The sector is continually evolving, and leading industry figures had their say on how brokers can maximize their chances of successful deals
The alternative lending space is one few mortgage brokers in Canada will be unfamiliar with, but carving out success in the sector is easier said than done.
Leading alt-lending executives at the recent Canadian Mortgage Summit in Brampton agreed there’s no single secret to a successful broker journey in the sector – but also that there are plenty of steps brokers can take to maximize their chances of getting deals over the line.
Unsurprisingly, productive relationships and clear communication with lenders featured near the top of the list. “It’s got to start with efficiency,” Joe Rosati (pictured top, far left), vice president at IC Savings, said during the panel discussion on navigating the next wave of lending. “You want to be efficient with your lender, and we want to be efficient with the borrower as well.
“In doing that, you really need to understand the lender’s policies. What is their risk appetite? What are their guidelines? What will they do? Ask for lender presentations. Lean on your BDM and your dedicated underwriter if you have one – just to get a good understanding of what it is they do and what it is they won’t do.”
For Susan Thomas (pictured, far right), VP, sales at Haventree Bank, having as detailed an understanding as possible of both lender and client is essential for brokers to make deals in alt-lending.
That’s a two-way street, she said. “When we get a deal in, there are a lot of questions,” she advised brokers. “Have you answered them? Do you have detailed loan notes? Are you finding the right solutions? Have you gone out and sourced the lenders that will provide you the right solutions?
“Knowing who does what is very important, but so is the relationship. Make sure you’re getting to know them and pick up the phone. [That’s] probably one of the most underused tools out there. When an escalation comes to my desk, a lot of the time it didn’t necessarily need to be there. It could’ve been mitigated early by simply giving the underwriter the full story to begin with.”
‘You need to keep those options open’
Curiosity about other lenders and a willingness to learn more about the space are also vital components of broker success in alt-lending, according to MCAN Financial business development manager Gita Cartwright (pictured top, second from left) – particularly with the lines blurring between A and B spaces.
“You need to keep those options open with other lenders,” she said. “Don’t ask, ‘Why should I choose you as a lender?’ Ask, ‘How can you fit into my business? How can we work together?’ Those are the questions that we can’t wait to answer for you.”
There’s also an onus on brokers and lenders to act ethically and with integrity towards their clients, Cartwright said, to continue elevating the reputation of the industry. And Isabel Eydlin (pictured, top centre), director, regional sales at First National Financial, also urged brokers to think beyond the mortgage for ways to offer real value for clients and deliver an exceptional value proposition.
“Think of different credit-related things you can offer your client: credit repair, financial coaching, possibly some advice on real estate investing,” she said. “Your clients aren’t really coming there just for a loan. They’re looking for a gameplan.”
Leaning on others essential in an ever-evolving space
For brokers who are newer to the space, Eydlin also recommended co-brokering a few deals with more established veterans to learn the ropes as well as tapping into BDM knowledge and maintaining a strong line of communication with them.
Community Trust business development manager Philip Beer (pictured top, second from right), meanwhile, spoke to the ongoing evolution of lenders in the sector and the continuing transformation that’s likely to take place in the years ahead.
“We need to identify the brokers that we want to deal with and the ones we don’t want to deal with. We can’t be everything to everybody,” he said. “There’s not any lender here that can and if we take that approach and we’ve done our part and the broker’s done their part to give us a shot… that’s how we’re balancing holistically the risk versus opportunity.
“I think the product that’s needed five years from today in this space hasn’t even been designed yet. The industry’s evolving.”
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