Mortgages Made Easy – Underwriting in 1-2-3

“Mortgages made easy” is a common buzz/marketing term that agents and brokers leverage when marketing to consumers to explain why using a broker/agent to get a mortgage makes the process easy. We could say the same to you on the underwriting side. Leveraging the latest tools and technology results in mortgages made easy!

Here are some mortgages made easy underwriting tips from the Purview team at Teranet! Whether you are a broker who simply brokers to larger institutional lenders, you represent more private lenders or you lend your own money, you can benefit from these tips. The very nucleus of solid mortgage underwriting boils down to verifying the information provided by the client – information that we group into 3 categories.

1.    Know the client – Knowing the client means checking identification, matching it against other documents, reviewing the credit report, as well as checking to ensure that the client (in the case of a refinance) is the legal homeowner of their property. So often clients forget that other people are on title, not to get one over on you but because they simply did not remember. In the case of divorcing spouses, sometimes a transfer of title has happened without the existing first mortgagor’s knowledge. Is the lawyer supposed to notify any mortgage lenders when adding/removing from title? Absolutely. Does it happen all the time? No. Sometimes a fax with notification is sent but an administrative issue sees it end up not where it needs to be, and so without a response, notification is enough and the transfer takes place. Independently verifying who is on title and knowing your client are two critical components of the mortgage underwriting process.

2.    Know the property – Another key aspect of the independent verification process is knowing the property. When surprises come up once a deal has been sent to a lender, it can strain relationships and damage your credibility – especially when it happens all the time. When we say know the property we mean know the sales and financial history. This can not only identify potential fraud but can identify issues with the property type, value and equity.

3.    Know the area – Finally, and this is especially key when arranging private mortgages and lending your own money, you need to know the area. Receiving deals from all over makes it impossible for you to know each and every area, but again you can leverage technology to learn very quickly about an area – both what is located around the property being financed and also the sales histories of other properties in the area.

Leveraging our Purview For Mortgage Brokers – Mortgages Made Easy, Underwriting in 1-2-3 is one way to take advantage of all the tips above using one easy tool.

For more information, please contact us today at 1.855.787.8439.

Attn: Mortgage Agents – Hot New Mortgage Product Perk “Mortgage Vacation”

TD Canada Trust teaches us a valuable lesson about how to brand a hot new mortgage product around its privileges - this can make all the difference when it comes to offering consumers a simple and clear message about why a particular mortgage makes sense.

TD Canada Trust introduces the Mortgage Vacation. What exactly is a mortgage vacation? Well it essentially allows you to make a lump sum payment, or pay more towards your mortgage payment to be able to skip up to 4 mortgage payments.

This is an incredibly useful new mortgage product because it allows people that are facing time off work, a baby on the way, continuing education, etc.,  to have a brief reprieve from their mortgage payments.

I mean, who doesn’t want to be able to take a vacation from their mortgage payments, right?

As you well know, many of the mortgage products you have offer perks like acceleration amortizations, prepayment privileges and even cash back programs. Get creative and brand your products so that they have a quick and catchy name that means something to your audience.

Also, reach out to your lenders. Many banks like TD Canada Trust are rolling out new and innovative products. Jump on to their product branding. You don’t have to wait for a BDM to make a visit out to your office – don’t wait for them to reach out to you, reach out to them!

Our challenge to you. Send an email to each BDM at each lender asking them what new products they have rolled out in 2015!

Don’t just target lenders whom you already deal with! Reach out to all the major banks and MICs to see if there is something you have missed that you can take advantage of. Do they have any materials that you can leverage? Then incorporate these products and materials into your marketing.

This TD Canada Trust Mortgage Vacation product is an excellent example! We are into the second month of summer vacation season and what a great way to draw a connection to this Mortgage Vacation product. Think seasonally. When looking at all the great products you have to offer, which tie in nicely with the season?

Recipe to mortgage agent broker success:

·         1 cup of sales

·         1 cup of underwriting/due diligence

·         1 cup of relationship building

·         3 cups of marketing

You see it’s not just about the products you offer but about how you market them! Make use of every tool available.

