Winning in the alt space: Placing, packaging and positioning for success

00:01 [music]
00:09 [music]
00:10 I'm pleased to introduce the next session, Winning the Alt Space: Placing, Packaging, and Positioning for Success.
00:17 Great. Welcome, guys. Enjoy.
00:19 Thank you all for coming, and I'm hoping we're going to have a nice collaborative panel. We're going to kick it off. We're going to start off nice and easy. This
00:27 one is going to be directed at Joe, but please feel free to all chime in. What are the most common alternative borrower
00:36 profiles? And when is alternative lending the right fit for a client?
00:41 I might be a little bit biased, but I'll say always. Um, the borrower profile in the altit, you know, kind of take a giant step back and think about what was
00:50 that profile back in the day? Bruised credit. We love to always say bad things happen to good people. At the same point in time, Bruce credit has evolved in
00:59 terms of the alt space is now anything alternative to prime big six credit
01:06 boxes. And what I love about the space is the growth, the depth and breadth of the relationships that we can have with our broker partners.
01:15 About in particular that customer profile, we've got customers everything from ranging to life circumstances
01:23 around say divorce, CRA, bankruptcies, small business owners. It's a real challenge in this market with tariffs
01:31 for small business owners to be able to make it through. However, I'll extend that to multiple properties, rental income, seasonal properties.
01:40 We see the entire gamut of what used to be prime borrowers are now alternative customer profiles.
01:48 And we actually, I would say, if anything, have started to redesign a lot of our workflows and partnership models with our brokers completely anchored around what the broker and client experience
01:55 looks like for this growing profile base.
02:03 It's like the box around the typical borrower is getting a little bit smaller, and now you're finding it's not just bruised credit. It's a lot more different client profiles. Do any of you have anything else to add on this?
02:11 Yeah, I guess I'll jump in. I mean, I agree 100% on that. I'll take it a little different. Like, the bruised credit's still always going to be there, but it's a
02:19 much smaller part than it was. I mean, 15, 20 years ago, it was double bankrupt and breathing, and you can get a mortgage. It's a little different now.
02:27 But I think when you look at it, it's the customers that have that unique income situation. It's customers that need somebody to look beyond just the line
02:35 15,000. I look at our profile. The average FICO score is 763.
02:40 That is actually, in some cases, it's outperformed some of the big six banks.
02:44 I think what you're looking at is what we're seeing on the alt side is it's entrepreneurs. It's clients with a great net worth that fall outside of
02:52 that bank box that you're talking about, but it's because of the qualification criteria. And that's the big thing that's happened over the last five or 10 years is with regulation, banks have
03:01 very, very specific ways of looking at income. And I think that's where the alternative lenders can come in and have a different risk appetite to be able to
03:09 say, you know what? We want to look at that cash flow of the business. Some of our clients have multiple properties, like, again, entrepreneurs, bank
03:17 statement approach, investment properties, holdcos, stuff that's just a little bit outside of what the traditional bank is.
03:25 The other part of the advantage is the market's gotten so big, so big banks, big six can focus on building their businesses off of that more traditional type of credit.
03:34 And there's more customers now that need that unique type of flexible verification or a different way of looking at the file.
03:40 Are there even any key signs anymore that a borrower is more suited to alternative versus prime? I know maybe a
03:48 while ago we would have said bruised credit, but is there one key differentiator that stands out?
03:57 I mean, look, I think it really depends on the client profile. Just to add a little bit, historically in the alt business, it was perceived as
04:04 a short-term solution for clients. In many cases now, the alt solution is the prime solution for these
04:11 clients. So, you've got clients that are perhaps self-employed or have part-time jobs or contract work or
04:19 multiple properties. There are lots of different opportunities, I think, where clients can fit that alt bucket.
04:28 I think one key point, though, is it's no longer for many a short-term solution. It is the best solution for many clients that fit that profile.
04:36 Yeah, I see for a lot of my business-for-self clients, it is a solution for them, more of a long-term solution. Now, for cash, what documentation, income and
04:45 down payment expectations should brokers understand to help improve underwriting efficiency?
04:51 Great question. So, I mean, income and down payment, right? Those are two easy things, right? Always run really smoothly, no problems at all. The
04:59 alt business is really no different than the prime business in terms of deals need to be qualified effectively and down payment needs to be sourced.
