Building your business g n i r e t s Ma data mining Managing risk exposure Winter 2010 Tips and pointers targeting success How to t e k r a m y l e v i t crea PLUS: IMBA’s netwers! headquar on ti The assoctioa its moves in ity new facil PM40787580 Vol 3 Issue 4 Biz The Voice of the Mortgage Brokers and Agents of Ontario Canada’s FIRST Mobile Mortgage App! Bring your office wherever your business takes you. Available for SmartPhones and Tablets! ® MOBILE MORTGAGE OFFICE News Calculators R ates Lender Produc ts Filogix M or tgage Application BDM Direc tor y TRY IT TODAY! www.verico.mobi E-mail [email protected] or visit www.verico.ca or call 1-866-983-7426 to find out more. www.hometrust.ca www.hometrust.ca Think reverse mortgages are expensive? Think again! With CHIP Home Income Plan’s new low rates, homeowners 60+ can now access up to 40% of their home equity at rates comparable to other home equity lending products. But unlike these other products, with the CHIP solution: • no payments are required, until homeowners choose to move or sell • no income, credit or medical qualifications are needed • funds can be received as a lump sum or over time, giving your clients the flexibility they need Why not tap into the potential of the growing seniors market and recommend CHIP? You’ll receive a referral fee, and we’ll look after all the paperwork for you. To find out more, or to partner with CHIP, contact us: 1-866-536-2447 www.chipadvisor.ca In addition, clients maintain ownership and control of their home. CHIP Home Income Plan is provided by HomEquity Bank, a Schedule I Canadian Bank. HomEquity Bank is a wholly-owned subsidiary of HOMEQ Corporation, a TSX-listed company. TM Trademark of HomEquity Bank. Vol 3 Issue 4 BrokerBiz The Voice of the Mortgage Brokers and Agents of Ontario Departments 8 President’s Message 10 Industry News 12 Calendar of Courses 14 New IMBA Members Winter 2010 IN THIS ISSUE 14 Calendar of Events 34 Career Corner 34 Advertisers Index Features 16 Committee Update: What IMBA’s committees have been up to in the last quarter By Liz Katynski 19 M ining for data: How data mining can help you stay on top of your clients’ needs and broaden your customer base By Kelly Parker 23 M arketing magic: How one company upped the ante when it came to cross-selling its mortgage and critical life mortgage insurance 24 Exhibitors’ blueprint: Trade show expert Barry Siskind weighs in on the best way to showcase your company By Roma Ihnatowycz 28 Getting serious: Brokers need to become more vigilant about managing risk exposure to avoid high E&O premiums By Leslie Fallaise 30 VoxPop: Why use a mortgage broker? Brokers from the industry comment on the reasons By Liz Katynski 32 Eye on the community: Mortgage professional Charles Bristoll gains recognition and accolades for active volunteering By Nestor Gula Publisher Robert Thompson Independent Mortgage Brokers Association of Ontario 2950 Keele Street, Suite 103 Toronto, Ontario M3M 2H2 Tel: 416.252.4622 Fax: 416.252.4623 Province-wide Tel: 1.877.564.4622 Province-wide Fax: 1.866.232.8385 Editor Jeanne Fronda Associate Editor Roma Ihnatowycz Executive Editor Leslie Fallaise Sales Manager Joe Strazzullo Sales Executives David Tetlock, Marlene Moshenko, Kari Morgan, John Pashko Production Team Leader Adrienne N. Wilson Senior Graphic Design Specialist James T. Mitchell Published by: www.mediaedgepublishing.com 5255 Yonge Street, Suite 1000 Toronto, Ontario M2N 6P4 Toll Free: 1.866.216.0860 ext. 229 [email protected] 531 Marion Street Winnipeg, MB Canada R2J 0J9 President Kevin Brown Published December 2010 Senior Vice-President Publication Mail Robert Thompson Agreement #40787580 Branch Manager Please return Nancie Privé undeliverable copies to: All rights reserved. Independent Mortgage The contents of this Brokers Association publication may not of Ontario be reproduced by any 120 Eglinton Avenue East, means, in whole or in Suite 500 part, without the prior Toronto, Ontario written consent of the association. M4P 1E2 Articles and information in this magazine represent the opinions of the writers and do not necessarily reflect the opinions of the Independent Mortgage Brokers Association of Ontario (IMBA), its board of directors or its staff. The information used within the magazine was, to the best of our knowledge, accurate at the time of writing. Certain names, scenarios or identifying information may have been changed to protect confidentiality. Users of any information contained in BrokerBiz are encouraged to validate that information by independent means. However you gauge it, Solidifi PerforMAX ™ gives you the advantage SPEED PRiCE Quality introducing Solidifi PerforMaX™ the Next Generation in appraisal services Solidifi PerforMAX™ is a NO HASSLE, fully managed appraisal service utilizing the highest quality, regional appraisers you have come to know and trust. • 72 hours or less guaranteed turn around times • Regional expertise from appraisers you know and trust • 100% national coverage with 3,000 independent • Lower your overall appraisal costs appraisers from coast to coast • Direct access to our dedicated Solidifi PerforMAX™ client service team • Canada’s largest independent, full fee appraiser network To find out more about Solidifi PerforMAX™ and the Next Generation of appraisal services contact us at 1-877-644-2648 or [email protected] Make an Incredibly Smart Decision www.solidifi.com President’s Message T he onset of fall has proven to be quite busy at IMBA, with September 12 marking IMBA’s tenth anniversary. IMBA has made some significant strides over the last 10 years in mortgage education, participation in changes in mortgage legislation and regulations, and public awareness to the consumer. IMBA takes pride in its accomplishments to date and looks forward to a successful future. In early September, IMBA’s treasurer Robert Gascon and I attended the Alberta Mortgage Brokers Association’s (AMBA) annual conference and trade show in Red Deer, Alberta. This year’s theme was “Under the Big Top.” The conference was well attended. On Friday, the main events included an economist panel discussion led by former Alberta Premier Ralph Klein. The keynote speaker was well known author David Chilton, who penned The Wealthy Barber. At the conference, we also met with our provincial and national counterparts at the interprovincial associations meeting. On September 20, I had the pleasure of attending the Ontario Mortgage Industry Ladies Charity Golf Tournament. I was part of a great foursome that included Hali Strandlund, chair of CAAMP, Joanne Vickery, president of MBABC, and Sharon Fitzpatrick, vice president of Paradigm. September 30 was the date of the first annual Wounded Warriors Charity Golf Tournament. Wounded Warriors.ca is an independent not-for-profit charity that supports Canadian soldiers wounded overseas. It is primarily a fundraising mechanism that supports existing programs that tend to injured soldiers. IMBA selected Wounded Warriors as its corporate charity for 2010. Along with IMBA’s vice president Albert Collu and his wife Kim, and fellow IMBA 8 • brokerbiz director Lou Perrotta, I attended the Tournament’s dinner where Albert and I presented cheques totalling $7,100 for this important cause. At the end of September, IMBA moved to its new corporate headquarters and training facility located in the beautifully renovated, heritage George Jackson House at 2950 Keele Street in Toronto. This is a very exciting transition for IMBA to permanent headquarters with adequate space for staff, storage and a private, well equipped training room. IMBA has saved a considerable amount of money in monthly fixed costs by making this move and has enhanced the services we are able to provide to our members and the industry as a whole. The training room is available for meetings, training and other uses by IMBA members and business partners. Please contact the IMBA office for details. The IMBA Board of Directors has commenced a comprehensive strategic planning initiative. This began with a facilitated session on Friday, October 15 and continued on Saturday, October 16. IMBA is examining all facets of its business including its vision, mandate and value proposition to the industry. It is expected to take place over a series of sessions covering different core topics and objectives. I will report on the progress as it unfolds here. And last, but certainly not least, a happy, safe and joyous holiday season to you, your family and colleagues. I wish you every success in 2011. Sincerely, Margo Wynhofen President, IMBA Margo Wynhofen, CPMB President, IMBA It’s about more than just a great rate. And you know it! “ Service” wins the deal! Lending Excellence, by people who care. Experience the Equitable approach. Open conversation. Partnership success. Equitable Teams take the time to see & hear what’s often missed . . . ......Client Circumstance. Got a Client Circumstance that wants Lending Excellence? Let’s talk today. In Ontario call: 416.515.7000 1.866.407.0004 www.equitabletrust.com IndustryNews IMBA moves into new office IMBA moved into its permanent corporate headquarters in September, in the beautifully restored George Jackson House at 2950 Keele Street in Toronto. It was a fitting time for the move, as IMBA had just celebrated its 10th anniversary on September 12. The move represents a milestone for IMBA and has been a goal for the association since its inception ten years ago. Please turn to the Committee Update for further details about the benefits of the move. IMBA 2950 Keele Street, Suite 103 Toronto, Ontario M3M 2H2 IMBA’s Annual Family Ski Day Join us for a great day of family fun and skiing. Activities for the entire family, downhill skiing, snowboarding, cross-country skiing, snowshoeing, sitting by a warm fire. All proceeds from this event will be donated to the Children’s Wish Foundation. Monday, February 21, 2011. www.imba.ca TEL: GTA – 416.252.4622 Province-wide: – 1.877.564.4622 FAX: GTA – 416.252.4623 Province-wide: – 1.866.232.8385 [email protected] IMBA launches new benefit program IMBA is introducing a new benefit program for its members, offering group automobile and home insurance through the Waterloo Insurance Company (a division of Economical Insurance) and LMS PROLINK Ltd. Members can receive competitive group rates and quality insurance coverage for car, home, condominium, apartment, cottage, seasonal home, fine art and other valuables. Applicants will also be entered into a draw to win the $5,000.00 pre-paid MasterCard. As an added bonus, Waterloo Insurance will also send each applicant a $5.00 