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Mortgage Broker News | 15 Jul 2014, 09:38 AM Agree 0 will join forces with an influential channel player to launch a new brokerage, with several brokers arguing the move is a betrayal.
  • Blair Anderson | 15 Jul 2014, 12:32 PM Agree 0
    Looking for an online alternative to generate leads without participating in rate buy-downs? Promote your professionalism and leverage your social campaigns on It’s a model that consumers demand, and one which you can thrive in. Being part of a national community of mortgage industry thought leaders is the best way to not only keep up, but to pull ahead.

    All it costs is your time.
  • Michael Mullis, president, Mortgage Teacher | 15 Jul 2014, 12:32 PM Agree 0
    Well, we can all see that true North pays a ratehub good money for their leads, clearly… True North is all over all of the rates throughout the ratehub site… It would be interesting to hear what Dan at True North feels about this?… Will they keep putting the same budget in to Ratehub ?

    Also a good thought.. If great hub is going to hand leads out the same, then why would Laird move to a different a brand new brokerage, in fact ... Whole new brand.

    Jivan makes a good point, we as brokers have helped pay, and build a Ratehub "Brand".. Now that Brand is our competition.

    Will be interesting to see if the service stays the same to us paying brokers.
  • Slippery Slope | 15 Jul 2014, 12:53 PM Agree 0
    This should be no surprise. The obvious strategy of any direct to consumer approach (and a rate site is a direct to consumer approach by definition) is to disintermediate the middle man, namely the mortgage broker, and create a straighter line connection between online demand and manufacturing supply. This strategy necessarily inserts the "website and fulfillment center" as the new middleman.

    Brokers should not be surprised. They act as free and variable cost labor that is a useful surrogate until such time as the website hits critical mass and the economics support in-house processing and fulfillment.

    Amazon does not refer its book leads to Barnes & Noble. And iTunes doesn't farm out its online leads to H&M. Last I checked Netflix didn't enhance the business of Blockbuster.

    This would result in increased inefficiency, cost and extra layers that is counter to the "straighter line" mantra of any direct to consumer online strategy.

    The good news is that taken to its obvious conclusions rates sites will ultimately strive to teach consumers to "do it themselves directly" and in so doing sow the seeds of their own creative destruction as they develop a market large enough for the banks and mono-lines to simply keep and spend their fees financing their own "direct to consumer" online strategies.

    In the medium term they cannot win -they are merely a new middleman eventually ripe for disintermediation too - they are neither demand nor supply.

    Service and expert advice anyone?
  • Mark | 15 Jul 2014, 01:40 PM Agree 0
    This is fantastic news!!! All along we as brokers has a feeling that buying down rates is a sure way to shoot yourself in the foot and this model can not last. Since the onset of these rate sites it was obvious that the only brokers who are going to receive leads from these sites are those who are willing to work for practically nothing, buying down the rate to a bare minimum. They were counting on repeat business and servicing down the road. However, as it turns out, these customers don't value service all that much and are mostly concerned with rates, and so come renewal time once again the best rate wins. The existing broker obviously has learned a lesson from the first time that working for free does not compute, and so the second time around that broker is not willing to discount and the client goes away. This obviously lead to a serious decrease in brokers who are willing to purchase these leads from the rate sites, and so the rate sites have now been put in a position to start working harder and processing these mortgages themselves. They will also learn very soon that discounting rates to a bare minimum does not pay. As a matter of fact, even today, one can notice that their rates are not nearly as competitive as they used to be. I even started telling clients to go to these sites and compare their rate to mine. Let face it, if the model for these sites was so successful they would just continue on selling their leads, but there is obviously no one willing to purchase them anymore. TrueNorth is going to have to find alternate sources to make the bottom line work. Once again, to all the respectful brokers out there, don't sell yourself short. You are not an employee in a flee market, you are a business person, and respect yourself.
  • Farnsey | 15 Jul 2014, 01:41 PM Agree 0
    I'm thinking that there are plenty brokers that are grinning ear to ear about this turn of events.

