Not only is closing mortgage deals about to get harder, it’s also going to become more time-consuming than ever before, and that might cause part-time agents and brokers to jump ship.
Guideline B-20 is, among other things, going to make mortgage funding more cumbersome than it already is, and some believe anything less than full-time brokering will be insufficient.
Della Dwyer, an Invis mortgage broker and team lead, expects a significant increase in lender rejections, for which part-timers will be ill-equipped.
“You need to be up-to-date on all of your rules and keep fresh with what’s going on,” she said. “If a client doesn’t fit into the A side, you have to be able to understand how you can put them into a mortgage in an alternative way if it fits for them. A lot of part-time agents only know the A side, and I think they’re going to struggle.”
Dwyer claims to have a lot of experience working with part-timers, and says nine times out of 10 they leave the industry because of demands on their time.
“You have to be able to jump full-bore into this business if you want to survive,” she said. “They’re going to spend so much more time on every deal; they need the time and stamina, and wherewithal, to do the research this job requires and go back to their regular job.”
Principal Broker of CLN Mortgages Raj Babber expects conditions so tight that lenders will only work with agents and brokers they know—most of whom, invariably, are full-timers.
“It will be tougher to do deals, and some of these individuals will have to look to the alternative side, which will only have so much capital to lend out,” said Babber. “To access these lenders, you’ll have to build relationships, which is harder to do when you’re only part-time. Lenders will be worried about reduction in volume, so they’ll want to keep efficiency up if they’re going to be profitable.”
He also says the FSCO licence fee hike will dissuade part-time agents.
“The pending increase in fees might mean that part-timers won’t have an appetite to stay in the business.”
Part-time mortgage agent David Hanson of mortgageoutlet.ca is well ahead of the game, though. His brokerage is already strengthening its lender relationships in the A-minus and B channels, and Hanson sees opportunity, not impairment.
“Roughly two-thirds of mortgages go through big banks, and a lot of people who are going to be affected by B-20 are still going to have a need they’ll need a solution for,” he said. “There are lot of lenders out there who are not affected by B-20. At our brokerage, we already have an excellent list of credit unions we’ve worked with, and we’ve put more time and energy into expanding that list because we see demand growing there.”
Collin Bruce of Collin Bruce Mortgage Team agrees with that assessment, because the confusion created by the rule changes have strengthened, not diminished, the need for mortgage brokers and agents.
“I do not believe the new B-20 rules are going to push part time brokers out of the industry,” said Bruce.
“As a broker, if you have survived the last few years with all of these changes, you should be able to get through anything.”
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