gift card for simply requesting a quotation. For more information, call the Waterloo Insurance Sales and Service Centre today at 1-866-247-7700. Wounded Warriors cheque presentation IMBA president Margo Wynhofen, together with committee chairs Lou Perrotta and Albert Collu, attended the Wounded Warriors Golf Tournament dinner September 30. During the event, they presented the charity with cheques totaling $7,100 from money gathered by IMBA members at the association’s SummerFest and conference events. “They were thrilled with the size of our donation and very thankful for our 10 • brokerbiz efforts this past year in raising money and overall awareness for their cause,” said Wynhofen. The threesome also purchased raffle tickets at the dinner for a chance to win two open-ended tickets from Air Canada for anywhere in the world. While they did not win, Wynhofen commented that, “This was a fantastic idea to perhaps adopt at one of our future IMBA events to raise some funds for our charity of choice.” Air Canada donated the tickets, and each table had an envelope with strands of five tickets that could be purchased for $20 a strand. There was also a prize raffle in which everyone came out a winner. The Wounded Warrior Project is a charity dedicated to helping injured service men and women. It is this year’s charity of choice for IMBA. Calendar of Courses Mortgage Agent Course Winter 2011 Course Calendar Accelerated Correspondence Start time: January 7, 2011 Duration: 2 weeks Correspondence Start time: January 14, 2011 Duration: 10 weeks IMBA Office, Toronto Start time: January 22, 2011 Duration: 3 weekends IMBA Office, Toronto Start time: January 24, 2011 Duration: 5 days Accelerated Correspondence Start time: January 28, 2011 Duration: 2 weeks IMBA Office, Toronto Start time: February 14, 2011 Duration: 5 days Accelerated Correspondence Start time: March 4, 2011 Duration: 2 weeks IMBA Office, Toronto Start time: March 21, 2011 Duration: 5 days For more details please contact Meghan Delany, education coordinator, at 416-252-4622, Ext. 2 or [email protected]. Instructor-Led Programs In partnership with MortgagExec Ltd. Putting It All Together A two-day program designed to help mortgage agents enhance their skills, knowledge and confidence to achieve success. This program is for agents who have been in the business for a minimum of six months or those who are looking for a great refresher to improve their business. (10 CE credits) Sold Mortgage Math In this one-day (six hour) program, we discuss “10 tips” to keep the cost of your client’s mortgage to a minimum and, as a result, “sell” the client on your professionalism and ability to assist them with their needs. (6 CE credits) Power of Sale This is a one-day (six hour) program that will assist the mortgage broker and agent in determining how to proceed in refinancing a property that is under power of sale or how to deal with the client when they receive the power of sale notice. (6 CE credits) For dates please go to www.mortgagexec.com and enter the ‘Events’ page. 12 • brokerbiz Online Training Courses Module I – Taking a Mortgage Application: How to confidently gather all the information you need on a mortgage application Online portion: 40 minutes Practical applications: 90 minutes Module II – Reading Credit Reports: Uncover what credit reports are really telling you Online portion: 40 minutes Practical applications: 30 minutes Module III – Supporting Documentation: Learn all about the documentation Online portion: 40 minutes required to get your deals done Practical applications: 50 minutes Module IV – Basic Mortgage Types: The mortgage basics you MUST know before talking to your first customer Online portion: 40 minutes Practical applications: 30 minutes Module V – Specific Mortgage Types: Knowledge you need to call yourself a mortgage expert Online portion: 40 minutes Practical applications: 40 minutes Module VI – Categorizing Lenders: Different types of mortgage lending in the Canadian market today Online portion: 40 minutes Practical applications: 60 minutes Module VII – Processing Files: How to determine if your client qualifies for a Online portion: 40 minutes mortgage loan, summarize the deal and assemble an application package Practical applications: 60 minutes Module VIII – Agreements and Appraisals: Essential details in appraisals and contracts so you can read them the way lenders do Online portion: 40 minutes Practical applications: 60 minutes Module IX – The Closing Process: Understanding the closing process and costs involved to avoid surprises Online portion: 40 minutes Practical applications: 30 minutes Module X – Alternative Lending: Tap into the most profitable lending opportunity that there is Online portion: 40 minutes Practical applications: 30 minutes Module XI – Rental and Recreation Properties: Rev up your revenue by financing rental and recreation properties Online portion: 40 minutes Practical applications: 30 minutes Module XII – Self-Employed Borrowers: How to tap into the 20 per cent of Canadians who are self-employed Online portion: 40 minutes Practical applications: 30 minutes Module XIII – Construction Mortgages: Get the tools you need to confidently arrange and close construction mortgages Online portion: 40 minutes Practical applications: 90 minutes Module XIV – Financing New Immigrants: How to tap into one of the fastest growing markets in Canada Online portion: 40 minutes Practical applications: 30 minutes Module XV – Mortgages and Financial Planning: Present a professional image when you are talking to financial planners Online portion: 40 minutes Suggested reading: 2 to 4 hours Module XVI – Business Planning: Take charge of your business – it is worth it Online portion: 40 minutes Practical applications: 2 hours Commercial Lending Basics 1 - An introduction to the commercial mortgage market Online portion: 40 minutes Practical applications: 40 minutes Commercial Lending Basics 2 - An introduction into commercial underwriting Online portion: 40 minutes Practical applications: 30 minutes Vol 3 Issue 4 • 13 New IMBA Members Zubair Afzal Centum Interstate Mortgages Ltd. Olga Coulter Laurentian Bank of Canada Ken Hollinrake Northwood Mortgage Ltd. Jan Li Centum Direct Financial Inc. Avnish Kumar Aggarwal Centum Interstate Mortgages Ltd. Natalia Czeren Amit Jain Centum Coast to Coast Financial Corp. Anthony MacFarlane Marks & Associates Mortgage Brokers Inc. Sandy Jandu Centum Interstate Mortgages Ltd. Meenu Malik Centum Interstate Mortgages Ltd. Ranjit Jhutty Centum Interstate Mortgages Ltd. Abid Maqsood Centum Interstate Mortgages Ltd. Lakwinder Jhutty Centum Interstate Mortgages Ltd. Julia Matchuk Northwood Mortgage Ltd. Swarnjit Battu Northwood Mortgage Ltd. Philip Beer Macquarie Financial Ltd. Meena Beetan Centum Interstate Mortgages Ltd. Sandy Beniamin Homeguard Funding Ltd. Gulshan Bhandari Northwood Mortgage Ltd. Tanweer Bhatti Centum Interstate Mortgages Ltd. Valerie Bizzoni Dominion Lending Centres Mortgage Plus Kirpal Singh Bodal Centum Interstate Mortgages Ltd. Ray Brooker Macquarie Financial Ltd. Syed Mukarram Bukhari Centum Interstate Mortgages Ltd. Kara Daniels Macquarie Financial Ltd. Brian Deckker Northwood Mortgage Ltd. Gagandeep Duggal Centum Interstate Mortgages Ltd. Austin Dziwinski Northwood Mortgage Ltd. Steve Fabian Firm Capital Corporation Howard Freeman Centum Capital Corporation Amanda Garraway Mortgage Edge Ranjit Singh Gill Centum Interstate Mortgages Ltd. Inderjit Gill Centum Interstate Mortgages Ltd. Dilpreet Gill Centum Interstate Mortgages Ltd. Alex Godfrey Home Trust Company Warwick Johnston Mortgage Edge Daljit Kahlon Centum Interstate Mortgages Ltd. Harbans Kainth Greater Toronto Mortgages & Financial Services Corp. Jaswinder Kaur Centum Interstate Mortgages Ltd. Krzysztof Kazimierczuk Canadian Lending Network Inc.Mississauga Stephen Mohammed Northwood Mortgage Ltd. Syed Multani Centum Interstate Mortgages Ltd. Harpreet Singh Multani Greater Toronto Mortgages & Financial Services Corp. Ibrahim Niyazi Centum One Financial Group Inc. Michael Palmer Mortgage Edge Heather Philpott Mortgage Edge Nasir Khan Centum Interstate Mortgages Ltd. Leslie Pinkus Northwood Mortgage Ltd. Chetan Khokhani Centum Interstate Mortgages Ltd. Jagtar Punia Centum Interstate Mortgages Ltd. Mark Buller HLC Home Loans Canada Sandeep Gosain Centum Interstate Mortgages Ltd. Carmelo Buttice Capital Direct Antoinette Graham Northwood Mortgage Ltd. Prashant Kumar Centum Interstate Mortgages Ltd. Richard Quelle Northwood Mortgage Ltd. Terence Carruthers Verico One Mortgage Corp. Stephen Halicki All Ontario Financial Consultants Ltd. Balbir Singh Lakha Centum Interstate Mortgages Ltd. Roland Renaud Centum Prime Realty Services Inc. Danny Cimbron Mortgage Edge Dianne Harrison Merix Financial Inc. J. E. Michel Lalonde Verico Capital Mortgages Linda Roush Pokolm Centum Future Mortgage Group Inc. Stephen Clark Northwood Mortgage Ltd. Richard Hasfal Northwood Mortgage Ltd. Amarpreet Lashar Centum Interstate Mortgages Ltd. Lakhbir Sahi Centum Interstate Mortgages Ltd. 2011 IMBA Calendar of Events Visit www.IMBA.ca FEBRUARY 2011 Mortgage Agent Course IMBA WinterFest RIU Palace Paradise Island Nassau, Bahamas MARCH 2011 Mortgage Agent Course 14 • brokerbiz Visit www.IMBA.ca April 13 to 14 Jagjit Singh Centum Interstate Mortgages Ltd. Raj Kumar Singla Centum Interstate Mortgages Ltd. Kelly Squelch-Simpson Oriana Financial Group of Canada Ltd. Georgios Stamatakos Centum One Financial Group Inc. Afzal Syed Centum Interstate Mortgages Ltd. APRIL 2011 IMBA Annual Conference, Trade Show and Awards Gala Alex Sigouin Merix Financial Inc. Michael Stagg MorBridge Financial Corp. Visit www.IMBA.ca Mortgage Agent Course Barbara Scade Northwood Mortgage Ltd. Harbans Singh Centum Interstate Mortgages Ltd. Visit www.IMBA.ca February 5 to 12 Rajashree Sangameswar Centum Custom Mortgage Solutions Inc. Rupinder Singh Sarkaria Centum Interstate Mortgages Ltd. JANUARY 2011 Mortgage Agent Course Balvir Saini Centum Interstate Mortgages Ltd. Toronto, Ontario Ravindra Uppal Centum Interstate Mortgages Ltd. Simranjeet Singh Walia Centum Interstate Mortgages Ltd. Eric Wyckoff Northwood Mortgage Ltd. THERE IS NO OFF SEASON Team Bridgewater works harder for you. We see the whole game, and will do what it takes to get you the win — through strong support from our Business Development Managers, fast approval turnaround times, and high overall service levels. Ask us about our new BwB POWER COMPENSATION® PROGRAM for brokers and how you can qualify! 