In a market where traditional options are tightening and clients are under growing financial pressure, mastering alternative submissions is no longer a nice to have for Canadian mortgage professionals, it is essential. With higher volumes of refinances, rising consumer debt and greater scrutiny on every file, brokers need a clear, practical playbook for structuring deals that stand up to lender review and deliver timely solutions for borrowers.
In this episode of CMP Talk, Magenta Capital Corporation’s Vice President of Mortgage Origination, Paul Campbell, draws on more than two decades of experience in underwriting, sales and brokering to break down what a strong application really looks like in the alternative space. Speaking from the perspective of a property first MIC lender, Paul walks through how Magenta assesses deals, why exit strategy and storytelling matter so much, and how open collaboration between brokers, BDMs and underwriters can turn complex scenarios into funded files.
In this podcast, you will learn:
Tune in now as Paul Campbell and CMP break down what makes a strong alternative deal and how to apply it to your very next file. Listen today to start building submissions that strengthen your lender relationships, protect your clients, and close faster.
[00:00:17] Fergal McAlinden: So, hello again, and thanks for joining us on another edition of CMP Talk. I'm Fergal McAlinden. I'm the editor here at CMP. Today, we're going to be delving into the art of submitting deals to alternative lenders as a mortgage broker. Best practices, common steps to avoid, some of the ways that brokers can ensure as fast as possible a turnaround for their clients. Joining us today to discuss all of that and the best way to guarantee a strong application for brokers and borrowers, we have a really well-known alternative lending executive with more than two decades of experience in financial services and the mortgage industry. Paul Campbell is the Vice President of Mortgage Originations at Magenta Capital, a mortgage veteran whose lengthy career in underwriting, sales, and brokering has given him a great insight into how deals get done and how relationships are built. So Paul, first of all, great to have you with us today. How are things with you?
[00:01:06] Paul Campbell:
Things are great, Fergal. Thank you for having me. I feel blessed to be here. So, I'm excited to have this conversation with you.
[00:01:13] Fergal McAlinden:
It's great to have you with us. And you know, it's funny, I mentioned in the intro, probably one of the top challenges for brokers today and over the past few years, whenever they're dealing with any type of lender, but it's that question of how to guarantee a strong application and how to, you know, make the type of application that's going to get a deal approved by a lender. So from your perspective, Paul, talk me through the main signs of a strong application when it comes across your desk.
[00:01:37] Paul Campbell:
You know, for us here at Magenta, it's one of those things because we are in a little bit of a different space being a mix. You know, we're a property first lender. So, when that deal initially comes in, one of the first things that we want to do is, we want to look at the property, right? Is it in an urban center? With a reasonable commute? You know, is it one of those things where it's the average home in the average neighborhood? That's more or less what we're looking for just to kind of start like the initial assessment of the deal when it first comes in.
[00:02:05] Fergal McAlinden:
Okay, great stuff. We also often talk about turnaround time. We have our brokers on lenders survey, which reveals the things that brokers are looking out for from their lenders and turnaround time always features really near the top of the list. So, I bet when it comes to turnaround time, Paul, what is it that you are kind of focusing on there? Any advice for brokers on how they can get deals kind of approved and moved along quicker?
[00:02:28] Paul Campbell:
I think one of the biggest things that we notice with brokers asking about specifically turnaround time, it's really a function of them sharing everything that they know about the deal. Usually we're in some cases, maybe the second or third kick at the can by the time we get the deal. So, we're asking that, you know, from our broker partners that when they're submitting a deal that in the notes, they really give clear and concise notes about everything we need to know about the property. One of the things too that we'd like to focus on and we want to share is that, you know, the big one for us is the exit strategy, right? And I think sometimes it gets misconstrued that, oh, you know, Magenta's asking about the exit strategy. This is actually a FISRA requirement, right? And it helps to protect not only the lender, but it protects the broker as well. So, you know, we want to know if there's been any other credit issues. Do they have liquid assets? Where are the extra fundings going if there are extra funds that are being taken out? Those types of things really help us with the decision making, because now we're looking at the client holistically, right? We're looking at them thinking, okay, this is their situation. How do we help them? And yeah, you know what, 12 months from now, they're going to be in a better position. So yeah, absolutely. Let's do this deal.
[00:03:37] Fergal McAlinden:
Exit strategy. Is it a good idea for brokers to have that detailed in the notes whenever they're sending in an application?
[00:03:42] Paul Campbell:
A hundred percent. Exit strategy tells us that, you know what, this is what happened. This is where you guys are going to come in, meaning Magenta. And once the client's been with you for 12 months, here's what we're going to do. What we're going to take them to a B or A lender, or the client's going to sell the property, or it just lets us know and understand on a go forward, how we need to approach the situation when dealing with the client.
