M3’s acquisition of Verico
on Thursday sent shockwaves throughout the mortgage industry, but insiders aren’t so quick to deprecate a move they consider a win-win for brokerage houses and consumers.
Verico CanWise Financial’s president dispelled speculation that the transaction set the wheels in motion for competition-stifling conglomeration. Instead, he described Verico’s acquisition as a boon for the mortgage industry.
“I think there are now two formidable groups having merged, which I think is healthy,” James Laird told MortgageBrokerNews.ca. “There was worry that a monopolistic position was starting to form and I think some will see it as relief that there will be different players continuing to compete for brokerages to be under their umbrella.”
As for industry-wide ramifications, mortgage agent Adma Maher believes only positives will emerge from the transaction.
“I believe that in this industry, as in any industry, you need big players — professional go-getters, people that are able to build their clientele and their business, and get their names out,” she said. “Everybody needs a mortgage, so number one: there are always enough mortgages to go around, and two, people should look at it as a good thing that our industry is getting stronger. This should be a motivator for other individuals to get to where Verico and M3 are.”
Maher pointed to tighter regulations and lending habits across the industry that will impact agents and brokers more than an acquisition involving industry monoliths.
“We all know today it’s getting tougher with lenders and there are more rules with insurers and banks getting tighter,” she continued. “I don’t find it difficult. It’s more challenging, for sure, but again, with challenges comes motivation.”
Usually when smaller brokerage houses are subsumed by larger ones, they benefit from a deeper pool of resources, which ultimately benefit the consumer.
“They have access to greater things and offer more products,” said Wasah Malik, a private lender with Mortgagepedia. “The bigger the brokerage, the better the rates they offer because of the volume of business.
You, as a customer, would get a better mortgage interest rate with banks. Customers get offered perks, too, but ultimately they will have access to enhanced products and rates.”
“When you have two big players, that’s going to make the company, and companies around them, stronger.”