05:10 Some of the key differentiators, I'll start with income in particular. When you're looking at that self-employed or there's a shift, you're not really
05:18 focused so much on the individual earnings. That's part of it, but the real focus is what is the business actually generating?
05:26 So, you're doing a really cohesive deep dive on this client's business. What type of business do they run? Where do they get their
05:34 clients? What overhead expenses do they need to operate their business? It's a full overview of the actual business
05:42 rather than just focusing on their personal income. With that comes additional flexibility. The two main types of documentation you would use for
05:50 income would be either bank statements or business financials. Where the additional complexity comes for all of you is really understanding that
05:59 business profile for the customer. And the reality is, especially for small businesses, everyone operates it slightly differently.
06:07 We are seeing certain cases where sometimes personal expenses shift into business expenses. So, I'd say the key
06:15 point up front when you're looking at these deals and packaging them is just have a really good understanding of your client and their
06:24 income and the revenue and expenses that their business generates. The more equipped you are upfront, the easier
06:32 it's going to be for all of us to be able to assess the deal and give you a quick answer and move the file along.
06:38 Similarly with down payment, down payments coming from savings for 90 days and there's no movement in money. Great.
06:45 I don't think many of those scenarios exist anymore. So, very similar, like if down payment's coming from overseas, it's where's the paper trail? Like,
06:53 really understand where the money is coming from, be able to explain it and be able to back it up. But I'd say the big key differentiator is income and how you're assessing it.
07:02 For alt lenders, especially for those self-employed clients, it's really requiring a deep understanding of the client's business.
07:11 Did you have something to add? Yeah.
07:12 You know, I've been at all aspects of the business as a broker, a lender, an underwriter, and I truly believe a
07:19 well-packaged file is respect for not just you, the lender, but also the client as well. It's important to make sure you
07:26 deliver the package properly. It's all about your customer at the end of the day.
07:30 Yeah. And time savings, right? Not only for us, for the clients, realtors, underwriters, just to keep the file moving along smoothly.
07:39 And certainly having an understanding of the full file before we send it in. Where do you see brokers most often missing the mark on
07:47 this? Is this what it is? The package? Is it the business financials?
07:52 What's the biggest slip? I don't think they're missing the mark per se, but I think the challenge is, and maybe I'll ask everyone here, how many
08:01 people in this room have called a lender and asked them to tell them how to calculate income?
08:09 Okay, I want to, like, there's over 100 brokers in this room who every day send deals in, and 99% of you have not asked the people who are making a decision.
08:17 And that's the difference. How each one of us looks at income is going to be different. That's why the four of us can grow. We all look at it a little differently.
08:26 Part of the biggest changes as well is to be productive and improve processing. We're all creating new processes. We're all using checklists and
08:33 forms, AI-built tools so that we can streamline the process. A lot of times what I find with brokers is, here's my
08:42 package, and you need to figure out the income into it. That's going to take us three, five, seven days. And if you really
08:49 want a lender investigating and looking and finding things, they'll find stuff and they'll have more questions. If
08:57 you actually take the time and ask them how it is. So, I'll share a personal story. Many years ago, when I used
09:04 to do deals, my old underwriter, I will point her out because she hates it, is in the room. I took her out for a coffee and I asked her how to do deals. And I
09:14 turned into that company's single largest referral source for seven-plus years. And the files were simple. I think they were. She'll tell you another
09:22 story, I'm sure. But that's the trick. I encourage every one of you: call a BDM, ask to meet with an underwriter, and
09:30 ask the simplest question: How do you calculate income? And they will tell you every tip, trick, and factual thing. And then build the package for the lender.
09:41 Because if you build it for yourself, it doesn't help the lender. And I think if you want a smooth, simple process, that's the benefit. And there are
09:50 advantages or disadvantages to that. You can negotiate, you can have some exceptions, but the reality is you're
09:58 asking a lender to approve a file. They need to prove it to their policy. So that's my suggestion. Thank you to the two people who put their hands up,
10:06 but to the other hundred of you, I encourage you to do that.
10:10 Yeah, I love that. And I'm going to just both agree with you and build on that. We have an entire sales team of BDMs.
10:18 Their job is to work with you, for you.