[00:04:06] Fergal McAlinden:
Got it. Okay. Brings me on to my next question, which is about kind of common mistakes or missteps that you see brokers make, not wanting to kind of pile on brokers here, but it's okay. Is there anything that comes to mind, you know, something that frequently happens that you think, you know, this shouldn't be happening or kind of a common mistake that you see brokers making that they shouldn't?
[00:04:27] Paul Campbell:
You know, this kind of goes back to the last question in the sense that oftentimes we don't get the information from the brokers about the files. So, you know, where we find that deals kind of go sideways is one, if the broker has limited knowledge about Magenta and what we do, right, that's a challenge in the sense that, you know, they're basically just sending in a deal and hoping for the best. We definitely promote connecting with our business development team as well as our credit team. Right. Both are equipped to kind of assist you and help you structure that deal, package that deal. So, you're more often than not, you're getting an approval versus a decline. But really, I'm trying to think of some other things that we would see on the go forward with a deal that might be like a bad deal. Sometimes it's also the, you know, like I said, they're not understanding the type of lending that we do. So, where you might find a really strong property that's, you know, maybe like a $4.5 billion property in Oakville, clients looking for 50% LTV, they've got great beacon scores. It sounds like a really good deal. But I mean, it takes me back to we're looking for the average home in the average neighborhood. And a lot oftentimes when we have deals, and I'm speaking specifically to mix versus a B or A lender, when you have properties that have these large price tags on them, you know, as a mix, it doesn't really take a lot of those deals to go bad before you're having problems versus, you know, in the A or B space. It's still a problem for them, but, you know, the book is larger so they can find a way to either remove that deal or put it between the other deals and kind of get rid of it that way. So, we're very kind of cautious when it comes to the loan types and the size of the loans, as well as the information regarding the loan. We want to have all that intel up front in the mission notes.
[00:06:15] Fergal McAlinden:
It's something that sounds quite basic, but I hear it from a lot of lenders that, you know, a common pain point with brokers is that maybe they haven't done the research on the lender or the type of deals that they do. And that kind of separates the good brokers from the rest of the pack. So, interesting to hear you say it?
[00:06:31] Paul Campbell:
Yeah. Listen, I understand it. I get it. There's a lot of different lenders out there. Oftentimes, you're looking at it thinking, okay, well, what's the difference between this lender and this lender? They're both mixed. But no, everybody runs a different shop. Everybody's beholding to their investors. So, we want to make sure that we protect the book. And when we're doing our due diligence on a file, obviously, we want to do that deal. Every deal that comes in, we want to do it. If it doesn't make sense and if it's not going to give us what we want in terms of a solution that is beneficial to both the client and to us as an organization, then, you know, we're going to have to stand aside on that. And the best way, like I said, to really familiarize with how Magenta does things is connect the BDM, connect with the credit team. And we'll tell you, you know, we're pretty forthcoming in terms of, hey, this sounds like a good deal we can do for you. Send it in. Or, yeah, that's not a deal that we can do. You know, you know, you might try sending it here or here. They might be able to help you.
[00:07:29] Fergal McAlinden:
Don't be afraid to ask silly questions, I'm guessing as well.
[00:07:32] Paul Campbell:
No silly questions. There's no such thing. I've been doing this for so long. And every month, there's a question that comes out to me. And I'm like, oh, yeah, I never thought of that. So, there's no silly questions. No silly questions.
[00:07:45] Fergal McAlinden:
Got it. All right. How about maybe a specific deal? I know we're about a month into the year. But anything cross your desk recently that struck you as particularly good or bad? What were some of the reasons for those?
[00:07:56] Paul Campbell:
You know what, we've been seeing a lot of refinances. And of course, after the holiday season, that's typical because you've got some debt that you might have incurred, so you want to take care of that. But in terms of what we've seen, I'd probably say in the last month or two, we've seen, like I mentioned, some refis. One particular refi that I do remember was in a really nice area in London. And the property in itself was in a good part of London, but the credit wasn't the strongest. And, you know, it goes back to the exit strategy on this is once we had a chance to connect with the broker on this and have a conversation around, you know, what are we doing in regards to this client after the fact? The solution was pretty clear in terms of the credit was really just from high utilization. It wasn't from any drugs. They just had a lot of different credit cards and they were close to the max on most. But this refinance was going to clean those cards off a bit and give them the capacity to kind of go back to their normal life. Now, were there stipulations that they had to close out some of those cards? Absolutely. But that came with us, again, protecting ourselves and also protecting the client and themselves not to end up in that situation again a year from now. So, you know, someone, a client like that to us, given once we put the deal through and saw what it looked like cleaned up, we'll make an assessment a year from now. And, you know, it could be someone that we end up keeping on the books. Maybe they do a renewal with us and they're in a much better position. Or maybe the broker says, hey, you know what? You've done great with Magenta, it's time to move you to another lender. So those are the types of deals that we like to see where there's a good exit strategy and just an overall good outcome. I mean, at the end of the day, we're doing this to help Canadians, right? It's a tough time right now. We're all aware of it. We see it in the news every day. And if we can help put more Canadians in homes or help more Canadians clean up the situation that they're in, then that's a win for everybody.
