The results of CMP's 2nd annual Broker Sentiment Poll

The results of CMP's 2nd annual Broker Sentiment Poll

The results of CMP

The Broker Sentiment Poll puts out an open call to the Canadian broker community to participate in an online survey where comments are invited. This year CMP received more than 300 responses from brokers across the country.

When CMP conducted its inaugural Broker Sentiment Poll in early 2009, the results were overwhelmingly positive despite it being a period of uncertainty. This time around, the Canadian market is in a much stronger place than it was a year ago, and the results of our poll are a bit more reserved, with lingering economic concerns and renewed fears of the big banks taking aim at the brokers' share of borrowers.

In fact, one of the most surprising findings of this year's survey was the response to the question, "Do you think you might be leaving the brokering industry in the next 12 months?" Last year, 95 per cent said no, but this year, 49 per cent of respondents said yes - a sign that some brokers may still be feeling the pinch of the economic downturn or re-thinking their choice to be an independent businessperson.

"I haven't had any time off in over three years and no one to leave my files to. A salary at a bank and holiday and benefits is very attractive," said one B.C.-based broker.

Others pointed to increased competition from banks and the difficulty to stay independent as reasons to exit the brokering industry.

But enough with the not-so-good news. The above statistic aside, the results from this year's poll were far from full-out negative or discouraging to industry newcomers. Almost 50 per cent of respondents said they would be hiring new staff in the next year (only two per cent said they would reduce staff) and close to three-quarters of those polled said they would increase or keep their marketing budgets the same as they did in 2009.

Here are some more findings from this year's poll results.

Economic concerns
While last year's results showed brokers' main concern was fewer lenders operating through the broker channel, economic conditions took the lead in 2010 with 23 per cent of brokers listing it as their top worry.

"Middle-class, mid-paying jobs are eroding in our country and they are not being replaced," said Anthony Spadafora, an agent with Assured Mortgage Services in Burlington, Ont. "With the low rates, people are budgeting unrealistically, spending more than they make and not saving."

Don Stoddart, a broker with Mortgage Architects in Brampton, Ont., summed it up when he said economic conditions were the only thing not within his control as a business owner.

"If you run a good brokerage company, other issues will not be a concern," he said.

Although there were plenty of viewpoints on economic instability, more than half of those surveyed (55 per cent) said they don't think Canada is on the cusp of a housing bubble - a topic that's been debated in the press since the beginning of the year. For those respondents that did see a bubble forming, many of them said they think it's happening on a regional basis, particularly in urban centres where prices tend to fluctuate most.

After the recent federal government changes to mortgage-borrowing criteria, there were mixed views on whether the government was handling the economic situation properly. Just over one quarter of respondents gave the federal government a seven out of 10, while 35 per cent scored them five or lower.

"[The] changes set for April 19 are good, I feel, as long as lenders do not layer more conservative requirements on top of these," said Maury Lum, a Vancouver-based broker.

Ann Turner of Waterloo, Ont., was more critical. "Default rates are very low and Canadians do not think of homeownership like the Americans do nor do they take risks with their homes like they do, so why this sudden push to make homeownership more difficult?" she said.

Vittorio Oliverio, a Centum broker in Lethbridge, Alta., voiced a similar concern.

"The government announces buying back mortgages so more people can borrow, but then they put in restrictions so that less people qualify," he said.

Some respondents also questioned the big banks' motives in pushing for the federal government to impose the new mortgage rules when the institutions could have tightened the standards on an individual basis.

"The pressures [the banks] are trying to apply to the finance minister are nothing more than a disguised attempt to curtail the growth of mortgage brokers' market share," said Jim Solomon, a broker from Medicine Hat, Alta., while Ritchie Simpson of Charlottetown, P.E.I. said he thinks banks are "pushing back against the mortgage broker channel" due to a loss of branch-originated business in the past few years.

Next page: Thoughts on lenders and business strategy

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  • Gary Tagg 2010-04-09 5:31:57 AM
    The marked changed from 5% leaving to 49% leaving sounds like the survey is flawed. I find it hard to believe that almost half of the brokers in the country are considering throwing in the towel. The only way these numbers can be accurate is if these brokers are among those who are part time or who just don't write any business. It would be great if that type of broker did something that they could make a living at. It would be good to know if these were full time brokers who were surveyed.
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  • Professor Anon. 2010-04-16 2:30:25 AM
    Ann Turner of Waterloo makes the comment that Canadians don't take risks with their homes like Americans Do. While I am not a mortgage broker, I am a former American whose current income is in the top 4% of all Canadians. I am continually bewildered as I look around at my collegues (who make similar wages) as they purchase $400-600,000 dollar homes and $50,000+ vehicles (Lethbridge, Alberta). I fundementally can't understand how they make ends meet. While the rules and regulations may be different, there is plenty of evidence that Candians do take plenty of risks with their homes.
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  • Professor Anon 2010-04-16 2:35:51 AM
    While it may seem reasonable to some folks for a person with a six figure income to purchase such a house, I should also note that the individuals I observe also have designer clothes, multiple children, take huge vacations, and own large campers. The math doesn't add up. Frankly, a house in Lethbridge, Alberta should NEVER cost more than a house in Hawaii or a condo in downtown Chicago.
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