10:22 Plain and simple. They don't run operational processes. They don't do internal documentation. They are there as reference guides for you. So, if we
10:30 only got two people putting their hands up, I would highly recommend that for every single one of these lenders: pick up the phone, call your BDM, and say,
10:39 "I've got a deal." And honestly, my biggest piece of advice: What's the story? The BDM will help you figure out
10:47 how to package that, what you need to ask the client that maybe you didn't even think of asking yet, but that is their reference source for you. Pick up
10:56 the phone, call them. They're going to have all the answers for you. And if they don't, I promise you they can get it to you within minutes.
11:01 Yeah. Every BDM that we call, they're very helpful. They want to see you get that deal across the finish line. And we're not in the A space. It's
11:09 not two T4s and a pay stub. And you all treat income, especially with a bank statement, differently. So, really packaging the file properly, direct
11:17 communication, as well as telling the story and having that open line. Right? Is that a good summary?
11:24 Well, it's not just a beacon score anymore. No, it's not just a beacon score. Yeah.
11:27 Yeah, I mean, we could do the beacon scores, but it's not just the beacon score, right? Okay, this one's for Cam.
11:33 How can brokers position alt solutions as part of a broader sustainable client strategy rather than the last resort?
11:41 Honestly, it's about strategy for brokers. When they look at a file, it shouldn't be about, "Can I get an approval?" It should be about building these clients, looking for one to three
11:50 years down the road versus, "Hey, can I at least get an approval for this deal?"
11:55 It's about building the deal out, helping your client, finding an exit strategy at the end of the day, moving them to the next phase, to the next
12:02 lender or wherever it may be. At MCAN, I'm trying to get a little prop here. We do have a graduation program that will help clients move to the next phase of the transition of the deal.
12:13 Yeah. And it's looking at the whole file and their real life, right? What problem are we trying to solve? Is there even a problem that we're trying
12:21 to solve? Do they just not fit the A profile? It's all about the journey.
12:25 Yeah. Does anybody else have anything to add on this?
12:28 Yeah, I'd agree. I think it comes down to, again, understanding the client situation, and I'll go back to what I said earlier. I think for many clients
12:35 that fit this bucket, the alt solution is their prime solution. Like, it's the best option for them. Rate
12:43 is important, no doubt about it. But when you factor in, let's say you're looking at the two options of the best rate in the market versus the most
12:52 suitable solution, what would the client need to do to their business or from an income standpoint to qualify for that
12:59 best rate? And then run an analysis: Is it feasible? Can they do it? How much time would it take them? How much would
13:06 it cost them to actually shift how they structure their business to be able to qualify for that lowest rate? So, I think another part is just shifting away
13:14 from the actual rate conversation and finding the solution that fits best for the client's profile. And many of
13:22 the clients that we finance every day, and Grant mentioned the FICO score, but we're very similar. These are very strong client profiles, but these are
13:30 the best solutions for their current income or equity situation.
13:36 Yeah. Because for some clients, we're placing them. It's not, again, just a stopgap. This
13:44 is more of a longer-term solution for them. How can we help? How can us brokers help clients understand that and pave that path for them?
13:52 So, I mean, one anecdote I've got: during COVID, rates were obviously very low in 2021. We remember those
13:59 good old days. At one point, our five-year fixed term was at 2.59. Do you know how many clients took us up on the five-year fixed term? Any guesses? Close to zero.
14:12 The vast majority of those clients ended up renewing or moving to another alternative lender. Just a proof point and an example where this really
14:20 is, for most clients, the long-term solution. So, just thinking around the most suitable term for their situation
14:27 is also an important piece of the puzzle.
14:29 Yeah. And in some cases, the spread between a conventional and the alternative side, it's not that great, right? It's not that big of a
14:37 spread. Explaining to the clients why this is a good, long-term solution for them. Again, say if we're talking about business-for-self, self-employed. Anybody else have anything to add?
14:46 Like I said earlier, it's not always about beacon score. It's not always about rate. It's finding the right lender to fit your client, the right
14:53 exit strategy for your client, preparing your client for that next phase. For sure, you have to be ready for that journey all the way.
15:00 Maybe add one thing. Alternative space as the lender of last resort? I'd say as
15:07 far as the thought process around that, no longer applies. There are millions of Canadians that do not fit the prime big six credit box on a full-time basis.
