Are you doing enough to keep your clients from leaving you for a bank? How about for another broker?
With rates increasing and the mortgage landscape changing, clients are approaching brokers looking to better their past experience –not with a bank, but another broker.
“A lot of deals come to me from other brokers who had put them into a product and then disappeared,” Kevin Crigger of Mortgage Alliance told MortgageBrokerNews.ca. “You can’t just put clients in a product and let them go – a product from two years ago may not work today.”
The problem, according to Crigger, is that these brokers lack the experience to provide the advice needed to properly choose mortgage products in a market now in flux.
“There are a huge number of brokers in the market and we’ve had a great market to work in, recently,” Crigger said. “My concern is that as rates come up, we really have to be in a position to provide proactive insight; some brokers may not be experienced enough to provide that kind of advice.”
Meanwhile, other industry players are benefiting from a surge in the number of homeowners looking for switches because their original mortgage advisor failed to fully explain the limitations attached to their loans.
“The biggest thing is the whole collateral mortgage: he didn’t know he was in a collateral mortgage and he wanted to switch from a variable to a fixed and he was forced to pay penalties,” said Chris Rempel of True North Mortgage about one particular client.
And this case wasn’t the first – or presumably last – of its kind.
“We’ve had a lot of clients come over from TD who had no idea they were in a collateral mortgage and a lot of these are coming up for renewals and they’re coming to us to renew their mortgage and to get a regular mortgage,” Rempel said. “It comes up for renewal with TD and they come to us and we have to inform them that it’s a collateral mortgage and they have to pay legal fees to get out of it. We’ve had a couple with ING, HSBC as well.”
Again, the issue comes down to a lack of communication and, perhaps, ignorance.
“When the client is getting the mortgage, they aren’t understanding what a collateral mortgage is and the banker isn’t having that conversation with the client,” Rempel said. “They may not even know themselves; so we’re having a lot of the conversations (that the original mortgage professional should have had).”