Taking it to the street

Taking it to the street

Taking it to the street Alfonso Casciato, senior-vice president of sales at Street Capital, has been with the lender since the beginning – and he’s still there as it embarks on its continued evolution

WHEN ALFONSO CASCIATO joined the mortgage broker industry in the early 2000s, he was drawn by the relationship aspect of the business. In 2003, he left a management job at CIBC to become VP of credit for FirstLine Mortgages.

From there, he seized the opportunity to help launch Street Capital as its VP of credit, a role he held until 2015, when he was promoted to senior vice-president of sales for the lender.

“Launching Street Capital was intense; it was 24/7,” Casciato recalls. “By having ownership, it was a perspective I had never had before. You weren’t just responsible for the role you had – you were responsible daily for the success of all aspects of the company.”

Launching a lender meant a level of commitment Casciato hadn’t experienced before. And it also brought with it its own challenges, especially considering the timing of the launch, just before the global financial crisis.

“We were lucky our strategy was always to be a full-suite lender,” Casciato says. “The idea was to launch on the B side and roll out our prime business within the first year of starting Street Capital. With the economic downturn, we were able to quickly turn our focus from the B business over to the prime side of business. We successfully launched that in February of ’08 and haven’t looked back.”

Challenging times

Given the constant changes in the mortgage industry, particularly over the last few months, many brokers have been grappling with the best way to adapt. In Casciato’s view, learning what lenders are looking for in the new framework can set a broker apart.

“I think the successful broker will adapt to the changes that are going on right now by putting more focus and attention on the application and the submission of the application to the lender,” he says. “If they spend time on providing details and a strong story on each and every transaction, it will allow for a moreseamless approval on the lender side and a more positive experience for the customer.

“The story has to make sense,” he adds. “There has to be a level of reasonability. So, for example, if a 25-year-old is putting $120,000 down on a home, a story has to be made to explain where that deposit came from. In the past, it would have just been a section filled out in the application that $120,000 is the total deposit, and there was no story around how a 25-year-old had such a large deposit.”

Casciato also gives the example of a businessfor- self borrower – a sector that has increased year-over-year. Brokers need a story plan for those clients as well.

“How does the income that is being submitted for that self-employed individual make sense?” Casciato says. “Do they own retail space, how many customers do they have, how long have they been in business – that kind of reasonability.”

Another major challenge for the broker industry, according to Casciato, is ensuring brokers and lenders can better compete with their big-bank peers.

“I think we have to be competitive on rates and better on service,” he says. “Better service looks and feels like more timely contact, more support. When the application comes in from the broker, I would expect the lender to make initial contact, thanking them for the application and asking for clarifying questions right after the application – a hand-holding experience. Not just an application comes in, a commitment goes out, the documents are sent in, and the deal either funds or for whatever reason stalls, or we lose it to a competitor.”

Street Capital recently became a Schedule 1 bank, which will allow it to provide many of the same financial products already on offer at the country’s larger institutions.

“To be able to continue to offer all of the products available to the customers that the banks currently offer the customers” will continue to be a challenge, Casciato says. “At Street Capital, by successfully launching as a Schedule 1 bank, we’re positioning ourselves to be able to offer a full suite of products to all of our clients.”

Mortgages trending

Despite the growing popularity of the broker channel, Casciato says brokers still bear the burden of having to educate Canadians about the value they can provide.

“Market presence is always a challenge [brokers] have to focus on,” he says. “It seems as if they’re always competing against the banks, and I think that suggests there isn’t enough broker presence out there.

“The numbers are there,” he continues, “but I don’t think there’s a good enough marketing campaign out there so the end customer is aware of what an independent mortgage broker can offer.”

He believes technology will be key in driving more consumers to the broker channel – but that both brokers and lenders have a lot of catching up to do to put themselves on the same playing field as other industries.

“I think being able to submit an application from your phone is technology that is out there,” he says, “but both brokers and lenders have been slow to ramp up to that level of technology – the ease of online application submissions by clients to brokers, and in the same fashion,
brokers to lenders.

“There’s really only one mode of submission to lenders these days, and it’s electronically through Marlborough Sterling or D+H,” he adds. “I think we’re archaic when it comes to the options we have to submit an application from a broker to a lender.”