Want to find out more about what some of these tools are? Contact Purview For Mortgage Brokers today by calling 1.855.787.8439.

Canadian Mortgage Trends – Biggest Challenge Facing the Mortgage Industry

In a rather obscure comparison, we could equate the old children’s song, The Skeleton Dance, to the Canadian mortgage trends of 2015 quite nicely – the oil bone’s connected to the dollar bone, the dollar bone’s connected to the interest bone, the interest bone’s connected to the lending bone…. Ok, so that was a little humour but in all seriousness, some Canadian mortgage trends that began in 2014 and have carried into 2015 have had direct impacts to the mortgage industry – both positive and negative.

Towards the end of last year we saw oil prices drop. This led to a crisis in Alberta where the oil and real estate industry is concerned. The direct result: lenders began to tighten up their lending practices in Alberta as one Albertan mortgage brokerage reported to the Mortgage Brokers News: http://www.mortgagebrokernews.ca/news/broker-frustrated-by-tightened-lending-191719.aspx.

In addition, the low oil prices led to a reduction in the Canadian dollar which has both helped and hurt the Canadian economy in different ways. On the plus side, it makes the business sector more attractive to other countries who want to spend and do business here. In an article in the Financial Post earlier this year, Rhys Mendes, an economist at the Bank of Canada, spoke about the significant decline in the price of oil as being negative for the Canadian economy and indicated that the decline could reduce aggregate income. Even though the GDP saw growth in the 4^th quarter of 2014, the real income of Canadians contracted because the world price of the important export product declined.

The Bank of Canada put out a fantastic article on the topic of oil and the economy which is worth a read: http://www.bankofcanada.ca/2015/01/drilling-down-understanding-oil-prices/. This brings us to the next point….

The drop in oil prices also led to a drop in the Canadian interest rate – another double-edged sword. One would hope that a lower interest rate would lead to more competition and even lenders loosening their purse strings but with trends on the borrower side indicating that Canadians have more debt than ever and declining income, it may mean more harm in the long run.

The Canadian Government has done about all it can to protect Canadians from another recession and housing crisis. CMHC guidelines have been tightened up reducing max amortizations from upwards of 40 years down to 25 and the amount one can borrow against their home has also been lowered – yet Canadians just seem to want to keep racking up the debt.

News publications, Statistics Canada, the Bank of Canada and others continue to warn that Canada’s historically high levels of household debt are dangerous for the Canadian economy http://www.theglobeandmail.com/report-on-business/economy/canadian-household-debt-burden-hits-record-high/article23417022/. Even Prime Minister Harper has warned that Canadians must get a handle on their debt.

All of the developments the Canadian market trends show us can help us predict what is to come next and adjust strategies accordingly. Paying attention to world markets, what the economists have to say, house price indexes like the Teranet National Bank House Price Index, and BOC announcements make you more informed as a mortgage broker and in the end more competitive when planning new products, services and marketing strategies.

This blog was produced by the Purview team at Teranet. Have you checked out Purview For Mortgage Brokers yet? If not learn more by visiting www.purviewforbrokers.ca

HPI Monthly Report: Home Prices up 1.2% in July

In July the Teranet–National Bank National Composite House Price Index™ was up 1.2% from the previous month, a seventh consecutive monthly increase. The rise exceeded the 14-year July average of 1.0%. Prices were up on the month in six of the 11 metropolitan markets surveyed – 2.7% in Hamilton, 2.4% in Toronto, 2.3% in Ottawa-Gatineau, 1.7% in Victoria, 1.6% in Vancouver and 0.3% in Montreal. Prices were down on the month in Winnipeg (−0.5%), Quebec City (−0.6%), Edmonton (−0.7%), Halifax (−1.0%) and Calgary (−1.9%). The composite index was at another all-time high in July, though only the Vancouver, Hamilton and Toronto component indexes matched it in this regard. The resale market in those three centres is a seller’s market according to the Canadian Real Estate Association criterion of sales relative to new listings. In recent months sales have been rising strongly in all the markets surveyed except Halifax and Winnipeg, though in Calgary and Edmonton sales are still below their year-ago level.

