Syndicated mortgages may still be relatively unknown, but leading player Fortress Real Developments hosted an informational conference Wednesday, focused on filling in the gaps and the opportunities for brokers and investors.

“It’s a way of subsidizing income and it’s a great opportunity for clients if it’s right for them,” said broker Elisseos Iriotakis, co-chief executive officer of Safebridge Financial, one many industry professionals in attendance in Toronto. “If risk is calculated and it’s the right product at the right time.”

The Fortress event, held on the Exhibition grounds, showcased a number of the projects taken up by the lender/equity partner. More generally, syndicated mortgage providers offer investors secured investments that pay brokers a return based on referral.

And Fortress Real Developments, through FDS Broker Services, is increasingly garnering interest from mortgage brokers who are looking to add more revenue generators to their business models.

“We started our (broker) business channel on June 1 and we’re already starting to see huge interest,” said Glenn May-Anderson, president of FDS. “We’ve already signed a national deal with Centum.”

For now, the biggest challenge may be educating the broker public about what syndicated mortgage investment can offer clients. Wednesday’s conferences are a step toward overcoming that.

“Once people come to the event, they’re all over it,” May-Anderson said. “Our mission is education, education, education... the product is far safer than anything else out there; people just need to find out about it.”

For his part, Iriotakis is still doing his due diligence, but is impressed.

“We just signed up and we’re very happy with what we’ve seen,” he said. “It looks like they have corralled a great management team.”

As for how he thinks other brokers will take to syndicated mortgages, Iriotakis sees them becoming a common addition to the sales arsenal.

“Absolutely, it will pick up with brokers, (especially) brokers with access to financial planning,” he said. “They just need to be careful not to marry the mortgage brokerage business with the syndicate business.”

  • Ron Butler 2013-09-19 10:53:09 AM
    I think the last sentence in this article is very important. "careful not to marry the mortgage brokerage business with the syndicate business"

    There are many fine people involved in this venture and I know several of them personally and all have sterling reputations and tremendous backgrounds but I think it is important to understand that this is not the "mortgage business". It is perfectly reasonable to refer clients to review this offering as an investment but I for one would want the client to understand that I am not trained, educated or licensed to comment on the nature of the investment (unless you are indeed licensed as a financial planner as well as a mortgage broker).

    I for one always believe that for the sake of our E & O insurance that we must carefully delineate what our jobs and limitations are. These offerings from Fortress, as far as I know, are investments and are sold as such. Most of us are not qualified for anything other than a simple "go and have a look" referral to our clients and nothing more.
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  • Vince Gaetano 2013-09-19 11:00:38 AM
    I would have to agree with Ron. Anytime referral fees are 700-800 basis points for referring these type of investment instruments, one must comprehend that the risk level is heightened to the investor.
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  • JERRY ROSE 2013-09-19 11:24:56 AM
    I agree with Ron.The yield offered to investors plus the referral fee paid to investors and the admin. fee charged by the syndicators make this type of investment far too risky for the average investor.I would urge all mortgage brokers to be extremely careful before refering clients to these syndicators.
    If things do go wrong it will severely damage not only the reputation of the referring broker but every one in The Mortgage Broker industry.Industry.
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