Alternative lending trends

Narrator: [00:00:04] CMP Talk, the Canadian Mortgage Professional Podcast. This episode is presented in partnership with Alta West. Armando Diseri, head of National Mortgage Sales at Alta West Capital, joins us in the latest episode of Pitchfork to discuss the company's ambitious restructuring. What brokers can expect when engaging with Alta West and the trends in the alternative lending space that are likely to develop in the coming months.

Fergal: [00:00:45] Hello again. Thanks for joining us on another edition of CMP Talk. I'm Fergal McAlinden, news editor for Canadian Mortgage Professional. And today we'll be continuing our specialized lending series of podcasts, talking with some of the major lenders in Canada's mortgage space and what's been happening on their side of the industry. For today's episode, we're speaking with Alta West Capital's head of national mortgage sales, Armando Diseri, for an update on how things have been going at the company. Some of the main lending trends in recent months and what brokers need to keep top of mind in their choice of lender. Armando, many thanks for joining us today. How are things with you?

Armando: [00:01:20] Fantastic. And thank you for having me.

Fergal: [00:01:23] Thanks for coming on. I know that it's been a really eventful year so far in Canada's mortgage space. We often speak with brokers and mortgage professionals about how things have been going with them. But for this series, we're really focusing in on lenders and how the year's been going so far on their side. So give me a bit of a background on how things have been going at Alta West so far this year and some of the main things that you've been excited about.

Armando: [00:01:50] Well, yes, there's the first 100 days of the year. The first quarter is an exciting quarter. Volumes for just like other institutions out there have been through the roof for Alta West. And specifically, we've had the the biggest funding quarter in units and in dollars in the most in the past 30 years that Alta West has been in business. So it's been a fantastic growth story for us. Coupled with that, we've hired a new BDM for B.C. Territory, Tony Gueness. So we have Boots on the ground in B.C. and we're currently looking for an Alberta BDM as well. So we're just in the process of doing hiring somebody for Alberta. So and then operationally, we have hired in every department, we've hired new people to support the growth that we continue to see coming Alta West, Alta West Way. And on top of all that, we moved our head office. So so that was also after all this growth and change and so forth, we moved our head office once again to support our growth. And and and so we're very, very excited. Great location and everything is new and fresh for us.

Fergal: [00:03:23] So it's fair to say that it's been an eventful few months for the company. And I know myself from speaking with you and with Jared last year that the company underwent quite an ambitious restructuring in 2021, and that was something that really signaled its intention to continue growing and achieve some of that spectacular growth that you just mentioned. How have things been working out on that front since the restructuring?

Armando: [00:03:49] You know what? It's been fantastic. 2021 was also a great year. We've we've done a lot of things. We've increased our social media exposure. We've hired a marketing team. Now that that is specifically helping the business expand our exposure within the marketplace with our broker partners. Let them be aware of what Alta West has to offer. And so marketing has been a focal point in 2021 to really get out there, utilize the social media. Our mortgage minute has improved for those who have been receiving it twice a week. You've seen a dramatic change on how that looks and feels and the messaging that is getting across. And we're seeing that it's resonating with our broker partners right across the country, along with our marketing expansion and exposure. We've also enhanced our product suite and we've introduced our express product where we have very competitive rates. But also the lender fees is is a fee split with our broker partners, the submitting agent. So that has resonated very well with our broker partners and every province that we lend in. We've also expanded in B.C. and Alberta and the small town lending BC in Ontario. Sorry, we expanded our geographical reach as well. So we are now lending in small, small towns, urban suburban areas, but they're smaller towns. We've so we've seen that happen during the pandemic where people were moving to moving out of the GVA or GTA and just looking to move out of those areas and acquire properties. So we've expanded our geographical reach as well in those smaller towns and cities in those provinces. So with our underwriting team, we've added underwriters to additions to our underwriting team and to support the volumes that  Alta West is receiving and coupled with the improvement in our technology. We felt technology is paramount to get us to where we want to be and provide the service, the turnaround time that brokers expect. And we pride ourselves to get an answer back to our broker partners within four business hours. And part of that technology is not our CRM, but our connectivity with FI Logic's Velocity Lendesk, MX, three, BOS and FINMO and that just a nice flow through that goes from those platforms right into our CRM. And that just makes that that approval process experience efficient and quick, which our broker partners expect from Alta West.