    You know.. The ones are aren't rate whores lol
  • Ottawa Broker | 15 Jul 2014, 01:42 PM Agree 0
    I feel no pain for the brokers that use Rate Hub and are whining about what Rate Hub is doing by opening their own brokerage.
    in "my personal" opinion, rate sites are a lazy and quick way to obtain clients, but these clients "normally" do not have any allegiance to the broker that obtained the rate for them. So are these brokers whining because they took the easy route and paid for leads and now they may get fewer leads due to the new partnership Rate Hub is forming or are they mad that they may get dropped and have tom work to obtain clients????
  • Jivan Sanghera | 15 Jul 2014, 01:42 PM Agree 0
    Just to clarify my comment of building the beast was meant to say that as brokers we are driving down rates by reducing our commission in most cases to . I had not read the release from Rate hub but now understand that they will be buying leads the same way we do. Our Market does not have a barrier to entry the same way there is no barrier to us developing an aggregation site. I have been and will continue to use Ratehub.
  • Jivan Sanghera | 15 Jul 2014, 01:47 PM Agree 0
    also on being a rate "whore" i'm far from it. I realize that there is a cost of procurement for each client. with the ratehub leads it was simply a small buydown to stay with market rates. As a matter of them operating a successful brokerage more power to them. As I said i will analyze my position once they have actually launched. And consumers ARE using these sites. Its advertising, with a lower closing ratio then traditional referrals. For people who are only rate sensitive then they will flow to the lowest rate. No matter how good or bad the product is. It hasn't been bad for my business at all.
  • Ron | 15 Jul 2014, 02:06 PM Agree 0
    Michael, Dan has sold True North
  • Paul | 15 Jul 2014, 02:15 PM Agree 0

    "I had not read the release from Rate hub but now understand that they will be buying leads the same way we do. ........ I have been and will continue to use Ratehub."

    May want to dig deeper into that comment. How can this work? RateHub pays RateHub for leads, net result on their financials = a complete wash and paying $0 for leads. Not on the same playing field and not as "transparent" as they said they are being. This would be very concerning to me if I was to ever consider advertising on their site and believe most big, long term thinking brokers would agree.

  • Okanagan Broker | 15 Jul 2014, 02:15 PM Agree 0
    Love Farnsey's post...too funny!
  • Okanagan Broker | 15 Jul 2014, 02:15 PM Agree 0
    Love Farnsey's post...too funny!
  • Dave | 15 Jul 2014, 02:54 PM Agree 0
    Ratehub needs to make some changes to their system which has been taking forever. They charge $70 for preapproval leads that are junk. They don't allow brokers to put rate and product details on their offer page, therefore the broker gets more junk leads from clients who won't qualify for the rate product they 'think' they will be approved for. Top it off with this news of starting a brokerage and it just gets worse.
  • AnthonyC. | 15 Jul 2014, 03:06 PM Agree 0
    They corner the market online with rate discounting and then they pop this news on your history folks...that's a Standard Oil tactic...

    In essence, you are shooting yourself in the foot with continued support of this outfit...not only will you be paying them for the leads, you will be be subsidizing the operating costs of their brokerage division...

    The brokers who bail will hit their bottom line hard...and of course, by design, they will have to post as having the lowest discounted pricing to generate finder fee there goes their lead-generating income...

    My money is on Eisner to bail out first...

  • AnthonyC. | 15 Jul 2014, 03:11 PM Agree 0

    ...when did Eisner sell True North...?
  • Ron Butler | 15 Jul 2014, 04:27 PM Agree 0
    Just to be clear I am not "Ron" mentioned above nor I do not believe that Dan Eisner has sold a controlling interest in True North.

    As I read through many of these anonymous troll posts there is the usual recurring theme. Rate Sites bad, brokers who offer the public discounted rates are dumb and evil, hurting the "good" brokers who offer higher rates and brilliant mortgage plans and great fridge magnets; Yada, Yada.

    Heard this this all before about a thousand times.

    Simple fact: in the future more and more people will search the web for mortgage information and rates, the consumer will grow more educated about mortgage products and more informed about competitive rates. Lenders, brokers and all others will have to sharpen their pencils, work more efficiently and effectively and deliver what the consumer wants.

