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Mortgage Broker News | 30 Jan 2013, 12:00 AM Agree 0
A credit union in B.C. is now fielding broker concerns about the “full-commission” renewals of a discontinued program – an offer that was nonetheless in play at the time of funding.
  • Ontario Broker | 31 Jan 2013, 06:34 AM Agree 0
    Trailer fees are only as good as the lender offering them. If the lender changes policy, closes down or is bought up, bye-bye TFs.
    The other issue with this is what lots of brokerages are finally discovering, they rely too heavily on one lender. FirstLine is gone, ING is gone & the list will get longer. Spread you business around. You might lose 10 bps on the volume bonus, the franchises won't like that because thats what they live on, but you have built relationships with other lenders. Business is built for the long run, not from deal to deal.Build your business on the false premise that trailer fees are forever & you build your busiess on sand.
  • Ted Jones | 31 Jan 2013, 07:55 AM Agree 0
    I placed $2.7 million with Northern Savings for the 12 months between 2009 and 2010 before they went through their reorganization and changed their underwriting. These files were funded with the knowledge that if I serviced the clients and if in their best interest were renewed, a trailer commission would be paid. I worked closely with my Northern clients to renew and in some cases early renew when it was in their best interest. The issue of renewals hit me this past year. I worked with one of my clients in March 2012 to negotiate a June renewal. No mention was made that a renewal fee was not forthcoming. I followed up for payment for 5 months to only hear in January 2013 that they stopped payments on renewal and have not been paying trailers since 2010. I received my last trailer in January 2012 on an early renewal that I negotiated in late 2011. I have never been advised of the termination of the program and from discussions I have had with other brokers who have also indicted that they too were not informed of changes. To be told now that I have to become a Tier 1 broker to get paid trailers on my previous files is an insult as I was a Tier 1 up until they made their changes. This is a sad example of brokers who try and build their business relationships with a lender to be only shoved aside without notice. I am so disappointed with Northern Savings.
  • Ted Jones | 31 Jan 2013, 09:24 AM Agree 0
    For the record, Northern Savings were promoting "NSCU pays full commissions on all renewals for Life of Mortgage" up to the August 6, 2010 Residential Mortgage Rate Sheet. The first time that the phrase was absent, was on their September 27, 2010 Rate Sheet.
    I understand that policies change, and that sometimes it is impossible to notify every broker who dealt with an organization, however Northern Saving's executives should implement a grandfathering of those files and pay renewal fees for the Life on the mortgages that were originated prior to September 27, 2010.
  • Chris | 31 Jan 2013, 11:22 AM Agree 0
    I placed many deals with Northern Savings in years past, and like others was shocked with the discontinuation of the renewal program. I loved dealing with Northern, but as they turned their eye to "A" business they simply were not competitive with rates or products, so I could no longer rely on them to meet my clients needs. Without competitive rates or products there was no way to retain "Tier One" status with Northern, but why should I/we be penalized for their change of business plan/model? Some sort of compensation should be provided for ALL deals originiated prior to the Sept 2010 date.
  • Michael Sjerven | 31 Jan 2013, 03:06 PM Agree 0
    I have a similar story as Ted in that I wanted to support this credit union as they were advertising 'full compensation on renewals'. Trailer fees and renewals fees are clearly where this industry is heading.
    Here's a quote from a letter I received on July 12, 2010.
    "Northern Savings Credit Union values your business and we look forward to a long-term relationship with you and your clients. We would like to take this opportunity to remind you that we offer an Annuity Program to all brokers. This means you can potentially earn commission on renewals in the same manner as a new deal.
    You have referred $1,976,406.05 in mortgages to us. If these mortgages are renewed with Northern Savings Credit Union you could potentially earn up to $17,787.65 ** in commission. *
    We will continue to send you semi-annual reminders, which outline your holdings with Northern Savings Credit Union. Please do not hesitate to call us for additional information regarding this exciting and profitable annuity program."
    It was clearly stated on rate sheets and commission statements that northsave would be paying on renewals, and I feel this lender needs to be held accountable. Brokers have real grounds to collect this money and what this credit union did is unacceptable. The next step may be to start discussing this as a collective group to resolve this matter.
  • kac | 01 Feb 2013, 05:21 AM Agree 0
    from 2005 to 2010 northern savings funded millions of dollars of mortgages to our clients and was the leader in the stated income product and as discussed offered renewal fee compensation on these mortgages,our commission in renewal according to Northern Savings was in the $100,000+ margin if all the mortgages were renewed.To date not one commission cheque has been received.I agree they are permitted to change their compensation level for new applications after the program ended however should have to honour their previous commitment as Mcquarie has done even after leaving the market place. Many of these stated income clients have also been issued demand letters on their mortgages for as little as being 1 to 2 months over due on property taxes as well which by their standard mortgage terms is allowable but rarely acted on in a tough real estate market. A credit union was taken to task not too long ago for charging pre payment penalties which were calculated incorrectly?
  • Jonathon | 01 Feb 2013, 05:24 AM Agree 0
    When I entered the broker world I understood that I need to work for the commissions that I earn, I say shame on those people who do not recognize or have forgotten that fact. It would appear this Credit Union used the word potential twice in that letter. The definition of potential is possible, as opposed to actual, capable of being or becoming. Having a letter that states I have the possibility of earning x dollars would not provide me with much comfort. If you are not going to take the time to keep in contact with your borrowers and more importantly your lenders then you are risking that potential commission. In this line of work we are the only ones that can be held accountable for our potential earnings, something I take very seriously and maybe others should too. I wonder if I will get as upset as you when I don’t win the Reader Digest grand prize, because based on the letter they sent me I have the potential to win $250,000
  • KS, Nanaimo | 01 Feb 2013, 07:17 AM Agree 0
    My last letter from NSCU dated July 9th, 2010 tells me I have referred over 10 million and can earn up to $95,000 in commission. I have been quite upset about this for some time. When I talked with the Manager a short time ago at NSCU he said that they had no legal contract with me but, if I was do do 5 million in new business they would reinstate my status. They pulled out of the Nanaimo market making it impossible for me to attain the 5 million. Like I trust them anyway....... Let's do something about it.
  • PO | 08 Feb 2013, 07:33 AM Agree 0
    Class action?
  • Paul Therien - CENTUM | 09 Feb 2013, 07:22 AM Agree 0
    I think it is important to note that there is a difference between Northern Saving Credit Union who uses the abbreviated name NorthSave and North Shore Credit Union who uses the moniker NSCU. They are not the same credit union.
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