15:19 We're going to do a little Q&A with the crowd. This is not scripted. No, not at all. I love Q&A.
15:25 I like to go off script. My team hates me for it, which is a lot of fun. Of all the brokers in the room, can you please put your hand up and keep it up for a sec?
15:35 All right, keep up.
15:38 If you have never submitted an alt deal, put your hand down.
15:44 All right. So, you know what we're talking about. If you think about it, you can put your hands down now, or you can keep up. I mean, that could be fun.
15:53 The alternative space, you already know that there's a need for, and if you're having conversations with your customers, and for any of you who did, because I did
16:01 see a couple of hands go down, by the way, everybody else is clearly eating lunch. For every single one of them, you've got to build your business around the
16:10 client and that client need. Cash was talking about BFS. There's a lot of different needs, there's a lot of different programs and criteria and
16:19 qualification programs that are out there. Your ability to understand those. Again, go back to the BDM conversation.
16:26 You don't need to know every single lender's exact criteria. We're there to help you figure that out. We're there to
16:33 help you. And as I tell my team all the time, brokers are small business owners.
16:38 This is your business. We are there to support you in that. And in particular, this isn't about us building a lending
16:47 portfolio. This is actually all about building a partnership with you. And building that partnership with you is actually about creating a great
16:54 experience for you, a great experience for the client so that your small business thrives, so that your reputation and referrals will come
17:03 through on the back of what you hopefully get as a great experience from all four of us. Look for those opportunities when you're looking at clients to not just say it's not just
17:12 about rate, it's the terms and conditions that come along with every single one of those programs or products at the different lenders. And if you
17:19 need to know, we've got Sandy and Nelly from the team right here, that are more than happy to pick up the phone and help you figure that out.
17:27 I'm gonna add in on that. I think there's also a big change with some of the alt lenders. Many years ago, oh, there's just an alt lender, they just do mortgages, and you know, a year
17:35 later, we'll switch you to the bank with the branches, the bank accounts, and sorry again, but three of the four lenders up here are actually full-service banks. Like, that's a big
17:43 change. And I think when you're now talking to your customers, you used to say, "Oh, it's okay. Go to this lender.
17:48 All they do is mortgages or an alt lender. You go there for a year. We'll switch you to a real bank later." Three of us have actually some of
17:56 Canada's best high-interest-rate savings accounts. I got to commend you on the World Cup, like the soccer card, the yellow card was quite good. I'll give
18:03 you that credit. But that's the difference today. When you actually refer your customers to some of the alternative lenders now, you're actually referring them to a full banking package for them. They can get a bank account.
18:13 They can get a savings account. They can get their GICs there. There's lots of other services. So, I actually suggest to you to look beyond just the mortgage.
18:21 When you're actually positioning a client, you're talking about rate. You actually can refer them to a bank in some cases and help them position that solution going forward.
18:29 It's wonderful. Well, this question is for you. From a lender, and I think I know the answer. It's kind of a two-parter. From a lender's perspective,
18:37 what makes a file easy to approve? I'm sure it's going to be part of what we've already covered. And the second part is what separates a broker from a lender's preferred partners?
18:48 So, I think we talked a little bit about it before. The brokers that we love to work with are the ones that actually have taken the time to know our products. The ones that have sat down with the BDMs have called in.
18:57 They're fully transparent. They will say, "Hey, look, I've got this dog's breakfast of a deal, or the income I'm not sure, or I need some help." And they actually collaborate.
19:06 Just throw in a file everywhere. There's a gentleman in the room. I don't want to out him, but a number of months ago, we put together a very
19:13 complex file. Social media income, large net worth client, like gig economy. It
19:20 was not an easy file to put together. He made the call. He's like, "How do we put this file together?" And we found a way
19:27 to take a very complex file that I probably, if I told you the story, would sound like not a deal that we normally would put together. But we were able to look
19:35 beyond the documentation and actually collect the documents. And the one thing I'll say about this broker was every time we asked for something, he went and
19:43 got it. And it wasn't like, "You don't need this." And I don't know how many of you have said to a lender, "Oh, you don't need this." What's our money? Like, and we may actually.
19:53 We can do that.
19:54 We could also say we're not approving it. Like, I think there's that partnership. So, the best brokers are the
20:03 ones that we look at and say, "How do we work together on a file? How do we find a solution and actually collaborate and not become adversaries?"
