The value of agents and brokers is coming increasingly to the fore, says industry executive
An increasingly complex regulatory landscape in the Canadian mortgage space means that brokers and agents are playing a more important role than ever in helping find solutions for current and prospective homeowners, according to a prominent industry executive.
Veronica Love (pictured), senior vice president of corporate development at TMG The Mortgage Group, made the comments during a panel discussion on mortgage brokering hosted by the Financial Services Regulatory Authority of Ontario (FSRA) at its recent Exchange event in Toronto.
“We are the best solution for Canadian consumers, especially right now because thanks to the government and so many rule changes, it’s now so confusing to get into the mortgage space,” Love said. “[Borrowers] can rest assured and feel secure that mortgage brokers pivot very quickly.
“With every rule change, we lead the ongoing education as well… We’re constantly going through ongoing training and development, as are the lenders and suppliers as well.”
Big regulatory changes, such as new lending guidelines or qualification criteria, can have significant ramifications for the industry – not least on the technology side through the need to adjust backend software and mortgage processing systems, Love added.
Still, she said that the industry had proven its ability to shift gears and remain efficient through various rule changes and an evolving borrowing environment.
“Rest assured, this industry adapts well and consumers are going to lean on us more,” she said. “The numbers are proving that Canadians are valuing the support that mortgage brokers and agents give, now more than ever.
“We’ll take you through the complications, we’ll give you way more options than you’ve had in the past, and you’ll rest assured that we’ll find the right mortgage product for your needs.”
Activity in Canada’s housing market had already shot through the roof at the onset of the COVID-19 pandemic – and on November 26, 2020, the governor of the Bank of Canada delivered the words that seemed to light the touchpaper for further borrowing.https://t.co/zfaRyLFdGR
— Canadian Mortgage Professional Magazine (@CMPmagazine) February 3, 2023
Why a more complex market increases the need for brokers
Recent years have seen a plethora of new challenges for Canadians in the mortgage market, including a steeper stress test and affordability issues as a result of skyrocketing house prices and dwindling housing inventory.
Rising interest rates, meanwhile, have been an enormous hurdle for many borrowers who have seen their monthly payments shoot upwards over the past year, cutting into budgets that have already been stretched in many cases by inflation and cost-of-living crises.
Those obstacles only reinforce the strength of the service that mortgage professionals can provide, Love said, in helping clients navigate a difficult market.
“We not only want to make sure that the Canadian consumer is getting the right mortgage and the right product for that time in their life, but also we want to have a crystal ball and try and predict what’s going to happen in three years for them, in five years for them,” she said. “Whether they know it or not, we are thinking that way.
“But we also have to think about our lender partners and making sure it’s a suitable fit for the lender. Is that the client that they’re looking for? Is that a right product for their needs as well? We are constantly worried about suitability in every angle of the transaction, and our partners know it.”
A message for borrowers: just pick up the phone
A good mortgage broker, she added, will be more worried about efficiencies and suitability of arrangement for their client than about the amount of volume they manage to put together.
The economic challenges of the past year have prompted many Canadians to make an immediate decision on their mortgage without first consulting with an expert, Love said.
A better course of action would be to pick up the phone and run through the options available instead of making a knee-jerk move, in her view.
“Canadians are doing themselves no service by immediately calling their lender and automatically renewing without seeking advice,” she said.
“Regardless of lender and what type, the lenders are shocked at how their retention teams, who used to take one to three months to try and renew a client and offer them amazing rates and negotiate, now are just receiving phone calls where they’re saying, ‘Lock me in, I don’t care on rate,’ because they’re so freaked out by the media.”
Her message for borrowers? “Call your broker and ask for advice,” she said. “See what is suitable to you right now, what might work for you in six months, what might work for you in the next year – but have a plan and don’t just blindly lock in because the media is freaking you out.
“You might be doing yourself a worse favour than you would have if you called a broker and got proper advice.”
What advice are you providing to your clients about the mortgage market in 2023? Let us know in the comments section below.
