TMG’s 24th Anniversary -- keeping it real

For twenty-four years, TMG The Mortgage Group has been quietly earning the respect of lender partners, the brokers who are part of the TMG family, and colleagues in the industry. As part of a very influential Western core group of broker advocates in the early 1990s, founders Grant and Debbie Thomas were instrumental in ensuring that Western brokers were properly recognized. Through their efforts, mortgage lenders such as Scotiabank to their business market.

Over the years, TMG has developed some of the best lender relationships in the industry, which stems from a corporate philosophy that lenders ought to be treated like customers.

Today, July 24, marks the 24th anniversary for TMG. With a network of nearly 800 mortgage brokers and agents nationwide, TMG has assisted hundreds of thousands of Canadians find the mortgage to best suit their financial needs. TMG operates on the premise that a mortgage broker provides the best value for consumers and has the knowledge and expertise to assist anyone seeking mortgage financing advice.

The Year was 1990

It was the year the Edmonton Oilers came back and Mario Lemieux couldn't. The economy turned its worst performance since the Second World War.

It was the time of Brian Mulroney and George Bush (Sr). One US dollar cost $1.17 Canadian. Caller ID systems were introduced and the Internet revolution began. Nelson Mandela was released from prison after 27 years and Iraq invaded Kuwait.

It was a time of hot pants, mini-skirts, pre-ripped jeans, grunge art, Ninja turtles, head bands and sneakers. "Die Hard" was a box office hit and TV show "Cheers" won all of the Emmys.

TMG was formed

In its early years, the company operated as Kirk capital Corp. and opened its first franchise in British Columbia under London, Ontario-based “The Equity Centre,” led by industry pioneers Grant and Debbie Thomas. In 1997, Kirk Capital Corp. parted ways with that franchise network and changed its name to The Mortgage Group, becoming an independent privately-owned mortgage brokerage firm.

 “When we started, mortgage brokers had a bad rap and were considered as a last resort,” said co-founder Debbie Thomas. “I wanted to educate the public of the benefits of using a broker.”

Although the industry has made inroads into gaining market share, it’s still not enough. “We just have to keep sending our message out to consumers and make sure our brokers are well-trained.” Debbie’s goal has always been to instill confidence in consumers when dealing with brokers.

TMG has also attracted mortgage leaders from across the industry and across the country. Its regional sales leaders and vice-presidents are experienced and well-respected individuals who work directly with brokers in their regions to help them exceed their mortgage business goals.

 “TMG The Mortgage Group Canada Inc.  is a special company” said Mark Kerzner, President of TMG. “So much of our success is based on the relationships that we have developed over the years with our brokers, lenders and industry providers. We are continually looking to the future for ways of enhancing a broker’s value with an end consumer. At TMG we are on the right path.”

The company’s contribution has not gone unrecognized in the industry. In 2011, TMG was honoured with the Canadian Mortgage Award’s top award for Network Broker of the Year. In 2012, the company was named one of the Best Companies to Work for in BC. In that same year TMG was awarded with CAAMP’s Partners Excellence Award and Grant and Debbie received MBABC ‘s Pioneer Award for Lifetime Achievement. In 2013, the company won Employer of Choice at the Canadian Mortgage Awards and last year Grant and Debbie were inducted into CAAMP’s Canadian Mortgage Hall of Fame.

Yet, TMG is not a big, faceless company. Throughout the company’s growth, the brokerage has never lost its family-centred values. Indeed, it has maintained and reinforced its corporate family culture.
In the 14 years that Corrie Chenier has worked for TMG, she has watched the company grow from 40 brokers and a few staff to nearly 800 brokers staff. In all that time, she said TMG never lost its family values –it’s a place that Corrie calls home.

 “TMG is very family-oriented and we work quite well together as a team,” she said. “The culture here also promotes a high degree of professionalism and we do all we can to help our brokers succeed - from our marketing department to our regional managers – we are focused on their success.”

Branka Hayes, who works in payroll, has been with TMG for 10 years. She has glowing praise for the company that has made her feel a part of a larger family. The atmosphere has helped her in so many ways -- as the company grew, Branka experienced her own personal growth.

“We are treated so well – all of us feel the same way,” she said. “Whatever challenges we go through, this company is here to help us. And whenever I was in need, Debbie and Grant were totally present with me and what was happening in my life.”