1-888-837-2326 Personal. Efficient. Committed. ■ bridgewaterbank.ca ® Registered Trademarks of Bridgewater Bank IMBA_Halfpage_Ad_1010.pdf 1 10/15/2010 4:26:09 PM Canadian brokers rank us #1 for service. “Fast, friendly and efficient” is how they describe processing a mortgage with First National. Some even use the word “enjoyable.” We share your goal for success by streamlining the mortgage approval process. This all adds up to big results for your business. C M Y CM We’re Glad You’ve Noticed Faster turnaround First National responds to 90% of broker mortgage submissions in less than 4 hours. Access 24/7 through Merlin and Merlin mobile, Canada’s leading mortgage approval and tracking system. Higher commissions with the Wizard Reward Program. MY Mortgage solutions CY including rate plans and flexible features to suit any lifestyle. CMY K Head Office: 800.465.0039 | Firstnational.ca First National is licensed under the Mortgage Brokers, Lenders and Administrators Act 2006 (Ontario) Licence No. 10514 Vol 3 Issue 4 • 15 Committee Update Progress Report This Fall, BrokerBiz caught up with representatives of IMBA’s various committees to find out what they have been up to since the last issue of the magazine. Here are the highlights: Association Relations Committee The Associations Relations Committee had nothing new to report. Committee chair: Stewart Eadie [email protected] Communications Committee The Communications Committee continues to provide the latest industry news to IMBA members in a timely and accurate manner. They also oversee the publication of the popular BrokerBiz magazine. In this issue, readers can enjoy our new Careers section, designed with IMBA members in mind. The Communications Committee is also excited about IMBA’s move to its new premises. The new centralized location offers more space in a convenient location. Committee meetings will now be held in the new offices, saving travel time for members and money for the organization. Committee chair: Martin Marshall [email protected] 16 • brokerbiz By Liz Katynski offer IMBA members and others quality education in a comfortable, accessible environment that IMBA controlled. “We will now offer IMBA courses right in our own classrooms,” says Mal Eccles, chair of the Education Committee. To learn more about upcoming courses to be offered in Toronto at the IMBA office or by correspondence this winter and spring, please visit www.imba.ca. Committee chair: Mal Eccles [email protected] Events Committee The Events Committee looks back on a successful SummerFest and also looks ahead to a warm and inviting WinterFest. It was a great SummerFest. Over 200 golfers enjoyed a beautiful day at the Legends of Niagara Golf Course in Niagara Falls on August 20. The night before, over 40 people attended an impromptu networking event, where they had an opportunity to discuss business and other industry-related issues. The annual SummerFest Golf Tournament raised over $2,500 for IMBA’s charity of choice 2010, the Wounded Warriors. Education Committee The Education Committee is very excited about IMBA’s move to its new, more spacious headquarters. The new facility houses in-house classrooms, which will provide a centralized location for IMBA to conduct its training programs and hold other lectures. As a result, IMBA will no longer have to rent outside classroom space, and members will be able to continue their education in one familiar facility. Winter is coming and it is going to be cold. The solution to beating the winter weather is to attend WinterFest 2011 from February 5 to 12. This year’s event will be held at the beautiful Riu Palace Paradise Island Resort in Nassau, Bahamas. Guests can choose from either a four-night or a seven-night option. Reservations are filling up fast so be sure to reserve today. WinterFest is a great way to relax, unwind, and network with fellow mortgage professionals in a warm, casual atmosphere. The association always endeavoured to one day have its own classroom in order to Committee chair: Martin Marshall [email protected] Governance Committee province by March 31. This will be the third year the forms are required. In the first two years, over 20 per cent of those who were required to fill in the form did not comply and complete their forms on time. “We are very disappointed in the lack of enthusiasm for getting it done,” says Jeff Atlin, chair of the Government Relations Committee. “The industry has higher expectations. Currently a fine for a first-time offender is $1,000. Fines may be increased. There is no reason not to do it on time… Other industries have a 96 per cent compliance rate. You can lose your license if you don’t file it so don’t take this lightly.” The Governance Committee is working on developing a searchable database of IMBA Board motions and follow-up to motions. The new system will make the process of referencing and monitoring compliance of motions adopted by the IMBA Board more efficient. Shortly, the committee will address any suggested changes to the bylaws that may come out of the association’s strategic planning session and that are recommended by the board. The Governance Committee is also preparing for the upcoming annual election of association directors for 2011, and the IMBA AGM. The online election will be held in March, followed by the association’s AGM, which will be held later that month. Committee chair: Lou Perrotta [email protected] There will be minor changes to the forms this year, to make them more efficient. Also, the Government Relations Committee is still working with accounting firm Deloitte in order to get clarification on the recent implementation of the HST in Ontario and how it affects various kinds of broker activities. This is expected to take time. Government Relations Committee Committee chair: Jeff Atlin [email protected] The Government Relations Committee reminds all IMBA members that they must complete their Annual Information Return. The online form is a requirement of FSCO. The forms will be available in early January and have to be completed by every broker and administrator in the Membership Committee The Membership Committee is enthusiastically working to increase membership in IMBA. It’s their job to secure existing members and bring in new ones. They are focused on the 6,000 brokers and agents who are not members of IMBA or the other professional organization in Ontario. Professional association membership is not a requirement under FSCO but the committee is committed to extolling the virtues of membership in IMBA, says Jonah Bonn. In September, the committee sent out postcards to the 6,000 unaffiliated mortgage brokers and agents in the province. The postcards told them about the benefits of IMBA membership. To date, they have sent out two emails via Constant Contact, also directed to the 6,000 unaffiliated brokers. The messages included information about what IMBA is doing, upcoming events and benefits of membership. A direct to voice mail campaign is also planned. Unaffiliated members will be left informative voice mail messages to let them know why they should join IMBA. As well, the committee is working with LMS Pro-Link, IMBA’s insurance provider, to strengthen the errors and omissions insurance program for members and make it a better incentive for potential members. Committee co-chairs: Jonah Bonn [email protected] Glenn May-Anderson [email protected] Commercial Lending in Ontario for over 35 years Construction Loans, Bridge and Equity Financing. Loans from $1,000,000 to $15,000,000+ Recent loans: $15,750,000 FIRST MORTGAGE $8,000,000 FIRST MORTGAGE Construction Loan Site Servicing and Construction Loan Student residence Waterloo, Ontario 32,000 s.f. retail centre Toronto, Ontario Financing Ontario projects only. Contact Mickey Baratz Lic.# M08000714 (416) 483-8018 ext. 233 or [email protected] $6,500,000 FIRST MORTGAGE $1,450,000 FIRST MORTGAGE Construction Loan Land Banking 11 Luxury Townhouses Toronto, Ontario 3 Acres Brampton, Ontario Brokerage # 10160 Vector Financial Services Limited Vol 3 Issue 4 • 17 Committee Update Partner Relations Committee TREASURY REPORT IMBA has commenced its roll-out of the 2011 sponsorship program. There are some new and innovative changes to the 2011 program. In most cases, bundles have been reduced by up to 25 per cent. There are also many value added elements this year and the program is available online. A potential sponsor is able to visit the newly updated IMBA website, www.imba.ca, to review and purchase a package. At the time of this writing, IMBA’s total income is well ahead of plan, and our reserve fund is growing each year, up from $0.00 three years ago! The Finance Committee continues to evaluate and implement effective cost control polices and examine more and better value-added products and events to offer the IMBA membership. I would also like to mention that IMBA’s recent move to its new headquarters will help save a substantial sum of money for the association. The new space houses in-house classrooms for IMBA’s continuing education courses, which means IMBA will no longer need to pay for the rental of outside classroom space. All courses will now be held at the new facility. As well, with the new space the need for off-site storage has been eliminated. For more information on the financial impact that IMBA’s new headquarters will have on the association’s annual budget, please read my year-end report in the upcoming spring issue of BrokerBiz. Treasurer: Robert A. Gascon, AMP, [email protected] Some successes must be repeated! IMBA held their annual Partners Appreciation Evening at The St. Andrews Club and Conference Centre on the evening of November 9. This has become one of IMBA’s most prestigious and anticipated events. The sole purpose of this event is to host our business partners and volunteers in an inviting environment and acknowledge their support and commitment to IMBA. Sponsorship solicitations for 2011 began in late September and have started off with a bang! IMBA wants to acknowledge Dominion Lending Centres as its Platinum Sponsor for 2011. IMBA is excited about building a close working relationship with DLC throughout the year. For 2011, most sponsorship bundles have been reduced by 25 per cent, while still offering some significant enhancements over bundles in the past years. Sponsorship for 2011 is 80 per cent sold at time of this writing. If you would be interested in participating at the sponsorship level in IMBA please contact Robert Gascon at 905-274-4801 or Lorne Collis at 905-846-5687. Committee co-chairs: Jim Hill [email protected] Robert Gascon [email protected] Planning Committee Has Your Client... • Been turned down