A Lesson in Customer Service

By Mark Kerzner, President TMG The Mortgage Group

How many times have you heard one of the following?

1.  “It’s our policy.”
2.  “I have to check the policy manual”
3.  “Because I have to”
4.  “I am just going on my break”
5.  “Let me provide you with a website address where you can fill in your comments”

… and the list goes on and on and on. While these are just a sampling of my personal business pet peeves, my blood boils as I simply recall them and write them down.

Let me share a couple of challenges I had with the customer service practices of a car rental agency as a lesson on how not to treat customers.

Last winter I rented a car at the Calgary airport.  After completing the compulsory paperwork the rental agent handed me my keys.  To my surprise there were three identical keys on the key chain.  Over the past few years I have become a personal fan of the keyless car starter if for no other reason than to reduce the bulk of what I have to carry around. I was travelling on my own, so I said I would just take one of the keys, asked that they keep the other two. They refused. The reason: because I have to take them all.

I didn’t let it go quite that easily and tried to reason. I said, “If I happen to lose the keys, I would lose all of them if I had three with me on the single key chain. At least if you have the spare you could help me out.”  It didn’t work.  At that point I simply didn’t have the energy to continue and went on my way.



A few months later I had the exact same experience. Knowing where this was likely going to end I decided to circumvent the conversation by asking how I could get feedback to a decision maker so that they would have the opportunity – yes, I do believe it was an opportunity -- to hear feedback directly from a customer. The rental clerk said she could provide me with the contact information for the owner of the franchise and I could give my feedback directly to them. I was happy with this outcome until I got the “business card” of the franchise owner. (See below)



Despite my frustration at receiving a form email alias rather than contact for an accountable human being, I decided to follow through with the feedback form and went to the main home page of the company to provide it.  By the time I was ready to submit I had some additional feedback as well. The car that I was given was dirty inside and out. I wrote up a nice, long note, and went to submit it when the system bounced me out. Nothing I wrote was saved and I would have had to rewrite it all again.  Which I did not do.

By the way, I was not able to submit feedback to the survey URL provided from the rental agent. There was no room for feedback and I would have had to provide the digital Rental Record number to complete the survey.  In the end the car rental company never had the opportunity to hear my feedback and lost my future business.

I guess what I was hoping for was an opportunity to help empower the client service people so that they could remove the above excuses from their vocabularies. 

As mortgage brokers, we know our business is evolving and has become more competitive.  Our clients are asking us for more than they did just a few years ago. Many of our clients are better educated about finances and mortgages when they speak with us. They have already done research online or with their personal bankers.  This is actually a good thing for both the client and us. 

As problem solvers we ensure clients have the best product for their unique circumstances.  But it’s also about being there with answers and not just standard phrases such as “those are the lenders’ rules”. We owe it to our clients to explain why policies are what they are. This means we must be more diligent about knowing our lenders, their products, and the policies. We need to connect with underwriters and BDMs to makes sure of the varying conditions and be informed with recent changes.

It also means keeping in regular contact with clients to keep them informed of what’s happening in the industry and how those changes impacts them. And, if there is a complaint, then we need to listen to what they’re saying and find ways to continually improve our level of customer service.

You’re self-employed and need a mortgage

It’s becoming more challenging for self-employed workers or those who earn commission to get a mortgage to purchase a home. Nearly 20 per cent of all income earners in Canada are self-employed; and the category is growing.  They are individuals operating their own businesses and those who work on 100% commission such as Realtors, insurance brokers, and even mortgage brokers. This group has the most difficulty getting a mortgage because a good tax accountant will identify write-offs to reduce income to pay the least amount of tax, which may not reflect traditional earnings.

Mathieu McCaie, a mortgage agent with TMG The Mortgage Group in Moncton New Brunswick who works with self-employed clients doesn’t necessarily see you as ‘higher risk’ due to the source of your income. “I understand the value of self-employed clients and what they’re trying to accomplish and can provide lending solutions to help them with their personal home as well as investment properties,” he said. “However, there are guidelines that may seem more stringent then for self-employed borrowers.”

By offering expert advice, agents like McCaie can alleviate the time and frustration that most self-employed individuals experience when looking for a mortgage. Even with an excellent credit score, most lenders will ask for financials and personal tax assessments for up to three years. Those documents may not be available, depending on your situation. For example, if you are new in business, you may have only one year of tax returns.

Recently,  lending criteria for self-employed individuals has changed making it even more challenging to get a mortgage loan. However, some lenders are now offering the Stated Income program for clients who don’t have a lot of documentation. “A few months ago, this program seemed to be on hold but is now gaining some ground again as some insurers have opened it up again,” McCaie said.

Financing your home

There are a number of ways to finance a home when you are self-employed. You can opt for a conventional mortgage if you have a down payment of at least 20% of the appraised value of the property. Since you are making a larger down payment and have equity in the property,  it mitigates the risk the risk to the lender. In addition, conventional mortgages often do not require mortgage insurance.

Also, the self-employed come under stricter scrutiny to get approved for either a conventional or a high ratio mortgage and an approval will depend on a number of factors. If you have provable income, there is much more available to you. Provable income requires you produce, but is not limited to, the following:

1.  Tax returns showing income
2.  Recent Notice of Assessment showing no tax arrears
3.  Documentation showing self-employment for two years
4. No delinquencies in the past 12 months
5. No previous bankruptcy or out of bankruptcy for at least a year with reestablished credit

Self-employed borrowers who are unable to provide traditional income verification but have a proven two-year history of managing their credit and finances responsibly may be able to qualify under the Stated Income program. Here are the guidelines:

1. The income reported by the borrower must be reasonable based on the industry, length of operation and type of business
2. Strong credit profile with a minimum of  two trade lines with at least two (2) years history 
3. Minimum 5% down payment from the borrowers own savings. The remainder may be gifted from an immediate family member. Borrowed down payments are not allowed from m,nay lenders 
4. No tax arrears
5. Property must be owner-occupied

Scenario 1

Perhaps you are a 40-something carpenter who has been operating your own business for just two years. You have one year of tax returns. You have worked in the industry for 10 plus years. Your credit score is high, -- 700 plus –and have at least two trade lines that show a history of good credit management.  You have a business license, a website and have saved 10% for the down payment.  To complicate matters, the house you’re buying is a private sale.

Working with a mortgage broker, you may be able to access the Stated Income program – an ideal product for those with low documentation –and get low rates. 

Scenario 2

You’re a 20-something entrepreneur operating a painting company for one year.  You’re looking for a fixer-upper in a good neighbourhood. However, you’ve had some credit issues and your score is in the low-600s. You don’t qualify for “A” lending with best rates but you may be able to qualify through an alternative lender. If you have your NOA, a business license, a website, bank statements for the six months showing an income stream and 10% as a down payment, which can be gifted, a mortgage broker can help.

The mortgage interest rate will likely start at 4.5% and go up from there and there is usually a lender fee; and there might be a broker fee as well. However, the fees are not necessarily high – it depends on the situation.

While being self-employed does not mean you won’t qualify for a mortgage – it means there are different rules and different products available to you – a mortgage broker can help you navigate the landscape with you.