Shanna Goldberg, Broker Services & Benefits Coordinator, who works out of the Toronto office, has been with TMG for just two years yet it feels like her extended family. She is about to go on maternity leave. “It feels a bit like losing a family member,” she said. “I kept asking Mark if there was some way I could still work while on leave,” she laughs. “But he reminded me that it was my family time.”

While within TMG, Grant and Debbie are seen as mentors, experts and leaders.  Within the mortgage industry, they are seen as entrepreneurs, advocates and pioneers. But always, at its core, TMG is one big family.

Job Posting -- Broker Support Coordinator

TMG The Mortgage Group – Broker Support Coordinator

Licenses or Registrations Required: 5-7 years in an administrative role, ideally in the financial industry, but not required
Location of Positions: Toronto, Ontario
Applicants may contact: Email shanna@mortgagegroup.com or fax 1.888.534.3706 by August 1, 1014

Job Description

Broker Support Coordinator:

Reports To
Mark Kerzner, President

Hours and Salary
* Full Time, Flexible
* 12 Month Contract, Maternity Coverage
* Competitive salary and benefits

Summary
 
Broker Support Coordinator is responsible for a wide variety of administrative duties in support of the President and other senior management members and teams. Duties include but are not limited to coordinating the hire and resignation process for all Ontario mortgage brokers, arranging travel plans for TMG management if required, meeting organization, scheduling appointments and drafting both internal and external correspondence. Strong customer service and interpersonal skills will be required as communication and client inquiry assistance will be a key component within this position. He/she is required to maintain confidentiality and professionally interact with employees, brokers, management and the public.

Job Duties

• Provide direct administrative and office management support to all members of the executive team, and Ontario brokers as required and directed including but not limited to broker hires, resignations, terminations and team switches.
• Coordinate logistics for all ON brokers including and not limited to setup and removal of multiple database, e-mail, distribution lists, mortgage origination, insurance, memberships and Equifax.
•  Update daily rate sheets every morning.
• Prepare travel schedules, book travel arrangements, and make reservations for senior management and executive staff if required.
•  Coordinate logistics of executive team programs including meetings, seminars, workshops, special projects, and provincial events. This includes maintaining RVSP lists and coordinating all national sponsorships.
• Prepare draft reports, background documentation, and research for President and Senior Managers
• Coordinate office activities.
•  Troubleshoot and/or escalate office administration and broker issues.
•  Receive incoming mail.
• Deposit Banking
• Facilitate communication from department managers, business unit leaders, and project managers.
• Complete expense reports, pay invoices, and other related duties.
• Work with discretion regarding sensitive and confidential information
• Provide employee assistance with registration processes
• Other duties as assigned by management

Requirements

• Post-Secondary Diploma or University Degree in Business Administration, or relevant discipline, preferred.
•  Secondary School Diploma required.
•  5-7 years’ experience in an Administrative/HR role preferred.
• Strong knowledge of office procedures and practices.
•  Keen attention to detail.
• Proficient with Microsoft Office Suite (Outlook, Word, Excel, Power Point).
• Experience in the finance industry preferred.
• Data analysis skills required.
• Basic research skills required.
• Ability to develop and implement strategies.
• Effective communication skills with individuals at all levels of the organization.
• Superior telephone manners and strong interpersonal skills.
• Proven organizational and time management skills.
• Presentation skills required.

Work Conditions

• Interacts with employees, various management levels and Ontario brokers and assistants

Creating a competitive lending environment

The ongoing government policies that have intended to slow the housing market have certainly shown their desired effects over the past few years.  We have seen changes to amortizations, debt service ratios; reduction in the maximum amount Canadians can borrow to refinance their current homes from 85% to 80% loan-to-value, and limits on the maximum loan-to-value on HELOCs to 65%. The hardest hit was first-time homebuyers. And the most recent changes affected investors, those who purchase second homes, and the self-employed.

However, recent economic conditions suggest that mortgage activity will trend upwards for the near future as a modest rise in employment -- 1.2% in 2014 and 1.9% in 2015 according to CMHC’s most recent Housing Market Outlook -- and disposable income is projected to support housing activity.