by the bank? • Had past credit issues? • Been seeking bridge/construction project financing? Pillar Financial Services will finance your mortgage deals up to $4 million – with no penalty for full repayment after 90 days* We source all of our mortgages through the mortgage broker community. For more information, please contact: Marc Moeys, Business Development Officer Phone: 613 539-1131 [email protected] Mortgage Broker Licence #M08000254 Mortgage Administrator Licence #11209 *with 30 days notice Celebrating 25 Years of Mortgage Portfolio Administration 18 • brokerbiz The Planning Committee has hired a facilitator to assist the association in the creation of a strategic plan. The planning session, led by the facilitator, will be held on October 15 and 16 in IMBA’s new offices on Keele Street in Toronto. All board members are expected to attend. Committee chair: Jonah Bonn [email protected] Professional Standards Committee The Professional Standards Committee had nothing new to report. Committee chair: Albert Collu [email protected] Marketing Mining for data How data mining can help you stay on top of your clients’ needs and broaden your customer base T here are several terms for it: personal information management (PIM) and database or data mining, but perhaps the most widely used is the acronym CRM, which stands for customer relationship management. By definition, CRM is a broadly recognized, widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes. For the mortgage professional, that means sales and marketing activities. CRM is a tool that can help win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. In a nutshell, it is the way commission-based outside independent sales is done – or at least, it’s the tool by which it is done effectively. The point: CRM can be that much of a driver of business. “From my perspective,” says Lorne Collis, president of KIT Services, “there is a long-term goal and a short-term goal. The long-term goal is to get your By Kelly Parker client back in five years and move them to another lender so that you can pick up another fee, which would generate a continual income stream. The short-term goal – which is not as predictable – is to make your clients that you’ve done a great job for, your marketing sales force, going out to their friends and neighbours, telling them what a great job you did for them, and recommending you.” Choosing software The first step, and by far the most important, is to create a workable database so that you can start to mine it, and that includes choosing your software. There are a host of CRM software applications on the market, and some companies have developed proprietary systems as well. Generally speaking, the best applications will – once the relevant customer contact and financial information has been input, which is too often where the human element fails it – track which client has which mortgage. They will also assist in maintaining contact with the client throughout the course of their mortgage so that the broker will be the default choice when it comes time to renew, re-finance or otherwise alter the terms of that mortgage. Vol 3 Issue 4 • 19 Marketing One popular choice is GoMax Solutions, used and endorsed by Greg Williamson, mortgage broker and head coach of 180 Degree Coaching. “I like it,” he says, “because it’s built by mortgage brokers for mortgage brokers and they understand the business.” Williamson likes that the automation of the database assists in action planning. “From the time that you close your mortgage until it renews in five years,” he says, “there might be 15 touches that I want to get out to you over that five-year period. When I set you up in my database, I indicate that I want this (communication) plan to go to that contact. Boom! For the next five years, all of that stuff just happens. Emails go out a certain times, or if I need to send you a letter, a reminder will come up for me. It automates the entire system, and I think that’s fabulous.” As a general rule, the more automated the software offer, the better, because the less automated it is, the more work that is required by the broker. “I’ll always find Toronto Toronto Phone:Toronto 416-924-4680 Phone: 416-924-4680 416-924-4680 Fax: Phone: 416-924-4685 Fax: 416-924-4685 Fax: 416-924-4685 Toronto Hamilton Hamilton Hamilton Phone: 416-924-4680 Phone: 905-528-8956 Phone: 905-528-8956 Phone: 905-528-8956 Fax: 905-528-8182 416-924-4685 Fax: Fax: Fax: 905-528-8182 905-528-8182 www.efforttrust.com Hamilton www.efforttrust.com www.efforttrust.com Pinpointing strategy What about the tasks themselves? The ways CRM can be used are as varied as the business styles of the people using it. Ask a group of brokers how often and in what ways they prefer to reach out to their database, and they could debate the pros, cons and types of contacts for hours. “We do a monthly mail-out – some of it via email and some of it is direct,” notes Mike DiStefano, president of BTB Mortgage Solutions. DiStefano says that “Seventy per cent of Phone: 905-528-8956 Fax: 905-528-8182 When you need dependable results... www.efforttrust.com When you need dependable results... deals don’t make it Effort Trust Trust is is your your choice choice Effort When you need dependable results... forTrust Alternative Lending: Effort is your choice for Alternative Lending: for Alternative Effort TrustLending: is yourin choice • Specializing • Specializing in Residential First for Alternative Lending: Residential First Mortgages including if you’re not keeping When you need dependable results... Mortgages • Specializing in including Construction Construction Residential First Financing • Specializing in Financing Mortgages including Residential • Broker focusedFirst Construction Mortgages • Broker focusedincluding Financing Construction • Customized to • Customized Financing your clients’ to needs your clients’ needs • Broker focused • Brokercustomer focused • Excellent • Excellent customer service with fast • Customized to fast service with time • Customized to turnaround your clients’ needs turnaround timeneeds your clients’ • Excellent customer • Excellent customer service with fast service with fast turnaround turnaround time time 20 • brokerbiz a reason to do something else,” notes Williamson, “or if more work is required by my staff, then I have to pay someone to do it, and I think that’s where things fall apart. The more automated it is, the more likely I will stick with it.” to a five-year term, so in touch with your database until just before maturity, 70 per cent of them will already be gone” Doreen Walsh, First National Financial his big campaign of late has been to go through his database for last year’s primeplus clients and flipping those existing clients out of their prime-plus products because of the recent drop in rates. He emphasizes that those were “very easy flips” because they only paid a threemonth interest penalty to refinance. DiStefano says he follows up with current clients too, sending them a plant on the day they take possession Marketing POPULAR SOFTWARE SOLUTIONS Axiom’s CRM solutions help you continually gather information about prospects and customers, leverage that information to develop customized campaigns, products and services, personalize service to customers, and support the marketing, sales, delivery and service processes. (axiom-softsol. com/crm) Filogix Expert is a continually evolving origination system designed to meet the changing needs of the Canadian mortgage industry. Expert is intended to improve the way mortgage originators of their property, “along with a bag of popcorn and a blockbuster video card, inviting them to have a movie night on us because moving can be stressful, etc. Of course, we survive off referrals, and generally speaking, if you send somebody something nice, they will send you three or four names back.” administer their business and their ability to conduct business transactions with lenders and clients. (filogix.com) GoMax Solutions offers mortgage professionals an easy-to-use, web-based solution allowing them to foster existing client relationships and open up new business opportunities. The InTouch CRM is divided into three powerful modules including Action Plans, Projects and Events. Each module is designed to provide a specific level of automated communication with clients. (gomaxsolutions.com) inContact: Working directly with Filogix technology, inContact is able to import all of a broker’s applications and allow him or her to create reports, newsletters, emails, labels, cards, letters and much more. This tool enables brokers to make use of 13 different marketing programs with over 100 templates and also gives them the ability to create their own. Users can search their existing database of clients to find out who is maturing and when, who is in the third year of their mortgage term, or even which clients have a birthday this month. (incontact.ca) Construction Financing can be this easy! DiStefano also contacts his purchase clients after three years, sending out solicit letters indicating that if they’ve done any improvements or upgrades that they’ve built up some equity in their home. While many brokers choose to send out monthly electronic newsletters, others say that is too many. “I think that is overkill,” says Collis. “I’d do it quarterly, because in my opinion, something sent out every month is not being read. If you’re doing it 12 times a year, you’re sending them fluff.” Others like to send out birthday or holiday cards, which – especially if sent close to when a newsletter goes out – can leave your client thinking of you as a spammer. Misconceptions One common mistake that brokers make is mistakenly thinking that data mining would turn them into spammers. “It’s funny because I do hear brokers saying constantly that they don’t want to bother their clients,” says Doreen Walsh, account manager, GTA West for First National Financial. “Don’t worry – if you’re not bothering them, somebody else is. Seventy per cent of deals don’t make it to a five-year term, so if you’re not keeping in touch with your database until just before maturity, 70 per cent of Vol 3 Issue 4 • 21 Marketing them will already be gone. The broker who is effectively mining their database and sending out periodic information to stay in touch probably got that deal.” The advice is: send good, specific, useful information, and be very strategic in doing so. Williamson advocates using new technologies like Facebook, YouTube and Twitter in order to get your message out in as many formats as you can. “Instead of me sending you