Beating tougher regulations

Tightened lending regulations have made life tougher for brokers in Canada, but those that have changed with the times are still writing good business.

“We have to battle for our share of A-business; we need to become more efficient, more productive, more nimble and creative, learn to live with what is likely permanently lower revenue per deal,” Ron Butler of Verico Butler Mortgage commented to MPA sister title Canadian Mortgage Professional.

“It's no fun but too many great people have worked too hard for too many years to abandon the A mortgage space to competitors now.”

Butler’s comments come on the heels of increased competition among the big Canadian banks for so-called ‘A-deals’, with several of them aggressively targeting customers with sub-3% five-year fixed rates. It has some brokers wondering how to compete.

“We’re seeing more and more brokers exiting the A-market; I’m seeing more private [lenders] out there, more B-lenders and the banks are killing us in the A-space,” Joe Walsh of Dominion Lending Centres Bedrock Financial Group Inc. said.

“Banks have begun focusing more on their retail lending and if they wanted to they could blow us out of the water. They can undercut us and that’s a reality.”

But getting creative and taking on an advisory role will set brokers apart from their banking counterparts, said another industry player.

“Brokers spend a lot of time lamenting how difficult it is to get a mortgage, and how much harder they have to work to get a deal done now compared to before,” said commentator M. Robertson. “But isn’t that the whole point of a mortgage broker? To do the work so the client doesn’t have to?”