House prices in many markets are still increasing and sales are healthy in most parts of the country. This is causing concern for Canada’s top banking regulator. Mark Zelmer, deputy superintendent of the Office of the Superintendent of Financial Institutions (OSFI), in a speech last week, focused on the continuing growth in household debt relative to income.

“I would not presume to claim that borrowers are acting irrationally or do not know what they are doing. But, by the same token, it is clear that the ability of the household sector as a whole to absorb major shocks is less now than it was a decade ago,” Zelmer said in a prepared speech.

Zelmer also said stress tests that show Canadian banks are prepared for a downturn, should not be viewed as overarching “safe harbours” because they are based on models and arbitrary assumptions. “Boards and senior management of financial institutions need to apply judgment in a forward-looking manner and not become too complacent in their capital planning exercises,” he said.

While the mortgage rule changes have created a tighter lending environment among the Big Banks, smaller institutional lenders are developing mortgage products to fill the void. Banks do carry a slight competitive edge in the market because they can cross sell to customers. However, smaller lenders are becoming more innovative with their product offerings, which is good news for consumers.

According to Paul Grewal, president of Street Capital Corporation, smaller lenders are continuously looking at different ways to provide a broader product line in order to differentiate itself from the competition.

“Market competition is always fierce and a healthy component of any industry. Although recent mortgage regulation changes have not reduced market competition as a whole, the industry is definitely changing.”
It’s not surprising that OFSI is speaking out now. The spring mortgage market is always a time of high competition and as a result, lower mortgage rates are being offered across the industry. “Competition is always beneficial to consumers -- more choice, more competitive pricing and more product selection are being offered,” Grewal said.

Street Capital is currently in the process of restructuring to become a bank, which will enable the lender to offer new products and services like credit cards and GICs through the mortgage broker channel. This, in turn, will help create a competitive environment for mortgage brokers who will be able to diversify their offerings to consumers.

Hassan Shaikh, Assistant Vice President, Investments, for MCAN Mortgage Corporation, agrees that innovation is key to ensuring a competitive environment that will benefit consumers.
“We, as lenders, have to bring something to the table; one factor might be competitive interest rates,” he said. “However, there are many factors.”

Some of the other factors are those that a consumer won’t see directly but will feel the effects. For example, Shaikh mentions turnaround times and relationship management as two important factors. A smaller lender is better able to move on mortgage transaction quickly, which has a distinct advantage for a certain type of client.

Also, by having built a strong relationship with an underwriter, a broker will have the added benefit of working with a processing team who will try to get an approval on the more difficult deals. This makes the broker invaluable to his client.

Overall, consumers are the beneficiaries of a competitive environment. The introduction of new mortgage rules was the genesis for change, and for a time, it looked as if the competitive environment had been eroded. The industry lost lenders; lenders eliminated many of their product offerings; and the pool of potential home buyers was reduced.

However, smaller lenders and new specialized lenders have stepped up to the plate and the industry is, once again, competitive. 

TMG National Breakfast Club Day – what a success!

By Mark Kerzner, President, TMG The Mortgage Group

In the early Fall of 2013, I had the pleasure of meeting Daniel Germain, founder of Breakfast Club of Canada (http://www.breakfastclubcanada.org). Over the course of our meeting, Daniel shared his personal story with me -- to say I was touched was an understatement.  In his passion and commitment to helping others in a number of countries around the world, Daniel then focused his attention to his own backyard right here in Canada.

What surprised me during our conversation was that he was also ‘interviewing’ us (TMG) to ensure we were a suitable partner, with shared values. He asked a lot of questions about TMG -- our history and our people. I believe one aspect that may have impressed him was not only our desire to raise money for his organization, but also our interest in getting involved in the school communities across the country.

As soon as we ‘officially’ kicked off our national commitment to support Breakfast Club of Canada (BCC), TMG’ers were volunteering in local schools and raising money through regional events. As well, our passion for this organization has encouraged others in our small business community, including lenders, suppliers and customers, to get involved and give as well.  Within two months of launching our support for BCC we exceeded our first year fundraising objective.

On May 29, 2014, we  marked our first ever TMG National Day in the Schools where 10 teams from PEI to Victoria helped serve nutritious breaks and hand deliver ‘Smile Bags’ to participating students in some schools.  As president of TMG I am so proud of the level of engagement and am so excited to see how this initiative will continue to grow over time.

