Mauris to talk buy-downs on webinar

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DLC’s Gary Mauris takes the hot seat Wednesday for an animated discussion on buying down rate and other challenges facing the broker channel -- joining industry trainer Greg Williamson for the last of two webinars now attracting hundreds of mortgage professionals.

“I love this spirited conversation,” said Williamson, on the heels of last week’s candid discussion, largely focused on steering brokers away from buying down rate. “It is simply not true that all customers want is lowest rate, just like it is not true that all people buy cars on lowest price.”

His first webinar -- “180 DEGREES SOLUTIONS -- Threats To The Broker Channel and What Can We Do About It” – drew more than 600 brokers and agents last week, with Paul Grewal offering his take on the need to buy down rate, something an increasing number of mortgage professionals reached for in January in order to compete with BMO’s record-setting 2.99 per cent five-year fixed.

Calgary broker Greg Williamson has led the industry charge against that practice, arguing its use threatens industry self-preservation. He’ll offer the same analysis when the free webinar goes live Wednesday at 1 p.m. EST.

“Ultimately, following a system of buying down in order to attract and retain clients leads the industry down the path of travel agents,” he told “That’s not in their best interest – it’s like telling lenders that we as brokers are prepared to get paid less.”

Still, there are a growing number brokers now turning to lead generation sites to hawk their wares, most relying on buy-downs to do it.

“The fact is that our products and services have been commoditized – that’s a reality,” said Jim Tourloukis, owner of Advent Mortgage Services in Unionville, Ont., and Ontario’s No. 1 broker on last year’s CMP Top 50. “We talk about value propositions and customer service, but at the end of the day everyone expects good customer service, so if you want to keep your deals, you’re going to have to also offer the lowest rates and that means buying down.”

  • Paul Therien on 2012-02-08 6:28:24 AM

    That rate is king and a customer will squabble over one or two basis points is in truth the mortgage industries own doing. For years brokers sold the fact that they could get the consumer a lower rate than the banks, and yes, at one time it was true. The result of this however is that too many consumers based their relationship with brokers on rate, and not on the value offered by the broker. Today the game has changed and the banks are competing more directly on rate. It is a misnomer however that the broker community believes that they are only doing it to compete with brokers, they are also in direct competition with each other.

    I 100% agree with Greg Williamson, Paul Grewal, Gary Mauris and others on this… it is time that the broker community shifted from focusing only on rate. There are multiple avenues for business that most have never explored, and there are many ancillary value offerings that simply have not been offered to the consumer in the past by the broker channel but that are a part of the homeownership cycle. It has to be about more than processing a mortgage application and it must be about more than just good service – we need to take the next step and create a lifelong customer who values the expertise, and professionalism of the broker they are dealing with.

  • Jasmine on 2012-02-08 10:58:02 AM

    Paul, why can there not be different models for different segments of the industry. Some clients only care about rate and nothing else. Why is it wrong for some brokers to cater to this clientele? Were you this upset when Walmart came to town and squeezed out The Bay and offered a lower price? If it is true that about 20% of the population only cares about rate and the other 80% want good value and service (I'm not saying that those that buy down do not offer good value and service - they are not mutually exclusive), then there is a market for these rate-shoppers and good on those brokers who are able to service them. Further, if the mass market does NOT care about rates and only value and service, then who really cares if other brokers are buying rate down as it shouldn't affect those clients of brokers who don't care about rate. The truth of it is that EVERYONE CARES ABOUT RATES!!!!!!! Yes, people want value, service AND rates. I think all you brokers are in a huff over this issue because you all know this is true and your world has changed and you do not want to change with it. You all know that you are all grossly ovepaid for what you do and now economics has caught up to bring back a reasonable return to your job.

  • Ron Butler on 2012-02-09 6:09:27 AM

    Jasmine,I think you are a smart person who thinks about all sides of an issue and we need more people like you in the mortgage brokerage business.

  • Paul Therien on 2012-02-09 7:13:47 AM


    I am stating that the broker industry needs to change, and I am suggesting that there is value that can be offered beyond rate to solidify the relationship with the client. I did not say that it is wrong for someone to cater to rate shoppers; I am saying that if we as an industry limit ourselves to only competing on rate, we will have even greater challenges in the future. What I am saying is that it is more and more difficult to compete with the banks on rate today than it was in the past. What I am saying is that there can be more to a broker/client relationship than just rate.

    Is rate important?

    Yes it is, but as clearly demonstrated by the actions of the Big six banks and other lenders over the past 3 years, they are fully prepared to undercut a broker offered rate to get the client. It is a simple fact of life, and based on the staffing ramp up that the banks have done, based on the changes that have been made to broker channels, based on the market share grabs going on between the banks, rate competition is only going to get hotter.

    It also needs to be considered that 70% of ALL mortgage funding comes either directly or indirectly from or through the big Canadian Chartered banks and their investment divisions. That means that very simply they have far greater control over what rates are offered to whom than an independent broker ever will – buy down ability or not.

    As for being grossly overpaid, I do not agree with that statement. I have known a lot of brokers over the years – from all of the big brands, and small independent brands. The vast majority of those people work VERY hard for their clients and they earn every penny they make.

    Based on your rant I can only assume that you did not fully read nor comprehend my comments, and you are obviously not a broker. As for being upset about this, there is no reason to be upset about any of it. It is reality and no bank or lender makes these changes out of spite, they do it because it makes business sense to them and for their business model. We can’t change it, but we CAN adapt. It is what you do in a free market. Competition drives great change in all industries, and for the most part the consumer benefits from the required adaptation.

  • Ron Butler on 2012-02-09 8:08:01 AM

    Broker or no broker; the key point Jasmine makes is true: everybody cares about rates!

    The more we as brokers try to dance around that issue the more we fool ourselves.

    Rate is not everything but it is a very important thing.

  • George on 2012-02-09 8:49:47 AM

    It is interesting to see that the Top 2 and 3 brokers in the CMP survey are indeed guys that buy down rates to win business. Does this tell you something??? They are obviously winning the battle. The #3 guy did over $200m with just 2 assistants. Looks like he has an efficient model and can afford to buy down if necessary. Good on both these guys.

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