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Mortgage Broker News | 22 Sep 2011, 08:00 AM Agree 0
It may be the broker equivalent of, “If you can’t beat ‘em, join ‘em.” But an industry veteran studying the channel’s growing use of the big banks says brokers have now earned renewal fees from those lenders.
  • Dennis Rajewski Mortgage Broker AMP Mortgage Archi | 23 Sep 2011, 07:15 AM Agree 0
    Banks paying a trailer fee.... Let's look at how the banks work. First, they lend the money at discounted rates to get the cliet in. Then at renewal, they offer the client posted rates. If we are to believe statistics, 80% of clients renew with posted rates. Will you as a broker advise your client to renew at posted rates? Is that ethical? And for this you will get 15 basis points? Isn't this the perception the public has of us? Why not work with the monolines who always have better renewal rates? Why not keep in touch with your clients and be honest with them? Tell them if they are getting a good deal and if their lender won't budge on the rate, work with them to get that better deal. This, in my opinion, is better then holding your breath waiting for the banks to pay you a trailer fee. 5.39% for 5 years V 3.39% Which would you offer for 15 or 100 basis points? No contest, as I see it.
  • E | 23 Sep 2011, 08:06 AM Agree 0
    Agreed, Dennis. Our job is to counsel the client on what are their best option at the time of renewal. These agents should perhaps consider becoming mobile mortgage specialists... if you can't beat them join them right?
    Although, i'm amazed that given low margins you would think that more lenders would embrace a trailer fee model and pay the agent as long as the deal is on the books on a declining scale. This would help build loyalty and strengthen relationships while giving agents a book of business thats worth something. We have to focus on delivering added value to the client and continue earning their business not sit back in our chairs waiting for the lender to throw more money at us... besides i think those days are coming close to an end anyways.

  • Steven B | 23 Sep 2011, 10:15 AM Agree 0
    I know I would send more business their way if they had renewal fees. I have moved most of my book over to monoline lenders that are willing to work with me in the future to maintain my client relationship.....and not steal it. I would like a win/win with the big boys but they want the deal and then want to push us aside and away.
  • Angela Wong-Liao, Invis Inc | 23 Sep 2011, 10:50 AM Agree 0
    I am a big fan of Scotiabank because I have invested 28 years of my financing life with them prior to becoming a mortgage professional in 2001. It is my pleasure seeing Scotiabank's growth and improvements over the past 10 years from the bottom of the list to no 1 lender in the mortgage broker channel. I notice that Scotiabank offers competitive pricing to their clients at renewal time and they do not charge a renewal fee. Yes, it is very difficult to switch out a Scotiabank mortgage to another lender at renewal time. I am more successful in refinancing versus switch.
  • Calgary Broker | 23 Sep 2011, 01:54 PM Agree 0
    I just switched an RBC client at renewal. I have the RBC offer renewal statement and it's not posted rate as Dennis alluded to. It is a discounted rate. Though still not as low as 3.39%. However, I know if the branch want to fight it they will match 3.39%.
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