Wish List 2020?

by |

When Michael Sjerven, principal broker at Verico Vivid Mortgage – looks to the future, he sees a significantly different industry than the one now facing professionals both in and outside his Vancouver market.

“I do believe most of these changes will be here by 2020,” he tells CMP, “although, it could end up being only a few. It’s hard to predict, not unlike where interest rates are headed.”

But if brokers want to stay alive long term and compete with the Big Five, argues Sjerven, “then I believe changes need to be made and this list reflects that coming reality.”  My hope is that these ideas will encourage some leaders to start working together on positive change for the industry.

 The future of mortgage brokers in 2020?

- One national licence tied to one designation:
A national licensing body will simplify the registration process and allow for out-of-province deals. It will likely combine a designation (eg. CGA/AMP) with licensing and so add more credibility to the profession.
 
- One (national) broker association, combined with provincial associations:
Considering there is already some overlap with regard to conferences, especially with MBABC and CAAMP, by 2020, it will have made sense to roll all associations into one. Now, not all brokers can afford to pay all membership fees, and the synergy created by combining all associations into one have been viewed as beneficial to everyone.
 
- One national ad fund for brokers – supported by all brokers, networks and lenders:
This fund will be targeted, promoting "Mortgage Brokers" much like the ones Realtors and insurance brokers have. It may also be tied to the national designation (e.g. AMP). All networks, brokerages, suppliers and lenders contribute about one per cent of gross commissions.

 



read more > 1 2

  • SJ on 2013-07-03 8:45:19 AM

    Totally agree. Divided we will fall.

  • Christopher on 2013-07-03 9:45:36 AM

    By 2020 I expect the process will be totally automated on what will be the equivalent of today's Internet. Brokers and lenders will be obsolete.

  • Michael on 2013-07-03 9:46:14 AM

    What this article does not address is the compression of the broker industry and a desperate need to “re-gig” the profession. The banks continue to grab market share, and the mono-lines continue to challenge brokers on renewals and some are moving towards obtaining bank status to increase their relationship with the clients. Yes there will always be broker-only lenders, but they will be fewer and more challenged. People need to REALLY think about it… what service does a mortgage broker REALLY fill for their clients? They certainly don’t have the rate advantage that they once had. Advice? What advice? Do I go into a fixed or variable? What term? Prepayment clauses? Rate? I read comments on here about brokers acting like they are the god send to the consumer… really, let’s see what you really do…

    You take my application, “consult” on the best product (all brokers will bow to the clients wants regardless – you can argue that until you are blue in the face, but anyone who says that they don’t is not being truthful – If I demand a Scotia 5 year fixed, you will get me that mortgage just so you do not lose the deal). Then you send my application to the lender, get an approval, get documents from me and send to the lender, and then move on to the next client.

    If I need help on my mortgage after funding… the broker cannot help me. If I need a statement… the broker cannot help me. If I am going to be late with a payment… the broker cannot OK that. ALL dealings after funding MUST be with the lender direct, there are one – maybe two – lenders that are the exception, but let’s face facts – it is faster to deal with the lender direct.

    If I need more money, THEN the broker can help. Most will recommend moving to a new lender, not because it is better for me, but because it means you get paid on the full amount again. All the broker has done is be the go between at the application stage or the find money stage. When rates go up or down brokers will then solicit me to change my mortgage, because there simply is not enough new business so that means churning the existing book. Brokers deny doing that too, but I have yet to meet or see a broker that does not in my 37 years.

  • K.S. on 2013-07-03 9:55:52 AM

    The broker industry is going to die in Canada, unless they change their spots. Lack of professionalism, higher rate of fraud and delinquency - and as mortgage guidelines continue to be difficult... more and more are finding that they cannot compete with the banks on getting approvals or deals done. Most of the banks have realized that the cost of dealing with mortgage brokers is too high, and it will not be long before TD and Scotia come to the same conclusion. It is cheaper to have their own sales force then deal with independents and the mortgages are more profitable.

    Time to wake up from the dream of the late 90's through to 2008 Mr. / Mrs. Broker. It is not going to get easier - this is not the real estate industry where the major brands own 80% of the market. This is an industry where the banks own the market, and if brokers left the field of play, it would not even register a blip on the radar for consumers. They will just carry on and deal with lenders direct. Unless you have a business model that allows for additional services to the consumer, or the broker industry actually figures out how to change their ways, you will be lucky to be here in 2020.

  • A Broker on 2013-07-03 11:29:23 AM

    I also believe our industry will die. With the National brokers hiring anyone with a pulse, a bogus AMP designation, steep decline in knowledge and professionalism and incline in fraud promoted mostly in part by agents learning from their brokers how to do business, we're a dying breed. I myself as a broker tell friends honestly to never use another broker now and go directly to a bank to avoid unnecessary stress, costs and problems. I have dealt with numerous borrowers who have or are dealing with nightmare agents. Also never to use an agent or broker recommended by a realtor. Time to get back to grass roots, shut down CAAMP and start with a professional national organization, ensure agents are properly trained and educated through university level core finance programs and attend a week long ethics course, not a one hour course for AMP credits.