Fergal: [00:07:00] And Armando. It's been such an eventful and busy couple of years in the industry and in the mortgage market on all sides. I mean, you mentioned the spectacular volumes that the Alta West has achieved during that time, but in the context of that success, it's quite easy to overlook or forget that there actually were a lot of sizable changes that were faced by, particularly by mortgage lenders. Throughout that time you had the transition to working from home, all the uncertainty about the market, interest rate questions tighten and guidelines and things like that. What were some of the main challenges that lenders faced throughout that time and out Alta West in particular? And how did you overcome those?

Armando: [00:07:43] Yeah, I think I think it's always about being connected with our broker partners. Let them aware of what we have available. You know, the fact during the during the pandemic, we're not able to to meet at conferences and go to offices and like how we done that. Traditionally that was challenging. So utilizing the technology that we have through Zoom calls and so forth, we try to continue that, that connection. And and that's one of the reasons why we really wanted to amp up our marketing team, because social media helped keep us top of mind with our broker partners. And, and, and so, you know, social media utilizing the technology, staying connected with our partners and let them know what we have to offer in those situations. I think that was one of the challenging things because let's face it, you know, if you're out of sight, out of mind, and we want to be we wanted to ensure that we were top of mind. And by utilizing the tools that we had, we were able to not only keep that relationship with our existing base, but we were able to expand our broker partner base and started receiving deals from brokers and agents that we've never dealt before. And it proven to be a successful venture for us.

Fergal: [00:09:20] And it seems that so many Canadians have gravitated towards the lending space over the past couple of years, and that's something that it looks like it's going to continue. Is that something that you would agree with? Do you think that this kind of surge towards lending is here for for the long haul?

Armando: [00:09:35] I absolutely I think as we see almost a half a million new immigrants coming into Canada, people who during the pandemic lost their jobs and decided to open up their own businesses. So we're seeing a huge influx of business for self people, new immigrants that now could not typically get qualified with traditional regulated institutions. Companies like ours can satisfy and bridge that gap so they can fix whatever that problem is. If it's documentation for income or they just need to establish some credit, we can bridge that gap for them. So then they can eventually go to a regulated institution, a bank or trust company. And I think that's just going to continue to grow as we see the population grow and the dynamics of how people are generating income in Canada, that is changing constantly. We're seeing people with two or three business lines or flows of income, and that's that's what we're seeing now. And that's going to be that's going to continue even post-pandemic, that that segment of the marketplace is just going to continue to grow. And that coupled with regulations with the regulated institutions. I think that's that is only going to bode well for companies like ours that can once again get that trickle down effect from the regulated institutions coming to us because they don't qualify for one reason or another.

Fergal: [00:11:27] One thing that I'm always interested in hearing from guests is what they're keeping top of mind throughout this year and anything that's kind of a priority for them going forward. Is there anything that you could identify for either you or Alta West, that's been your key priority so far this year?

Armando: [00:11:44] Well, yeah, there's a few things, you know, on a macro basis. There's that whole geopolitical issues that that is disrupting the marketplace. We have rising interest rates. That's are that is happening. And what what kind of pressure that's going to be putting on Canadians in general? You know, how far is is the Bank of Canada going to go in 2022 in terms of how many times they're going to raise interest rates? That's that's all going to play a factor in in in the in the real estate industry in general, in terms of Canadians mindset of either do I stay where I am or do I move up, or if I'm on the fence, is it going to push people to. So those are things that, you know, it's happening really fast. There's a lot of things that are going on. And of course, we have this pandemic that still hasn't totally gone away. So these are things that we have to keep in mind. You have to stay agile. You know, our business is very scalable. Where you move, we can move fairly quickly. I think interest rates are going to trend higher so as as the year progresses. And that's one of the things that we need to keep in top of mind. And everybody's going to have to address those. And it could compress margins. And lenders like us, we have to start trickling our rates higher because of just economic situation that, you know, we see it's happening and and something that we need to not only keep our broker partners aware of that this is happening, but they need to get their clients adjusted, that the market is changing and and it could affect their borrowing power down the road. So that's so and then of course, we need to stay competitive in pricing when all of this is happening. At the same time, we understand that we still need to be competitive in the marketplace. And and we feel that we will always have a product product suite that's going to be very competitive in our space. And we talked a little bit earlier about that sort of surge or swing of Canadians towards lending over the past couple of years and a rise in business for self and things like that. And obviously, that interest rate question that you mentioned is one that always comes up in all conversations about the industry. Are there any other trends in lending that you are keeping an eye out for in the next few months that you think the industry needs to be aware of? Well, I think I think, you know, obviously, the interest rates is a is a big thing. And we have a lot of the macro and geopolitical things that are going around the world. But when you bring it home to Canada, we're still seeing a lot of activity. And where the activity where we're seeing a big shift is Alberta. So what we're seeing is the an interesting dynamic where we're having people from Ontario and B.C. purchasing property in Alberta either to move or to buy rental properties. And, you know, with with oil being close to $100 a barrel, that's it's kind of the economy starting to pick up in Alberta. And for the longest time, commercial spaces, you know, there's been vacancy, high vacancy rates. So we're seeing companies moving IT departments. A lot of fintech companies opening up in Alberta because of cheap commercial space. And and you're seeing people gravitating to purchasing residential properties there either because they're moving there, because their companies moved there or they're moving there because just the affordability factor, because they can sell their house in Ontario for 1,000,002 and buy a house in Alberta for one half $1,000,000 or so. So you're seeing you're seeing that dynamic happening where there's there's more and more people just gravitating to Alberta because the prices have been depressed for a while.

