Mortgage Broker

CMB MAGAZINE cmba-achc.ca spring 2016 | 17 ceochat caNadiaN Mortgage Broker: Set the stage for us; what do you think of the mortgage industry today in Canada? stephen smith: It's competitive, becoming more so, and it's changing. On the one hand, revisions to securitization rules have increased NHA-MBS allocations going to aggregators. at's a change that increases liquidity and opportunity. On the other, we're seeing the ongoing evolution of the regulatory regimen. cMB: Sounds like good news and bad. stephen: Great news in the sense that increased NHA-MBS allocations will enable mortgage brokers to offer more and better products to borrowers from lenders who rely on securitization. Challenging news in that B-20 and B-21 will necessitate increased oversight from lenders and insurers and lead to more documentation. is, in turn, leads inexorably to additional time in transacting business. cMB: Is there a solution to this? stephen: Not really, but this is an industry- wide phenomenon, so at least the playing field is level. At First National, we typically respond to mortgage broker submissions within four hours and I can tell you that hitting this standard 90 per cent of the time – as we're generally doing now – is not easy in this environment, but it's something we remain committed to achieving because we know how important it is. And if it's any consolation to readers who are suffering from regulation overload, First National feels the burden too, including a reduction in loans-per-underwriter productivity. cMB: Can technology help? stephen: Technology is absolutely a business accelerant. Improving turnaround speed but also transparency was the reason First National developed the MERLIN mortgage approval and tracking system back in 2001. It helps the mortgage professional stay connected to the status of their deals in real time so they can hopefully exceed borrowers' expectations. ese advantages still hold true. But heightened compliance is not something that technology alone can solve. First National is fortunate in that mortgage lending is our only business. is specialization gives us a structural advantage in responding to change, regulatory or otherwise, and in achieving the consistency and predictability of approach that we think are keys to satisfying customers. cMB: As mortgage technology innovators, does First National envision technology disrupting the industry? stephen: We look at it this way: getting a mortgage is an emotional, time-consuming and complex proposition, particularly for a first-time buyer. And for all buyers, it's clearly the largest personal financial transaction they will make. Technology can help. For example, I know that some mortgage brokers are tapping social media to build their books and educate borrowers, and First National has proven the utility of technology with MERLIN and the MYMORTGAGE portal for borrowers. But technology cannot replicate the value that is created when a mortgage broker sits across from a borrower to offer personal advice and counsel, or the value that accrues when a broker interacts with lenders to advocate for deals. cMB: So the key is to offer the personal touch? stephen: Everyone has to decide on their own value proposition. For some, it's the lowest rate and for others, it's rate plus personal service. We really try to cater to both value propositions at First National, but the one that seems to endure is personal service. It's indispensable and not easily disrupted. cMB: Speaking of service, First National promises it. How do you put substance behind the pledge? stephen: Technology is one way; another is to be in the market with competitive rates 12 months a year, something we're able to do because of the diversity of our funding sources, be they institutional partners, NHA-MBS, the Canada Mortgage Bonds program, asset-backed commercial paper or commercial mortgage-backed securities. But fundamentally, it's about creating a culture where honest, responsive and respectful service is second-nature and reflected in simple ways such as answering our 1-800 call lines instantly. We strive to be good at communicating, good at offering options and always aligned with brokers in achieving mutually beneficial goals. cMB: All of that comes back to people. stephen: Right, if we want our people to be good to customers, we have to be good as an employer in retaining talent and recruiting it. In First National's case, we are tremendously proud of our people. In fact, in our last annual employee survey we surpassed industry benchmarks. More than 80 per cent of current First National employees indicated they would recommend First National to a friend as a great place to work. Over the years, our team has grown, however one thing that has remained unchanged is our commitment to our brokers and our customers. As a consequence, we now have about 900 employees across Canada devoted to one cause: growing mortgage volumes by attentively serving broker and customer needs. ese statistics say a lot about our workplace and hopefully that's reflected in our service delivery. Ultimately, when we can help a broker by providing superlative service to the end customer, we know First National has done its job. cMB: You recently started a third-party mortgage underwriting venture. stephen: Correct, and the comments we've received from mortgage brokers have been very encouraging. ey like the service. is collaboration with the Toronto- Dominion Bank gave First National an opportunity to prove that we could scale a new and entirely separate business quickly and effectively. In just over seven months, we opened three dedicated offices across Canada, recruited more than 120 people and trained them so that they could apply the service and underwriting standards that everyone has to decide on their own value proposition... but the one that seems to endure is personal service. It's indispensable and not easily disrupted.

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