One broker is asking whether or not smaller broker networks and brokerages will be challenged to compete against the clout of increasingly big players like DLC, now the proud owner of MCC.
One broker is asking whether or not smaller broker networks and brokerages will be challenged to compete against the clout of increasingly big players like DLC, now the proud owner of MCC.
“It's a great strategic move for DLC. It makes business sense,” Tamer Tarchichi, a broker with Homesster new homes and condos. “On the other hand, with clients chasing rates, what chance do small firms get when DLC has the negotiating power with all lenders?
When DLC announced the takeover of MCC on Thursday, it was the final act of CIBC’s departure from the broker channel, and one more major player falling within the orbit of a larger company.
Last year ING Direct was absorbed by Scotiabank, preceded by CIBC selling FirstLine and MCAN taking over XCeed. It was only a few months after the sale when Scotia announced ING would be leaving the broker channel in February.
The effect on the market, says Tarchichi, is that bigger will do better.
“What impact is expected to ripple in the market? Well, big brokerages will eventually dominate the mortgage industry and banks will resort to sub divisions to accommodate the change,” he told MortgageBrokerNews.ca.
When CIBC closed their brokering arm FirstLine in 2012, there were rumours that the bank was marketing MCC at the same time.
In the case of the Xceed takeover in April by MCAN, Xceed CEO Michael Jones felt that the
“MCAN and Xceed have synergies”, citing the takeover as a “complementary deal” that would almost guarantee Xceed remaining a viable alternative lender in the mortgage channel.
Gary Mauris, president of DLC, told MortgageBrokerNews.ca that he would be keeping MCC intact, valuing “what the MCC brand means to us.
“MCC runs a really, really, good group of quality owners,” Mauris said, “and we are very happy to have them on board.”
Karen Hoehn, a senior mortgage broker/owner with The Mortgage Centre – TMK Team, feels MCC will have an even brighter future with DLC.
“I have the utmost respect for Gary Mauris, and believe him to be an exemplary leader in our industry,” says Hoehn. “I couldn’t be happier that we have the power of DLC behind us. What Mortgage Centre was lacking has now been supplied and we will all be more empowered as a result.”
