broker and realtor referrals vee ramburn, broker relationship manager, duca financial cupa 2013
TRANSCRIPT
![Page 1: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/1.jpg)
Broker and Realtor ReferralsVee Ramburn, Broker Relationship Manager, DUCA Financial
CUPA 2013
![Page 2: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/2.jpg)
AGENDA
• Macro outlook of the industry (focus on brokers)
• Different types of lenders and brokers
• Micro analysis of your credit union dealing with brokers
• How to get started, creating a broker strategy
• How to differentiate yourself from competition
• Common broker questions
![Page 3: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/3.jpg)
Dealing with realtors/brokers
What comes to mind when you think about dealing with brokers and realtors?
![Page 4: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/4.jpg)
Some interesting broker stats
• Brokers account for approximately 25% of funded mortgages in Canada in the USA it accounts for 75%
• 51% of broker mortgage clients are satisfied vs 43% for lender direct
• Age breakdown of broker originated deals in Canada:
• 29% between 18-34
• 24% between 35-54
• 21% 55+
![Page 5: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/5.jpg)
Why deal with brokers/realtors?
• What is the average age of your credit union’s membership?
• Where are you currently generating your mortgage volumes?
• Is there a need to grow membership between ages 18-55
• Do you have excess liquidity?
![Page 6: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/6.jpg)
Industry Broker Lenders
• Balance Sheet Lenders
• Monoline Broker Lenders
• Private Lenders
Two types of mortgage lending:
• A business
• B business
![Page 7: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/7.jpg)
Common Lender Names
Balance Sheet Lenders
• Bank lenders: TD, Scotia Bank, National Bank
• Credit Union lenders: Meridian, Alterna, FOCU, DUCA, IC Savings
Monoline Broker Lenders
• Merix/Paradigm
• Home Trust (B lending)
• Equitable Trust (B lending)
• MCAP
• Canadiana (formerly Macquarie)
• Street Capital
• First National
![Page 8: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/8.jpg)
Trends in Broker Community
• Similar to credit union system we are seeing mergers in the broker industry
• Broker houses believe in economies of scale…the larger they become, the more efficient they will be, gives the broker strong bargaining position with national lenders (white label product)
• Some recent mergers:
• Dominion Lending Centre and Mortgage Centre
• Invis and Mortgage Intelligence
![Page 9: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/9.jpg)
Popular Broker Houses
• Dominion Lending Centres
• Verico
• Invis
• Centum
• Mortgage Architects
***hundreds of independents in ON***
![Page 10: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/10.jpg)
Brokers/Agents
• Brokers and agents are regulated by the FSCO, and maintain license with 20 CE credits per year
• FSCO constantly changing mandates to become agent, making it tougher, more emphasis on long term professionals
• Can also become members of CAAMP (AMP designation) and/or IMBA
• Have to be an agent for 2 years working under broker/owner
• Split finders fee with the broker/owner
![Page 11: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/11.jpg)
Brokers/Agents
• Brokers can pay a franchise fee to large broker house and split finders fee, lot more support (compliance/marketing)
• Agents then report to directly to the broker who takes a split of their finders fee
• Broker – less focus on mortgage lending and more focus on running business and managing sales people
• Can be independent – lot more stress, 100% responsible for running all facets of the business
![Page 12: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/12.jpg)
Where to start?
• Create a broker strategy and do SWOT analysis with senior leadership
• Thoroughly review your current underwriting guidelines
• Set service standards for turnaround time
• Ensure you have the infrastructure in place to handle additional business
• Network, talk to other credit unions who are already dealing with brokers
• Talk to third party providers
• Host a broker roundtable at your head office
![Page 13: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/13.jpg)
Things to create
• Create a broker contract, to be signed by broker/owner or individual with signing authority who can legally bind brokerage
• Create specific broker marketing material, brokers love one page product sheet of what your credit union can and cannot do, focus on your unique lending attributes
• Create broker specific presentation, and role play it
• Create rate sheet detailing commissions to be paid
• Create email list, to give brokers updates on rates/products
• Have branch broker meeting pitch created
![Page 14: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/14.jpg)
Broker Contract
• Detailing the consideration of the contract
• Clauses for termination of the contract
• Clauses for no payment of finders fees
• Privacy
• Broker agents (agents working for the brokerage are bound by the contract)
• Ownership
• Licensing (http://www.fsco.gov.on.ca/mbsweblist/agents)
![Page 15: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/15.jpg)
Broker Presentation
Does not have to be on powerpoint, keep it simple
Highlights:
• Your credit union’s history and strengths
• Showcase what makes you DIFFERENT (alternative lender, NOT the bank)
• Little hierarchy, ability to run deal by senior leaders in timely manner
• Ask them what is currently frustrating them
• What are you working on right now, ask agents to run deals by you, tell them you will stick around to talk about their deals
![Page 16: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/16.jpg)
Branch Meeting
• Clients are coming into the credit union viewing this as a commodity transaction, here for their mortgage only
• Have one opportunity to sell them on the virtues of your credit union
• Branch staff should give themselves the time go through the docs, and look for opportunities
• Have their credit union pitch well rehearsed
• SELL creditor insurance
• Don’t view this as a service meeting this is a SALES meeting, you want this member to become full service
• Show INTEREST in their business
![Page 17: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/17.jpg)
Who are you going to target
Biggest question facing a credit union, “who do I reach out to?”