20:10 Yeah. The ones that take the time to know your products, that take the time to communicate and package a file properly, obviously, right?
20:17 I just add, I mean, tough files or situations, those are all things we can work with. We're all a scrappy bunch. We've got amazing teams
20:26 that can roll up our sleeves and try to figure solutions out. What kills deals are surprises. The more info that
20:35 we know upfront, the better equipped we are to try to navigate a solution. A little plug for us:
20:42 you can call Equitable First. If we can't help, we'll pass it off.
20:46 Oh, who's second there? Come on. Putting you on the stage. I'm just—But no, that's really it. Again, it's just going back to really understanding your deal and don't shy
20:54 away from the issues. Be forthright about it. Let us know where the challenges are. We'll all hit it head-on and try to figure out a solution.
21:04 Anything else that brokers can do to build trust? That's actually my first line on it.
21:09 Trust and consistency. Having been an underwriter before, nothing worse than not understanding what the deal is about and the deal's been submitted. Like,
21:17 tell us the story. Tell us about your deal. Tell us about the property.
21:20 Explain the whole process because alt deals aren't hard to approve.
21:24 All deals can be challenging to approve if we don't have all the information in front of us. So, if you work with us in building a deal out, everybody here can
21:32 approve that deal. Every deal has a story behind it. Every deal can make sense. Find the right lender for your deal.
21:39 And I'll add on to that. I think Frack said it as well. When you get up against something, so if the down payment comes in and it is a wire transfer from somewhere else,
21:47 don't try and provide another document around it. Deal with it head-on. "Hey, look, this came in." Hello, I got the NOA and it shows some taxes outstanding.
21:56 Okay, what's going on? Well, they're going to pay them today. This is what's happening, or the wire transfer came from here. There are ways to deal with it, but this is where, if the lender
22:04 discovers it and the lender asks, it's very different to change the narrative once the cat's out of the bag. Come to us and be honest and say, "Look, I
22:13 have a problem." Yeah. The red flag is made.
22:15 Yeah. It's better for you to put the red flag up of a problem and then come and ask for a solution than us to
22:24 put the red flag up and assume the worst.
22:26 Oh, yeah. You don't want something pulled and called in the 11th hour as a broker.
22:30 For sure. Not as a CL. Nobody wants that because you've already done the work on the file, right? Disclose it upfront.
22:35 Answer your phone when the underwriter calls you. I'm sure you could all echo that.
22:39 No lender actually wants to pull a file. That is the worst call to say.
22:44 It's like, "Hey, we've worked together for three months. Your client's got a house closing on Thursday. I'm sorry."
22:49 Nobody wants to do that. We want to fund the deal. We want to make it happen, and we have to just figure out how to get through it.
22:56 And honestly, a good broker looks at their income documents before sending them to the lender versus just forwarding them through. Like,
23:02 understanding that some brokers I even work with actually do the verbals themselves before sending them to the lender, so they know what they're looking for, what they're actually going
23:11 to get the responses from when they call the employer.
23:13 Oh, yeah. You can't just send a file in without doing that. Absolutely not.
23:16 Especially since you all qualify income in different ways too, right? Okay.
23:20 Where do you, and this is kind of a question for all of you. You can kind of jump in. Where do you see the biggest opportunity for brokers to become more
23:27 effective in the alt space in the next 12 to 24 months?
23:31 Well, I'll start. It's all about being educated. Recently did several summits over the past few months in all the provinces, and the biggest thing that I
23:40 found was a lot of brokers deal with 10-plus lenders on a going basis. It's almost too many. Narrow it down, like,
23:47 to two or three per on the alt side, or just alt-side lending private. Just narrow it down, get to know your lenders, understand their products, and
23:56 this way it works better for you. I'm going to add on that. I think the biggest opportunity is embracing change with AI. And I'm not worried about AI
24:05 doing mortgages. People are using it. And actually, I skill this, but our CamLo created a saying: AI creates the drawers, and I use the drawer. And the difference is we can now get things done in weeks and days and a weekend that used to take six months, seven months.
