Recent discussion around the issue of renewal fees has seen a proposal for an across-the-board 15 bps, an idea that is gaining traction on both sides. Lenders would dole it out whether the brokers take commissions straight up or opt for trailer fees. Either way, this mandatory renewal fee is proposed as a good way of eliminating a lot of the moving around that occurs at renewal. On today’s Big Story, we spoke to Ariel Santos of Unity Financial Mortgage Services, Drew Donaldson of Verico Safebridge Mortgage Solutions and John Bargis of Mortgage Edge. Find out on today’s The Big Story, on MortgageBrokerNews.ca TV, your home for industry news, opinion and analysis.
Video transcript below:
John Tenpenny, Mortgage Brokers News TV
John Tenpenny: Hi, I’m John Tenpenny, Editor of CMP Magazine and welcome to the Big Story on Mortgage Broker News TV.
Co-operation is not the first word that comes to mind when you think of brokers and lenders. But when it comes to the issue of renewal fees, a proposal for an across the board 15 basis points is gaining traction on both sides. Lenders are doling it out whether the brokers took commissions straight up or [after] trailer fees. Either way this mandatory renewal fee is proposed as a good way to eliminate all the moving around that occurs at renewal. Ariel Santos, Unity Financial Mortgage Services.
Ariel Santos, Agent, Unity Financial Services
Ariel Santos: I think the idea of 15 basis points across the board renewal compensation would be a great idea for brokers and for lenders. I think it would eliminate a lot of moving from one lender to the next and I think the 15 basis point compensation would, it’s a nice thank you for being loyal to the lenders.
John Tenpenny: So a mandatory renewal fee might help brokers and lenders, but the interest of the clients still have to come first,
Drew Donaldson, VERICO Safebridge Mortgage.
Drew Donaldson, Agent, Verico Safebridge Mortgage Solutions
Drew Donaldson: Yes, so for renewal fees I do agree that the industry has to adopt this more and for us to be getting paid on the next five year term. But at the end of the day we have got to make sure that we are doing what’s in the best interest of the client, and if that means there is a lower interest rate or even just a better product that meets the needs somewhere else, we will make sure that we switch them even if we are getting paid by the existing lender.
John Tenpenny: Whether the fee is more or less than 15 basis points is not the most important part of the equation. Brokers and lenders agreeing to a long-term solution is. John Bargis, Mortgage Edge.
John Bargis, Broker, Mortgage Edge
John Bargis: I have personally been a proponent of renewal fees / trailer fees right from the very beginning. I am not sure that 15 basis points is a magic number and frankly I don’t think it would prevent an agent from re-soliciting that client after the term or maybe even in between. I think what really needs to happen to address the issue is, a strong focus group between lenders and brokers alike to determine really what the sensitive issues are and create more of a long-term viable solution.