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Mortgage Broker News | 04 Mar 2013, 10:00 AM Agree 0
The issue of trailer fees is once again sparking debate among brokers as they look to secure their financial futures in very insecure times.
  • Ivan in Toronto | 05 Mar 2013, 05:30 AM Agree 0
    She makes a good point....
  • Brian | 05 Mar 2013, 05:35 AM Agree 0
    Really? What advisor uses trailers as a retirement fund? Any that do should not be advisors, that is very poor planning.
  • Terry | 05 Mar 2013, 05:39 AM Agree 0
    Funny, I had the very comment in mind. You think we need to deal with the Monolines, however, everytime you turn around, these monolines are being purchased by the 5 big banks. The Monolines are not dependable.
  • Layth Matthews, CEO RateMiser Mortgage Advisors | 05 Mar 2013, 06:05 AM Agree 0
    Angela Wong-Liao brings up the critical point. She's right, it is dangerous to think of trailers as a retirement strategy. However, the trailer fee model redeems itself much sooner than that. If you do the math, most trailer fee models break even or better within 3 to 5 years. So it is a bit of a risk, but not that big. A little more income stability, helps shift the focus more on investment and less on rent. We need CAAMP to set some fair guidelines and highlight key terms in trailer agreements to protect the members. Also, what are the obligations of brokers to agents who don't last? RateMiser is going flat fee all the way. With minimal Admin fees at retirement.
    Policy makers should like the trailer model too because it reduces the incentive for spurious refinancing.
  • Jason Dodd | 05 Mar 2013, 09:14 AM Agree 0
    Why doesn't Angela go work for a big bank then? If we are going there anyway pull your chute and make your way there already. We will keep advocating choice in the marketplace. If we throw in the towel and don't support home grown industry choices consumers suffer in the end. Limited choice will alter the pricing in the marketplace. Careful what you wish for and you might get your job at the bank paying you 25-35 bps on each deal and a smaller volume bonus.
  • Bonnie | 06 Mar 2013, 02:09 AM Agree 0
    I don't think we should think of Trailer Fees as a retirement plan. However, considering the number of clients that we have that don't refinance in the first 5 years and don't want to be hassled by provided the necessary documentation to switch a mortgage, it does give us some income if they just sign the renewal agreement for another term with that lender.
  • Easy Decision | 06 Mar 2013, 03:27 AM Agree 0
    I don't understand the concern. With most trailer lenders paying full pop up front what is the problem? I still plan on staying in touch and servicing my client throughout their term so if trailer lenders change their stance or if they are no longer the best fit, then I still have a chance to move them if it serves my client's best interest. With industry figures showing 75% of clients staying with their lender at renewal why would I take that unnecessary risk if I don't have to? Maybe the trailer lenders decide to stop paying out one day…fine, now I am in the exact same position as I would have been with a non-trailer lender. There are contracts in place with trailer lenders and any change in policy would likely only apply to new originations moving forward. Relying on them for retirement is dumb but using them as a form of free insurance at renewal…why not?
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