A recent lender acquisition has renewed concerns that more amalgamation could be in store, and brokers fear it could be a big bank doing the buying.
It’s happened before and brokers fear it will happen again; banks, impressed by the technology and performance of broker channel lenders, acquiring those lenders and shutting players out.
“We all know there are a lot of changes taking place with the lenders and there are a lot of things up in the air,” George Macris of Dominion Lending Centres
Centre Ouest told MortgageBrokerNews.ca. “A lot of the monoline lenders are raising the bar in terms of service and rate and the banks lack that; if the banks could offer that same service (they would have a big advantage).”
According to one industry player, chatter among brokers is picking up steam that a big bank could be next to acquire a broker channel lender – and it wouldn’t be the first time.
“A lot of people are observing that the banks have purchased a number of lenders in the past,” Walid Hammami, a Montreal-based broker with Dominion Lending Centres told MortgageBrokerNews.ca. “What if (another bank) is making a move; that would be a big problem because nothing would stop subsequent banks from making similar acquisitions, which could eventually consume the industry.”
Hammami is noticing the more and more brokers discuss the possibility. He likens the potential result to Scotia
Bank’s acquisition of ING, which led to ING’s exit from the mortgage broker industry.
Of course, it’s all speculation at this point.
However, the industry has seen its fair share of lender acquisitions in the past; most recently with Home Trust
’s purchase of CFF Bank. That move will likely benefit brokers, with Home Trust beefing up its offerings. But a bank acquisition of that magnitude could mean one less option for industry players.