “It’s not sustainable forever, but it’s a good way for brokers who perhaps haven’t worked with us before to get to know us.”
In December brokers described the offer as “an unsustainable model” and “hurting our other lenders” in an online discussion on MortgageBrokerNews.ca.
In September, MortgageBrokerNews.ca broke the news that the company, having settled an outstanding legal dispute with funding partner HSBC, had come back to the broker channel. The return ended a hiatus begun in January 2011 and taking many of its broker partners by surprise.
Xceed returned to the conventional mortgage game in January this year, offering broker clients prime rates with a maximum loan-to-value of 75 per cent.