Financial Corporation announced the launch of its new Street Loyalty Program to encourage renewal business with brokers by offering two compensation models, including trailer fees.
“We believe that the strategic alignment with mortgage brokers on their renewing business demonstrates our commitment to our broker clients,” said Paul Grewal, Street Capital president. “It’s a great way for brokers to create enterprise value by partnering with Street Capital.”
The first option is an upfront fee model: up to 110 bps for upfront compensation with 105 bps for a finder’s fee and 5 bps in Street Rewards. Then a 15-bps renewal fee starting at the renewal date and paid on every anniversary date afterward. Together this equals 185 bps over two terms.
The second option is the trailer fee model: up to 75 bps in upfront compensation with 70 bps for a finder’s fee and 5 bps in Street Rewards. Then 12.5 bps is paid on each anniversary date of the initial term, and a 15-bps renewal fee starts on the renewal date and paid on every anniversary date afterward. All together, this equals 200 bps over two terms.
Toronto mortgage agent Dianne Chafe of Oriana Financial Group of Canada Ltd. prefers the trailer fee model when all other lender attributes are equal for the client. “I like that trailer fees build you a book of business,” Chafe told MortgageBrokersNews.ca. “So at the end of the day, 10 years from now if I want to retire, I have a book of business that’s worth some money.”
Street Capital will be accepting applications for the new program starting Mon. Jan. 31.
CMP magazine is also introducing a Guide to Compensation in its upcoming 6.2 February issue that includes a story on how trailer fees work for a broker’s business.