    The consumer will be the one who decides how they want their mortgages delivered to them: not brokers, not lenders and not rate sites. Whoever does the best job for the consumer will win their confidence and their business over the long haul.
  • Bill Nugent | 15 Jul 2014, 04:50 PM Agree 0
    Well said Mr. Butler
  • Ron | 15 Jul 2014, 05:04 PM Agree 0
    lol for the record I don't think buying down rates means you are working more efficiently than anyone else. I am actually insulted when a client expects me to work for nothing so they can get a better deal than the great deal Im already offering, so Im glad there are folks like you out there so they have some place to go. BTW I know a lot of brokers that just offer the best discounted rates and great service, no fridge magnets or yada yada
  • Ron Butler | 15 Jul 2014, 05:10 PM Agree 0
    @ Ron.............. what you said must be true, that is why you keep your name a secret.
  • George | 15 Jul 2014, 05:25 PM Agree 0
    Economics will always prevail. If they can make more money by processing mortgage applications rather than selling the leads, then they will. And so they should. For those of you whose business relies on these sites, you are in trouble. Good luck to Butler and Eisner. They will need it.
  • Ron | 15 Jul 2014, 05:44 PM Agree 0
    @ Ron Butler name is not a secret you can call me Mr Ron if you like. I guess when you buy down rates as a business model you believe everyone else is untrustworthy.
  • Ron | 15 Jul 2014, 05:44 PM Agree 0
    @ Ron Butler name is not a secret you can call me Mr Ron if you like. I guess when you buy down rates as a business model you believe everyone else is untrustworthy.
  • Ratey Mc Huberson | 15 Jul 2014, 05:58 PM Agree 0 you really think that if Rate Hub starts consuming a majority of the leads through their own affiliated brokerage (as some fear) that another, similar site (or several) won't pop up? If there is a demand for the service then there is a business opportunity for whoever is willing to build the next site. There certainly isn't anything groundbreaking about Rate Hub. Build website, attract brokers, advertise rates, dump money into SEO and Google adwords. Voila....Rate Hub 2.0 is born. What's happening to Rate Hub right now makes it abundantly clear that the strategy works....and that the momentum behind it is growing. Thinking that online origination, purchased leads and steeply discounted rates are going to magically disappear just makes you sound like someone who has their head in the sand. Brokers who share this mindset will very soon be the ones needing the luck going forward. As Ron Butler mentioned earlier, what you want or how you think the business should work is of very little importance in an open marketplace.
  • Ron Butler | 15 Jul 2014, 06:12 PM Agree 0
    @ Ratey..... Good point. There already are 5 other active rate sites operating in Ontario and more on the way.

    @ George ..... appreciate your good wishes.

    @ Mr. Ron .... I am not sure if that was a cogent sentence but at least we know exactly who you are now.
  • Ron | 15 Jul 2014, 06:31 PM Agree 0
    lol ..When you can't buy down rates any more you can try grammar school. If memory serves, my LA teacher had zero customer service skills.
  • Robert Stanfield | 15 Jul 2014, 06:43 PM Agree 0
    This site use to be good for "professional" conversations and comments, it has steadily gone downhill due to comments that are allowed to be posted by people not using their real name. I really hope will not permit comments to be posted if a person does not use their real name. I feel a lot of these postings are just to stir the pot by agents to unprofessional to use their real name. I may not agree with everything said on here, but I shouldn't attack the other person while hiding behind a fake name. At least Ron Butler doesn't hide. I may not always agree with him, but I respect him as a professional that uses his real name when posting a comment.
  • Jake Abramowicz | 15 Jul 2014, 07:01 PM Agree 0

    Our industry has gotten to the point where too many people spend too much time focusing on what other people are doing, and not doing enough to dedicate themselves to keeping and growing their slice of the pie. I've stopped caring a while ago and since then things have been fantastic. After 11 years I intend on accepting the changes that come our way, dealing with them productively and trying to better myself as an agent. Some good, some bad, but change brings opportunity.

    I will say though, anyone who would still support RateHub is short-sighted. The massive database, social media follow and potential conflict-of-interest they pose is huge, and you're doing yourself and the industry a disservice by competing within the game. Get off the train and focus on building a better business.

  • Paul | 15 Jul 2014, 07:39 PM Agree 0
    Just throwing something out there that isn't really being addressed....

    If I am a broker and advertising on this site. I am paying $50-$70 per lead, but am I paying $50-$70 per closed deal??

    Aren't closing ratios historically bad across these sites making the actual cost per closed deal exponentially higher??

    With rates being so aggressively tight and now I am broker paying $500, $1,000, maybe as high as $1,500 per closed deal, wouldn't that have a direct impact on my profit and how much I can buy that deal down to stay competitive vs all the other "rate whores?" True this is acceptable now, because all the other "whores" are on somewhat of an even playing field,..

    RateHub now also becomes part of the industry whore house but pays $0 per lead AND closed deal. Yes they said they will pay for the leads like everyone else, but I made a comment about this earlier as well....something along the lines of, out the front the back door (no in the backdoor pun intended as I am sure some brokers are feeling some pain there right now).

    Does that not just allow them to be much more competitive with their rates while still being more profitable in the long run?? Plus they are in direct control when they want to have the best rates being offered.

    All while already having a strong web presence that was and will continue to be built and paid for by their competitors.

    Not sure I have completely understood why brokers should continue to advertise there yet.
  • Jake Abramowicz | 15 Jul 2014, 08:57 PM Agree 0
    Their closing ratio is under 10%. So, doing the math, you're simply trying to get more and more people and hoping to market to them down the road. If 10 leads cost $500, and you can close 1/10, and on that one you're making 35 bps or $1500, then you're up $1000. BUT, to work those 9 leads will take up time, when you can be devoting to getting better business that may not suck you dry.

