JAC: Congratulations on your election as President of IMBA. What drew you to the Association in the first place?
MW: I think that I have been an IMBA member since 2001. What originally motivated me to join the Association was its demographic; I liked that the Association was comprised mostly of small, independent mortgage brokerages and its agents. At that time, I was working as a mortgage agent for one such independent - a “one-man shop”, with limited support and resources, so I sought mentorship and peer support through new friendships formed within the IMBA.
JAC: What are the biggest challenges that you see facing your Association?
MW: Declining membership is a short-term concern; recent changes to the MBLAA, including mandated Errors & Omissions Insurance, and increased educational requirements, may cause some participants to leave the industry, affecting the Association’s membership. Also, we have seen several lenders leave the industry, which also affects our membership.
JAC: How do you intend to meet those challenges?
MW: I think that the Association is going to have to redefine its value proposition in order to maintain, as well as attract, new members. Unfortunately, in our industry, association membership is not yet mandatory; this presents a challenge in recruiting agents and brokers to become Association members. Although this is a challenge, I also view this as an opportunity to introduce some fresh new ideas that will hopefully boost membership and participation by members at Association events.
JAC: What do you see as the major challenges facing the independent broker?
MW: As more consumers rely on the independent mortgage broker to procure financing, our overall market share is increasing - which is a good thing. The downside to this however, is that, because our minimum entry requirements are relatively low compared to other professions, we have a lot of uneducated, unprofessional individuals calling themselves mortgage brokers - not having a clue how to underwrite a file, or more importantly, effectively manage one’s business. This inefficiency is having an effect on the lenders, resulting in several lenders now requiring volume commitments from brokers and agents, and more scrutinized efficiency ratios. The smaller broker may experience some difficulty in fulfilling every lender’s volume requirements, resulting in limited representation. The main reason that a consumer chooses to use a mortgage broker to procure financing is because that broker has a wide range of lenders to offer the consumer; restricted access to lenders defeats our original mandate.
JAC: How does being part of a national brokerage network impact your ability to serve the independent broker?
MW: I don’t think that my involvement with a national brokerage network has any negative impact on my ability to serve the independent mortgage broker and agent as an IMBA Director. The main advantage of being affiliated with a national brokerage network is that I have the opportunity to earn a higher commission under the network co-operative, as well as enjoy the many benefits of corporate affinity programs and agent training that Verico head office has developed for its licensees. This is important, given today’s competitive mortgage marketplace. However, I still behave as an independent broker, with full autonomy in my day-to-day operations; and I still face the same issues and challenges that other independent brokers face, regardless of my affiliation to a national brokerage network.
JAC: What are your main goals for the Association in your term of office?
MW: I have made an extensive “wish list” for the Association, but as my term is only for one year, and our financial resources are limited, I have narrowed the list down to three key goals. These goals are not my creation; I am just continuing the work of my predecessors. My first goal is to increase membership. Secondly, I’d like to see more member participation. It seems that the same faces come out to our events; As much as I like to see these members, I’d really like to see some new faces! And lastly, I want to create a dynamic Association wherein a mortgage originator no longer asks us “What’s in it for me?”, when contemplating the $150 annual membership fee, but rather, “Where do I sign up?”, as there will be no question as to the value proposition we deliver to our membership.
JAC: Any comments or thoughts on the recent mortgage rule changes?
MW: I support the changes for the most part; I do have issue with the qualifying rate to be used for the variable rate mortgages.
I am pleased to see refinances limited to ninety percent from ninety-five percent. The previous limit put homeowners in a precarious position financially, once we factored in the high-ratio insurance premium - which could be as high as 3.15% on a 35-year amortization, added to the mortgage. If the borrower had to sell his/her home shortly after completing a 35-year, ninety-five percent refinance, there would be insufficient equity in the home to cover the real estate fees, mortgage penalty, and other closing costs, as we had really refinanced for 98.15%. With a 35-year amortization, very little principal is paid off in the early years.
I am also satisfied with the announcement to limit high-ratio rental property purchases to eighty-percent loan-to-value, from ninety-five percent. This will eliminate many individuals, who have very limited financial resources, from purchasing multi-rentals. There are several lenders who insist on a borrower having liquid assets in excess of a certain amount, and this does not include existing home equity, and I think that this is an excellent safeguard in underwriting the credit-worthiness of an application.
I totally oppose the new legislation affecting self-employed borrowers. To limit this program to self-employed borrowers with less than three years of self-employment history makes no sense to me. Personally, I’d have more confidence lending funds to a self-employed borrower with ten years of self-employment experience than to someone with just two or three years of self-employment history. I think that the Government’s justification for this is that perhaps self-employed individuals will start showing higher income on paper, thus resulting in higher income taxes payable. I understand as a self-employed person myself, that we can’t “suck and blow at the same time”; however, given the hefty premiums that the mortgage insurers were charging self-employed applicants for high-ratio mortgage financing - as high as 6.40% to a self-employed borrower with just five percent down, wanting a 35-year amortized loan, there’s no free ride here. Also, given that self-employment is on the rise, with no indication of the trend reversing, how will this impact overall economic recovery?
JAC: Any comments are thoughts on the GST/HST and how it could affect your Membership?
MW: I have nothing to add to this argument. I am not in favour of the HST. I believe it will only add fuel to the burgeoning underground economy.
JAC: Closing on a personal note, how do you intend to balance running your brokerage with being president of IMBA and with your personal life? Will you still get any rowing in?
MW: Balance - What balance? I am a workaholic, and I am very fortunate in that I love my profession, so it does not seem like work to me. It will be difficult at times to juggle work and IMBA duties, but I plan to rely heavily on the wonderful IMBA office staff, Cindy Smith and Meghan Delaney, as well as our seventeen Directors, for much of the work that needs to be done. There is an old saying, “When the student is ready to learn, the teacher appears.” I believe that I am finally at a place in my career as a mortgage originator that I am ready to learn some new skills, including how to delegate - which I currently am terrible at. I see my recent IMBA appointment as an opportunity to grow professionally and personally, while delivering increased value to our membership.
I have a large dog, named Hairy, who accompanies me to the office most days. He also ensures that I take some down-time every day to go hike the Bruce Trail or local conservation areas together. He is very persistent. I am very active physically as well, running several times each week, and now that the nice weather is here, I hope to get out in my rowing scull a couple of days a week. I am certain that my good health, positive attitude, and overall naiveté will see me through this year!
BIO: In 2003, Margo obtained her mortgage broker's registration and formed her own company, specializing in residential mortgage financing. In 2006, she joined the Verico Mortgage Brokers Network - a national network of independent mortgage brokers, and formed Verico One Mortgage Corp., with an office in the Niagara region. She is also an accomplished rower, and now stays fit by participating in international long-distance rowing tours.