[00:09:47] Fergal McAlinden:
And it sounds like good communication with the broker too on that particular deal that mentioned.
[00:09:51] Paul Campbell:
We have ongoing communication specifically starting with the sales team. The sales team will get involved on that level to first have that conversation about the deal. And as we get more granular on the file, then it gets taken over by the credit team. A lot of times we'll hear about the credit through the broker, but sometimes they haven't actually pulled the credit yet. So, from a sales perspective, we look at that deal as based on everything you've shared. This sounds like a deal we can do. When you start getting into rates and fees, then we like to give them a starting rate and a starting fee because until we know where the credit is, it's hard to really give you something very specific. And then once that conversation goes over to the credit team or the underwriter and the credit gets pulled, then we're able to say, okay, based on X, Y, and Z, this is what we can offer you. And then it's just constant communication from that point on between credit and the broker and just making sure that through every stage of the process, they're aware of what's happening and everyone's kept in the loop.
[00:10:52] Fergal McAlinden:
Is there anything that you'd like to see from brokers in terms of that collaboration with BDMs and underwriters? It's obviously really important in the application process itself, but any tips for brokers on how to make that work as well as possible?
[00:11:04] Paul Campbell:
I mean, tips for brokers, I would say it's the old adage, as soon as I've been, I look back and I think for as long as I've been doing this, we're preaching the same things, right? Like, tell us the full story, you know, don't be shy. We're going to find out anyways. We don't do it from an angle of, oh, we got you. We do it from an angle of we can now prepare how to help the client without any surprises. So, my tips for brokers is, you know what, if you're trying to do the best for your client, again, come with the exit strategy, but come with the story, right? We're on this earth and we know that life happens to us. So, there should never be any type of shame or embarrassment for the situation that you're in. You know, what's not yours today could be yours tomorrow. So, you have to really have that mindset and that empathy towards clients where you just want to hear the story. We're not here to judge. We're here to determine about lending money to you based on your situation. And if you give us that story and that story lines up and makes sense, then we're more than happy to move forward with your file. So, I would encourage every broker to have the conversation with your client. Hey, tell me what happened. I've got to go to the lender and explain this to them why we need to do this. And then, as a broker, when you're telling that story, know that it's a safe place, know that it's a place where we're trying to help. So give us all the facts about the deal. Give us what the expectation is from the client's perspective. And hopefully we can meet in the middle and find a solution.
[00:12:29] Fergal McAlinden: So, all about the story, the details and as much information as possible in the file, really important.
[00:12:35] Paul Campbell:
A hundred percent.
[00:12:37] Fergal McAlinden:
Paul, it's been a really good discussion, and I want to thank you for joining us today. Is there anything that my questions didn't cover that you wanted to highlight, any other kind of message for brokers or just thoughts on the process in general?
[00:12:48] Paul Campbell:
No, I think the questions had a high arching tone around getting to know your lender. I think this is not going to be an easy year for brokers. I think we're still kind of going through a little bit of pain still. So that's probably the one thing I can't stress enough of. Get to know your lenders, right? Get to know the lenders that are going to be, you know, finding solutions for you and your clients. Pick up the phone, meet your BDM, go for a coffee, they have an office, go by the office, meet the credit team, try to really know and understand the business on that side of the fence, because it'll make dealing with the lender that much easier. And it makes more of a talking point for you and your client. If your client feels that you believe and trust in this lender, that's half the battle, right? They're at ease. And we're going to work that much harder to, you know, find a solution for you and your clients.
[00:13:37] Fergal McAlinden:
Yeah. Broker–lender relationships so important, especially I think this year, as you mentioned, you know, there's a lot of challenges for Canadians, for borrowers. So, I think, you know, cementing those relationships is really key this year, for sure. Paul, thanks for joining us. Really appreciated the conversation today. I think that's a great place to leave things off. Plenty of great info there for brokers on how to submit applications, work with lenders, and ultimately get deals over the line. So really appreciate you taking the time to join us and I'm sure we'll talk very soon.
[00:14:04] Paul Campbell:
Appreciate you having me, Fergal. Have yourself a great day.
[00:14:06] Fergal McAlinden:
All right. Well, that's just about all we have time for on today's edition of CMP Talk. My thanks once again to Paul Campbell of Magenta Capital for joining us today. Thanks to you for listening, and we will see you next time.