    Bottom line is this: some people pay for service, some don't. The mortgage pie is big enough for a lot of good agents & brokers out there.
  • Michael Mullis, president, Mortgage Teacher | 15 Jul 2014, 09:11 PM Agree 0
    Wow, great thread everyone, I leave for meetings and miss out on all of this...

    We currently use ratehub, and will continue to do so, yes this brokerage announcement will have us monitor it even closer, and perhaps we are not the biggest fans or rate sites but they can work. What everyone seems to be missing.. Ratehub is just a small portion and only 1 avenue to generate leads, whether its SEO, Social Media, advertising or even the old B2B network breakfast on a weekly morning (too early for me)... they all have their place, and all can produce leads. Yes the rate sites take a certain level of broker to be able to handle those "lowest rate" calls, and usually that broker needs to be seasoned, have volume and be able to convert those tire kickers, I mean, its the consumer searching for the rates, and as many of you agree, you can't control what they least they are finding brokers, and not banks.

    As for the professionalism we are witnessing not only on this thread, but across the industry...well @Robert Stanfield, you said it Perfectly.

    @ Ron Butler, again, you are just stating how it is, and not everyone agrees....BUT, thanks for taking the time to share your experiences on here, this is our broker forum, for all of us brokers to learn.... its not meant for us to agree.

    Good chatting with you all, and good on you all to even give a care :).

    Cheers.... and Keep it Classy Canada
  • Lior, Mortgage Edge | 16 Jul 2014, 10:57 AM Agree 0
    There's already a glut of rate comparison websites. What's the point in having 15 or 20 different websites? The rates will be the same across the board and lenders can easily make life more difficult by limiting the amount of buy downs that a broker can do. In fact some lenders have already put a limit in place. If the rate is lower at one site by one basis point then what you'll have are consumers pitting all the competing brokerages for one basis point. If you believe that this is an effective way to run a business all the power to you. But let's not confuse mediocrity with being at the forefront of technology because the two don't always mix. Just because you are choosing to be part of something that you believe is the future does not mean it is a smart long term business decision.

    The newer brokerages who are joining these rate websites are trying to avoid doing the hard work that it takes to build a successful business. Why cold call, door knock, network, and engage with your past clients when you can just sit at your desk, fire up your computer and wait for the leads to fall in your lap. After all, we are living in the 21st century right? Good for Ratehub for starting their brokerage. Why get paid $70 for a lead when they can close the most promising leads themselves and even with buying down the rate they can make a few hundred bucks? They already handle all the marketing, the SEO, the social media engagement, not the brokerages who advertise there, may as well leverage that and close the leads yourself.

    The online leads will continue to play a tiny part of the mortgage market. As my colleague Jake said the mortgage pie is big enough for everyone. Buying leads online is one strategy to get business but in my opinion not a very good one for most brokers unless you're willing to invest a lot of money buying leads and sorting through all the crap. I'd rather spend my time going after higher quality clients and that entails work that fewer people are prepared to do.
  • Jake Abramowicz | 16 Jul 2014, 11:22 AM Agree 0
    The next BEST thing will be a rate site that compares rate sites, Lior!

    And then a rate site that compares the rate site comparison rate sites.

  • Dave | 16 Jul 2014, 11:23 AM Agree 0
    @Jake.... its coming...
  • AnthonyC. | 16 Jul 2014, 11:31 AM Agree 0 Eisner is looking at legal options against Laird...the drama is only beginning to unfold...
  • Newer Agent | 16 Jul 2014, 11:38 AM Agree 0
    @Lior I think sometimes some of the more experienced brokers forget that newer people like myself are trying to build our book of business in a very different environment than when they built theirs. If I had a database a few thousand deep, I would undoubtedly look at things like Rate Hub and buying down rates as a plague on the industry as well. Reality is though (and this comes straight from the mouths of agents/brokers in my brokerage) that it's far more competitive out there now than it ever has been. Agents with 10-20 years experience in my brokerage are mostly down year over year.

    They tell stories of being able to beat the bank on rate almost 100% of the time in the good old days....mortgages practically falling from the sky. Ok...a bit of an exaggeration, but you get the picture. In super competitive times, relying on an existing book would be a dream. Many newer agents don't have this and I am of the opinion that nothing is more lucrative than a book....and I will grow that book no matter what I have to sacrifice in the early years because I know each client I add offers potential future business, referrals, etc.