In July the composite index was up 5.1% from a year earlier, the same as in June. The 12-month gain was well above the countrywide average in Vancouver (9.9%), Toronto (8.4%) and Hamilton (6.7%). It was below the average in Victoria (3.9%), Edmonton (1.9%), Winnipeg (0.9%), Quebec City (0.6%) and Ottawa-Gatineau (0.5%). Prices were down from a year earlier in in Montreal and Halifax (−0.6%) and in Calgary (−2.3%). With an index at 196.94 as of July, Vancouver just outpaced Winnipeg (195.89) as the metropolitan area where house prices increased the most since June 2005.

For the full report including historical data, please visit: www.housepriceindex.ca

Mortgage Lead Generation – Going Digital the Cheapest Way to Generate Leads!

Traditionally, big mortgage agents and brokers have leveraged conventional marketing such as radio and television to expand their portfolios while smaller brokers and agents have turned to less expensive means like snail mail, birthday greetings and generating referrals through other business as well as happy clients.

Digital marketing though has changed the face of mortgage lead generation because it has really leveled the playing field. While digital marketing such as Google PPC can prove very expensive and is dominated by the bigger players, social media marketing is something that is available to all, regardless of budget.

Since social media involves reaching out to referral sources and enables past happy clients to influence others in their networks, mortgage lead generation through social media can prove to be one form of digital marketing that carries the lowest cost of acquisition.

Every agent and broker should have an established presence on social media. Yes, yes, we know – it takes time, but you don’t have to be everywhere. Brokers and agents with less time can work on building one solid presence at a time. Every follower you gain opens you up to valuable second and third connections. Every contribution and post leads to enhanced credibility and exposure. Every shared blog link leads to traffic to your website.

Leveraging digital marketing for social media and deploying the latest and greatest tools and technology in your daily workflow makes you current and a broker of 2015.

Not sure where to start? Here are some ideas:

·         Research what platforms you share on well. Who is your target, is your target there, and is there an abundant base? For example – LinkedIn is a more professional platform where brokers and agents can reach out to other industry professionals to generate referral business, whereas on Facebook the sky is the limit where the consumer audience is concerned.

·         Think about what you are going to share. Optimized full blog posts will always have the most SEO value. Taking an online course in SEO to understand how blog sharing works will be the best time spent value-wise. This is the best way to get the most mileage out of your content.

·         Offer value. This one is huge. Using your digital marketing for the sole purpose of self-promotion is not adding value. The mere act of sharing is promoting yourself so focus on releasing content that adds true value to your readers – content that they want to read or that they may even share. Content that spurs another blogger or news site to syndicate or mention your content.

·         Be professional. Make sure your profile is the best representation of who you are! Avoid photos that are personal in nature and ensure that your value proposition is well edited and doesn’t contain spelling or grammar issues.

Hopefully these tips on mortgage lead generation through digital marketing are helpful in your quest for marketing for less.

Purview For Mortgage Brokers has the tools to bring you up to date with the latest trends. Contact us today for more information: 1.855.787.8439.

Easy As 1-2-3! Get Started with Subscription Billing

Purview For Mortgage Brokers: making due diligence easy, one report at a time - now even more cost effective with subscription billing!

For more information, Contact Rudy Naraine at rudy.naraine@teranet.ca or 416.643.1027 to learn more about subscription billing from Purview For Mortgage Brokers.

Fraud in Canada – Outcomes of Fraud Awareness Month Group Feedback

Fraud in Canada continues to cost the entire mortgage industry as a whole – big time. It really has a trickledown effect, often damaging relationships between lenders and brokers. With so many different types of fraud in Canada it can be daunting to stay on top of the latest and greatest techniques for dealing with fraud.

This was the precise reason that we dedicated the month of June to fraud awareness. We can only prevent fraud if we work together to increase awareness of different types of fraud in Canada and how to identify them.