out a letter that is going to take three or four minutes to read,” he says, “send out a video that is going to take people three or four minutes to watch. More people are going to be inclined to watch that video.” Williamson feels there’s an added benefit to that technique in that “the customer is almost creating a relationship with you at the same time because they’re watching you and feeling more like they know you. Then, when they call you or refer you, they are already feeling warm and fuzzy about you because they have seen you speak and, hopefully, your personality has shined through.” under, and making sure that that financial plan still fits for them.” One area of CRM that too often falls by the wayside is good old-fashioned conversation. “Part of your business plan should be to reach out and speak to your database,” says Walsh. “It’s very helpful to break down your database into (demographic) sectors,” she says, “so that you know that a certain sector of your database is going to be getting to the age where their stressor is going to be RRSPs, for example, or that they’ve got kids headed off to university. Having that information in your database will allow you to pick up the phone, know what is going on in your clients’ lives, and to speak clearly to them about things that are interesting and important to them.” Do that properly, and you’re in business – long-term. “Our mortgage is our biggest financial commitment in life,” explains Walsh, “and if you send [information out to your current client base], those people also know what’s going on with family and friends’ financial circumstances as far as stages of life go with retirement or kids in university. You want your information to be put out into their universe; that will grow your database even more.” Walsh is adamant that CRM is not just about going back after existing clients and farming them. “This business is always a combination of hunting and farming,” she says. “Database management is about following through on the plan that you originally put your clients Finally – and perhaps most crucially – protect your database. “Have a database that will follow you wherever you go,” warns Walsh. “You need to absolutely ensure when you are starting with a company that you know what the situation will be with regard to your database when it comes time to move on. That database is your business. Each company runs differently… You would have to have those conversations right up front as to where you stand with the database.” BB Feeling a little left out in the cold? Having difficulty with “out-of-the-box” applications? Seeing more customers with challenging credit situations? n Frustrated with restrictive lending criteria? n Ready to expand your client base beyond the traditional borrower? n n We are the home of Sensible Lending® and have mortgage options suitable for most borrowers. (CWB:TSX) Serving brokers in Alberta, British Columbia, Manitoba, Ontario, and Saskatchewan. 866.441.3775 www.OptimumMortgage.ca 22 • brokerbiz Questions? Comments? Deals? Contact your regional business development manager or our underwriting centre at 866.441.3775 Marketing Profile Marketing magic How one company upped the ante when it came to cross-selling its mortgage and critical life mortgage insurance C ross selling mortgage and critical life mortgage insurance to clients is a natural part of business for Oriana Financial. However this year the company turned things up a notch with a novel new campaign that included an Olympic theme and sales contests to motivate agents. “We wanted to help our mortgage broker agents better understand the advantages of owning private insurance versus creditor insurance and how it’s a superior product for clients,” explains Mark Wadey, president of Oriana Wealth Management. The comprehensive campaign was a huge success. It boosted sales, increased brand awareness, provided agents with additional sales tools and gave clients an incentive to purchase insurance through Oriana Wealth Management. Elements of the campaign, which was developed with the help of Torontobased JOLT Marketing, included sales scripts, promotional marketing materials, an internal sales contest to motivate agents and a “Win A Free Mortgage Payment” contest. As part of this contest, clients that asked for an insurance quote were entered for a chance to win one of three prizes of $1,000 towards their mortgage payment. Olympian effort The Insurance Olympics, the name for the internal sales contest, launched the same day as the Vancouver Olympics. The Insurance Olympics launched the same day as the Vancouver Olympics. Oriana piggybacked on the Olympics buzz to present an exciting, fresh and timely campaign Oriana piggybacked on the Olympics buzz to present an exciting, fresh and timely campaign that included a Gold Medal prize for the future winner – a trip to Las Vegas. Agents were invited to the event and told something was going to be announced, but no details were released. As they entered the meeting they were handed gift bags with the popular red Olympic mittens, a raffle ticket for Olympic hockey jerseys, and they were thanked for coming to hear the big announcement. “The values of the Olympics with training, support and pride were the same values we have as an organization, so the campaign launch with a tie to the Olympics was a perfect match,” says Wadey. To keep agents’ interest throughout the five-month campaign, JOLT Marketing developed a full communication strategy, providing regular results charts for agents. This kept the sales team motivated and also provided regular sales strategies, tips, and humour to help keep everyone engaged. “Throughout the campaign we would receive updates, insight and information that helped us realize the value of working with a professional company that specializes in running campaigns such as this,” says Mike Hall, president of Oriana Financial. To wrap things up, Oriana invited agents to the Win A Free Mortgage Payment contest draw and luncheon where winners learned they would receive $1,000 towards their next mortgage payment. “With this campaign everyone won,” sums up Hall. “Sales results were spectacular, company morale increased, our clients were rewarded, and new recruits easily understood the level of support that Oriana provides for them.” BB Vol 3 Issue 4 • 23 Industry Q&A By Roma Ihnatowycz Think that exhibiting at trade shows is as simple as setting up a booth and selling your services? Think again. Internationally renowned exhibit and trade show expert Barry Siskind weighs in on the best way to showcase your company Barry Siskind is president and founder of the International Training and Management Company (ITMC) and is internationally recognized as an expert in trade and consumer shows. He is also the best-selling author of a number of trade show books, including his latest book, Powerful Exhibit Marketing. BrokerBiz: A trade show seems like a fairly straightforward affair – why would an exhibitor need additional help? Siskind: The costs aren’t getting any less, so the need to actually produce a return on your investment is so great now that it is not just ‘business as usual.’ Exhibiting is not what professionals do every day of their life – it happens once or twice or three times a year. And it’s really, really difficult. It’s physically and emotionally stressful, and it requires a tremendous amount of understanding of what this medium is all about. 24 • brokerbiz At the end of the day it requires actually sitting down and asking yourself, after an exhibition, what worked and whether you got a return on investment. Many exhibitors don’t know how to do that. A lot of people throw their hands up and say ‘I can’t possibly measure ROI because I don’t actually sell anything,’ which is dumb because of course they don’t sell anything – most shows are not selling shows; most shows are lead generators. You wouldn’t do anything else without setting some objectives and having some measurements – why is it any different here? BB: Can you expand a bit on the topic of effective follow-up? Siskind: Follow-up is what gets messed up the most. The tendency is to get overwhelmed by all of the things back at your office that you weren’t taking care of because you were at a trade show. The best time for follow-up after a trade show is really the next business day. The longer you wait to contact visitors after the show, the more this visitor’s real life takes over – they forget, they cool off. So my suggestion is to put together a plan [before the show] so that you can Industry Q&A get back to this visitor the next business day, even it it’s nothing more than to say thank you for coming by to the show, something as simple as that. BB: How should exhibitors assess the effectiveness of their participation in a trade show? Siskind: Generally we use two measurements in trade shows, return on investment (ROI) and return on objectives, or ROO. What exhibitors are looking for is ROO because the return cannot be monetized. So let’s say the objective was to get 25 good quality leads at a show – and this needs to be determined upfront, before the event – then you need to ask yourself the question, how will I measure that? So the next step in the process is to actually develop the tools that you can take with you to this show to do this measurement. The biggest mistake you can make is to return to a show with the same thing year after year after year. This is where benchmarks help. BB: What are the biggest mistakes that you see tied to the actual displays? Siskind: One of the biggest mistakes is going back to the same show year after year with exactly the same display. That’s boring and visitors don’t want that. They want to be excited, they want to be stimulated, they want an experience. If the experience you are offering them is that of boredom, what’s the point? I’m not saying that exhibitors have to throw everything in the garbage and start fresh every year. But you have to be constantly looking at the display to find what’s working. Keep that stuff and get rid of stuff that’s not working. You need to have this continuous improvement process. The other big mistake exhibitors make is trying to tell people too much with their display. The primary purpose “Follow-up is what gets messed up the most. The tendency is to get overwhelmed by all of the things back at your office that you weren’t taking care of because you were at a trade show” Barry Siskind, ITMC of the booth is to attract attention. It doesn’t sell anything and it doesn’t create a brand message and it doesn’t create presence or awareness. All it does is it gets people’s attention. And it’s very tough to do because getting the attention of a whole bunch of visitors who have no attention span is really difficult. At the big shows, you get to a point where nothing else goes in. You are just so overloaded with information. BB: Once you have a visitor’s attention, then what? Siskind: Then it’s all up to the people, who in my opinion are the most important part of the whole show experience. And the people manning the booth often have no idea why they are there. So not having a really clear idea of why they are there and really clear objectives is probably the first mistake we see. Secondly, not having mastered the very specific skills you need in order to work at a booth properly is another mistake. Working at a booth is different than selling outside, where you can sit down at a client’s office. The primary reason for that is time – you are seeing too many people in too short of a period of time. Staff needs to understand that there is this time pressure placed on them. They need to hone their skills … so that they can work in this unique, high-pressure environment. BB: How is the event environment different today than it was ten years ago? Siskind: In 2010 we are dealing with an entirely different generation that is coming to tradeshows than we were in 1990. When a manager says to say to me, ‘Oh my staff is great at this – they’ve been doing shows for years,’ those are probably the ones that scare me the most. I see CWT & IMBA Affinity Partnership! 