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Mortgage Broker News | 09 Aug 2011, 08:00 AM Agree 0
Broker channel lenders are increasingly taking a page out of the banks’ book, says brokers concerned about the growing difficulty in switching clients out of their mortgages as monolines ramp-up retention efforts.
  • Jim | 10 Aug 2011, 01:51 AM Agree 0
    This is not an issue as lenders currently renew 88% of the mortgages upon maturity anyways. If a broker is now relying on renewals for income, they are in trouble. Might as well leave the business now as this is only going to get worse for marginal brokers.
  • @kiltedbroker | 10 Aug 2011, 02:12 AM Agree 0
    I wonder if the loyalty programs that some of the lenders institute are worth looking at? I know Street Capital has a program that will pay out a small commission if they are successful in renewing the clients mortgage after the initial term. Honestly I have never thought of this as an option, but it might be something to look at. Curious what other brokers think about this?
  • Peter | 10 Aug 2011, 02:12 AM Agree 0
    This isn't new to our industry. All lenders are trying to keep their clients as long as possible. They are after all, running a business. Instead of relying on renewals I'm relying on that 88% retention rate to pay my trailer fees.
  • Peter | 10 Aug 2011, 02:21 AM Agree 0
    @Kiltedbroker-I've been getting paid Trailer fees on my business with Merix for 5 years now. I have 12k in trailer fees without having to lift a finger. Hey if they're going to get paid so should I
  • Laurel | 10 Aug 2011, 02:47 AM Agree 0
    @kiltedbroker Doesn't Street Caps trailer fee program have a sale clause?
  • Vic | 10 Aug 2011, 03:05 AM Agree 0
    I agree with Greg Williamson. We have to be more diligent in supporting our lender partners. Especially when it comes to efficiency. We must try to complete a deal with a lender once we send it there. Jumping somewhere else with the deal at the last moment doesn't help efficiency and funding ratios. Also a move to trailer fees is what will help all brokers in the long run. As Jim mentioned the renewal rate is 88% by lenders, give or take. I can't say my retention rate is anywhere near that percentage. If we went to trailer fees renewals would go from being the "cherry on top" to a significant portion of yearly business and beyond, whether it be for established brokers or newby's For those of you who are thinking it would be nice to have an income while you are on the beach in Jamaica, this is one way it is done.
  • Greg Williamson, founder of http://www.180DegreesA | 10 Aug 2011, 01:28 PM Agree 0
    Vic, thanks for the support. I think when we focus too much attention on renewal business and whether there is a trailer fee model or not we are missing the bigger opportunity. I think most brokers focus a lions share of their time and effort on working their last client list. I think it is worthy to of course do that, however I think creating "New World" lead generation Strategies means I am building a big list of FUTURE clients I have not yet done business with. Why should we stop talking about trailer fees? Average duration of a mortgage in Canada is 3 and a bit years. Meaning most of your mortgages don't go full term. When I am continually impacting my existing clients, and I am worki g on getting new clients then full term renewals and trailer fees are too small for me to worry about.
  • @kiltedbroker | 11 Aug 2011, 06:52 AM Agree 0
    Hey Laurel, sorry for the late reply, but there are some refinance/switch clauses using Street, but the house can be sold without extra penalty. Not something I have done before.
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