Top 5 mono-line challenges

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There’s no debate: Mono-lines remain the best friend a mortgage professional has, say brokers. Still there are at least five key areas where improvements could help them advance against the banks, say industry veterans.

CMP canvassed brokers from across the country on what exactly mono-lines need to do to keep more of the broker business now going to the banks. Here’s the Top Five ways brokers are challenged by mono-lines.

1.    Marketing meltdown:  Mono-lines just have to do a better job of telling consumers who they are, say brokers.

“Oftentimes a considerable part of the consultation/sales process is having the consumer become familiar with a brand they may have never heard of,” says Scott Bentley, with Verico Premiere Mortgage in Halifax. “Many request 'a Big Bank' simply because that is who they know, even if rates, terms, privileges and prepayment penalty policies are not as favourable as the mono-line.”

2.    Paperwork problems: Quite simply, many mono-lines have onerous, time-consuming instructing documents, complain brokers. Some real estate lawyers agree, arguing the banks have them beat in terms of fewer specific requirements.

“I have had complaints from lawyers that the paperwork for monoline and non-bank lenders took more time,” said Mike Missere, a mortgage agent with Mortgage Intelligence in Thunder Bay, Ont. “I was able to stop that, but from my standpoint I have to field more queries from the lawyers about the legal paperwork when the lender’s not one of the chartered banks.”

3.    Rascally rate premiums: Applied to BFS and rental deals, they somethings stick in the craws of clients and brokers, alike. Mono-lines attach those extra bps for a good reason, although the fact banks don’t presents a challenge.

4.    Forgetting to share: Several mono-lines do a good job of sharing the client with the broker by mentioning them in correspondence with the borrower. But some drop the ball here, say brokers.

“I’m talking about mentioning the broker by name in correspondence with the client, reinforcing the idea, in the client’s mind, that the lender and the broker are partners,” said Mauro DiCosola, with Dominion Lending Centres Mortgage Village in Mississauga. "Some mono-lines do this already and the others should follow that lead."

5.    Confounding conditions: Brokers frequently complain about the conditions mono-lines place on their deals and the extra legwork required of clients. That just makes it easier for the banks to snag them after commitment letters have been dispatched.

“My biggest beef is around conditions,” says Paul Mangion, with MCC in Mississauga, “We need more reasonable conditions and common sense here since we lose deals to branches when we send clients in there for more info or to ask for too much unnecessary documentation.”

 

  • Monoline Lender on 2012-05-11 2:47:15 AM

    Well, we could spend some more money marketing to consumers. But then why would we pay brokers? Broker commission is paid so you are an extension of us. Your job is to communicate the advantages of going with a monoline lender instead of a bank. I'd think that a trusted advisor explaining the benefits would be much more beneficial than a pamphlet or a commercial.
    If we wanted to advertise directly to the consumer, who's to say we wouldn't just take their application too?

  • Shawn on 2012-05-11 3:10:39 AM

    Hi Monoline, care to comment on the rest of the more important points here? You first comment seemed a little snarky, the point of the article was to give you an idea of what brokers would like to see.

  • MaestroBuzz on 2012-05-11 4:30:17 AM

    I agree with "Monoline Lender" re item 1. Scott the broker has a supposed brand (Verico) name behind him and he still can't sell. I find monoline much easier to sell, if anything I have found people up in arms about a bank that they despise! It is so easy to sell anything in this industry if you genuinely care about your client. You do not need "brand" to give away money! You just need a great reputation.

  • cj on 2012-05-11 5:48:45 AM

    Monoline Lender, I agree with Shaw, you do sound snarky! I would certainly appreciate better brochures/sample approvals, and additonal info from monolines to supplement our own sales techniques as it takes more time to sell a monoline than the big banks. One example of a company that does really well at this is ING Direct. I also agree with the the additonal conditions and paperwork needed to complete a monoline transaction.

  • Vanbroker on 2012-05-11 6:07:55 AM

    One other complaint I have that wasn't mentioned is that lenders should stop changing policies every other day. It's been brutal for the last year or so, to the point where I just can't keep up

  • SuperBroker on 2012-05-12 1:13:45 AM

    Vanbroker... The reason why the policies change is because the monolines have to sell the paper and the people buying the paper keep changing their risk thresh hold. As for marketing, I think that there may be value I. Them contributing to a national CAAMP marketing fund... But with brokers continuing to demand they get paid more on deals... Well why would they do that? There are very few of the big brands that have not gone to the lenders in the past year or so and asked for more money (VB, etc) and brokers are individually asking for more. Greed may just be the biggest down fall of brokers yet.

  • SuperBroker on 2012-05-12 1:13:46 AM

    Vanbroker... The reason why the policies change is because the monolines have to sell the paper and the people buying the paper keep changing their risk thresh hold. As for marketing, I think that there may be value I. Them contributing to a national CAAMP marketing fund... But with brokers continuing to demand they get paid more on deals... Well why would they do that? There are very few of the big brands that have not gone to the lenders in the past year or so and asked for more money (VB, etc) and brokers are individually asking for more. Greed may just be the biggest down fall of brokers yet.

  • AB Broker on 2012-05-12 1:15:39 AM

    I agree with you monoline. if we are doing our job then the client knows why the monoline is an advantage. However the other points are still valid and it would be appreciated if the lenders could address those issues as well.

  • Lisa on 2012-05-12 2:57:03 AM

    To CJ... I hate to break this to you but ING is a BANK - not a monoline. They deal directly with the consumer. A monoline only deals with one source for their business referrals. If ING has you fooled that they don't compete with you directly for that same client, my hat goes off to them. They have done a great job earning your support.

  • Mono Boy on 2012-05-12 3:55:59 AM

    It is disappointing and frankly misguided for a mono lender to express a POV like "Broker commission is paid so you are an extension of us; or to suggest that your job is to sell us. This is not the view point expressed by mono line lenders who respect and understand the challenges facing the brokers in the independent channel. As a mono line lender we do not advertise as it is simply not cost effective without additional product revenue streams like our competitors. We do rely on the ability, reputation, and professionalism of the brokers to sell our products. In return we pay a finders fee. It is a mtually beneficial partnership that hopefully provides the broker's clients with additional choice; and not be forced into a single channel. As for the other comments with respect to paperwork, rate premiums and conditioning. I know that mono lenders are aware of the issues and continue to try and improve in all areas. Our business models simply cannot absorb the cost and or potential losses as readily as the big boys which drive the majority of the decisions. The more important question for all brokers is what would happen to the channel with out the mono lines. We may not be perfect but the majority of us do have respect and appreciation for what brokers do.

  • Kyle Green on 2012-05-12 4:17:17 AM

    I liked Boris Bozic's idea (not to say it's "his idea" but he is the most recent VP to suggest this) to have brokers contribute to a marketing fund, seperate from what we contribute to our brokerages. This money is obviously currently used by the brokerages to enhance the individual brand but not enough is done for brokers as a whole to promote what we DO and how we are BETTER than the banks.

    Think about the realtor.ca ads, I think they've done a good job of reminding consumers how a realtor can help. Why aren't brokers doing this?

  • Liz on 2012-05-18 5:25:18 AM

    hey Lisa, ING is the most broker friendly bank of all! No, they are not a monoline, but the majority of the business is broker. I was told by a BDM that 80% plus of the mortgage book is broker driven. I am not sure how ING got dragged in to the conversation. Monolines agressively go after retention, just an FYI. I would suggest all Brokers keep in touch with their customers and may the best man/woman/lender win.

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