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And they’ve also weeded out those exhibitors they don’t want to deal with. They are very, very comfortable looking stuff up on the Internet, and on social networks. So the whole face of it has changed because of technology. BB: Is that a positive development for exhibitors? Siskind: I think it’s a very positive thing for exhibitors who embrace social media. They can use that tool to their benefit. They can create a sense of excitement with what is going on in the booth. They can post videos of people who have come to their booth on YouTube or send them out to their social network. ‘Look at the excitement that is going on here. So-and-so dropped by and here’s what they had to say.’ That’s cool. So someone that is walking around that may not have put you on the short list of places to visit all of a sudden gets a message from you. You are building some excitement that could very well motivate someone to come over and visit. BB: So clearly exhibitors should be getting on the social media bandwagon? Siskind: Yes, and the other trick to social media is using the right one. Not everybody is on Facebook and not everybody is on Twitter. So one of the things that I advise my clients is that if they don’t know which platform their customers are using, use the trade show as an opportunity to find that out. If I find that 90 per cent of my customers are on Twitter, then I wouldn’t waste any time with LinkedIn. Then you can also find out what your customers are saying 26 • brokerbiz about you because they are all talking back and forth. Gen X-ers are really comfortable doing that. Social media is a wonderful tool for exhibitors to help them do their job better. BB: What about when people approach a booth? What is the best way to interact with them? Siskind: People manning a booth need to have a pro-active approach and they have to have the right attitude. When visitors have been surveyed, the thing that they dislike the most is pushy salespeople. So I advise a client not to come to a trade show as a salesperson. Visitors don’t want to be sold something, they want to be informed. So to me it’s healthier and easier to play the role of host. This is your place of business for three or four days, someone has come in, welcome them. This also opens the door to non-salespeople working in the booth. BB: And after welcoming them, what is the next step? Siskind: I would then teach you how to engage a visitor in a meaningful conversation and then find a little bit more about them – who they are, why are they there and what are they looking for. Because the reality is that you already know what you are selling but you don’t know what they are buying. In 2010, the real purpose of trade shows is all about engagement. How do we engage ourselves with our customers? How do we form that community between customers and us? So what we need to do is we need to engage them in the process. What kind of things are they looking for, what do we offer, where do we go in the future? The very best [outcome] you can get is to have somebody who has been engaged with you, who has a really good feeling about you. Psychologists tell us that people remember the experience long after they have forgotten the detail. The visitor needs to feel that you have reached out and engaged them in conversation, that you are listening to them and their concerns rather than just pitching a product at them. Industry Q&A For the visitor What should you be considering when visiting a trade show? Event expert Barry Siskind explains: “The first thing visitors need to do is they need to get focused. Before they ever step foot on the show floor they really need to ask themselves, ‘Why am I coming to the show?’ They need to identify that. If they are coming to learn, the next step is, what do you want to learn? They can say how people are using a certain service, or what the new trends are. Then I would ask them, who’s going to teach that to you? Then I would take the show floor plan from the organizer’s website ahead of time. The mistake that people often make is they come to the show, grab the floor plan and just start walking. I would tell them to get the plan ahead of time and actually make a physical plan of how they will walk the show. What that allows you to do is to look for clusters of people you want to see. Rather than doing what most visitors do, which is enter the front door and go to the right, what you do is go straight to the cluster. So if your trip gets cut short, or you run out of time, at least you have taken care of some key issues.” DLO-IMBA Ad Spring 09 Horiz r2.qxd Residential and Commercial Purchase, Sale, Refinance 4/23/09 10:25 PM Page 1 Leasing Mortgages Private, Institutional Land Development Condominium, Subdivision, Severance, Committee of Adjustment Mortgage Enforcement Power of Sale, Foreclosure Joint Venture & Other Investor Agreements De Francesca Law Office P R O F E S S I O N A L C O R P O R AT I O N Tel 416 778 4433 • Fax 416 778 4432 • www.defranlaw.com Vol 3 Issue 4 • 27 GETTING SERIOUS Brokers need to become more vigilant about managing risk exposure if they want to avoid escalating E&O premiums and a continuing surge in lawsuits By Leslie Fallaise W hen the Mortgage Brokerages, Lenders and Administrators Act (MBLAA) came into effect on July 1, 2008, Errors and Omissions (E&O) insurance rates were stable and had even begun to decline. The baseline premium for a small brokerage was between $750 and $1000 per annum and the purchase of coverage was completely voluntary on the part of the broker. Three main factors impacted how the annual premium was calculated: the amount of revenue (in commissions, fees, etc.) that the firm earned in a year, how many agents they had, and the amount of coverage the broker chose to purchase. Then the “perfect storm” hit. The new legislation made E&O insurance mandatory, and aggressive plaintiff lawyers, working for borrowers and lenders, took that opportunity to test claims against it. In addition to the new legislation making E&O compulsory, coverage was made retroactive, which allowed brokerages to file a claim on services rendered before the effective date of their first E&O policy (which for many brokerages was July 1, 2008 when it became mandatory). And then there was the global economic downturn and falling real estate prices. E&O claims filed against our industry soared. In the six-month period prior to the MBLAA going into effect there were very few claims. However from July 1, 2008 to December 31, 2009 there was an astronomic increase in claims frequency. Many brokers were hit with unprecedented annual premium increases when their policies renewed. Several tried 28 • brokerbiz to shop their coverage to help ease the financial burden. Annual E&O premiums are now assessed utilizing an expanded number of underwriting criteria. Two important criteria are whether the broker does construction loans, as opposed to already constructed properties, and whether the brokerage arranges mortgages with private lenders. If they do, then the type of private lender and the type of origination process undertaken becomes important E&O underwriting criteria. The insurers tend to classify private lenders under one of the following: private lending institutions like MICS and trusts, individuals who want to invest their personal wealth in mortgages, and brokerage houses that underwrite mortgages with their own or related company funds. When an E&O underwriter evaluates a brokerage in order to insure it properly, they look at the highest risk exposure, which is the individual private lender who wants to invest their funds in mortgages. The highest rate of claims occurs within this category of lender because these private lenders often have limited underwriting experience and no problem convincing an aggressive plaintiff solicitor that they relied solely on the mortgage broker to look after their best interest. The claim will state the broker failed the duty of care they owed the lender, and subsequently cost them their life savings. In these scenarios it can be extremely difficult for the defence to prove the plaintiff had a long history engaging in this type of private lending because there is minimal documentation to support the mortgage broker. It is up to the broker to ensure their risk management practices are effective to appropriately manage this type of risk. Consider this scenario: a young couple with stable jobs in a union-protected environment and a strong beacon score come to a private lender for a mortgage on their first home. The deal is properly completed, the mortgage is done and six months or a year passes, with payments made on time. Then they both get laid off and the property ends up as a power of sale and is sold below the original purchase price. The individual private lender then sues the mortgage broker because the investment did not provide the return that was originally anticipated. This speaks to the importance of risk management practices and documenting your file inside the brokerage. Another