Early poll responses to the 2012 CMP Brokers on Lenders survey suggest brokers are concerned about the loss of product options and the cookie-cutter approach of conservative lenders.
“Currently, there’s not a big difference among the products that lenders offer,” said Paolo Di Petta, independent broker for EQRON Mortgage in Toronto. “It’s all about rates and not about service.”
Di Petta sees the current environment as part of a business cycle. “Right now the focus is on rates and it looks like a mad race to the bottom for lenders. I’m waiting for the pendulum to swing the other and they start offering better service,” he said.
“The channel is losing lenders…When we lose them we lose their products,” according to Keith Leighton of Ideal Mortgage in Halifax. “Channel lenders should do something about their rates or else we’ll be in a situation where there will be significantly fewer transactions within the next 12 months.”
The recent exit of lenders from the channel can be traced back to 2007 with BMO’s pull out, according to James Laird, broker for True North.
More recently, “we saw CIBC wind down FirstLine this summer,” he said. “It’s a trend that’s not good for the industry, but it doesn’t mean the channel is not profitable.”
“ING which had very strong broker ties were recently snapped up by Scotia. That only foes to show that the channel is profitable,” he said.
And it is because of this that Laird remains optimistic.
“As the channel loses existing lenders new ones will replace them,” he said.
What do you think? Have your say by filling up the CMP Brokers on Lenders survey.