Private lending at work

It all started when Christine Xu couldn’t get a mortgage. She and her husband were self-employed at the time, and they couldn’t qualify for financing. She opened the trusty phone book to the ‘mortgage brokers’ section and found one who was able to help her and her husband buy their first home.

Xu had worked as one of the first Mandarinspeaking investment advisors in Toronto, but after her family began to grow, she was searching for a career change. It was something close to fate when she saw an ad in The Globe and Mail: “Mortgage broker wanted, no experience necessary!” She answered the ad, took the courses, and the rest was history.

Xu was named Alternative Lending Mortgage Broker of the Year at the Canadian Mortgage Awards in both 2015 and 2018, an accomplishment she’s incredibly proud of because she believes it speaks to the heart of what she does.

“The alternative broker [award] is the best award for the mortgage broker because we’re not trying to do something easy,” she says. “We’re not just giving people the best rate. We try to provide people with solutions – that’s what we do.”

When Xu immigrated to Canada from China 30 years ago, she initially spent most of her time in her new Chinese community, and she’s been an ardent supporter and community advocate ever since. Given her strong ties to that community, Xu has built a very large client base that’s geared toward people who need lots of help obtaining financing: those who don’t speak very much English, who are new immigrants and have very new or very weak credit, and who are newly self-employed.

Over the course of her career, her business evolved from the A side of lending to the B side in order to help clients who had difficulty qualifying for more traditional financing. Her client base also continues to evolve in other ways, such as moving from being solely residential borrowers to those interested in small commercial and multi-unit residential properties. Xu has had to grow and evolve along with them, learning new things along the way.

Going her own way

Like a true leader, Xu says the differentiator between her business and that of her competitors is the strength of her team. Over the years, she has built a solid support staff, some of whom have now been with her for a decade. She has also developed extensive training processes and support systems for new agents, who can then feel comfortable learning the ropes as they go while still providing borrowers with the best service and options available.

“I’ve heard from the industry that we have one of the best back-office supports,” Xu says. “Newer agents, if they don’t know the product too well, they can render each file to the office staff, who can get that file from the beginning to the end and get the file closed. The different approach I have [compared to] other brokerages is just having a strong back office.”

When the B side of Xu’s business grew to the point that the business she was closing on her own was comparable to that closed by entire brokerages, a colleague at Mortgage Architects urged her to go out on her own, which she did with a lot of trepidation.

“For the longest time, I was actually just a broker with assistants working for me and then later on, I become a team lead,” she says. “I still didn’t want to set up my own brokerage because I hate the admin side: administrative, compliance – I just hate that paperwork. I like to deal with clients and sales, and I like to deal with products.”

But two years ago, Xu took the suggestion to start her own business and founded Moneybroker Canada – although the first thing she did was hire someone to deal with the administrative tasks. In her new venture, she’s continued with a few tried-and-true practices while also exploring new opportunities. A lot of Xu’s business comes from referrals from past clients and real estate agents, but she continues to pursue traditional marketing strategies such as advertising in community newspapers – and while those ads have gotten smaller over the years, they still result in business.

Meeting the demand

This year, Xu tried something different altogether and launched Ready Capital Mortgage Investment Trust, a new mutual fund trust that’s solely for private mortgages. The anticipated annual minimum return is around 8.3%, but Xu says the annual return right now is close to 9.5%.

“It’s been doing great,” she says. “This is the eighth month, and we are past our first $10 million mark. Right now, we have over 120 investors.”

She adds that private lending is “something we’re going to be focusing on because with the mortgage regulations, it’s harder for people to qualify, so the private space is going to be much bigger and stronger. And I think with the new mutual fund trust, we’re well prepared for that.”

As the private lending space grows, Xu is not only well prepared, but well positioned to advise and help even more newcomers navigate an increasingly arduous mortgage process. Gone are the days when stated-income letters and no-money-down options were prevalent; the requirements are much stricter, and Xu is committed to helping her clients navigate the process in spite of the many difficulties they face.

“I think I’m so lucky I’m in the field and still learning every day,” she says. “That’s why I love to work, and that’s why I’ve been doing it for the past 20 years. I’m very lucky to be doing the things I love to do. And that’s why I’m doing well and enjoying it.”