Xceed spreads commission cheer

by |

Xceed is sweetening the commission pot for its growing number of broker partners, tabbing on 25 bps for deals funded during the holidays and, indeed, for two months afterward.

The commission bump-up will see “Friends of Xceed” rake in 115 basis points for each and every three-year deal and 135 bps for a five.

While the offer is in effect until February 29, 2012 -- Xceed tweeting the news on Wednesday, at the same time posting it to its site for brokers – it’s likely focused on growing originations at a time when much of the market is on holiday hiatus.

The aggressive initiative largely mirrors the promotions of a few other lenders and reinforces the idea that Xceed is actively looking to deepen its funding pool through brokers.

Hundreds of brokers have already welcomed Xceed back into the fold, registering to do business with the lender despite what its president calls some “skepticism” about how long it will stick around.

“Yes, we have registered 200 brokers in the weeks that we’ve been back in the broker channel, and we’re not going to stop there,” Michael Jones told MortgageBrokerNews.ca in October, pointing to growing interest among mortgage professionals. “Yes, there is some skepticism about our return to the broker channel ... but what brokers need to know is that we will stay in the channel as long as we can add value and make a healthy return.”

In September, MortgageBrokerNews.ca broke the news that the company, having settled an outstanding legal dispute with funding partner HSBC, had come back to the broker channel. The return ends an hiatus begun in January and taking many of its broker partners by surprise.

That may now be water under the bridge for the growing number of residential specialists drawn back to the lender, now entirely focused on A deals.

Broker feedback also affirms the company’s decision to go with a simple upfront compensation structure, eschewing minimum volume requirements, even if it means doing away with volume bonus, suggested Jones.

“I think a lot of large lenders today are focused only on those large brokerages that will bring them large numbers of funded deals,” he said. “We are working with small- and medium-sized brokerages. We know who we’re dealing with and there’s a relationship that should” translate into a significant amount of business.

Broker appeal may also have something to do with Jones’s decision to offer 110 basis points on five year deals and 90 bps on three-year ones. That’s likely been heightened with the short-term commission increase.

  • Jeremy on 2011-12-23 4:27:04 AM

    I don't get it. Why offer more commission to only complain about profit margins in the future and have to put the brakes on lending again?

    For our office it's about what value do you bring to the table, not about how much will you pay us.

  • John on 2011-12-23 5:59:21 AM

    Well said Jeremy! These guys also hurting our other lenders. Any Broker who send deals to these guys is an idiot and enemy of Broker market!

  • Mark Norman, AMP - St. John's on 2011-12-24 3:41:53 AM

    Both of you hit the nail right on the head. Provide us good products, good underwriters, effective BDM's, service to clients. With an unsustainable model like that, Xceed will end up winning on price today while dying on it tomorrow. That said, the brokers that scramble to get deals to Xceed right now are probably not the broker partners they are aiming to do business with in the first place.

  • David from Markham on 2011-12-24 5:17:44 AM

    To you three clowns…..do your homework before you shoot off your mouths….Xceed tried to do something no other FI was attempting to do, place higher risk, high LTV mortgages & selling the paper into the US market…then 2008 happened…did any of you three predict the troubles of 2008? I didn’t think so, so how could Xceed?
    They are coming back to the market doing only A business, at A pricing & boosting the finder’s fee. They are attempting to differentiate themselves in a “commodity” market. The more competition in a market place the better it is for the consumer & the brokerage industry. Have you ever made an error & attempted to correct it?

    You three, I am sure, are hugely seasoned veterans of the mortgage industry, one is even a “highly touted” AMP (that and $1.65 gets you a medium at Tim’s).
    Look at the Board of Directors of Xceed….Ivan Wahl is the Godfather of Canadian mortgage-backed-securities. He was the founder of FirstLine Trust, one of the players that helped the mortgage brokerage industry expand to what it is today. Tom Alton ran the mortgage division of both BNS & BMO for decades. He has forgotten more about mortgages than any of you could ever dream of knowing.
    These guys understand real estate & mortgages better than most of current cadre of FI mortgage executives. They are innovators in an industry where innovation is frowned upon.
    Boys, there is an old saying “If you keep your mouth shut when you don’t know something, you might look stupid. By opening your mouth, you will only confirm the fact.”
    PS. Buy the stock.

  • Mark Norman, AMP - St. John's on 2011-12-24 7:28:59 PM

    Lots of "highly touted" execs have been at the helm of many failed ventures. We're not doubting Xceeds know how, we're doubting their incentives. A few of us DiD predict 2008, no where near what actually happened, but we understood the unsustainability of their system. Do what you gotta do in Markham, but I won't be selling my clients soul for a few extra bps. No way, no how.

    Veteran yes, sell out, not even maybe. Keep your head in the clouds. I'm sure you'll still be here when the other shoe drops.

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

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions