Mortgage Architects (MA) is well on its way to reaching its maximum number of lead planners. Once the company gets to 100 teams, MA will have limited ability for new lead planners to join. The cap was set to prevent the brokerage from diluting the value of ownership lead planners have within the company.
“If you have 100 people that own your company, you’ve created value,” says chairman and CEO Bob Ord. “When you reach 100 and somebody wants in – and there will be lots of people who want in – there’s value for a lead planner in selling his or her operation down the road.”
Instead of building the company with the goal of housing thousands of agents, MA wants to help these 100 lead planners grow their teams through associate planners and assistants.
“Our lead planners provide a rich mentoring and training environment for their associate planners – a practice we feel will be instrumental in building a new generation of planners with high standards of education and ethics,” says Ord.
MA associate planners also benefit from the strong relationships their lead planners have established with lenders. MA encourages young and up-and-coming brokers who are looking for this kind of mentoring to join forces with a lead planner.
Mortgage Architects has brought a unique value proposition to the table for its brokers – essentially, its lead planners will end up owning up to 80% of the company. Lead planners are automatically – at no cost – an owner in the company. Ownership allows MA brokers to have something secure for the future – focusing above and beyond their daily commissions.
The company determines beneficial interest when lead planners join, and each subsequent year using a straightforward formula – a broker’s funded mortgage volume for the preceding year, divided by 1,000, determines his/her beneficial interest.
Brokers can even allocate some of their ownership to their associates. This can be a useful tool for attracting new associates, as well as retaining existing ones.
MA brokers have exclusive access to myNext Mortgage Company – a lender that offers a broad range of products and competitive rates.
myNext mortgage was already in the insured mortgage space when the asset-backed commercial paper market dried up in August 2007.
“We got on to it really early,” says Ord. “We dealt with CMHC and Genworth because they had moved into the sub-prime/ non-conforming space anyway.”
Today, myNext is doing over three-quarters of a billion dollars on an annualized run rate in the insured business space. At the same time, the lender is ready to get back into the sub-prime space the minute that it opens up.
Although Ord would not offer predictions on the return of the sub-prime category, he says the company is ready to launch new sub-prime and Alt-A products when this segment returns to Canada.
MA planners also have access to exclusive white label products through myNext, says Ord, adding that a HELOC offering may be ready as early as this fall, while new generation products for the future are also in the works.
Mortgage planning tools
MA’s immediate goal for 2008 is to roll out its proprietary mortgage planning tools to all planners, says Alice Chan, senior vice president and COO.
“Our mortgage planning tools are in line with our vision of helping customers achieve their long-term goals through effective debt management,” she says. “This will give our lead and associate planners a strategic advantage because we are trying to evolve and differentiate our planners from being just a loan arranger to a total mortgage planner.”
Through its mortgage planning tools, MA is looking to strengthen its long-term relationship with customers. The tools are designed to allow planners to simply walk through a process with customers, where the customers will be given a take-away mortgage plan focused on their long-term financial goals. Depending on the category the customer falls into, the review can be as frequent as every six months, but definitely annually, says Chan.
“Our reliance is not on the residential resale community,” says Ord. “We really deal with our past clients and that has been our growth, particularly as we enhance our successful CRM program through segmentation. Our role at Mortgage Architects is to arm our people to be ready for anything that comes down in the future.”
Seeking top producers
Another factor that sets MA apart from the crowd is that all of its lead planners are proven top producers. Since inception, the brokerage has had a minimum requirement for brokers to hold at least $25 million in funded annual volume before being eligible for a lead planner role.
“We’ve never backed down on this requirement because we don’t want to be the biggest. Our focus is only to be the best, to be small, nimble and elite,” says Ord. “To date, our average volume per lead planner is $62 million – well above our minimum threshold, again pointing to the quality of brokers we have.”
MA also takes a no-strings attached approach to broker sign-up. As such, lead planners are only required to sign a 30-day notice clause, and their databases belong to them. “I find it surprising that in today’s dynamic environment, where we’ve already seen lots of changes in ownership, that brokers are locking themselves in for five or even seven years,” says Ord.
In the last year, MA has expanded its network of brokers in Western Canada, as well as opened offices in Nova Scotia and New Brunswick.
MA has been strengthening its operational infrastructure to support growth over the past year.
Planners have access to a web portal that offers customizable templates and other marketing materials – this is in addition to the custom work MA’s marketing team will develop for brokers, says Kelly Neuber, vice president of marketing. “We like custom requests because, after we develop the idea with the broker, the material is shared across the country – a concept our brokers all support,” she adds.
“We developed an excellent proprietary web solution for those who want a topnotch website without having to pay for an expensive custom site,” Neuber says. A key benefit of this web solution is that the site will be regularly updated with fresh content.
“We also designed and built a new commission system so most of our commission process is automated,” says Chan. “The deal-matching process and commission calculation is all automated, so once we ingest the lender’s report into our system, the automatic calculation is completed and this allows us to pay our planners weekly on time.”
MA also rebuilt its document storage systems so that its compliance documents are paperless. Instead of having original documents couriered to head office, MA planners scan their documents into a secure compliance module. Where required by provincial rules, some planners must also maintain their own physical files – in provinces such as British Columbia, Nova Scotia and Quebec.
All of these enhancements will enable MA to meet its longer-term goal of helping its lead planners grow their businesses to an average funded volume of $100 million per team.
With 100 lead planner teams generating $100 million each, the yearly funded volume will reach $10 billion.
To date, MA has funded in excess of $4 billion with 320 lead and associate planners onboard.
Company: Mortgage Architects
Number of agents: 320 lead and associate planners
Head office: Toronto
Opened for business: September 2006