Choosing The Right Mortgage Brokerage...

Dear New Mortgage Agent,

Congratulations! You’ve received your Mortgage Agent Certificate from either CMBA, REMIC or MPC. Now what? Well, this is where you determine which Mortgage Brokerage you’re going to join and grow your business with!?Seems easy, right??Not so fast!!!! Here are a few things you need to take into account when trying to figure out the next steps of your mortgage career!

There are several things you need to consider when choosing a brokerage to join. Some of those things are:

• Reputation
• Support & Training
• Systems, Tools & Technology
• Access to Lenders
• Size of Brokerage
• Underwriting
• Marketing
• Compensation & Fees

Notice that compensation & fees are last on this list, but I’ll touch on this later.

REPUTATION

Ever hear the phrase “Guilty by association”??Your reputation is all you have and you better do a fantastic job of protecting it.?It can take minutes to ruin and years to rebuild.?Who you join is a direct reflection of who you are whether you like it or not.?Lenders, Insurers, Realtors and even clients will judge you based on what they know and what they hear before you get a chance to present yourself.?

For example, if you work with “ABC Mortgage Brokerage” and they have a reputation for hiring agents that do unethical business, then you are now part of that group and will be treated as if you’re unethical.?I’ve had discussions with many industry professionals (lenders & insurers) over the years and they will look at deals (mortgage applications), significantly harder and longer based on which brokerage it’s coming from. There’s almost a “guilty until proven innocent” perspective.?They will never admit this publicly, however as a former underwriter myself 15 years ago, it’s definitely a practice that once existed and likely still does.

How do you know who has a bad reputation or who doesn’t? Do your homework.?Speak with other industry professionals and ask around with lenders and insurers.

?Support & Training

This is often overlooked especially by Mortgage Specialists coming from banks transitioning into the Broker space.?When you don’t know the answer to a policy or where to send a deal or how to package a deal, who do you call??When you need answers, what do you do? The type of anxiety this can create can be overwhelming.??Ensure that the Brokerage you join has a system in place where you can get answers readily. Whether this be the Principal Broker, an underwriting team, a manual or online library or a team of senior agents willing to help, be sure that you have access to knowledge.?Your brokerage should allow you to have access to the BDM’s of the lenders and shouldn’t restrict you.?If you’re a Specialist coming from a bank, understand that though there are similarities and parallels, the broker space is quite different and the learning curve is still steep, so ensure you’re prepared to “relearn” your trade.??

Training should be ongoing and encouraged. There should be routine access to lender product training and material.?Training shouldn’t be limited to only products and guidelines, as the industry evolves, sales training and development should be a focus as well.?As you will find out, nothing remains the same for too long and there is a need for continuous improvement.

?System, Tools & Technology

Imagine that you’re living in today’s world and your phone is a rotary phone, there is no such thing as the internet and all you can do is fax documents around.??How successful could you be as a mortgage agent??In this ever changing, fast paced industry, you have to have the right tools and technology that will make you as efficient and resourceful as possible. Without advanced tools and tech, it’s like trying to win a NASCAR race while riding a horse, others will pass you by.?Tools that are important to consider is a “forward thinking” CRM. This should be something that not only houses your client data, but communicates to your clients and all parties to your mortgage transaction. It should be easily accessible and manageable.?Do you have access to Purview? This is a very useful tool in your business.?Does your CRM help you with your marketing??Do you have access to a library of knowledge??

Don’t get caught up with gimmicks and old tech that’s just shined up to look new.?Some things seem useful and are novelty but not practical or functional as a business owner.?This is what you are as a Mortgage Agent; a business owner.?When choosing a brokerage, do not underestimate the value of what Tools & Tech the brokerage can offer.

