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Mortgage Broker News | 13 Jul 2011, 09:00 AM Agree 0
A veteran brokerage head is defending the controversial practice of pooling mortgage volumes as a key weapon for an industry fighting to retain promising but unseasoned talent.
  • larry gwynne, mortgage agent, md financial corpora | 13 Jul 2011, 12:52 PM Agree 0
    in my opinion, i believe that every borrower who uses a mortgage agent or broker should be entitled to getting the best rate a lender has to offer, so if pooling allows every agent/broker to do this then the borrower is the benefactor and this is how it should be
  • Misc Broker / SW Ont | 14 Jul 2011, 03:34 AM Agree 0
    I cannot agree with Kevin enough !! Pooling is crap and distorts those who are sincere, long timers and in general real good people ! I have challenged three of my main lenders and questioned their ability to manage. During a contest last year one firm backed out as pooling was shunned on !! The more who do this - the worse it is ! The agents who are for the short time - get a job ! Keeper going Kevin ..
  • Ross Taylor from Mortgage Edge | 14 Jul 2011, 03:43 AM Agree 0
    I agree with Larry Gwynne's comment above. High volume producers can still distinguish their services in other ways - but the innocent consumer should not be looking at less than optimal terms depending on the efficiency or productivity of the broker agent they are dealing with.
  • New Agent in BC | 14 Jul 2011, 03:46 AM Agree 0
    I have to say coming into this industry 2 years ago i didn't have many options for submitting to a lender on my own. Merix was the only lender who would take me on without having previous experience. Because of this i've now funded 4 million with them and they will be my first option before any other lender who wouldn't give me the time of day. I think the issue is it's really the chicken before the egg. how can you expect me to give you good deals without you giving me the best service and rates from the start?
  • Ron Butler | 14 Jul 2011, 03:56 AM Agree 0
    I know Calum is one of the finest minds and one of the very top performers in this business. I completely understand the direction he is coming from; when you have personally built up a massive, loyal client base it seems strange that a newbie can simply piggyback of a huge group of medium producing agents funnelling business under one name to achieve best rate results.

    That being said the consumer does not care about these issues and as Larry pointed out don't we as an industry want more borrowers to get great rates from mortgage brokers. In the end it is the consumer who shapes trend in our business. We like to think we control our industry but in reality our customers do. All the consumer cares about is good advise and competitive rates and the consumer rules our business.
  • Bob W | 14 Jul 2011, 04:00 AM Agree 0
    With pooling comes other issues... I suspect it has become much harder for the lender to recognize those agents who are prone to submitting fraudulent or weak deals, as those agents have gone underground and are no longer front and center in the Lender's eyes!
  • Christopher | 14 Jul 2011, 04:02 AM Agree 0
    I find the practice of pooling a bit silly. Lenders should recognize the firm's volume, rather than individual agents.

    I believe clients are not served by favouring a particular lender due to volume bonuses or any other incentive. Even top performers would be hard pressed to meet top status if they were dealing with 20 or more lenders, which should be the case if the client's needs were the first priority when selecting a lender.
  • Jerry | 14 Jul 2011, 04:18 AM Agree 0
    There is no loyalty from lenders to brokers left in this business. So I agree lets pool, it doesn't matter that I have done a 100 million with one lender over the past 8 years. I'm only as good as my next deal. The majority of lenders have encouraged pooling. The lender has really reinforced or promoted the super broker model of pooling resources and aimed their volume bonuses, preferred rates at that model. As far as the part timers in this business, I don't think it's a good idea. It dilutes our industry and isn't really good for anyone. If you want to do this full time make the investment of time and money.
  • steve kates | 14 Jul 2011, 04:30 AM Agree 0
    why should the small broker receive volume bonus when we spend a lot of money on rent advertising and so on this has got to stop steve kates northwood mortgage
  • Layth Matthews | 14 Jul 2011, 04:30 AM Agree 0
    I agree with Ron Butler. What is the harm in pooling with efficiency ratios? It ties the cost of underwriting to the pricing. Just don't make it too tight or you will start losing support dear lenders.

    Also, Callum, we are not commission sales people, we are "Brokers" remember. Big difference. Nothing less than lender tamers. We take the usury out of the mortgage market. The bank job is to widen the profit margin, our job is to narrow it.
    Personally, I think the health of the Canadian Mortgage Brokerage industry (and being slow to the sub-prime party) is what has saved the Canadian housing market, so far.