24:22 So, a lender wanted to change a process, they wanted to improve things, it would take a long time to get done. We can now
24:29 do it over a long weekend. So, my encouragement to you is embrace the change because it is going to come
24:36 faster. We saw from 2020 to 2025, we saw 25 years' worth of rate changes in three
24:44 years, or five years, sorry, and that tested a lot of things. You're now going to see 25 years of technology innovation happen
24:54 in the next 12 months. You're going to see products change. You're going to see lenders coming out with a vast number of product suites, full
25:01 service banking solutions. How do they wrap their arms? So, to all of you, embrace it. And if you are one lender, 10 lenders, that's up to you. But
25:09 if you're at 10 lenders, you're going to have to figure out how to embrace the change of 10 different lenders.
25:15 I think you only really need one. It's Haven Tree, but that's okay. I completely agree with the pace of change, narrowing the focus, building your relationships because, at the end of the day, it's
25:23 really hard to manage so many different partnerships and maximize your effectiveness. This isn't about—yes, there's a change of pace for us. There's
25:31 going to be a change of pace for your business and how you set expectations with clients and understanding the lay
25:38 of the land. We can all turn things around extremely quickly. So, if all of a sudden your pipeline of deals that you've been working through have had a
25:46 cadence of weeks and months, are all of a sudden now getting into days or hours, how do you change for your client? And
25:55 that pace is not just the lender's technology. It's going to be that integration with you. It's going to be how you communicate those expectations
26:02 with the client. And I'll go back to what Grant was saying. You've got three banks—schedule one banks up here. It's
26:11 not an exclusion thing, but it's a value proposition to your client. This isn't just about placing a mortgage.
26:19 This is about the millions of Canadians that are underserved from a banking perspective that you now have a greater
26:28 product set and greater value proposition that you can drive to a customer. And more often than not, what you're going to see evolve, I think,
26:36 over the course of the next 12 to 18 months is your own source or origination channel of how you're getting those referrals because it's no longer just about your placement of a mortgage.
26:46 You're not just acquiring a mortgage at the same time either. So, get the business resiliency in terms of how are you going to originate different
26:54 types of customers for where you can place them with a greater product suite.
26:59 Yeah, great commentary. I'll just add over the next 12 to 18 months, there's going to continue to be a lot of uncertainty out there. I think a lot
27:08 of clients are really going to be looking for sound advice as to what to do. And I think that's perfectly aligned to what all of you can
27:17 provide to clients. Grant alluded to it as well. There's going to be, there already has been, and it's going to continue. The pace of change is going to continue
27:25 to accelerate: how people earn income, what their employment structure is like.
27:30 All of that's going to continue to shift. I think the bright point in all of this is, as regulatory changes have happened
27:37 historically, as things have changed rapidly, that's proven very well for broker market share as a whole. And
27:45 I'm a firm believer it'll continue to grow. So, I think there's a lot of opportunity, even with the uncertainty that's coming up, and it
27:53 starts with you guys providing an opportunity for clients to come get the sound advice they need and really,
28:01 again, with all of us and other lenders that are here, find the right solution for them.
28:06 Sorry, I'm going to add a little, if that's okay, because I talked about change, or we all did. I'm going to put someone on the spot. She's going to get mad, but did anybody go to the Equifax
28:14 presentation earlier? How many of you noticed that the Equifax bureau is now going to include employment verification? Like, that is incredible.
28:23 The ability for a credit bureau, which every one of you has, to actually tell a lender, and as a lender, I'm actually not going to need any documents for that
28:32 customer. I want you to think about that change happened today. The ability for you to have to chase T4s and pay stubs and job letters is about to go
28:40 away. I'm probably overpromising it. You can tell me if I'm wrong, but that is a major change. If I told you two years ago, you don't have to get a job
28:48 letter, you don't have to do a verbal. My colleague here and I did it before we did a deal where it instantly verified income, and we didn't need a
28:55 single document from the client. That is now 30, 60, 90 days away on some files.
29:00 That's days away. Major change. That is a fundamental part of what brokers used to do. So, that's what I'm saying. Pay attention to some of the changes that
29:08 are coming and look at the technology tools that are out there. So, what you're saying is we should have all been at that panel.
29:15 Yes. And I wasn't there, but are there going to be slides after?
29:20 And I can tell you, as a lender, we already have that function supported, and it works very well. Just, yeah. Ditto as well. It's a fantastic route. We're going to have to ask Equifax for a plug.
