It was out and now it’s back in. Xceed has returned to the broker channel after “suspending” originations through external mortgage professionals in January, the mono-line’s new strategy focused on befriending a select number of agents and brokers.
“We never doubted that Xceed needed to partner with the mortgage broker industry,” Gleb Ioussoufovitch, director of sales and marketing for the non-bank lender, told MortgageBrokerNews.ca last Friday. “But we wanted to be a good partner ourselves. We are now working with mortgage agents again, what we call ‘friends of Xceed.’ They’re called friends for a reason – they had very successful relations with Xceed before and it was based on that that we approached them to re-establish those relationships.”
Xceed quietly began reaching out to those agents and brokers about a month ago, more than seven months after it ceased using external brokers on Jan. 14, 2011 – its chairman, Ivan Wahl, citing the cost of originating insured mortgages through the channel, among other reasons for the decision.
The timing of this latest move is directly “correlated” to the company’s $1.7 million settlement with HSBC on August 21, Xceed Mortgage disposing of the bank’s claim that it allowed borrowers to refinance when, in fact, they should have ushered them on to foreclosure.
Under the terms of the deal with HSBC, Xceed agreed to make that lump sum payment without having to admit liability or wrongdoing. HSBC had alleged Xceed as an underwriter “breached prudent standards of mortgage administration and "was inconsistent with the standards that a prudent mortgage administrator would follow when managing mortgages for his or her own account and, in several cases, breached Xceed’s revised Collection Policies and Guidelines.”
Ostensibly, an end to that legal battle has now freed the company to focus on rebuilding its book, although Xceed continued to originate A mortgages through its internal sales force even after it closed the door to broker channel deals.
That door is now open.
“We have just under 50 individual agents now registered with us,” said Ioussoufovitch, pointing to individual agents the company dealt with before January 2011. “We are open to other mortgage agents contacting us, but we are very interested in knowing exactly who we are partnering with.”
It means the company will review each mortgage professional at a brokerage before registering the firm for business with Xceed. That business will be entirely focused on A deals and not subprime.
Xceed is hopeful it will continue to attract brokers with competitiver rates but also innovative product, like its green mortgage and new RRSP mortgage. While it offers a straight commission of 110 basis points on a five-year fixed and 90 bps on a three-year, it will not be awarding brokers volume bonuses, said Ioussoufovitch
The company, in fact, sustained a $1.7-million net loss in its third quarter, the result of that settlement with HSBC.