Mortgage Industry News Jun 30, 2011

• June 30, 2011

Industry News

Good news, brokers: You remain a primary referral partner for real estate agents even as the number of home sales slows across key Canadian markets. Bad news, brokers: More and more, the banks are determined to change that.

“I’m seeing lots more mailers and literature coming into the office from banks, offering incentives, points and Air Miles,” Mark Savel, a sales representative with Re/Max Realtron Realty in Toronto, told MortgageBrokerNews.ca. “I see agents who get swayed by those incentives, but in nine out of 10 cases, it’s still a mortgage broker who I’m referring a client to, and that’s because of the relationship that extends past closing and for the whole term of that mortgage.”

He’s not alone, with other high-performing Realtors sticking to the same strategy in the face of increasingly aggressive targeting by the country’s Big Six as the number of new home purchases slows.

As MortgageBrokerNews.ca reported last month, National Bank’s CEO Louis Vachon told analysts that the financial institution is actively looking to grow the number of referrals coming directly from real estate agents, some representatives dangling cash finder’s fees of as much as 50 basis points.

Click here to read more from MortgageBrokerNews.ca.

It would take a strong rebound in bond yields to derail further reductions in fixed mortgage rates… and that’s exactly what has happened this week – between Monday and today.

The five-year government yield has catapulted 30 basis points from Monday’s psychological 2% level. On a closing basis, that’s the largest two-day advance since October 2009.

At the moment, we’re six basis points above the five-year yield on June 3rd. That’s the day when banks last cut advertised fixed rates. If yields continue much higher, current bargain basement five-year fixed rates (like 3.59%) could disappear posthaste.

Click here for the full article from CanadianMortgageTrends.com.

Are the banks doing an incredible job of retaining customers or are Canadians just too lazy to shop around when renewing their mortgages?

One finding of a survey by CMHC was that 89% of consumers renewing their mortgage stay with the same financial institution. And 68% stay when refinancing.

“They stay with the lender because of rate and they leave the lender because of service,” says Pierre Serré, VP, insurance product and business development, with CMHC.

Consumers are more aggressive shoppers when they are seeking a mortgage to buy their first home than they are upon renewal. Only 57% of first-time buyers took out their mortgage with their existing financial institution.

Click here for the full article in the Financial Post.

TransUnion has finally made its push onto the Filogix Expert platform alongside rival Equifax, although brokers won’t be able to shoot off its credit reports to lenders until early next month.

“It’s activated now for the brokers to pull a credit report, but they won’t yet have the ability to send it to a lender via Expert until early July and after testing to ensure that lenders will be able to receive the reports,” Steve Malone, VP of Broker Services for Davis + Henderson, told MortgageBrokerNews.ca.

With the release of D+H Expert 2.12 on April 30th, brokers were for the first time given the choice to set up TransUnion accounts in Expert, effectively allowing them to pull credit bureau reports not only from Equifax, but also TransUnion. That, of course, is after first winning client approval.

For TransUnion, there’s also the challenge of winning both broker and lender buy-in for services offered at a lower price point and mirroring those of Equifax, now the industry’s standard bearer.

Click here to read more from MortgageBrokerNews.ca.

Scotiabank today released the results of a recent poll looking at consumer debt levels and practices, and how Canadians are feeling about their debt.

The study was conducted by Harris/Decima and assessed the borrowing habits of Canadians. More than half of Canadians (56%) feel their level of debt is manageable and an additional 27%. A smaller number of Canadians (17%) reported feeling overwhelmed by their debt, and many of these people carry a credit card or line of credit balance.

“We know that a majority of Canadians are interested in having a plan that looks at their overall financial health and helps them make the most of their money,” said Mike Henry, Senior Vice President of Retail Payments, Deposits and Lending at Scotiabank. “Whether it’s renovating their home, funding a child’s education or planning for retirement, having a financial plan with a manageable borrowing strategy will help Canadians plan for and manage the role that debt plays in reaching their life and financial goals.”

Many Canadians do not currently have an outstanding balance on their credit card or on their line of credit (56% and 40% respectively). In fact, four-in-ten (41%) respondents never carry a balance on their credit card and one-third (31%) never carry a balance on their line of credit. An additional one-in-five only use their credit card or line of credit (18% and 22% respectively) in the case of an emergency.

Click here for the Scotiabank news release.

If you’ve been considering buying a house but you’re still unsure, consider some of the personal and economic conditions that favour home purchases.

If you find that a number of these signs ring true for you, it may be time to contact a mortgage/real estate agent and start shopping.

Click here for the six signs it’s time to buy a house from the Globe and Mail.

Canadians are flocking to California, where the high loonie can yield big returns in the low real estate market. Click here to watch the CBC video.