Mono-lines are facing renewed calls to increase consumer advertising, a way of helping mortgage brokers sell to often skeptical clients – inclined to dismiss all non-banks as B lenders.
“Indeed, I think that there needs to be a push to educate consumers on just what a mono-line lender is,” Dustan Woodhouse, broker with Dominion Lending Centres Canadian Mortgage Experts on B.C.’s Lower Mainland, told MortgageBrokerNews.ca. “They are pretty much invisible to the consumer currently.
“The non-bank lenders do not do any significant advertising promoting the channel that brings them business or even of themselves. Thus in the minds of most consumers, when they hear names MCAP, Street, First National, etc., they lump them in with the heavily advertised local B lenders.”
That lack of clarity makes it harder for brokers focused on A deals to sell clients on mono-line lending as a legitimate and safe alternative to TD, Scotia and National Bank, but also the big banks working outside the broker channel, said Woodhouse, one of this year’s CMP Top 50.
Ostensibly, advertising targeting consumers would help to better position mono-lines as an alternative to the Big Six and help distance them from the alternative lenders in this country, still grappling with fallout from the American real estate crisis and the subprime lending that led to it.
“I would like to see the public narrative surrounding brokers shift from ‘bad credit, weak income, bank said no?’ to ‘excellent credit, strong portfolio, solid career or business of your own?’” said Woodhouse. “I understand that as brokers we control how we advertise ourselves, but the catch there is that the lucrative and competitive world of B lending has a wealth of advertising by the actual B lenders themselves and independent brokers tend to be associated with those sorts of advertisements as we are clearly not associated with any of the big bank adverts.”
For mono-lines, increasingly squeezed by tight margins, advertising campaigns vary from institution to institution, but generally focus on reaching out to brokers rather than their clients. Mortgage professionals are themselves viewed as an advertising vehicle.
While consumer advertising around the AMP designation has helped to lift the veil off of the industry, high-profile, aggressive campaigns by large broker networks are increasingly credited with elevating consumer awareness of the channel.
As a DLC broker, Woodhouse has likely benefited from that growing public awareness courtesy of the Don Cherry campaign, still a direct appeal by mono-lines would only strengthen industry credibility and counter negative perceptions about its lenders.
“I see a need for more editorial and public discourse about why a AAA client should still be seeking the services of a broker,” he told MortgageBrokerNews.ca. “It would also be good to see some education on non-bank lenders that actually names the companies and details some history and answers the client’s biggest question – what if they go out of business?”
That can only help, said another B.C. veteran of the industry, although the increasing emphasis on rates has generally helped to level the playing field for big name banks and little-known non-banks.
“There’s only benefit to a mono-line advertising campaign,” Alma Pasic, director of mortgage solutions at Verico AM Financial, told MortgageBrokerNews.ca “There is no downside.”