area of concern is construction loans for financing the building of condominiums or development of vacation properties. The economy sours, money dries up, and an effort is made to sell the unfinished development with no success. Major issues with faulty construction financing include poorly done or erroneous appraisals, too few offers to purchase at the beginning of the deal, a mismanaged construction process, poor or no documentation between parties to the transaction and, lastly, a project so large in scope that it exceeds the capacity of the broker. The field is wide open for suits against the broker. Recommendations Some solid recommendations to mortgage brokerages to help mitigate their chances of a claim are: 1. Don’t try to be all things to all people. are often launched many years after the mortgage was arranged. Documentation is king, documentation is critical • Investor/lender disclosure statements must be properly completed. Always make certain that there is one in every single file. This is a wonderful risk management tool. • Appraisals! Always get a third party appraisal, a letter of transmittal and always include both in the file. • Basic, competent and correct document storage and handling. Be absolutely certain you know the statue of limitations in your area/market. Claims Diligent practices The standard E&O policy responds to protect all agents licensed under the brokerage, past or present. It is incumbent upon the brokerages to be diligent in their hiring practices. Agents should be made to understand the potential risks they expose the brokerage to. Brokerages are encouraged to develop consistent policies and procedures to make their agents accountable. One example could be to hold the agent responsible for the policy deductible through their contract with the brokerage, should a claim be made as a result of one of their files. Then, what are the brokerages policies and procedures surrounding accountability of the agent/broker once they have moved on to another brokerage or out of the business entirely? • Be consistent in how you note your files. Standard operating procedures and best practices should be developed, updated and properly maintained in strict accordance with the MBLAA. • Anyone involved in mortgage origination in the brokerage should sign a copy of your policies and procedures manual to indicate that they have read and understand the documents and agree to follow them. This should be rigorously followed. The practice of being consistent is very important should you find yourself defending a claim. In 2008, when E&O became mandatory, there were seven companies approved by the Financial Services Commission of Ontario (FSCO) to provide E&O insurance to the mortgage brokerage industry. There are only five still active in the marketplace today, and of these, some have restrictions and limitations on their underwriting of mortgage brokering E&O insurance. A growing concern is that more insurance providers may abandon this market, reducing the price competiveness for the mortgage brokerage industry even more. If the claims frequency continues at the levels experienced since July 1, 2008, you will likely see fewer insurance companies in the marketplace willing to write E&O insurance for our industry. Accordingly, you will see premiums continue to dramatically increase. 2. Do not undertake a deal that is out of your depth of knowledge or experience. 3. Know your professional limits and stay within them. 4. You are not a lawyer, you are a mortgage broker. 5. Proper communication is a must. E&O insurance represents what it says it is…there are errors and omissions. Omission-based claims are more challenging to defend because they allege that the mortgage broker should have done something and failed to do so. A claim will state the broker knew or ought to have known, in their capacity as a professional, what was to be done or what was expected of them and they failed to do so. Mortgage brokerages must become serious about managing their risk exposure for private lending more effectively. They must mitigate the chances of a claim and make it easier to defend a claim by having proper policies and procedures in place, good document management, etc. With this commitment in place, premiums will hopefully stay at current levels, and providers will stay in the market place. This is crucial for a strong and competitive errors and omissions insurance marketplace. Leslie Fallaise is a mortgage broker with Redwood Mortgage Corp. and the executive editor of IMBA’s BrokerBiz magazine. A Non-Bank Lender Providing: A Non-Bank Lender Providing: Construction, Bridge and Equity Financing Construction, Bridge and Equity Financing Recent Recent Transations: Transations: $1,945,000 FIRST MORTGAGE $1,945,000 FIRST MORTGAGE Construction Construction loan loan on on 7 townhouse 7 townhouse units units MortgageÊInvestmentÊTrustÊ MortgageÊInvestmentÊTrustÊ ForÊLendingÊInquiriesÊPleaseÊContact:Ê ForÊLendingÊInquiriesÊPleaseÊContact:Ê Michael Michael Carragher Carragher or Steve or Steve Fabian Fabian Tel: (416) Fax:Fax: (416) 635-1713 Tel: 635-0221 (416) 635-0221 (416) 635-1713 1244 1244 Caledonia Road Caledonia Road Toronto, ON M6A 2X5 Toronto, ON M6A 2X5 [email protected] [email protected] Ê Ê [email protected] [email protected] Ê Ê Ê Ottawa, Ottawa, Ontario Ontario $11,650,000 FIRST MORTGAGE $11,650,000 FIRST MORTGAGE Term Term loan loanonon 158,176 158,176 sq. ft. sq.retail ft. retail plaza plaza Kitchener, Kitchener, Ontario Ontario Ê FirmÊCapitalÊCorporation FirmÊCapitalÊCorporation Ê Ê OntarioOntario LicenseÊ#: LicenseÊ#: 10164 10164 Ê Ê www.FirmCapital.comÊ www.FirmCapital.comÊ $4,500,000 $4,500,000 FIRST FIRST MORTGAGE MORTGAGE Land Land loan loanonon condo condo development development site site Toronto, Toronto, Ontario Ontario Residential & Commercial Residential & Commercial Construction Construction Land & Development Land & Development Financing Financing InventoryInventory Housing Loans Housing Loans Infill Construction Infill Construction Financing Financing Bridge &Bridge Equity Financing & Equity Financing Investment Investment Properties Properties Multi-Residential Multi-Residential Alternative Alternative House Lenders House Lenders 1st & 2nd1st Mortgages & 2nd Mortgages Loan Sizes Loan $200,000-$20 Sizes $200,000-$20 Million Million Vol 3 Issue 4 • 29 VoxPop Why use a mortgage broker I ? By Liz Katynski n this issue of BrokerBiz, we asked a few members of IMBA to share their top reasons for suggesting people use a mortgage broker. This is what they told us. Nick Da Silva, Mortgage Broker Director of Mortgage Operations Northwood Mortgage Ltd. (Toronto) “Number one is convenience. Mortgage brokers are willing to travel. They come to you and meet with you, to offer one-stop shopping. We market your mortgage deal to 14 A lenders. We get pricing on a daily basis and we see better pricing. When people shop around by themselves, they have to find their best offer and make the deals. I am an ex-banker and I know that as a mortgage broker, nine out of 10 times my wholesale prices beat the banks. We beat bank rates the majority of the time. As a broker, I can give a better deal than I could give when I worked in a branch. Also, mortgage brokers offer specialty products in umbrella programs like construction financing. Not all banks want to do that. We know how to get the best deal. The key reasons are that banks and financial institutions have limits on the discounts they can offer. We don’t have that. We 30 • brokerbiz go to the table with 14 banks and see who offers the best price. There is no negotiation. Our customers get the best deal. They don’t care which bank or institution is offering it. A mortgage is not a tangible product. The best pricing is the bottom line. They are looking out for themselves, not the bank. They understand they are number one.” Baljinder Lailna, Mortgage Broker Greater Toronto Mortgages (Mississauga) “Consulting a mortgage broker has several benefits. First of all it is a benefit for the client because the broker is working for the client not the lender. As he is always working for the benefit of the client, the mortgage broker can understand the needs of the clients and put forward the deal to the right lender who can fulfill the client’s needs. Mortgage brokers deal with a number of primary, secondary and private lenders. Clients can get all sorts of services under one roof. For example, if a client cannot qualify for an A deal, then the broker can negotiate with a B lender or a private lender. Mortgage brokers work flexible hours and can meet clients at their choice of time, even on the weekend or late in the evening. Sometimes people do not communicate well in English and feel more comfortable in their own language. In this case, they can find a broker who speaks their language and can explain to them in their language. Mortgage brokers are dealing with conventional mortgages, high ratio mortgages, private mortgages, commercial mortgages, hotel, motel, gas station, business loans, etc. In a bank, a personal banker cannot do all of these things so it is very easy and comfortable for the clients to deal with one person for all their needs. As well, mortgage brokers work under FSCO so if a client has any complaints, he can contact FSCO with his concerns.” VoxPop Brian Matthey, Broker/Owner The Mortgage Professionals (Kingston) (Owned and operated by VERICO Blackburn Financial Services Inc.) “Today’s mortgage broker has to represent so much more to a client to survive in the new reality we are all about to face. The professional mortgage broker represents their clients’ interest, not the interest of the lending institution, and packages a mortgage for a client that takes into account the client’s whole financial picture and the client’s whole financial plan. If you are the professional mortgage broker of tomorrow, you can answer the question by stating to your clients the following: A mortgage is likely the single biggest loan you are ever likely to make. I do not want to do your mortgage just once. I want to be your mortgage partner for life. I want you to know that you can count on me to guide you in choosing the best financial solution for you now and to help you choose the best financing options for you in the future as your life circumstances dictate. My experience and expertise allows me to ensure that your mortgage fits with your financial plan now and in the future. I continually upgrade my skills and my knowledge so that along the way I am in a position to help educate you on changes that take place in the mortgage