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Mortgage Broker News | 06 May 2014, 07:54 AM Agree 0
The Royal Bank of Canada is taking a page from auto dealers by offering “employee pricing” to home buyers, reports The Financial Post.
  • David Skinner | 06 May 2014, 11:40 AM Agree 0
    Would love to know how good Employee Based Pricing really is. Is it just a different name for Rate Discounting? With broker based commission, can the RBoC rates be beaten?
  • Steve | 06 May 2014, 12:17 PM Agree 0
    most employee rates at the banks are based on a tiered system with respect to their salary multiplied by 2 or 3 or 4 times and so on. I can't see that working in the high priced markets like Toronto and Vancouver. Just another gimmick like the RBC knock a 1/2 % off your line of credit. Everyone is doing it at prime +.50 anyway.
  • George Christopoulos | 06 May 2014, 12:33 PM Agree 0
    Employee mortgages disappeared a long time ago at major banks , rates are better on the open market.
    Spin doctors doing their thing
  • Jacquie | 06 May 2014, 12:52 PM Agree 0
    Just a RBC trick to entice people that don't know the employee mortgages disappeared years ago, sounds like a great deal if the staff get it right? can get the best rates with the broker channel.
  • Catherine | 06 May 2014, 01:04 PM Agree 0
    Weren't these bank staff mortgage rates a taxable benefit with a clawback should the staff member end employment before maturity?
  • James | 06 May 2014, 01:04 PM Agree 0
    Quite humorous since the original "employee discount" mortgage products through most institutions tend to be a taxable benefit ...
  • Ron Butler | 06 May 2014, 01:08 PM Agree 0
    This is a very simple promotion: 2.99% Five Year and 2.79% Four Year. Regular (all the frills) RBC product with a 120 hold for purchases. A better product than the BMO offering which has expired. In many ways a quite competitive quality offering.
  • Paul Hudson | 06 May 2014, 03:18 PM Agree 0
    When I worked at RBC "Employee Pricing" was actually higher than "Customer Pricing" so employees would always choose the customer rate sale instead. What kind of message does this convey to the public about how RBC views it's employees?
  • Bernie | 06 May 2014, 04:39 PM Agree 0
    In the '80's the employee program at one of the banks was (I forget which one) a portion of your mortgage which was equal to your salary would be 3% below the going rate. This was a taxable benefit.
  • anonRBC'r | 06 May 2014, 04:43 PM Agree 0
    There are no negative tax implications related to this offering at this time for employees. As Ron Butler indicated, this offering is far superior than that of BMO, and the rates are very competitive (if not better) to those rates in the broker market (save for "bought down" specials). Its an exceptional offering for those borrowers who are just not comfortable dealing with lenders other than a big bank.
  • Ron Butler | 06 May 2014, 04:59 PM Agree 0
    @ anonRBC'r, you are quite correct there is no tax implication "employee pricing" is just a marketing piece. Please know that mortgage brokers offer 2.89% 5 - year rate with banks every day and 2.94 5 - year and 2.77% 4 - year rate with a bank that actually has almost identical Canadian mortgage volume as RBC so please believe me brokers can offer a BETTER deal than RBC's employee pricing and do so all the time. That being said I am one broker who recognises RBC as a very worthy adversary. Possibly the toughest competition.
  • Catherine | 06 May 2014, 06:43 PM Agree 0
    @ Ron; yes but doesn't RBC cherry pick the clients?
  • Ron Butler | 06 May 2014, 06:52 PM Agree 0
    I am sure anyone who qualifies will get the deal, standard application process same as any broker would. Naturally some apps are turned down same as we would but RBC is spending $4 - $6 Million promoting this, it's not bait and switch. It's not force the client to buy insurance and open a checking account although it will likely be encouraged. RBC is not going to attract reputational risk by saying "no employee pricing" to a qualified applicant .
  • Jacquie | 06 May 2014, 06:53 PM Agree 0
    Brokers deal with mortgage business day to day and know our stuff, the banks have alot on their plates and not always up to date in the mortgage arena. Have had some A clients come from from RBC with declines and i have no idea why?
