National Bank announces changes to broker services

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National Bank is effectively overhauling its status and compensation programs for brokers in an effort to better promote efficiency but also as a way of to ensure continued strategically controlled growth through the broker channel.

“We are committed to the broker channel and we look forward to doing business with brokers going forward, the brokers have been very supportive of us” Mark Squire, director of Mortgage Broker Services at National Bank told MortgageBrokerNews.ca.

With that in mind, National Bank has made a number of changes to its broker services including:

Volume Bonus and Efficiency Bonus

To continue the evolution of efficient business over strictly volume, a change will be introduced in fiscal 2014 that will further reward efficient brokers. “We believe that efficiency needs to overtake the volume and we believe we will see more of that over the coming years," said Squire.  "We are the ones leading that charge by our actions to put more emphasis on efficiency.”

•  Efficiency Bonuses will be doubled in all tiers, while volume bonus will be reduced to 10 bps.

•  Volume Bonus will be changed to 10 bps for all brokers no matter how much volume is funded

•  Volume Bonus commission will be the same for all independent brokers or ones with a brokerage network.

Removal of the 30- and 60-day Quick Close

National Bank Mortgage Broker Services will be eliminating the 30- and 60-day rate hold as a standard rate offering effective November 1, 2013,” the statement reads. “This change was required to help support both our brokers service expectations, but to also support our operational requirements in providing exceptional service to our broker partners.”

Red Carpet Program

National Bank introduced their status program 5 years ago and since that time have had a tremendous amount of success with the program.  Squire stated “we wanted to simplify the program but keep some of the features of the program that many of our status brokers have enjoyed such as our Trip of a Lifetime award”  The program has been streamlined into fewer tiers and options but still providing a competitive advantage for status brokers.

The bank hopes to continue making inroads with brokers and suggests the Red Carpet Program will continue to aid in that effort.

“We’ve become a significant lender within the broker community in the last five year,” Squire said. “We continue to appreciate the support that our broker partners have provided to us, and the confidence they have in us to provide product and services to their clients.”

  • unhappy agent on 2013-10-03 8:09:12 AM

    If you read the fine print, you will see that these changes hurt the brokers more than they are letting on:
    NEGATIVES
    -Volume bonus is now down to 10 bps from 20bps (what a joke as the rest of the industry is at 25bps-35bps)
    -compensation on the 1 yr and 10 yr drops 10 bps
    -compensation on the Allinone drops from 15bps from 65bps to 50bps
    -brokers are now charged $100 for the GIV whereas previously it was paid by the bank
    -client cashback drops from $750 to $500
    -they no longer offer $250 for appraisals
    -Loss of 30 day and 60 day rate holds at cheaper rates for clients
    -Loss of an option #3 under their Red Carpet Program

    POSITIVES
    -Efficiency bonus is increased. However, most firms do not come even close to reaching the approved-to-fund ratios required to get this efficiency bonus so is this really a positive? Further, most firms do NOT pay this efficiency bonus to agents anyways so how is this positive to agents?

    So, when National Bank says these changes are to “ensure continued strategically controlled growth through the broker channel”, what they are really saying is that they want to limit the growth via the broker channel, a message echoed in past by their CEO.
    Congrats to National Bank as these changes will accomplish just that – less business from the broker channel. Hey, we might as well just get our realtor licence and just refer a name to National Bank and get paid 50bps just a referral. Less work and more comp!
    Goodbye National Bank! It was fun while it lasted!

  • Ron Butler on 2013-10-03 8:57:48 AM

    @Unhappy Agent, I think NBC was actually telling the truth when they say they are making these changes to stay active in the Broker Channel.

    I think we should all try to act like business people in this industry and stop acting like commission driven hustlers.

    Our supplier are mainly banks, even the monolines are all using banks to provide the money to do the lending. Banks are the richest, most successful companies in this country. We have to wrap our heads around the fact our existence is based on their willingness to supply the money to fund mortgages through brokers. Every year the executives of these banks sit down and decide how to allocate the resources of their companies. They start from zero and decide how to allocate their capital: credit cards, securities, wealth management, mortgages, commercial loans, on and on.

    Our part of that pie is small but each year the bosses stop and say: stay with brokers or cancel brokers? buy mortgages from monolines or grow our mortgage sales forces?

    That's how big businesses work boys and girls. So when the NBC execs decide to stay with brokers for another year they want to make sure it as profitable, frankly MORE profitable than last year because that's what you do if you are a smart exec: better every year. So when we see these changes just be pleased we still have a good lending partner:

    1) Comp stayed about the same, (who cares about 1 yr and 10yr really) we just need to be more efficient and it's none of NBC's business what part of comp brokerages share with agents.

    2) Perks stayed the same or improved.

    3) They took some things out of their matrix but if you understand how rate buy-downs there is room for some strong rate offerings when NBC enters an aggressive pricing phase.

    4) SLOC portion of All-In-One, still a great product and the comp has gone from "Highest in Industry By a Mile" to "Still Way Better Than Most"

    So let's rethink this and be happy the Sales Team at NBC has stayed with us and we have maintained a strong lending partner.

  • Walid on 2013-10-03 6:41:34 PM

    None of NBC's fault if we are weak and can't negociate with the big banks. The broker channel is divided in groups that do not have a common strategy. You guys are lucky outside quebec. Here in Quebec we have a fraction of the lenders that you have. There is a language barrier imposed in the province that limits the arrival of new lenders.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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