    Let those loss leader's come. It is way too much money to lose money on for any length of time. Whenever a bank beats my lowest status rate, I think "wow, they are desperate, we must be doing a good job!"
  • John | 14 Jul 2011, 05:04 AM Agree 0
    I think that pooling within a brokerage is an acceptable practice, since the Broker of Record for each individual brokerage is, after all, responsible for all the files in his/her office. Therefore, the Broker/Owner and his entire staff should benefit from his/her collective performance. In addition, many small brokerages operate in a team environment --sharing resources, and often co-brokering files. To penalize brokerage firms operating in these team environments would end up hurting the entire industry; forcing brokers to compete with other brokers in their own office(s).

    By contrast, super-brokers and some national firms pooling all their agent's files to achieve status is not a responsible practice. This practice results in part-time brokers, working alone in markets with little to no supervision, having access to products they have not truly earned.
  • Kelly Rowe | 14 Jul 2011, 05:30 AM Agree 0
    I agree with John.
    After all, are we not trying to grow our industry. What better way than through the consistent knowledge from Joe public that you can ALWAYS get a better deal through a broker. I think we need to look at the big picture and the betterment for all, not just our individual selves.
  • Faye | 14 Jul 2011, 05:32 AM Agree 0
    I have always found it strange that a broker who signs with a super broekr that does one or two deals a year gets top tier pay and volume bonus. The lenders have encouraged this and it makes no sense. I have seen brokers that sell a product based solely on the income and VB - no consideration to the client all to get the Harley Davidson they can purchase with points. Again this is a mark on our industry.
    What is wrong with our industry is that nothing is standard. Splits are not standard, paying VB and receiving VB not standard, credit decision based on person submitting - not standard. Negotiating volume to a lender - not standard, and on and on. So I ask why should this be different?
  • A | 14 Jul 2011, 04:17 PM Agree 0
    What I hear is that we still disagree with everything, I pooling of files a hood thing? Why not the lenders determine what they want and this us want they want. I prefer what td does. The brokerage is the agent, the volume is based on the brokerage not individuals. Everybody can submit under there name. If the brokerage gets 25 bps than the agents gets that even if they submit only one deal. However if an agent submit more deals they may get get a lower rate aduch ad 30bps of their best rate. But the volume bonus is not increased. Why is this better? Td can than see what kind of deals each agent has sent in, by doing this they have at times contact the agent and helped them know that this kind of deal is not proper submitted and the bdm talks to the associate on individual bases and that does wonders for the associate. Td knows who sends the deal and that makes a different. They further reward the individual without sacrificing the brokerage status
  • len lane | 15 Jul 2011, 12:56 AM Agree 0
    This has another side to it over the last couple of years lenders have given status to brokers who haven't earned it to intice their business.I earned our status at our core lenders and share that with my team. So Status is really nothing when lenders give it out for free.
  • Another Broker | 15 Jul 2011, 02:38 AM Agree 0
    I believe that pooling has lead to brokers having to pay extremely high commission rates to a lot of sub par agents who really should not be in the business. Every agent should should have to stand on his own to earn income but the new generation of brokers hiring "bodies" and hoping business will come has lead to a much better experience for borrowers to talk to the girl behind the counter at your local bank branch. I see constant complaints from brokers in these articles with no blame put upon themselves. Our so called profession has been lowered to that of a used car salesman. The only thing the pooling benefits is the bank account of the broker. I think the faster agents realize that getting a piece of this cash and a more modest split will benefit them more. Also I thinks agents should realisticly take a hard look at their monthly fees to their brokers to operate. Another cash cow for the broker.
  • L. Rachlin | 15 Jul 2011, 05:09 AM Agree 0
    FSCO should wake up and face reality. Most brokers cannot supervise more than seven agents. The advent of super brokerage houses stymies a consumer's access to professionalism. It is totally unreasonable for any brokerage to have more than seven agents under one roof. A revision to the Act would level the playing field and require that all Agents become brokers within a reasonable time frame or lose their license. Pooling under these circumstances would not be necessary. It's time for the Ontario government to implement change buy promoting professionalism and eliminating an unfair access to funds provided by lending institutions.
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