A failing grade

Interviews with aspiring new mortgage agents reveal a standard of industry education that leaves much to be desired, writes Ken Lankin

A failing grade
Over the course of the past two weeks, I have interviewed five non-solicited mortgage agent candidates, all of whom were graduates of a well-known course. Although I’m not looking for any additional agents at this time, it’s always nice to know who is interested in the business, who could become a superior agent and who can represent our industry in a professional manner. More than that, I look to see if these applicants have the intention of pursing this profession part time or to simply supplement their income from an existing full-time job.

I am largely opposed to part-time mortgage agents. The only exception would be for those who have relevant industry experience under their belts already – those who have brokered full-time in the past or are retired bank professionals with a breadth of knowledge as a consequence of their past endeavours. These two types are examples of part-time brokers who can be a good fit for an existing business.

However, to those who are already employed in a full-time role in another industry, I can only say: “What are you thinking?” This is not like working at McDonald’s or in retail, where you are simply taking orders and bagging a product. How can any part-time employee field a mortgage call professionally when they are ringing in an underwear sale at The Bay? The answer is simple – they can’t!

This industry is life-changing. Should you face the nightmare scenario of making the wrong decision for a client who has relied on your putative expertise and the situation goes south, you will go south with it.

I was also shocked by what I found when I asked these potential agent candidates the following simple questions:

1. At what level is a mortgage called ‘conventional’ versus ‘insured’? Four out of five said all, and one said “I don’t know.”

2. If you put 5% down on a home as a first-time buyer, what percentage must you add to the mortgage for insurance premiums? Two said “I don’t know,” two said 3%, and the other is still thinking.

3. What credit score is deemed acceptable for a high-ratio mortgage? One said 640, one said 680, three said they had no idea, and the other asked what I meant by a credit/ Beacon score.

4. Can you create a residential mortgage on a ‘C’ property? Three out of five asked what ‘C’ was, and four out of five said, “I guess?” I then asked what the difference was between an alternative and subprime mortgage request. Only one of the five got the answer right.

5. I asked each to define Canada’s benchmark rate. Again, only one of the five answered correctly.

So, my five simple questions were met with few correct answers. I asked these questions for one reason: to see what was actually discussed and covered during the MB 101 course. While the fiduciary and judiciary items are very important, does anyone believe that a part-timer who is just trying to make extra money will prioritize protecting clients? As for the $300 calculator required for the course, we all know these calculators are available online through gazillion different sites, so the putative purpose of teaching someone to calculate a balance or a per diem rate or LTV ratios is clearly superfluous, and the calculator itself is both useless and a waste of money.

As seasoned veterans, we take much for granted when it comes to such matters as quick calculations, the approximate funds required to close a transaction and so on. It is obvious what is being taught has zero to do with what actually goes on in the marketplace.

I believe any organization that is deemed to be a mortgage educator needs to remove its at-home or online correspondence course. Those who wish to be in the business should make the drive and put in the time to do it right. If these habits continue, the mortgage profession will become sloppy, unmeasured and tainted.

Ken Lankin is a leading mortgage agent in the Niagara Region. Currently at Mortgage Centre Niagara, he was previously with Mortgage Intelligence Niagara for almost two decades.