29:31 Okay, one final question, and then we're going to open it up to the floor for questions if we have time. But just
29:37 quickly, what is the one misconception that you would like to clear up about alternative lending? One takeaway for today for everybody because I'm being excluded.
29:48 You get to go first.
29:50 MCAN's actually a federally regulated MC operating in a monoline space. So, we have the ability to do things a little
29:57 differently than a chartered bank as well. Not to take a shot at anybody. So, please, everybody has their expertise.
30:03 Everybody has their place in the market space. We are on the stock exchange.
30:07 Your client can buy a GIC. Your client can invest in us as well, just like you guys can. And we have several brokers that do invest in MCAN and grow with us. Just wanted to share.
30:17 Yeah. Tell them again.
30:19 It's a good stock. It's at 15% return for the last five years. Yeah, it's a very good stock. I think it's been said the misconception was it's a
30:26 short-term solution. It's not a full banking solution for a customer. If you're an investor and you're buying your ninth rental property in a holdco and you're an entrepreneur, probably not
30:35 a full traditional banking client. So, I think embrace the fact that these customers are long-term. Partner with lenders that actually want to compensate
30:42 you at renewal and actually invest that time to build a long-term solution with that customer and that bank.
30:50 The alternative space is part of your prime option now. It's as simple as that. And if you're not thinking about it that
30:57 way, you're losing opportunity for yourself. Yes.
31:02 Yeah. Again, just to double down on that, this is the prime solution for the clients that fit this bucket.
31:09 So, let's continue to present and offer it that way. And there are so many options and choices that clients
31:17 that fit in this space now have. I think the space will continue to grow.
31:21 Okay. Wonderful. So, we're going to open it up to the floor now. If anybody has any questions that they would like to direct at the panel,
31:29 please raise your hand. And we have someone walking around with a microphone, or stand up. Of course, I got a question.
31:35 Yes, I got a question for you guys. How prevalent do you see the market share increasing over the next five years in
31:43 the alternative space? Do you see it increasing, decreasing, and how important is it for brokers to have it
31:51 part of their portfolio? I think the entire mortgage market period is increasing. There's nearly $2 trillion
31:58 in mortgage debt. So, as a market share percentage, it will grow. Maybe it won't be 30–40%, but the entire dollars of mortgages are growing. And I think the
32:06 difference as well is customers will take advantage of these unique situations, unique opportunities. Any broker that's not involved in alternative lending is leaving a
32:15 significant opportunity. Can you imagine if you're not involved in that and a customer walks into your office and says, "I'm self-employed. I want to
32:23 refinance to pay out some CRA." And you say, "I'm sorry, we don't do that." And they walk down the street to the other broker who goes, "Yeah,
32:30 where is every single referral of that customer going? Where is that next LinkedIn shout-out, that Yelp review,
32:37 Google review? They're going to every other one of the friends and family to refer to the customer that chose to help them." So, if you're not in that space,
32:46 you're essentially saying, "I'm only interested in doing a teeny, itty-bitty little part of the mortgage industry."
32:54 To add as well, in the alt space, brokers own the deployment of alt mortgages. To Grant's point, the balances are going to continue to grow. The opportunity is going to
33:02 continue to grow. Clients are not leaving for five or 10 basis points for the offer they got from the bank on the corner. So, there's
33:10 immense opportunity. And if you're not in the space, you're completely missing out.
33:14 Without a doubt, I'd say it's going to increase. If you think about the same as compounding interest, go for the last five years and look at our marketplace and
33:23 think about the stress factors on your clients. And that doesn't get easier over time in today's environment and
33:31 over the next expected 12 months. Not only just—I feel like it's such a dull word now—is say tariffs, yet at the same
33:38 point in time, when you think about the interest rate environment, it's expected to increase without a doubt over the course of the next 12 months, which is further
33:47 going to compound the issue on a lot of affordability questions that your clients are all going to need solutions for. Where's that going to go from a
33:55 share perspective? It's going to be in your other prime option, and that's going to be Haven Tree Bank.
34:01 Okay. So, we are pretty much at the end of time now. I want to thank you all so much for being on the panel today and
34:08 for your very thoughtful answers. And I know not a lot of people raised their hands for Q&A, but I would like you to
34:15 please clap and thank them all for being here. Hopefully, you can hear me in the back. Thank you.
34:23 Thank you. Thank you. Thanks.