Armando: [00:16:26] And I think right now what you're seeing is it's catching up and to the rest of the two provinces because there's just more people just looking there and saying, hey, I can get some really good value there. And the beauty for us is that we're lending in all three provinces and we're able to manage to finance those properties, even though if the customers in Ontario, they want to buy in, in Alberta, we can arrange the financing as long as the broker agent is either has a dual license or can get a Co-brokered with somebody in the province, we can get the deal done. And that's something that's that's been happening for the last few few months. We're seeing a big uptick in those type of transactions.

Fergal: [00:17:17] Okay. That'll be an interesting one to watch for sure. I wanted to change tack a little bit and just switch back to something that you mentioned before. And this is something that always strikes me whenever I'm speaking with Alta West is just the focus on brokers and the emphasis on mortgage brokers. And I was wondering if you could tell us a little bit more about some of the advancements all the Alta West has made in dealing with brokers in recent times or even this year?

Armando: [00:17:43] Yeah, dealing with brokers. So we have if we start with the submissions, like when we have brokers that submitted an application, they, they get notification right from from the submission of the application who the underwriter is right down to funding. So there's always that the brokers always kept abreast of where their file is in terms of the application process to funding. So we really put a huge emphasis on that and we have BDMs that are constantly following up and with those brokers. So that's all set up in our CRM where it gives BDMs reminders as well as the broker reminders on those particular files. So that's something that's really helped the brokers. And for us in terms of enhancing that closing ratio with those with those broker partners. The other thing that we're very proud of, we launched in in late 2020 our broker loyalty program. And it's been very, very successful. Our brokers love that. We have brokers by submitting applications to all to Alta West every quarter, they have an opportunity to make up the 15 basis points as a volume bonus every quarter on every dollar they fund, regardless of the product. If it's an express or flex, a small, small town cottage country product or multi product doesn't matter. They can earn up to 15 basis points on every dollar they fund every quarter, and all they have to do to qualify is submit a minimum of two deals. Every quarter. And. And then it graduates the based on the number of units you funded, you can make up to 15 basis points. So it's 5 to 15 basis points. So that is it's something that we just give back and we're giving back to our broker partners. We want to we want to recognize our broker partners that are loyal to us, that continue sending us deals. And coupled with the quarterly bonus, we have an annual bonus as well. So if the if any broker partners find 12 deals in a calendar year, that's basically one per month. They get an additional $1500 at the end of the year. And it's a nice, nice gift to receive after Christmas, for sure. Absolutely. Yeah, sure. It sure is. And then one and the other thing that we did is we introduced the podcast, The Modern Alternative, and it's something that we want to do we always wanted to do, and we felt it was a great opportunity to start. And there's basically what you want it to interview people within the industry to give us some insight on how they run their business, who they are, how they got into the mortgage business and share some best practices. And so that's something we've started. We have to we're going to be doing our third shortly, and we think that's going to be something that we're going to do on a month to month basis. And we got so far some very positive feedback on that. People really enjoyed that.