    You might be inclined to conclude that these types of discount hunters are not the kind of clients one would want. I'm honestly not finding that at all. They are certainly more difficult to lock down in the question, but once I have an opportunity to work with them and take them through the entire process I end up winning them over on service, personality, etc. and even to my own surprise have been referred with the same frequency as other business sources.

    Call me a rate whore, call me lazy, call me whatever you need to in order to feel better. But until you decide to sign my paycheck, I will do whatever I have to in order to grow my business and my network of influence. I have bought down 15% of my business this year with most of that coming from rate sites like Rate Hub. I use these methods to supplement my growth so that I may one day have a book to rely on through good times and bad.

    Sidenote: Half the people complaining on here say Rate Hub is too much work for not enough pay. The other half say it is a lazy shortcut for slackers. How can it possibly be both?

  • Not using RateHub | 16 Jul 2014, 11:49 AM Agree 0
    I've never used RateHub, so I have never read the terms outlined in their broker agreement. Does RateHub retain the contact information of the leads they process, and will they be allowed to target these clients when they become a brokerage? If so, they will be starting off with a large list of clients and will fight to take away the very leads they provided to the agents who paid to use their service.
  • Scott Dawson | 16 Jul 2014, 12:01 PM Agree 0
    @ Jake Abramowicz
  • AnthonyC. | 16 Jul 2014, 12:04 PM Agree 0
    @Newer sidenote...

    My 15+ years in the business renders me to believe it can be both...there are no absolutes in this business...what works for one does not necessarily work for you will always have sides who differ in opinion.

    A rate site is analogous to have a nice shiny lure, you plunk it into the water and hope for a bite...and if you land a fish, you still have plenty of work to do before enjoying the catch....

    ...not that old school footwork and face-to-face selling practices doesn't have its fair share of challenges, but meeting person-to-person is far more rewarding both emotionally and financially...

    Don't worry about the book of business...keep on plugging away and it will come.

  • Ron Butler | 16 Jul 2014, 12:31 PM Agree 0
    @ AnthonyC......... While you are correct there are always going to be clients who want personal face to face service, there is a growing group of very good clients who simply want speed, efficiency and in their lives they do a huge amount of the business online.

    @ Newer Agent..... so many things you said are so true, this business has reached a new level of competitiveness for "A" mortgages and it will only get worse.

    @ Jake ....... you are actually quite right I expect to see a "site of sites" very soon, maybe the Trivago guy will do the commercials.

    @ Lior............ there is one thing online lead generation can do for a mortgage brokerage that is hard to achieve any other way: deliver the low rates consumers want and scale up a business without adding commissions agents.
  • race to the bottom | 16 Jul 2014, 01:08 PM Agree 0
    at the end of the day, banks, brokers and rate sites continue to affirm the most important thing is price. People don't care about service as much as rate, they don't care that you will call them three times a day or give them advice/stragtegy, they don't care that you will pay for the appraisal, if you won't the bank will and beat your rate, plus give them something else for free. The industry continues to move in this direction, the writing is on the wall. Prepare to work harder to make less money. Eventually the industry will move to just having brokers working for the banks or huge brokerages with an underwriting pit. Those people will be salaried or earning a small commission on each mortgage. The Race to the bottom is gaining more and more speed each day.
  • Ron Butler | 16 Jul 2014, 01:33 PM Agree 0
    @ race....... the lesson is technology drives better deals for consumers. No one can escape that fact.
  • Dave | 16 Jul 2014, 02:19 PM Agree 0
    @Jake... if the Trivago guy does a mortgage commercial we are the way, he said thanks for letting him sleep in your car last night....
  • Vince Gaetano | 17 Jul 2014, 11:59 AM Agree 0
    A number of very good posts by all the participants. Rate sites in their current and future form will be here to stay. The consumer wins and mortgage brokers will need to work harder and smarter. Embrace change.
  • Kent Farnsworth | 17 Jul 2014, 01:48 PM Agree 0
    For now anyway, I don't think that rate sites are much of a concern in my area. It's hard enough to get someone to see the value of a mortgage broker vs a bank let alone a rate site. Properties here in NB just aren't priced enough to make it worth discounting commissions. I guess you take the good with the bad. A 250k mortgage here is one heck of a great mortgage for us and there is no buying down the rate. We don't see too many deals above that, but then again, we're not constantly shopped to death by consumers that have been trolling rate sites.
  • Louann | 06 Jan 2015, 12:36 AM Agree 0
    I'm curious to find out what blog system you're using? I'm having some small security issues with my latest website and I would like to find something more safeguarded. Do you have any recommendations?
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