One in seven of our kids in Canada go to school hungry every day. For $1 we can feed one child. It’s that simple.

The volunteers of the Breakfast Club of Canada welcomes close to 130,000 kids every day.  Canada is the envy of the world. We live up to that adoration in the way we treat our own at home. 

On a personal level I want to thank John Charbonneau for introducing us to this amazing organization, which has given us the opportunity to give back in some small way.

Don’t be shy, please donate to this amazing cause. http://support.breakfastclubcanada.org/site/TR?px=1014305&fr_id=1050&pg=personal#.U4dpTS-D36Q

Cheers,

Mark

Rent vs. buy revisited

As house prices increase and affordability for first time home buyers looks as if it’s diminishing, the question of whether to rent or buy inevitably comes up. It’s a good question, especially in the current economy, but with no clear answer. 

Just ten years ago, the answer was simple – buy!  It had been the answer for much of the past twenty-five years.  Mortgage payments were relatively low; in many cases less expensive than renting, and a house was a solid long-term investment. But those were different times – for the most part, jobs were relatively stable, incomes rose steadily, unemployment rates were manageable,  home prices were not crazy and the real estate market was balanced, with the exception of a few corrections here and there.

Today, in many parts of Canada, house prices continue to rise. For one, housing starts are decreasing across the country, yet demand is still there – the result is higher resale pricing. A few months ago, affordability may have been an issue; however, we are now sitting at sub-3% fixed mortgages and variable rate mortgages as low as 2.4%.

If you’re considering buying, take a look at your current situation.  If you’re single – living in a high-priced market like Toronto or Vancouver and have a job with an average salary, it might make more sense to rent.  The basic rule is when a house costs more than 200 times the monthly rent it generates, it makes more financial sense to rent rather than own. In Toronto or Vancouver, for example, the prices of houses are 300 times the rent they would generate. If you rent a condo in Toronto for $1000, you’d be paying $1700 a month to buy it – that doesn’t include condo fees and taxes.  Not all markets are pricey but not all markets offer employment opportunities, so there’s the big trade.

 Families with children usually prefer owning a home even though it might cost them more. The stability of ownership and providing a good home for the kids becomes the deciding factor. Having two income-earners can make mortgage payments and housing costs more manageable. If commuting is not an issue, house prices just outside a major centre offer value – bigger houses for lower prices.

Aside from financial concerns owning a home is certainly an emotional issue. Most millennials grew up in families where home ownership was the cornerstone of every investment portfolio. But the economic realities today are far different.

But life is change and we are seeing those changes in the housing market and in the economy. Inflation hit 2% last week.  This is the benchmark the Bank of Canada uses to make its interest rate decision. Clearly, rate cuts are not likely. But a fixed-rate mortgage under 3% is something to consider.

Talk to your mortgage broker to help you decide if homeownership is right for you right now. If not, then, put a plan in place to get that home when you’re ready. 

10 Ways to Improve Your Credit Score

So you got behind on that credit card payment. Or you were laid off for awhile and couldn’t keep up your car payments. Or that student loan is in arrears because it took you a while to get a job. Now your credit score is lower and you want to move on with your life – maybe buy a house or get a new car. Don’t underestimate the power of your credit score. It not only reveals to a lender if you’re a good credit risk, it’s also the basis for the interest rate you’ll pay. In today’s credit world, if your score is low you can still get a loan for a car or a home, but it will cost you. Lenders may charge extra fees and will certainly charge you a higher interest rate.  This is a costly proposition. However if you’re patient and persistent, you can improve your credit score in six to eight months. Here’s how:

