Newspaper article: It's all about brokers

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Indeed, no publicity is bad publicity, with mortgage brokers welcoming a well-placed article in the National Post that’s all about them – more specifically, their willingness to buy down rate.

“Mortgage brokers are once again undercutting the banks and some are willing to buy down your rate — eating part of their commission in the process — to gain customers,” reads the first sentence of Garry Marr’s article, “Brokers undercut banks,” in Monday’s Financial Post. “Steep mortgage discounts from the major banks have all but disappeared from the market, leading mortgage brokers to make sacrifices for market share amid new rumours that another major Canadian bank is going to bring its business completely in-house.”

The article gives consumers a heads-up about the possible benefits of today’s rate wars, chief among them, the increased willingness of mortgage professionals to do what it takes to retain clients.

That eagerness may have increased following BMO’s move to withdraw its most special of special offers -- a 2.99 per cent five-year fixed -- late last month.

Today’s higher rates being offered by all lenders means brokers are having to buy down their rates in order to gain a competitive edge over the big banks outside the broker channel.

Brokers have traditionally been bashful about broadcasting that last ditch option to consumers, fearful that would foster expectations they’re simply unprepared to meet.

That reluctance is starting to weaken, as brokers fight to maintain market share.

“I don’t think (consumers) have to be told to ask for a buy-down these days, and if they don’t know it and this article encourages them to call a mortgage broker, that’s a good thing,” said Grant King, president and principal broker for Ottawa-Carleton Mortgage Inc. “You got to do what you got to do.”

Even with its emphasis on buy-downs, the news story should help to drive new business to brokers, said Ranjit Dhillon, principal broker at Centum Mortgage Smart in the GTA.

“When it comes to competing with the banks, it shows that brokers are being more flexible,” he told “I think the exposure will undoubtedly help to bring that to the attention of consumers who would otherwise have gone straight to the bank.”

  • Liz on 2012-02-14 5:18:39 AM

    Publicity is good for our industry, however, this sends the wrong message. What the consumers need to understand is when the bank (BMO as an example) slashes its pricing, they are BUYING the business. This was a no frills product and make no mistake, they will cross sell the consumer to death because they aren't making any profit on that deal. Lets also not forget, most people refinance or do an ETO within 3-3 1/2 year mark and products like BMO's, would not allow anyting to change within that 5 year term. I believe this also sends the wrong message with respect to compensation. It is NOT just about rate people. The optics, make it look like brokers can paid a ton of money and that they choosing to better an offer or not. I simply do not believe in buying rates down. end of story.

  • George Christopoulos on 2012-02-14 5:21:12 AM

    These comments remind me of Chicken Little. So BMO offered 2.99% , life goes on. The sky is not falling!
    We had and have rates under 3% for 4 yr terms. We as brokers have a lot to offer our clients, with rate being a piece of the overall package.
    So why is it that a little rate promo with some media attention immediately triggers the panic alarm. Life goes on, buy downs are a beginning to the end.

  • Sherry on 2012-02-14 5:33:25 AM

    what a great way to put yourself out of business to try to compete with banks for one by undercutting prices and to think that you can afford to cut prices and give the same service will discredit the industry and make prices the whole issue when we have been trying to sell on price, knowledge and service you can not get at a bank.

  • Rob Stanfield on 2012-02-14 8:06:03 AM

    Live by the sword, die by the sword.
    If all you sell is rate, then you will die when the banks undercut mortgage rates. Selling a financial service and educating your client enables your client to make an educated decision regarding their mortgage. Threfore, they wouldn't take a deal like BMO was offering. I am getting tired of listening to all this whining about rates. If all you sell is rate, start looking for a new career as you won't last in this business.

  • Marco on 2012-02-14 2:05:07 PM

    I agree with my friend above, At the the end of the day, we as licensed EDUCATED mortgage brokers/mortgage agents, should be educating the clients of the pros and cons of a product that comes into the market, perfect example BOM, and how that product doesn't fit most clients life style. So I welcome the banks when they offer these surprise offers, it's about the our service, and the mass variety of lenders we are able to deal with and what we offer more so than the B's out there. Value if we work our data base properly.... most of us live and breath the business. NEVER UNDER SELL WHO YOU ARE, and your educated does sent the wrong message to the public. Really think about it!!! I can see the odd deal, family, friends, and possibly a client here or there, but never out of spite...Wrong message.

  • Angela Wong-Liao, Invis Inc on 2012-02-14 3:34:58 PM

    I agree with Rob Stanfield, we are mortgage professionals and business professionals, any effective business people cannot afford to keep under cutting their profits to gain businesses. Yes, I agree loyalty is a rare virtue but if we can market ourselves to our clients as their ultimate mortgage professional, which means we provide value added on proposition to our clients. In the marketing world, there are perception of ourselves and how people perceived us, it is very much to do with our presentation and professional images. Confidence and beliefs are built on knowledge and experience, if we focus on our strengths and our good experience and keep thinking positive as positive attitude attracts positive results.

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