market that may provide an opportunity for you to save money. I take my responsibility seriously because I am a mortgage professional.” an application in search of a necessary approval, or to call upon our years of experience with many private sources, gives mortgage brokers many distinct advantages over our colleagues who must adhere to the rigid policies of their employers and are thereby restricted from being as creative as we can be. With so many families who can no longer count on the lenders they have always relied on for support, the silver lining of today’s recessionary cloud is clearly that this is a resourceful mortgage broker’s finest hour. Just ask anyone who’s recently bought a three bedroom house for $50,000 with no money down, or perhaps the family we’ve rescued from a power-of-sale, or orphaned mortgage situation. Paul Ouellette, Mortgage Broker Central Mortgage Associates Inc. (Windsor) “Our ability to think beyond a singlesource lender’s guidelines, to multi-source Chances are, they may have something nice to say.” BB ® We’re at home with Canadian housing CMHC & Conventional Mortgages for: Multi-Family Rental Properties Senior’s Housing Projects Commercial Properties Construction Projects Michael Lombard At CMHC, we’ve been a leader in the Canadian housing industry for more than half a century. For industry tools and videos you’ve never seen before and helpful information you can share with your clients, visit EverythingYouNeed.ca. CMHC. Everything you need to open new doors. Vice-President & Regional Manager Ontario Phone: 416-304-2078 Email: [email protected] Suite 1801-130 Adelaide St. West Toronto, ON M5H 3P5 www.peoplestrust.com Vol 3 Issue 4 • 31 Community Focus Eye on the community By Nestor Gula Mortgage professional Charles Bristoll gains recognition and accolades for the active volunteer role he plays in his community A family man, a successful businessman and an energetic volunteer: when it comes to making important life choices, Charles Bristoll likes to keep his plate full. It’s no wonder then that Bristoll was recognized as the recipient of this year’s IMBA Community Service Award, which he received at the association’s annual conference in April. Bristoll has his own mortgage lending and brokerage company, CENTUM Equity Access Corp., as well as Referral Only Realty Inc. However, his successful professional life doesn’t stop him from playing an active role in his community, which he does with an equal dose of passion and determination. Much of Bristoll’s volunteer work has revolved around the Caledon Chamber of Commerce, where he was president for two years running and now occupies the post of past president. In this capacity, Bristoll has played a pivotal role in broadening the Chamber’s involvement in building and improving business activity in Caledon, a town north of Toronto. 2010 IMBA Community Service Award recipient Charles Bristoll Bristoll helped organize networking meetings at the organization, and also, on the suggestion of members, spearheaded more active lobbying efforts. THE BEST APPRAISERS IN CANADA LOOK FOR THE PROFESSIONAL DESIGNATIONS DAR & DAC ARE CERTIFIED AND REGULATED BY THE CANADIAN NATIONAL ASSOCIATION of REAL ESTATE APPRAISERS CALL 888-399-3366 or FIND AN APPRAISER at WWW.CNAREA.CA 32 • brokerbiz Community Focus “Some members came up to me and suggested that we should do more advocacy work for business — that we should lobby the government. I agreed with that and we took that idea and started to get involved with the growth debate and that is what we are doing right now,” says Bristoll. “We turned the Chamber into more of an advocacy group as opposed to just a social group.” These efforts have helped advocate the interests of businesses in the region, which is facing some tough questions tied to growth and development, explains Bristoll. “In Caledon, there has been a big problem with growth right now and it has been around for the last couple of years. Caledon has been growing and growing [but] Council has frozen growth in Bolton, which is Caledon’s economic engine. There is a big battle in the public whether there should be growth at all in Bolton,” says Bristoll. Eyeing new options While pleased and proud of his contribution to this effort, the 45-year-old Bristoll is now looking for new avenues to further his volunteer work. Next on the agenda is offering help to local hospitals, or one hospital in particular, the Headwaters Hospital in Orangeville. While the exact role he will play has yet to be determined, Bristoll is eyeing his options. of assessment, to food banks, to hockey, to whatever,” he says. “A hundred here, a hundred bucks there, it all adds up. I rarely say no.” While the motivation for anyone’s good work is often multifaceted, Bristoll points to travels in his youth as his initial inspiration. He readily travelled the globe -- Europe, the Far East, the Middle East, Africa, the Caribbean – as part of his Bristoll was recognized as the recipient of this year’s IMBA Community Service Award, which he received at the association’s annual conference in April work at his family’s protective clothing business. Coming into contact with people less fortunate than him made him reflect on his own circumstances, and started him thinking about sharing his good fortune with others. “Having seen all these places, it’s easy to see why we are so lucky to live here Canada. I feel that Canada, without question, is the best country on earth,” notes Bristoll. “There are a lot of people out there that do not have the same background or upbringing that I had, I feel very fortunate. I like to share this. I like to share what I can – to show my appreciation.” In line with this, sharing his business expertise is also on Bristoll’s agenda, and he often conducts information seminars, in particular on the Credit Bureau, at Chamber of Commerce functions, conferences, community centers and local high schools. For this mortgage professional, his working day doesn’t end at the office. What happens after work is just as important. BB “There are people in hospitals that are sick and are more deserving of volunteer work than the area where I have presently focused my volunteer work,” says Bristoll. “I will be helping at the Headwaters Hospital here in Orangeville. I’ve been in there, my wife has been in there and my family has been in there and it is a really great place. I’ve met some volunteers there and the nurses can’t do everything.” As a successful businessman, Bristoll also supports many charities that come around to his door, as well as local community sports programs. Together with his wife and three children, Bristoll’s family is active in the local hockey and soccer leagues, and Bristoll readily admits to sharing a large part of his earnings with worthwhile causes. “It is fair to say, I donate probably more than half of what I make, what I show in my notice Vol 3 Issue 4 • 33 Career Corner Looking for new opportunities in the industry? In this new section, BrokerBiz provides news and information on professional opportunities available to mortgage brokers and agents in Ontario Homeguard Funding Homeguard Funding Ltd. (Verico) is a full service mortgage brokerage that has been in operation since 1983. Our president, Wayne Sudsbury, is a past president of IMBA. We are seeking to expand our mortgage brokerage company and are looking for mortgage agents. All inquiries can be directed to Martin Marshall, Ontario Sales Manager at [email protected] or by phone at 416-702-3942. Looking to expand your brokerage? Take advantage of your Career Corner in BrokerBiz and place your particulars here. For more information, please contact Cindy Smith, Operations Manager, at [email protected], 1 877 564 4622. If your company is interested in submitting information to IMBA’s Career Corner, please contact Cindy Smith at [email protected], 416-252-4622 ext. 1. BrokerBiz ADVERTISERS INDEX AGF Trust Company........................33 www.agf.com Applied Business Software Inc......27 www.themortgageoffice.com Bridgewater Bank..........................15 www.bridgewaterbank.com Canada Guaranty Mortgage Insurance Company ........................... Inside Back Cover www.canadaguaranty.ca Canadian Western Trust.................25 www.cwt.ca Davis & Henderson........................12 www.dhltd.com De Francesca Law Office...............27 www.defranlaw.com Dominion Lending Centres..............5 www.dominionlending.ca Effort Trust.....................................20 www.efforttrust.com Equitable Trust.................................9 www.equitabletrust.com Firm Capital...................................29 CHIP – HomEquity Bank...................4 www.firmcapital.com C M H C..........................................31 FirstLine Mortgages .........................Outside Back Cover www.cmhc.ca www.firstline.com CNAREA.........................................32 First National Financial LP.............15 www.chipadvisor.ca www.cnarea.ca 34 • brokerbiz www.firstnational.ca Foremost Financial Corporation....21 www.foremost-financial.com Genworth Financial Canada...........11 www.genworth.ca Home Trust.......................................3 www.hometrust.ca National Bank of Canada...............26 www.nbc.ca Optimum Mortgage........................22 www.cwbank.com Peoples Trust.................................31 www.peoplestrust.com Pillar Financial Services Inc...........18 www.pillarfinancial.ca Shapiro Cho...................................13 www.shapirocho.com Solidifi Inc........................................7 www.solidifi.com Vector Financial Services Ltd. ....................................................17 www.vectorfinancialservices.com Verico Canada.......Inside Front Cover www.verico.ca Aldo Aragon Underwriting Manager SERVICE EXCELLENCE MEANS... Speaking with a decision-maker the first time, every time. “At Canada Guaranty, we make it our priority to ensure all calls to the National Underwriting Centre are answered directly by an underwriter. This allows us to address important questions immediately so that our partners can respond to their borrowers, that much sooner.” - Aldo Aragon, Underwriting Manager Canada Guaranty Mortgage Insurance Company From application to approval, our dedicated underwriting team is committed to helping you find the right solutions. Contact us today and discover how we’re making mortgage insurance better, one deal at a time! National Underwriting Centre: 1.877.244.8422 Canada Guaranty Mortgage Insurance Company 877.244.8422 I www.canadaguaranty.ca
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