1. Pay bills on time: Pretty obvious, right? Late payments are the most common piece of negative information that appears on a credit report. Since payment history accounts for 35% of your total score, getting behind has a big impact. If nothing else, pay the minimum by the due date. By the way, any late payment will affect a credit score –cell phone bills, child support payments, etc.
2. Keep balances low: If balances on your accounts equal more than 35% of the total credit available to you, it will actually hurt you. I know, it doesn’t seem right -- why have a credit limit of $1,000, let’s say, and only spend $350 of it? It’s all about proportion-- thirty per cent of your credit score is based on it.  A good credit risk is someone who doesn’t need credit. Go figure! TIP: For disciplined credit users: Call your credit card company and ask to increase the limit – this will decrease the proportion you’re using.
3. Don't close unused accounts: The longer your credit history, the better. The length of time you’ve had credit is worth 15% of your total score. You get a star for each creditor you’ve had a positive history with –it’s proof that you’ve consistently paid on time. So don’t close older and unused accounts. Just put the cards away and forget about them.
4. Only apply for credit when you need it:  It’s pretty common to walk into a store and get asked to apply for the store’s card to pay for your new purchase – the retailer will even offer you a special deal.  Think twice.  Opening new credit accounts or having your credit checked frequently will hurt your credit score temporarily. The reason? It looks like you’re going credit crazy. New credit determines 10% of your score. So try using an existing card for that purchase unless you know you won’t be applying for a mortgage or a car loan in the next few months.  
5. Vary the credit used: Believe it or not, the types of credit you have accounts for 10% of your credit score. That means that having a car loan, a major credit card, a retail card and a mortgage can help your score.  But it’s not necessary to run out and apply for all that credit. (See item 4)
6.  Correct mistakes in your credit report: Get a copy of your credit report from Equifax and Trans Union and make sure all the information is updated and correct. As you can imagine, these two agencies deal with millions of pieces of information on a monthly basis. Sometimes mistakes can happen, which can result in false credit scores, which can lead to you getting denied a loan or paying more in interest.  
7. Separate accounts after divorce. Joint accounts are common in a marriage and once wed the info on each spouse’s credit report and their score will impact the other spouse.  If a couple divorces however, this creates a whole new set of challenges. A legal divorce does not absolve one or both from their financial obligations to their joint accounts. If both names are on the debt, it belongs to both spouses, married or divorced. 
8. Avoid bankruptcy, if possible: This is bad news for your credit score, but it may be the only option. If you’re at this point, then your score has probably tanked anyway—some debts may have gone into collection. Bankruptcy is not a death sentence – there is life after one. It’s just going to take time to rebuild your credit. This will take a few years – there’s no quick fix – but it does give you a fresh start. Talk to a bankruptcy trustee. 
9. Negotiate with creditors:  Your creditors are in the business of making a profit. If you’re not paying your bills, it impacts their bottom line.  Many of them can understand when financial challenges arise and you may be able to negotiate with them and come up with a solution that is mutually beneficial. Do this before you start missing payments.
10. Be patient: No credit score calculation here. It takes time to repair a credit score and/or to build it up. Follow the steps outlined here and you’ll be on your way to a Triple AAA credit rating.

Is real estate a good investment? The long answer is yes

It seems it’s a tough world for Gen Y’ers – high student debt, shortage of jobs, living with parents longer, and now the dream of home ownership might have to wait. Yet, an RBC poll released early in April found that young Canadians see home ownership as a good investment and 41% of the respondents plan to buy. The poll also found that 86% of those aged 25-34 believe owning a house or condo is a solid investment, up from 78 % last year.

So is real estate still a good investment?  The RBC poll confirms that it might be, at least as far a millennials go.  “The increase in the number of those who feel the housing market is a good investment, as well as the number of those who intend to buy, really highlights that Canadians have no doubt in the strength of the housing market”  said Erica Nielson, RBC’s vice president of home equity finance, about the poll results.

Here’s how the results breaks down per province:

• Ontario, Quebec and the Prairies saw the biggest surge in home-buying interest over last year
• Ontario, 24% said they have intentions to buy this year, up from just 14% in 2013.
• In Alberta, 28 % said they hope to buy this year, up from 22 % in 2013.
• Atlantic Canada also saw some increase in buyer intentions.
• In B.C. the percentage of those who are likely to buy a home has increased slightly, from one-in-five (20%) in 2013 to more than one-in-five (22 %) in 2014.

Interestingly, a discussion initiated by the Globe and Mail asking the question about real estate as an investment received a lot of attention. Those who answered do believe that a home is an investment that builds wealth in addition to it being a place to live.

Let’s take a closer look at that. Those who are pro a home as a good investment will point to the increase in resale prices over the past 10 years, which have increased more than 6% annually since 2000, according to the Canadian Real Estate Association (CREA), which is triple the inflation rate. This increase helped improve a household’s net worth, unless you were under the age of 35.