  • anonRBC'r | 06 May 2014, 07:50 PM Agree 0
    There's a lot of misinformation here. RBC, as with pretty well every "A" lender out there (save for a couple I won't name), do not cherry pick. If a client qualifies, they qualify. We don't have minimum beacon score requirements, or a net worth requirement, etc. @Ron Butler...I agree, there are always bigger and better rates out there, either through standard lender pricing or via individual brokers trying to capture market share. But this offering is not meant to be the biggest or the best. It's just a really good offering that is well suited for those borrowers who prefer to deal with a Big Bank as opposed to a monoline.
    @ Jacquie...your comments ring true when applied to any bank's branch personnel, but you're selling short the capabilities and knowledge that mortgage specialists possess. In regards to picking up clients declined by RBC or another bank, I think we can all share a story or two of how we were able to scoop those clients. (example: if a client applies for a mortgage with Scotia/TDCT and that client has a history of derogatory account activity, whether on a credit card, line of credit, or a standard chequing account held at that bank, the odds are they will
    be happens all the time).
  • Jacquie | 06 May 2014, 09:35 PM Agree 0
  • John B | 06 May 2014, 10:18 PM Agree 0
    I have, over the years, done deals for 3 RBC managers, 5 people from H.O. of the largest A bank we all deal with and countless employees of the other high street FI's.
    My biggest coup was doing a mortgage for a BNS senior guy, with his own employer.
    Employee pricing "Humbug", another name for a reasonable product.
    As a member of the broker community, I/we should not fear this type of offering. What we must fear more is the lack of compliance, at branch level, that allows them to get deals funded that the insurers will not look at twice, if it comes via a monoline.
  • Paul Hudson | 07 May 2014, 12:12 AM Agree 0
    Agreed John B. From past experience working at a branch, in many cases branch employees are given a lending limit, responsible for their own due diligence and not required to keep copies of income or down payment verification on file. What ever is typed into the comments screen by the branch staff member is considered 100% verified (whether is actually is or not). I'm not sure why the OSFI lets the branches get away with this. It's certainly not an even playing field nor in the public interest.
  • anonRBC'r | 07 May 2014, 07:51 AM Agree 0
    Sorry to hijack the thread, but again there is much that is misunderstood. @ John B...getting deals funded at the branch level has little to do with a lack of compliance, rather the fact that banks are simply more receptive to looking at deals that monolines would traditionally poopoo. Our verification/documentation standards are no different from those in the broker world. (example, deals where downpayment could not be verified for a full 90 days are often times approved within the bank environment provided there are mitigating circumstances explaining the deficiency. Another big example is TDS/GDS being higher than guidelines. Banks will look at other reasons why a deal is considered "affordable" in spite of a 49% TDS. A third example is providing financing to a client with a lower score. All these issues paralyze a monoline's ability to "spin-off" the paper, which is why we still see policies like minimum beacon scores and tiered pricing based on LTV (especially on what would be traditional conventional deals). @Paul Hudson...while it is true we don't keep a traditional "paper trail" of documentation on file, I can assure you that every piece of relevant supporting documentation is imaged and stored digitally for reference (and audit). It is true once upon a time, branch networks were exploited (especially by the broker community) to obtain unsecured lines of credit and mortgages for clients who didn't "qualify" via traditional broker channels or didn't want to be placed with a "B" lender where they belonged. Usually these were obtained via the production and presentation of marginal documentation and in fairness and respect to the broker community, these deals were done with the full knowledge/complicity of the branch personnel, who was usually receiving a portion of a serious broker fee levied on the borrower. While this practice has not totally been eradicated, I can assure you this isn't 2005 anymore and that wild wild west attitude has been curtailed dramatically. With all respect to the banking community, this broad based fraud has also been dramatically reduced in the broker community, although anyone who has ever tried to write a mortgage in Brampton or Mississauga knows there are still many shady operators out there.
  • Walid Hammami | 10 May 2014, 11:51 PM Agree 0
    My wife works at RBC (10 years now), there was no such thing and she never heard about it.
    This is just another marketing gimmick. This one was borrowed from the auto industry.
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