It may be the end of a very lucrative era for brokers using TD. But for one high-volume broker, in particular, it’s the loss of a $400,000 shot in the arm, with the bank finally moving to bring its generous mortgage replacement policy in line with other lenders.
“It’s a sign of the times and I understand why they’ve done it,” said Gord Pipkey, owner of Verico Real Mortgage Services and No. 1 on this year’s CMP Top 50. “Still, the change is going to affect us more than it will most brokers because we do 40 per cent of our deals with TD and we’re one of their biggest brokers.”
Pipkey is bracing for revenue loss of $400K annually stemming from TD’s move last month to alter its commission on “replacement” mortgages. It means brokers arranging refinances with a minimum $20,000 increase for existing TD clients will no longer earn full commission on the entire replacement mortgage, but just the bump-up.
TD’s decision to close that loophole brings it in line with the overwhelming majority of broker channel lenders. It also represents the loss of what Pipkey terms “easy money” for brokers, already grappling with a slower real estate market. Refinances have helped to fill the gap, although for brokers sending a significant percentage of their deals to TD, the bank’s decision may further compromise their bottom lines.
Still, Pipkey, who did $263 million in funded volume last year, isn’t dwelling on the loss.
“I’m a mature broker, who understands economics and the current environment,” he said. “TD’s decision reflects a tightening market. It’s only equitable.”
It’s unclear what if any affect the move will have on the big bank’s appeal with mortgage professionals, although at least one agent is suggesting the bank has now increased the willingness of brokers to move clients for refinances that would otherwise have stayed at TD.