We thought we would take a moment to shout out some of the mortgage professionals who contributed excellent insights in group threads on fraud prevention. Here are some of the consolidated contributions by topic which we are sure many will find useful.

Fraud related to employment status

Laurie Post, mortgage professional said:

“I still call the employer to validate verbally or request it in writing. I had at one time a borrower who hand-carried the letter from his employer....excuse me? Not acceptable.” This bodes to the point that independent verification of employment and receiving the client’s job letter directly from the employer are two excellent ways to mitigate fraud by employment status.

On the topic of identity theft…

HannifHighclass, private mortgage lender and mortgage broker with Genie Sabre Realty Inc. said:

“Am not sure how often fraudulent mortgages are happening in Canada but it’s happening on a large scale. Close friends of mine were innocent victims of identity theft involving mortgage and title fraud. Unknown individuals posed as the purported vendors and as a purported purchaser. These individuals completed a fraudulent transfer of the condominium from the real owner’s names into a fake buyer’s name and then obtained a mortgage loan from the bank. The individuals who orchestrated this fraud then disappeared with the proceeds of the mortgage. Thank their lucky star after a lengthy & an expensive court case they got back the title to the condo home and the mortgage was withdrawn.”

This very personal story is worth sharing because it shows us that we must take every step possible to identify identity theft including independently verifying the home ownership information, validating signatures. This easily could have happened because a broker took on the deal and took the initial documents presented at face value. Always dig, dig, dig!

On the topic of mortgage fraud in general we had several very constructive contributions

Gerry Caden, retired bank manager said:

“And of course another major danger is where the purchaser of the property is, for instance, a solicitor who is also dealing with the legal aspects of the purchase. These types of situations are wide open to abuse/fraud which is why it is most important for a lender to ensure that there is no undue influence affecting any party to the transaction I.e. that a junior partner in a law firm is not assigned to complete the legals for a senior partner’s property purchase. And that all outside professional parties to a property deal are all properly qualified and registered with the relative supervising authority for the industry and hold proper professional insurance.”

This insight from the lender’s side is worth highlighting. As a mortgage broker or agent you are positioned to protect every party to the transaction after the initial mortgage application. Pay attention to how close your client is to the lawyer on the transaction, especially if the client is a lawyer and is insisting that another lawyer they know or even works within their firm is being pushed to be the lawyer who closes the transaction.

Mal Eccles, Director at IMBA and President/Broker at CIR Mortgage Group pointed out that FSCO is making fighting fraud a priority by including new guidelines “FSCO will be announcing new guidelines for Mortgage Brokers and Agents to follow later this Month. They will address that one major issue, FRAUD. Mortgage Brokers/Agents will do well to read the new guidelines and implement them in their day to day practice.”

Echoing the thoughts of Jyothi suseela Rajan on a similarly themed thread in another group, Graham McWaters AMP, identity theft protection expert and President of FMP Mortgage Investments contributed that “It's imperative that you “Know Your Client”. Verify their IDs up front and get copies of driver's license, Passport and other photo IDs. Ask your clients numerous questions. Do applications face to face in their place of residence when possible. In today's fast moving high tech world we get caught up in electronic apps and no face to face time with our most valuable asset: the client. Do your due diligence and you will reduce fraud.”

Mark White, Co-owner of superiorfinancialsolutions.net added “Not Asking for valid ID is a risk indeed. It is important that we first verify that our clients are who they say they are as well as verifying all the documents we receive on an application to assure we do our due diligence. These simple steps will be of value in maintaining good relationships with our clients.”

Having lenders, agents, and brokers involved in the conversation provides different perspectives on this very serious issue. Let’s keep the conversation going! Jump on our Facebook page at https://www.facebook.com/purviewformortgagebrokers or Tweet us @Purview4Brokers sharing your tips on how, as an industry, we can combat fraud. Stories, examples of what you have seen, as well as solutions and ideas are all welcomed!

Purview For Mortgage Brokers is committed to helping stop real estate fraud in Canada. Contact us today to learn about the tools you can use to mitigate your risk: 1.855.787.8439.