• Talk to your high ratio insurance account managers
• Go to the CMP top 75 broker list
• Top brokers are always looking for alternative lending
• Asking for small % of their total business can be a little easier
• Check your local papers
• Broker community is tight, ask a broker who they feel could gain from using your credit union as a lender
• Provide a good service, word of mouth will spread
![Page 18: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/18.jpg)
Where can you find success
• What can your credit union offer that is unique
• Local area expertise of a credit union vs the central underwriting office based out of one location
• SERVICE: provide the same level of service to your brokers as you do your members
• Know your underwriting policies, be confident
• Brokers will always appreciate an honest answer
• Be willing to be creative
• Finance risk with surcharges on rates, more profitable for your credit union
![Page 19: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/19.jpg)
Niches
• High Ratio Programs
• New to Canada
• Purchase Plus Improvements
• Collateral
• Work/live
• Land
• Hobby farms
• Rental properties
• Construction financing
• Storybook lending
![Page 20: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/20.jpg)
What can you anticipate
• Your credit union will attract good brokers, but unfortunately will also attract bad brokers (you will be tested)
• Anticipate a lot of “amazing” deals
• You will see fraudulent deals, be very thorough with every application
• Some applications will be declines from other FIs, and insurers
• Will see some quick close deals
• Lower funding ratio on broker deals vs direct deals
• Some brokers will give very little docs and ask for everything to be conditioned
![Page 21: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/21.jpg)
Difference between member and broker deal
Member Deal
• Much easier to judge character
• The relationship is direct with borrowers
• Ability to contact the borrower directly
• Usually have all docs up front
• No surprises, typically less need for amendments
Broker Deal
• Character is a challenge to decipher
• The relationship is with broker, until borrower signs and becomes member
• Have to contact the broker
• Challenge to get all docs up front
• Unfortunately there are surprises, higher probability for amendments
![Page 22: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/22.jpg)
How to deal with this
• Be very firm, do not get bullied…remember who is in charge
• Do not be afraid to tell broker to resubmit properly packaged deal
• Ask for most of your documents upfront
• Remind broker of your underwriting policies
• If declining a deal, be very direct as to why your credit union will not be proceeding (support the decline)
• Preferably over the phone, not voice mail or email
![Page 23: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/23.jpg)
How to deal with this
• Ask if deal has been declined by other FI or insurer
• If it is not adding up…ask for more supporting docs
• Create a “do not use list” don’t be afraid to cut a broker off
• Create a “watch list”, these broker deals will need to have ALL docs upfront to issue commitment, NO conditions
• Talk to other credit unions dealing with brokers
• ALWAYS BE HONEST!
![Page 24: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/24.jpg)
Dealing with Fraud
• If fraudulent…DO NOT insinuate the broker is committing fraud
• Ask the broker how they got the deal
• When discussing the deal, use the word “questionable”
• Cancel the deal immediately, and report to your credit manager
• Discuss next steps: watch list or do not use list
• If high ratio approved, inform insurer of your concerns
• Join CAAMP fraud committee
• You can only disclose the borrower name, subject property
![Page 25: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/25.jpg)
Common Fraud Trends
• Income misrepresentation
• LOE
• T4
• NOA
• Paystub
• Downpayment misrepresentation
• Online statements
• Term deposit certificates
![Page 26: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/26.jpg)
First time broker
Give them one last opportunity to disclose information on the file that was submitted. Make
broker understand the consequences of lack of full disclosure.
![Page 27: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/27.jpg)
Common Broker Questions
• How do I submit my deal?
• Do you guys pay finders fee and do you pay volume bonuses?
• Can I charge my client a broker fee?
• Can I use my own appraiser?
• Do you insure conventional deals?
• Do you have a sliding scale?
• Do you have a funding ratio requirement?
![Page 28: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/28.jpg)
More Common Questions
• Do you underwrite the deal, or is it done at head office?
• Do you use all three insurers/which programs do you subscribe to?
• Will the branch offer a better rate than what you are giving me?
• Do you do stated income? What are your BFS guidelines?
• Do you do commercial?
• What’s your policy on rentals?
• Where can you lend?
![Page 29: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/29.jpg)
More Common Questions
• Do you offer preapprovals?
• What are your maximum and minimum loan amounts?
• Do you pay on HELOCs?
• Policy on work/live properties
• What documents do you require upfront to issue commitment?
• What is your turnaround time?
• Do you have a minimum volume requirement?
![Page 30: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/30.jpg)
Difference dealing with realtors
Two types of realtors you will be dealing with:
• Biggest concern is what they will be paid on the deal
• Most concerned about getting deal approved, to waive condition of financing
![Page 31: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/31.jpg)
Dealing with Realtors
PROS
• Cost effective way to gain mortgage volumes
• Can be very loyal, if you are able to provide very quick turnaround time
• Good for branding if you can provide rate sheets for open houses
CONS
• Most realtors know very little about mortgage lending
• Can tend to be very pushy to get approval to waive COF on little supporting docs
• Most clients of realtors already dealing with broker or MPS
![Page 32: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/32.jpg)
Long Term Plan
What’s the strategy:
• Do you shorten the number of brokers you deal with
• Do you sign up with Filogix (broker submission system)
• Do you need to hire additional staff to handle extra volume
• What’s the success of cross sell penetration at branch level with broker generated deals?
![Page 33: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/33.jpg)
Useful Links/Follow on Twitter
www.mortgagebrokernews.ca
www.caamp.org
www.imba.ca
www.canadianmortgagetrends.ca
www.fsco.gov.on.ca
www.philadelphiaflyers.com
![Page 34: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/34.jpg)
RECAP
• Different types of lenders and brokers
• How to create a strategy
• What to anticipate
• Common questions from brokers
![Page 35: Broker and Realtor Referrals Vee Ramburn, Broker Relationship Manager, DUCA Financial CUPA 2013](https://reader035.vdocuments.mx/reader035/viewer/2022062223/5517f2f6550346d5568b4c45/html5/thumbnails/35.jpg)
Thank you!
Questions?