Fergal: [00:21:17] Okay. Fantastic. And Armando, is there anything for the brokers listening out there that you would encourage them to keep top of mind about dealing with all the Alta West or anything that you'd like to highlight?

Armando: [00:21:31] So one of the things that we pride ourselves on is it's all about communication, speed and and that's and transparency. You know, if you want to know our rates, it's not a guessing game. You can go to our website and you can see all our rates based on products. That's something that we take pride and there's no guessing when it comes to pricing. We show it's right there on our website at awcapital.ca But, you know, we everybody says, oh, we're quick, we're responsive. But I can honestly tell you, we've closed deals within 48 hours. Some there's some that we've closed. We were able to close within 24 hours. And in our business, we're seeing more and more of these situations where customers, they thought they had financing at a regulated institution and at the 11th hour, things fell apart. We can pick up the pieces and we can get that to the finish line for them, especially on purchases where it's with a builder and they're going to they not only have jeopardized their down their deposit that they made, they can lose that property that has appreciated because they bought that property two years ago and they're losing that capital appreciation. And builders are not giving extensions. We've saved a lot of scenarios. And I can tell you in the last 90 days how many of these situations we've come across where it's been a rush deal and we were able to we have we built a system that can accommodate that that that quickness we have right from our systems to our underwriters and the lawyers that we use that close our deals. They're very, very quick. They understand our business and it's all about speed and and not every deal is a rush deal. But when you do have those situations, you can you can rest assured that we can close those situations. If we have the appraisal and and documentation that we require to close, we can we can close very, very quickly.

Fergal: [00:23:57] So let me ask you this before we wrap things up, because this is something that it was whenever I was doing interviews for the top mortgage employers last year when I was speaking with anybody from the Alta West, it was on that list. One of the things that everybody said from the company was that the culture is one of its number one priorities and that it's so, so important to everybody who works at all the Alta West. Can you talk a little bit about that idea, just how it's developed and really why it's so important to the company?

Armando: [00:24:32] Yeah, culture is is is definitely paramount for the Alta West. You know, we always say there's three piece to a successful business. It's people process and product. We have the product. We think we have a very efficient process. Then it's the people and the really the people are the the ones that really make it all happen. And we have a team that is approachable, approachable, trustworthy, and they're focused at moving deals across the finish line. And they're there is this collaborative, collaborative process spirit within all to Alta West that we're all working together because it's it's that goal of helping people get through their homes if they need to purchase or refinance. That is the end goal. And I'll give you a little story. We launched last summer. We we had a corporate retreat and we were trying to determine the corporate why. And we broke up into six different groups. And this is from everybody, from finance to investor relations, operations, sales, underwriting, the whole team top down. And the underlining theme that everybody came back with was we we all love to help people. And and that resonated from the top, from our chairman of the board or CEO president all the way down is we always want to help. People. And this is not only helping people in the mortgage industry, our broker partners and our customers, but even outside and we talk about giving back with the broker loyalty program and so forth, we give back to communities. One of the things that Alta West does consistently is give back to communities. We support local charities. And one of the things that we've done is we started raising money to build homes in El Salvador and we've raised money to build homes. And there's a group of employees that will fly down to El Salvador and actually build homes for the underprivileged in these in El Salvador. And we take a great pride in doing that because we feel that we've been blessed with success in our company, but it's important to help others. And and that resonates right across the country from top down. And I think if we keep that spirit within Alta West of giving back, success will come to us as well. And and that's something that's an underlying theme with the company and the culture of our company. And we're going to continue to keep that spirit going.

Fergal: [00:27:43] All right. Perfect. Well, I think that's a great place to leave things. Armando, I want to thank you again for coming on today. Really great discussion, some fantastic insights and kind of a view into how things have been going so well with all the Alta West. All the best. And I'm sure we'll talk very soon.

Armando: [00:28:00] Sounds good. Thank you very much for having me.

Fergal: [00:28:04] Well, that's just about does it for today's edition of CMP Talk. We'd like to thank Alta West again for coming on to today's podcast. Thanks to you for listening at home. Make sure to stay tuned for even more great content from CMP in the near future and we'll see you next time.

Narrator: [00:28:21] Thank you for listening to this episode of CMP Talk. For more from Armando and the team at Alta West, visit them at awcapital.ca. That's awcapital.ca for more.