In February, Statistics Canada reported that the median net worth for families increased 78% from 1999 to 2012 on an inflation-adjusted basis, or about 4.5% a year. However, in households where the age of the highest earner was under 35, net worth grew just 8.6% in total, or about 0.6 per cent a year. Since inflation averaged 2.2 % over that period, as reported by Rob Carrick in the Globe and Mail, “those young-adult households actually lost net worth on what economists call a real basis.”

That’s not really a surprise since gains in net worth have been driven by real estate appreciation and those under 35 years of age have less equity in their homes. Can they catch up? Well, prices can’t rise indefinitely – so say many economists – so that may not be helpful when trying to make a sound financial decision.  However, there are a few hot markets in the country that might buck the trend.

For example, in Alberta, and especially in Calgary, real estate is a growth industry. Heather Manna, Managing Partner and Mortgage Broker at TMG Millennium Mortgage Group in Calgary says that real estate definitely is a good investment. “Over the last few months we have seen lenders loosen the reins on financing restrictions, which is making it easier to qualify a consumer who is in the market to purchase a new home,” she said. “This, combined with the low mortgage rates, continues to make real estate a great investment, whether you are buying to occupy the home, or purchasing for an investment.”

And why not invest in real estate, Manna asks? “Just like the stock market there will always be lows and there is always a correction. It’s about keeping well diversified and that includes having your home in your portfolio,” she said. “If you need a roof over your head, you might as well be paying your own mortgage down instead of someone else’s.”

There is also a shortage of listings in the Calgary market, which is upping the prices there. The rental market is also very tight with a 1% vacancy rate. “If not purchasing a property long term for your family, the rental market proves to be aggressive year-after-year for income earning potential or a retirement plan,” Manna added.

Granted, Calgary may be an exception, however there are similar hot markets in both B.C. and on the Prairies. Ontario and the Atlantic provinces have hot areas. Some economists say that prices will struggle to show any real gains in the next five to 10 years unless you happen to be in a hot market. But in some of those markets affordability is the real issue and young people are looking for help with larger down payments from their parents.

The hidden story for Gen-Y’ers is debt load. Statistics Canada says under-35 households owed $36.44 per $100 in assets in 2012, by far the highest of any age group. Purchasing a home adds to that debt load, not only with mortgage payments, but interest, property taxes, insurance and maintenance costs. If there is a modest 5% drop in house prices, then a 5% down payment equity position is wiped out.

However, in a Globe and Mail article published on Wednesday, April 23, Will Dunning, chief economist of the Canadian Association of Accredited Mortgage Professionals (CAAMP) says he thinks that home prices have turned.

Using data from the CREA, he said that sales of existing homes rose last summer and peaked in the August-September period. Although here has been a slight rise during the past two months, he doesn’t see this as meaningful.

Dunning referred to the Teranet-National Bank home price index, which shows a very gradual increase in prices over the last while. “If you take the price index and seasonally adjust it, it shows a sharp pick-up in price growth around the time I would have expected it to have occurred, and “the last data point hints that on a seasonally-adjusted basis, the period of rapid growth has ended – when it should have.”

With prices stabilizing, low rates, larger down payments, real estate starts to look better, especially as a long-term investment, which it actually should be. There was a time when a couple would buy a house, live there, raise their family there, and then retire there, mortgage free. We may be coming into those times once again.

 The most important question to ask is, “am I ready?” Consider a home a long term investment -- its value will fluctuate up and down over time, but eventually you’ll be mortgage-free. It’s a big commitment, but it’s also a great achievement. Home ownership offers a great deal of personal satisfaction, as well as financial stability.

There is no right or wrong time to buy a house. Mortgage rates and house prices will fluctuate but over the long term, home ownership is still a sound investment. 

Ask yourself:

•  Are you at the point in your life where the idea of home ownership is attractive and makes sense, both now and for the long term? 
• Do you qualify for a mortgage, and how much? If you don’t know, talk to a mortgage professional.
• Can you manage the mortgage payments as well as other expenses that may come along with home ownership, such as maintenance costs and higher insurance fees? 
• Do you have a down payment?
• Do you have a strategy to take advantage of this low interest rate environment to more aggressively pay down your mortgage and accumulate equity?

If you answered yes, then it’s the right time to invest in real estate.