With a new book aimed at educating consumers and new agents, Blair Anderson hopes to do his part in raising the public profile of mortgage brokers
Blair Anderson didn’t set out to become a published author, it just sort of happened. But, once he decided to write about the Canadian mortgage industry, he discovered he had a bit to say.
The owner/broker of Anderson Associates Mortgage Brokers in Burlington, Ont., says he wrote most of Ask Your Mortgage Broker: The Most Practical Guide for Canadian Homebuyers and Homeowners during 2010. Why undertake the task?
Because as far as the industry has come in the 19 years since Anderson began working as a broker, it still has a long way to go in terms of consumer awareness.
As he writes in the book’s preface:
When I sit down with clients in my office, or speak to them by phone, I routinely educate them on my role as a mortgage broker and the benefits of using me. Why? Most of the time because I get questions such as, “Are there any hidden costs for using a mortgage broker? How are you paid? Why shouldn’t I deal directly with my bank?” These are all good questions, which I am only too happy to answer. The problem is, in the nineteen years since I began my career, I expected the fog to clear and consumers to gain a better understanding about mortgage brokers. The sad truth is, as an industry, we have failed to adequately educate the public about our role. This is one of the reasons why I decided to write this book. There has been, and still remains, very little written about this misunderstood and under-used resource in a Canadian context.
He also hopes it can be used as a primer for new mortgage agents getting their start in the industry.
“It can be a difficult start for a new agent to get established in the industry,” says Anderson, who founded his independent company in 1998. “You’re kind of left to your own devices and there’s not a lot of literature out there. I thought this book could be a good opportunity to help that new broker starting a career. I would have liked to have had a book like this when I got started. It would have helped to know what you were getting into and what was going on.”
As an independent business owner, Anderson also knows writing a book can only enhance his credibility with clients. “As I push forward with my business, it’s just one more accomplishment that could help raise my credibility in the eyes of the public.”
Credibility with lenders is something else Anderson sees as an issue as he looks to the future o f the mortgage brokering business, specifically what lenders are asking of brokers.
“Now you’re essentially signing contracts with lenders as a broker to make sure that everyone knows their responsibilities and that’s great,” says Anderson. “It spells out what the requirements are, specifically things like efficiency ratios or conversion ratios that from a lender’s perspective only make sense. I don’t know why it took them so long to focus on things like that, because no one has money to waste.
“But as much as I’m happy to see them incorporate some to these metrics into their protocol, there are some other things that I do take issue with , such as minimum volume requirements. They’ve taken such a draconian stance, and I’m not sure why, but a lot of them now won’t work with you unless you sent them a certain amount of business.”
For smaller shops, such as Anderson’s, who want access to as many lenders as possible, being told “You have to send me $5 million a year or we’re cutting you off,” is something he takes umbrage with.
“I only do so much business a year and I can’t throw it around to everybody,” he says. “I know they could all stand to benefit from focusing on productive brokers that understand them, but if I send you one deal a year and it closes, that should be OK.
“I’ve had some lenders cut me off because I had sent them very little business, but anything I ever sent them closed, and I have a hard time understanding why they would want to cut me off. If I had to speculate, I would suggest that they might be trying to influence our behaviour. That is, by enforcing minimum volume requirements, brokers are losing their ability and willingness to shop around for the best deal in order to maintain their active status. From an economic perspective, I think efficiency ratios are all that matter.”
When it comes to his status as an independent broker, Anderson is equally steadfast.
“I’m pretty hard core when it comes to my independence and it’s something that would be pretty tough for me to move away from.”
For him, it is also related to how he does business. With a background in accounting, Anderson feels operating as an independent plays to his strengths.
“I’m as good or better as an administrator as I am a salesperson. And that may be a little abnormal as you have a lot of people in the industry who are great salespeople, but not so good administrators,” he says. “I haven’t felt the need to forge an alliance with any of these bigger companies that can provide me all of this back office administrative support. I do a good job of that on my own. I’m also writing more private and subprime deals every year which would not favour the larger brokerages value propositions vis-à-vis shared volume bonuses, which can be dependent on many things, such as, lenders used.”
In line with his book’s goals of increasing consumer awareness, Anderson also founded www.
MortgageResource.ca three years ago as a news aggregation and website for the mortgage market.
“It’s neutral,” he says. “The site is supposed to be a place where consumers can comfortably go and feel that there is no bias and get all the information they want, including picking the right mortgage originator to work with. If they want to take the ultimate step and apply for a mortgage, the website offers the only directory of originators, across all channels, and they can apply directly with the originator of their choice. The site encourages people to invest more time before they apply.
“I don’t care what business you’re in, you’re always trying to think like the consumer. And if I stepped back as a consumer and looked at the various places to go to get a mortgage, whether it’s a bank or a mortgage broker, I think it’s confusing seeing so many different rates, and little or no objectivity. I thought that like a Consumer’s Report, it would be nice to have a place to go that seemed unbiased, neutral and had contributions from everyone in a culture of education, collaboration and innovation.”