Brokers believe that the practice of volume pooling is bad for the channel, according to a recent online poll run by MortgageBrokerNews.ca.
MBN asked brokers the question: Is volume pooling bad for the channel?
Of the 133 respondents, 61 per cent answered “Yes,” and 38 per cent said “No.”
The controversial issue of volume pooling recently resurfaced when First National sent an email to brokers last month saying that the lender will cut the compensation by 5 bps and will pull the plug on its Wizard Spending Account Incentive program.
First Nat blamed, in part, volume pooling saying it suffered efficiency losses by having to deal with multiple agents submitting under one broker and not just that mortgage professional.
First Nat’s move released a series of opposing comments from brokers for and against volume pooling.
Not a few brokers commented that volume pooling encouraged brokers to focus on obtaining bonuses paid out by lenders rather than getting their clients the best deal.
Others said volume pooling encouraged brokers to focus on quantity rather than the quality of documents they submitted to lenders. They suggested that volume bonuses be wholly replaced by an “efficiency bonus” so that smaller firms can better compete.
On the other end of the debate, some brokers said that volume pooling allows smaller operations to obtain bonuses that they would otherwise not achieve.
A feature in upcoming September issue of CMP proposes new ways that broker lenders can deal with concerns over pooling. What some brokers call a problem created by the lenders themselves.