Brokers: Time for mono-lines to eat refi fees

Brokers: Time for mono-lines to eat refi fees

Brokers: Time for mono-lines to eat refi fees

It’s increasingly apparent all mono-lines will have little choice but to cover legal and appraisal costs for refis, argue leading Toronto agents, billing it as essential to satisfying clients – now inundated with no-fee offers from the banks.

“One lender offered brokers an incentive to bring bank refi clients over to the broker channel,” Darin Bauer, with Mortgage Intelligence in Toronto, told “But I think the incentive has to be for the client, not the broker, because they’re already getting that offer from bank branches, which are covering their legal and appraisal costs. To draw business from the branches broker channel lenders have to match that.”

His analysis reflects that of a growing number of brokers, struggling to grow their refi portfolios in order to compensate for a weaker real estate market. Consumer interest, spurred by rock-bottom rates, has also played a part.

Still, renewed aggression at the bank branch level means that most are prepared to assume a client’s associated legal costs, including disbursements, said another Ontario agent,Sudip Adhikari, with CENTUM Gold Mortgages. As a result, brokers are opting to cover those costs themselves.

Both Bauer and Adhikari want to see that burden lifted from off the backs of brokers.

“It would be better overall if the mono-lines offered to cover those costs,” he said, identifying an average range of between $500 and $800. The bill is likely to be smaller for broker channel lenders, most, in fact, using title companies like FCT.

More and more clients are also expecting to see lenders cover appraisal fees, something many broker channel players have resisted, although several have made special offers specially focused on legal expenses.

Regularizing those offers would help to remove the obstacle brokers still face in selling mono-lines and other broker channel lenders to clients wary of corporate names outside the Big Five,” said Bauer.
“Aside from no-fee offers, mono-lines have to look at offering products that really set it apart from the banks,” he told “Brokers need that to better sell them to clients.”
  • common sense 2011-10-20 4:31:28 AM
    This isn't news
    Post a reply
  • MortgageFlex 2011-10-20 4:39:10 AM
    There is only so much money in profits. If the lenders start offering free legal fees, closing costs, and other fees, it ultimately comes out of our commission.

    I totally agree with Bauer who says, "mono-lines have to look at offering products that really set it apart from the banks".

    The product is what will make it easy for us to sell. If all we have is rate, then we will die by the rate.
    Post a reply
  • AB Mortgage Broker 2011-10-20 4:44:26 AM
    Oh my, now I have heard it all. First brokers buying down rates and now brokers paying for legals. If you find yourself doing either of the above, it's because your customer sees NO value in your service-you are a commodity! My office has NEVER had to pay legal fees, nor would we, and our clients simply don't ask. They see the value we offer and at the end understand there we be some costs they will have to absorb.

    Change the way you look at things, and the things you look at will change. Einstein said it best, "Insanity: doing the same thing over and over again and expecting different results". Time to change the way you do things and stop blaming others for not doing enough. Hold yourself as willing and able!

    Post a reply