Scotiabank closes ING Direct mortgage broker division… but who cares?

In an email sent to Mortgage Brokers today, ING announced they will close the Mortgage Broker division February 16, 2013.   My first reaction was one of sadness.  In the mid 2000’s, ING was a strong Lender and partner with Mortgage Brokers.   They offered some great products, competitive pricing, a fair prepayment penalty calculation and had an excellent team of employees, including their senior management.

Yes, I was sad to hear they would close the Broker division… But then I asked myself how much would this affect me?  my clients? How much business was I referring to ING these days?  The answer soon made me realize that there isn’t any reason for sadness.    I soon realized that since they made the switch to registering all their mortgages as a collateral mortgage charge, back in December 2011, I all but completely stopped recommending them to my clients.

TD and ING are the only major Lenders that have taken this ‘one size hand-cuffs fits all’ approach.   And let’s not forget that ING is now owned by a BIG SIX BANK… that’s right Scotiabank…. Anyone that has followed my articles over the past few years will know that I am not a fan of the BIG SIX BANKS when it comes to their mortgage products….their inflated prepayment penalty calculation, their rate haggling game and inconsistent pricing leaves much to be desired.

I realized this really won’t be a big change for me or my clients.   There are several other quality Lenders that have offered superior mortgage products for several years… including better rates, terms, options and a fair, prepayment penalty calculation.

So while some might see this as a sad day, I think it’s really just another day at the office…  and probably a good day for the rest of the Lenders.  They will now have an opportunity to grow their volumes from the ING loss..

To existing ING clients, I say this….  No need to panic just yet… ING will continue to offer mortgages directly to the consumers….  Is the consumer better served this way?  Only history can answer that…. But if we look at Scotiabank’s buyout or takeover history, we can see they like to convert their acquisitions to the Red Scotia label…  (Montreal Trust and Maple Trust are 2 buyouts that come to mind..both brands have disappeared)….  Beware of any ‘special offers’ from Scotiabank… yes, I think there will be some sort of offer to extend your mortgage or convert to a Scotia product…. Before you sign anything, seek out and speak with a qualified Mortgage Broker to shop around…  you might be pleasantly surprised to find out there are several other Lenders that are hungry for your business..

As always, I welcome all comments and questions..

Steve Garganis 416 224 0114 steve@mortgagenow.ca