By Lorne Collis
Dominion Lending Centres has purchased Mortgage Architects, making it the largest mortgage originator in Canada.
Quoting from a recent REM article, “Dominion Lending Centres (DLC) says it is now the largest mortgage originator in Canada after acquiring Mortgage Architects from Pacific Mortgage Group. DLC now owns three brands (Dominion Lending Centres; Mortgage Centre Canada and Mortgage Architects) and it plans to continue operating all of them. It says the DLC group of companies will now reach close to 40 per cent market share, with a combined $32 billion in annual mortgage volume, translating to more than 100,000 individual mortgages per year. With the addition of Mortgage Architect’s 1,287 mortgage brokers and agents, DLC now has more than 4,800 accredited mortgage professionals in the three companies.”
What effect will this have on consumers? Probably none.
The biggest fallacy in the mortgage industry is that your “brand” is what makes you different.
Any mortgage broker who thinks they are in the business of selling mortgages is in for a rude awakening. In Ontario alone, there are over 12,000 registered mortgage brokers and agents. What sets them apart? It is not the logo on their business card. It is their attitude.
Mortgage brokerage is a service industry. If you can’t sell yourself, it doesn’t matter what logo is on your card, or what mortgage products you have access to, you will not be successful over the long term.
This doesn’t mean there is no benefit from this merger. DLC brokers may command higher commissions from the lenders, based on the combined volume of business generated. Some brokers may use these higher commissions to buy down rates to the benefit of their clients. (Some, but not many!)
The one place where the consumers may benefit is from better educated mortgage professionals. DLC is well known for its quality education and training programs. Brokers who already recognize the importance of professionalism will gravitate towards further self-improvement. This will benefit the consumer by providing expert advice and guidance in the areas of personal finance, and not just product selection.
As rates begin to rise (everyone has been predicting it for years. Sooner or later someone will be right), the ability to make your clients feel comfortable with the choices they are making will provide a solid base of satisfied clients. They will refer their friends and neighbours in the future, the cornerstone of longevity in an industry that has, too often, been driven by rates.
The mortgage professionals working for the DLC group will benefit from the confluence of technology, the improved marketing opportunities (lest we forget Don what’s-his-name), the potential for exclusive (or white-label) mortgage products and the bragging rights to working for the largest mortgage originator in Canada (until the next sale or merger). Should they choose to share their wisdom and new-found flexibility with their clients, everyone wins from this merger. If it is just business-as-usual, is bigger really better? Only time will tell.