?Access to Lenders

This is important in your consideration.?Does the prospective brokerage have access to all of the major lenders??Notice, I said major.?If there’s a credit union in a distant location that does very unique and special lending for one-off transactions, that’s not considered major.?You should have access to all the major A lenders and at least 3 Alternative (B) lenders.?If there are lenders that the brokerage is not signed up with, you should ask why???What happened? Were they cut off? If so, why? Did they not sign up? Was there not enough volume? Also, what is their compensation arrangement with the lender, are they top tier or not.?This will impact you directly.???

Think about it, if your client wants a STEP mortgage with Scotiabank, but the brokerage doesn’t deal with Scotiabank, what are your options??Do you look competent to your client or realtor? You’re leaving possible income on the table if you don’t have a solution due to your brokerage not having access.

?Size of Brokerage

This is important to a degree, depending on the situation.?The prospective brokerage may have very few agents but they are all high producing agents. If this is the case, then they likely have top tier with all of the lenders and have access with all of the lenders. Also consider if there are many agents, it’s possible to have many different experiences and levels of knowledge that you will have access to.??Fewer agents which are high producing could possibly mean that they’re busy and don’t have as much time to share knowledge or experience.?This isn’t always the case, but this is something to consider.?Often, smaller brokerages, do not have access to all lenders and thus do not have top tier compensation.

?Underwriting

This topic has been a major focus in recent years.?If you were to look around the industry, actually in most sales industries, there is a commonality amongst top producing sales people; they have someone doing the administration.??Successful mortgage agents who are producing at a high level have some form of underwriting and administration.?Good sales people sell. They spend their time building new relationships, meeting with referral sources and clients and taking in applications.?They rarely are involved in the administrative tasks of collecting documentation and dealing with the fulfilment of conditions with a lender.?The brokerage you join should have an underwriting solution that helps you be more efficient and focus on your strength of selling and supports you in the typical sales persons area of weakness; paperwork.?There’s nothing wrong with trying to work on your own administration, however you will find in time that it’s difficult to maintain a pipeline of business when your time is spent “working on the deal” vs “working on the business”. Know your worth and know your strength and build your business around it.

Marketing

If you’re not constantly building your brand recognition and trying to be top of mind among your network, then someone else is taking up the spot and taking your business.?When someone thinks Mortgage, you should be the first name that comes to mind.?This is done by marketing and advertising.?Your brokerage should be helping you with promoting your brand (within the guidelines of FSCO/FSRA) and providing you with direction and material.?A website and business cards should be considered basic and expected. As a “Business” you should have a social media presence. You should be readily located on Linked In and other social media platforms so that your clients can research who you are and start developing a comfort in who you are.??If you’re not present on social media and are not marketing yourself, you’re already behind. The world is different today. It’s moving faster and faster and is becoming more digital by the minute, so don’t get left behind.

Compensation & Fees

This is often the first thing that new mortgage agents bring up when interviewing a brokerage and it really should be the last thing. As a new agent, typically you know very little and therefore will be asking many questions and “taxing the system”.?Compensation is important however if everything else above isn’t addressed, then you’ll have bigger issues getting a high split on 0 volume.?Splits are typically not set in stone and you should be able to increase your split once you’ve started putting some business on the books.?You should focus on learning the business and increasing your sales and naturally your splits will increase accordingly.?There needs to be an understanding that a brokerage is there to also earn a profit. The more time that is taken away from the Principal broker and the resources around them, the less time they have to sell themselves and thus impacting their own productivity and profit.?Again, this is a business for everyone involved.

Fees are important to consider when determining who to join.?Always weigh out what you get in return for what you pay.?You often get what you pay for and the same can be said that you don’t get something if you don’t pay for it.?Stop and think, if you were to pay for tools, technology, support, training, marketing and so on and so forth, what would that cost you out of pocket??Consider that versus paying a monthly fee and royalty on your transaction. Often, you’re still gaining more by paying fees and royalties vs trying to pay for it yourself.?Only you will know what you need and what you value.

As a recap, choosing a brokerage is much more complicated than one would think.?It’s imperative to your success that you ask many questions and understand how your choices will impact your business. Good luck on your search!

Regards,

Seasoned Mortgage Professional