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Mortgage Broker News | 01 Dec 2009, 12:00 AM Agree 0
There are still only two Canadian lenders offering the trailer fee option, but that doesn't mean it's not being talked about. CMP checks in with brokers to see what they like and dislike about this form of payment
  • Victor | 11 Dec 2009, 01:49 AM Agree 0
    I think there seems to be far too much of a live for today mentality in our industry. Thinking that they make as much money today as one can and wow I am so great EGO's. where as a financial planner first I am just boggled that more mortgage associates don't understand the positive potential that belies these Trailer fees. Counting on RRSP's that as we the Baby boomers retire will inevitably be treated the same way as capital gain tax system and will be taxed separately and thus harder as we all take them out. The trailer fee is an income that will come as long as the customer still pays their mortgage. Think long and hard and take it upon yourself to have the Authority to seek win win for both yourself and your clients. don't just give your business to a lender that won't forward that business back to you. You need to make sure there is enough income or savings in your kitty to survive your life. Have you ever heard of a poverty stricken retired insurance agent??
  • Jo | 11 Dec 2009, 06:50 AM Agree 0
    Any mortgage broker not supporting trailer fee lenders is very short sighted. If we send our deals to merix, macquarie, and various white labels hopefully other lenders will be forced to offer similar programs. Why are brokers sending banks (competition) all the business only to have banks renew 90% of these clients? It just does not make sense, and brokers/lenders need to recognize this trend and start making changes - our business and future depend on it. If lenders want to get more business (and stay in business - unlike Abode) then they need to truly partner with brokers and pay on renewals.
  • Jerry Rose(Verico Allendale) | 15 Dec 2009, 02:14 AM Agree 0
    I fully agree with The comment that all brokers should start sending the bulk of their business to the lenders offering trailor fees or at least avoid sending deals to chartered banks.The banks renew 90% of their mortgages and in the BNS and TD require the borrower to attend one of their branches.I urge all brokers to try and use lenders that source all their business from brokers and try and stay away from chartered banks.
  • tom | 15 Dec 2009, 07:18 AM Agree 0
    Lender's are not stupid and there is no free lunch. If you do a PV analysis, you will find that it is more advantageous to take the money up front.
  • tom | 15 Dec 2009, 07:23 AM Agree 0
    Lender's are not stupid and there is no free lunch. If you do a PV analysis, you will find that it is either more advantageous to take the money up front or the amount is the same. There are also issues as to the value of the goods you recieve ala the Merix model versus the dollar amount represented by the trailer fee. Also, what happens if the lender goes out of business. You have lost all your future earnings. Take the money and run!
  • victor | 15 Dec 2009, 10:29 AM Agree 0
    PV should also be calculated as income per hour of effort. With a secured mortgage (even when they are conventional) there is absolutely no risk of the mortgage company not paying out the entire trailer till it's completion. Before the first cycle of renewal you are ahead of any volume bonus and with any competent financial adviser on your side,your re-invested trailer income will inadvertently grow. unlike volume bonuses that are almost always spent immediately.
  • Jason | 15 Dec 2009, 05:55 PM Agree 0
    If another major lender (firstline, 1stNat, Scotia, MCAP, etc) were to offer trailer fees (or at least payment on renewal) they would probably double their funded volumes within a year and have higher mortgage retention overall. It's crazy that only two lenders are offering this right now when this is the FUTURE!! To all you lenders out there.. get on board before it's too late!!
  • No for Now | 17 Dec 2009, 06:44 AM Agree 0
    Can companies like Merix really compare themselves to the big banks? How long has Merix been in existence for? If it weren't for the mortgage insurers propping these companies up they could go under at any time and in a blink of an eye. If they do, then what would happen to the trailer fees they committed to?
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