  • Ron Butler on 2013-07-03 12:18:37 PM

    Wow, I thought I was pessimistic, I am little, fat, Miss Sunshine compared with these posters.

    Don't worry, Mortgage Brokers, rats and cockroaches; we can survive disaster and we'll still be around to make deals happen.

  • The end of an era? on 2013-07-03 1:54:48 PM

    Way back when brokers were the folks you went too when you had no choice. That all changed, and for years broker have rode the wave of easy borrowing guidelines, cheap money, and consumers spending like there was no tomorrow. Gone are those days however, and today we see the banks and lender starting to wake up and realize that brokers are not all they thought. Most are belligerent and downright rude to the lenders if they don’t get a deal approved, and when the broker inevitably give bad advise… they lay all the blame at the feet of the lender. Even the good brokers have done it in the past in order to save face with their clients.

    Lenders are starting to wise up to the shady activities that brokers partake in. How many broker “omit” information that could hurt an application? FAR TOO many. Even the ones that will stand on their soap box and say they never have or will do that – we all know you have.

    Brokers are glorified application takers who profess to give sound advice to the consumer. Advice that usually at best about going with fixed or variable. In the end all the broker cares about is the commission, and they will do whatever it takes to earn that dollar.

    Watch out brokers – the existence you know today is not long for this world and things are about to get even tougher. If 50% of you survive you will be lucky.

  • Jake on 2013-08-08 7:32:21 AM

    Christopher is right. What the rest of you are saying is nonsense; fraud, unprofessionalism etc, will not lead to the change in the industry. Moving forward I see Realtors having an app on the spot at an open house for instant pre-approvals. Matter of fact it is already happening. General public and consumers don't care about "advice" as much as about rate. Don't kid yourselves, if you think you'll make 80bps in 5-10 years you're out to lunch. Automation model is coming and it's going to kill us like it did the travel and insurance industries.

    I've been at this for a decade and have carved out a very good niche for myself but I'm not silly enough to think that things won't change for the worse for us all.

  • CC on 2013-08-08 7:48:50 AM

    WOW.......... I can not believe what I have just read from you all. You best to go find work in another industry now.

  • Jake on 2013-08-08 10:03:00 AM

    CC; Thank you for your insight. The same could have been said about numerous industries that can easily be automated. I don't need to find another career because I am already working on other projects within the industry that'll help the automation process and make me money. Dinosaurs will be dinosaurs, bet they never thought things would change either.

    Differences of opinion is all but I am not going anywhere. I do hope that over 50% of the fly-by-nighters disappears ASAP because they are unnecessary for the business but it'll never happen either unless they are forced out.

  • Jake on 2013-08-09 10:54:23 AM

    Annnnnd that didn't take long. The first step in automation. http://www.mortgagebrokernews.ca/news/you-know-about-rates-sites--what-about-rate-apps-174705.aspx

    Think about how easy it is for an AAAA client to get a mortgage, regardless if cmhc or non-cmhc insured.

    This is the first step in the evolution of our industry. The question is how to monetize it? Well, ratesupermarket will obviously do this by charging Realtors for this, and offering the absolute lowest rate thus cutting out our "expert" opinion.

    You all see it from our side of the fence - that you THINK we are needed - but not from the consumer side, where 75% of mortgages originate via the bank channel.

  • Ron Butler on 2013-08-09 11:03:37 AM

    Jake, just to let you know there are no realtors working with Rate Supermarket at present.

    You do make a very salient point, its not important what we as mortgage brokers think about how mortgage acquisition should work; the question is how does the public want mortgage acquisition to work.

  • Jake on 2013-08-09 11:12:34 AM

    @Ron Butler, there are no Realtors in Canada but this model is being tested in the US on a micro level and it is finding traction (as is the US market). We brokers can pound the drum all we want about how important we are but we can't even get our big houses together to launch a national campaign and beat the banks at their own game. So, instead, we comment on sites about how good we are and/or criticize each other, and forget that consumers who know nothing/very little about the mortgage process want to K. I. S. S. as much as possible.

    I don't know what "the answer" is for the future but I can see technology greatly influencing our commisions, incomes, clients, and realtor relationships - and those who fail to see it are stuck in the 90s along with the fax machine.

  • Jake on 2013-08-09 11:12:51 AM

    @Ron Butler, there are no Realtors in Canada but this model is being tested in the US on a micro level and it is finding traction (as is the US market). We brokers can pound the drum all we want about how important we are but we can't even get our big houses together to launch a national campaign and beat the banks at their own game. So, instead, we comment on sites about how good we are and/or criticize each other, and forget that consumers who know nothing/very little about the mortgage process want to K. I. S. S. as much as possible.

    I don't know what "the answer" is for the future but I can see technology greatly influencing our commisions, incomes, clients, and realtor relationships - and those who fail to see it are stuck in the 90s along with the fax machine.

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