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Posted 2 Comments on RBC Mortgage Specialist crosses the line. Mortgage News

RBC Mortgage Specialist crosses the line.

They say competition is good for the consumer.   And I must agree.. this is part of what a Mortgage Broker does…A Broker determines a borrower’s needs, goals and objectives…..and then go to the market to seek out the most competitive mortgage product for that client…

Last week, I received what must be the most inaccurate piece of marketing propaganda I have ever seen in my 21 years in the Financial Services industry.  click here to view… At first, I was offended, angry and upset that RBC would put out something like this… but then I realized just how ignorant some Bank employees must be…..

Clearly, this RBC Mortgage Specialist thinks it’s okay to spread lies in an attempt to win over more mortgage business and discredit Mortgage Brokers . .. It’s just too bad she didn’t take the time to do some research before publishing her propaganda.

I thought I’d take the time to clarify some of her misinformation…..I’m making some comments below so that other RBC Bankers can get their facts straight…..and maybe answer or address any concerns or questions the average borrower would have…

  • Brokers will charge set up fees and have other hidden costs you should be aware of.    A mortgage broker does not usually charge a set up fee... A broker fee MAY apply for harder to place mortgages and for commercial mortgages…. BUT all fees MUST be disclosed BEFORE a borrower signs any document.… there are NO hidden fees…all Mortgage Brokers are licensed provincially and must disclose all fees through a disclosure statement…  (most provinces have these regulations including BC, Alberta and Ontario)… By the way, Mortgage Specialists are NOT licensed by the government...
  • Ask the broker what their compensation will be.  Nothing wrong with that question… A broker’s compensation is based on the mortgage amount and product type…longer term products tend to pay brokers more.   But let’s ask the Bank Mortgage Specialists this question….  What compensation does she receive?   Did you know that the Bank Mortgage Specialists are paid more for selling a higher rate?  
  • Brokers will set you up with a financial institution based only on the lowest rate, no other factors.  Another completely false statement.  If you are a regular visitor of CanadaMortgageNews.ca then you know that interest rate is just one part of a mortgage…There are many other factors to consider such as a client’s personal needs, the terms of the mortgage, privileges and options….
  • When selling your mortgage, the broker and the financial institutions reviewing your file may pull numerous credit bureau requests.   This one makes me laugh…”numerous credit bureau requests” are NOT pulled when dealing with a broker.. In fact, the credit report that a broker pulls is considered a ‘soft hit’ by the credit reporting companies, just like the Banks… and the broker’s report is shared by the lender or lenders that underwrite and review the mortgage application…  it’s actually better to deal with a broker where there will only be ONE inquiry, rather than go to 5 or 6 banks and have them pull multiple inquiries….Numerous inquiries can affect your credit score in a negative way.
  • Brokers will not be there in a few months when you need to ask questions about your mortgage.   Any good mortgage broker will tell you they must stay in contact with their client…keep them informed….otherwise, how can they expect a borrower to come back to them for their future needs?  Brokers depend on repeat and referral business….  hmmm… let’s turn the tables… ask the RBC Mortgage Specialist how long they have been in their current position and how long they intend to stay in that position?    Ask yourself, how many times has your local branch changed account managers, branch manager?
  • Mortgage Brokers can most often find you the lowest rate on the market (well, that part is true and I’m glad to see this acknowledged… here’s a good link that proves this)  by taking advantage of this one time, one term rate offer the client has a price to pay.      No need to comment too much here…All mortgages have terms that expire… typical terms are 5 years… at the end of 5 years, borrowers can stay with their current Lender or go elsewhere…  A good broker will contact their clients at maturity and compare what their current Lender is offering and what the Mortgage Market is offering.

This post is a bit lengthy, but I thought it was important to be as thorough as possible…. I’m not sure how long this marketing piece will be in circulation but I know that the Canadian Association of Accredited Mortgage Professionals is aware of this and are in the process of contacting RBC to get them to take some sort of action with this RBC Mortgage Specialist…  We’ll update you as more news on this becomes available…

I do agree with one thing in this RBC piece…you really do need to check the credentials and credibility of your advisors…Hope you found this informative…

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Report shows Canadian borrowers are too complacent…don’t drink the koolaid.

That’s what a report in the latest Bank of Canada Review had to say…    This article in the National Post sums it up well…  “Simply put, borrowers are often complacent and end up paying more than they should.”

This is exactly the reason I started this site…..To make you an informed borrower. Like the review said,  “consumers have different preferences and skills when shopping and bargaining for a mortgage and where lenders maximize profits based on observing these preferences and skills.”

So, how does the average Canadian borrower know if they are getting the absolute best rate or the right mortgage product?  Is there a better product with a different Bank, Financial institutions or other Lender?  How do you know if you aren’t speaking with an unbiased professional that doesn’t work for any one bank?  For me, there is only one sure way to know you are getting a highly competitive mortgage product…..You must deal with a Mortgage Broker.

Here’s another quote from the Bank of Canada Review…  “Canadian lenders appear to be extremely slow to pass on changes in the Bank Rate to their customers.”  I’m sure this comes as no surprise to most of us.

Never forget that the Banks are a business… and they are here to make a profit… It’s imperative to seek unbiased, market neutral advice…..  A Bank Mortgage Specialist just can’t be neutral or unbiased….They can only offer one set of products…  I save the best for last….

A Mortgage Broker helps to ‘creates competition’ as the report said.

Hopefully, this site will keep you informed and awake…Don’t settle for the status quo….

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Deloitte report on Mortgage Brokers.. 38% use brokers

Here’s a great report that was put out by Deloitte. The report shows that Canadians rely on Mortgage Brokers more than ever… but not as a last resort.

Unlike the U.S., where mortgage brokers used to account for 65% of all mortgages arranged prior to the October 2008 mortgage crisis, U.S. broker now account for less than 20% of mortgage business.

Here in Canada, 38% of all mortgage originations went through a mortgage broker…. including  44% of First Time home buyers.

With national and provincial organizations like CAAMP (Canadian Association of Accredited Mortgage Professionals) and IMBA (Independent Mortgage Brokers Association), Mortgage Brokers play a vital role in informing and educating borrowers.    Mortgage Brokers aren’t just a last resort, they are now viewed as a first choice for getting unbiased and professional advice.

Dare we say it, a mortgage broker helps to create competition….and isn’t competition good for the consumer?