When I see things such as: "AGF Trust is offering two 5 Year Fixed Quick Close options at reduced commission rates"
show up in my inbox I cannot help but to cringe. I realize that the lenders in their limited wisdom are attempting to provide us with a tool to avoid losing business to others such as Bank of Montreal, but they are killing the industry and us by doing so.
I don't need their help to give my money away.
I don't need them to give me permission to do so.
I don't need them to try to sell me on the idea like it is some favour they are doing me.
A more proper way for them to phrase it would be: "We make millions of dollars, but in order for us to offer competitive rates, we want to pay you less"
In order for the lender to continue to make millions, either the customer has to pay more or you have to earn less.
This creates a real problem and an ethical dilemma for us as mortgage associates.
Every time you sell a mortgage you must decide, "is it more important I save this client $30/month or is it more important that I buy groceries this week?"
Who comes first, your client or your kids?
Now maybe that is a bit of an extreme way to look at things, but it is a reality for many in this industry where we have seen compensation slowly eroding, bonuses disappearing, lenders trying to steal and retain your clients, etc. Some of our peers are literally starving for business and income. The broker model is under immense pressure and it is all due to these lenders preying upon the compensation and client lists of mortgage brokers.
So what is the solution? It is all about your attitude and choices.
You're experienced, educated, and a valuable financial resource to your clients.
You can personally answer their questions, advocate on their behalf, and alleviate their stress regarding their financing.
You can share with them true stories about people who made good and bad choices, people who saved and lost money, people who took good advice and people who did not.
You meet with them on their time schedule and at their convenience, often outside business hours or even at their home.
You find them good rates, flexible mortgage products, and steer them towards sensible financial decisions.
You deserve fair and reasonable compensation for your services, so either the customer or lender needs to pay you for that. You need to know that, understand that, and act accordingly.
I would like to see all mortgage brokers stop selling the products of lenders who offer cut rate compensation. Stop believing that the mortgages that offer the lowest rate at the expense of all else are the best choice for your client, for you, and for the industry. They aren't.
FYI: The difference in monthly payment for an average mortgage between the lowest no-frills rate of 2.99% and the lowest rate from a lender who offers decent compensation and industry support at 3.14% works out to be about $30/month. The difference in the payout penalty between those two products is literally thousands. The value of the mortgage broker who shares that information with you and helps you avoid the wrong mortgage products is PRICELESS.
Do you know why the Bank of Montreal has that mortgage product on sale for 2.99%? It is because that mortgage product is SHIT and if they didn't offer it for such a cheap price then nobody would want that BMO mortgage. And you can take that advice to the bank!