A lender increasingly considered Vancouver’s rate leader is addressing broker concerns around access – in a number of cases only being won through co-brokering.
“We do not limit the number of brokers we deal with to a specific number,” Kathy McGarrigle, COO for Coast Capital Savings, told MortgageBrokerNews.ca. ”We were recently inundated with deals – which is great – but it did mean that we weren’t adding additional brokers to our system to ensure that we maintained our service levels so brokers and their clients receive lending approvals in a timely fashion. That was an exception and not a rule. We encourage brokers that are interested in working with us to get in touch.”
They have tried and, in a number of cases, tried again without being able to gain status with the credit union. The financial institution’s aggressive rates strategy has been credited with reshaping mortgage lending on the Lower Mainland, with its fixed rate product, in particular, being offered at some of the most competitive rates in the country. Its “You’re the Boss” mortgage, launched in November last year, has galvanized consumer interest and left brokers scrambling to satisfy client demand for features like combination rates, no-charge skip-a-payment options and annual prepayment of up to 30 per cent of the principal.
Coast Capital sells that award-winning product through the broker channel – at the same rates offered through its branches and other sales channels. Still, mortgage professionals are now pointing to extended delays in getting approved to access them.
“My brokerage just recently got an agreement with Coast Capital after two years, I believe,” Michael Sjerven, a broker with Dominion Lending Centres - SmartyMortgage in Vancouver, told MortgageBrokerNews.ca. “Before that I was having to co-broker in order to get a deal in with Coast, which isn’t ideal not just because of the commission sharing, but because it creates another layer between the client and the lender. And the person dealing with the underwriter isn’t the one who is dealing with the client.”
Other brokers are offering the same kind of scenario.
“I gained access to Coast Capital through TMG,” Nima Zadrafi, with TMG The Mortgage Group in Vancouver, told MortgageBrokerNews.ca. “But if you’re a broker just starting out you’re not really getting in. It’s different from other lenders, where if the broker agrees to a minimum volume requirement, the lender will deal with you.”
The frustration is, in fact, mounting as rate wars between the banks and lenders using the broker channel continue to heat up. Access to Coast Capital’s rates has allowed many brokers to remain competitive in that key area at the same time they hawk the customer service benefits of a credit union.
Coast is now suggesting co-brokering as an option for brokers looking to access its lending. It’s also pointing to “several hundred or more” brokers it deals with, although it also identifies certain criteria. The broker must be in good standing with FICOM, be E&O insured and preferably “located and focus their business in Coast Capitals primary trade area,” said McGarrigle. Coast also prefers that “broker-referred customers live in close proximity to Coast Capital branch locations” and it considers the “size of the broker's firm and the effect their volumes might have on our service levels and resources.”
That last criterion is problematic, charge some brokers.
“If brokers have specific questions about how we can help their clients, we encourage them to get in touch with us through our broker centre, and we can discuss possible options for them such as co-brokering a deal,” said McGarrigle.
Credit unions across Vancouver are increasingly moving to adopt the practices of their bank competitors as their reputation and market share grow, charge some brokers. That higher profile -- Coast Capital Savings and rival Vancity claim a collective portfolio of $13 billion in mortgages -- may be encouraging them to focus on branch originations, effectively bypassing the broker channel.