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Why there’s plenty of room for optimism in Canada’s mortgage market
Despite facing headwinds in 2023, the mortgage industry is set to emerge all the stronger when the storm eventually subsides, according to two top mortgage executives
Grant Armstrong
Community Trust
Industry experts
Dean Larson
Tango Financial
Grant Armstrong has been working in the mortgage industry for over 20 years, driven by a passion for delivering excellence to both clients and partners. While at RBC, he specialized in finding solutions for non-traditional lending clients, partnering with some of Canada’s top alternative lenders. Grant then moved to CIBC and led the mortgage options group to record-setting sales results by focusing on training and development. In 2020, Grant joined Community Trust to lead the national sales and lending team and its expansion across Canada, supporting brokers in the alternative lending space with a focus on technology, innovation, and organizational development.
Community Trust
Grant Armstrong
Dean Larson has over 25 years of successful management, sales, and business operation experience. Larson has a history of building and managing successful ventures, having put together several strategic multimillion-dollar contracts between some of North America’s largest technology companies and private- and public-sector corporations.
As a mortgage broker licensed for 17 years and the founder of Compass Mortgage Group and co-founder of Tango Financial, Larson has built a successful network of key relationships and many strategic initiatives in Canada's mortgage business. Larson has been an active board member for many business organizations and charities, bringing a wealth of knowledge and experience to Tango Financial.
Tango Financial
Dean Larson
“I’m pretty comfortable with how the market is going to turn out. Canadians are resilient, and you never just see a market drop. You see it come back up”
Grant Armstrong,
Community Trust
CANADA’S MORTGAGE market may have withstood a turbulent 2023 – but the industry will come out on the other side better for the experience of recent times.
That was the message that shone through from a recent CMP Power Panel featuring top mortgage executives Grant Armstrong (director, originations at Community Trust) and Dean Larson (CEO, Tango Financial), both of whom shared their thoughts on the current environment and top trends on the horizon.
Larson said that while agents, brokers, lenders, and borrowers alike were facing their fair share of challenges at present, there remained lots of room for optimism looking ahead.
“As we come out of this, I think we’re going to see a stronger overall mortgage industry than what we had before. We’re going to see more competence, more professionalism, more knowledge”
Dean Larson,
Tango Financial
The present market has seen lenders intensify their focus in three key areas, according to Armstrong: first, their processes, including how they can originate loans, establish partnerships, and further their use of technology.
Their second priority has been examining credit policies and changing Canadian demographics. “The gig economy is huge now,” Armstrong explained. “Ten to 15 years ago, it was ‘job letter, pay stub, or tax returns.’ Now it’s ‘job letter, pay stubs, bank statements, contracts, TikTok number of subscribers on an application.…’ You’re seeing types of incomes that we’ve never seen before.”
Lenders are increasingly comfortable with those types of income declarations, Armstrong said, with the pandemic having heralded a sea change in perceptions of the gig economy and different forms of income.
“For a lot of alternative lenders, it was one-to-three-year terms [during the pandemic],” he said. “So we’re now seeing those clients coming up [and] getting an earlier glimpse of some of the changes, and we’re able to try to find solutions to help them manage their new cashflow dynamic.
“The rates aren’t changing. They are what they are today and they’re not coming back down by four percent, five percent, six percent in the next 12 months. So it’s, ‘How do we help Canadians evolve through their next [stages] of financial lifecycle?’”
“On a positive note, I want people to realize that the way things are today is not the way they will always be,” he told CMP. “I’ve been in this business for 20 years, roughly, and I’ve seen ups and downs. I’ve seen crashes, I’ve seen booms – I’ve seen both.
“In both cases, human nature’s tendency is to feel like whatever’s happening today is the way it’s always going to be both on the positive side and the negative side, and I try to remind people I’m in contact with and people at our company that everything changes.”
The best thing agents and brokers can do in anticipation of that shift, according to Larson, is to ready their business for busier times, “for the inevitable change in that market when things will get better, when they will stabilize, when there will be more positive news and a more active real estate market to participate in and help your clients with.”
He noted, “A good mortgage broker is reading the economic reports and reading the graphs and charts and predictions and they’re now giving their clients advice on what they should do to either get themselves ready to get into the market, if it’s first-time homebuyers, or get themselves ready to make sure their next mortgage renewal or purchase gets into the long-term financial strategy that also fits in with what the economics are going to look like in the future.”
An educated and seasoned mortgage advisor, he said, “right now, is in a better position than ever to show their value to a mortgage consumer.”
Armstrong agreed that, despite the rocky recent market, he had seen cause for positivity of late – not least upward movement in the number of Ontario transactions in recent weeks.
It’s also important to avoid comparing today’s market to the unprecedented boom that emerged at the height of the COVID-19 pandemic, Armstrong said, with present activity trending more closely to normal times.
“I … like to take out 2020 to 2022 in the analysis, because they’re such an atypical [occurrence],” he said. “If you start looking at 2018 and 2019, where we thought 2020 was going to be – we’re on that trajectory now.
Finally, while clients at renewal have always been a priority for lenders, they’re being provided particular attention in the current market, according to Armstrong, because of the fact that they’re having to contend with much higher interest rates than when they first took out their mortgages.
Read on
Additionally, the onset of COVID-19 in early 2020 and the uncertainty that came with it, coupled with the threat of increasing capital gains tax rates under a new presidential administration, brought a wave of incremental private sellers to the table. While we saw a brief pause in activity from some of the more active acquirers in early 2020 due to the COVID-19 pandemic, activity picked up through the end of the year from both strategic and private equity players.
With the presidential election uncertainty behind us, we expect a continued focus on potential tax increases and availability of attractive debt financing to drive robust M&A activity and sustained valuations through 2021.
Community Trust is a flexible alternative to larger, more traditional financial institutions. We have been working with our valued partners as a leader in the alternative lending space for many years. We are also leaders when it comes to service and technology, with a firm commitment to providing brokers with innovative solutions that make working with us even easier and faster, giving them all the support they need to succeed with their clients. Above all, we genuinely care about the partners we work with and their clients, and about helping Canadians become more financially successful and secure. This underlying motivation is what drives everything we do.
Find out more
Tango Financial is one of the largest and fastest-growing super brokerages in Western Canada, and an industry leader in technology and innovation. Our team is our core, at over 400 agents and counting, and we have made it our mission to evolve the way they do their jobs to make the process easier not only on them, but also on their clients. With ongoing education and collaboration opportunities throughout our Tango community, our ever-growing team of hundreds operates like family. We believe that the best growth is the kind we do together, and with funded volumes surpassing $4.2 billion annually, the thriving and supportive environment of the Tango group of companies is palpable.
Find out more
In Partnership with
Why there’s plenty of room for optimism in Canada’s mortgage market
Despite facing headwinds in 2023, the mortgage industry is set to emerge all the stronger when the storm eventually subsides, according to two top mortgage executives
Read on
Dean Larson
Tango Financial
Grant Armstrong
Community Trust
Industry experts
Grant Armstrong has been working in the mortgage industry for over 20 years, driven by a passion for delivering excellence to both clients and partners. While at RBC, he specialized in finding solutions for non-traditional lending clients, partnering with some of Canada’s top alternative lenders. Grant then moved to CIBC and led the mortgage options group to record-setting sales results by focusing on training and development. In 2020, Grant joined Community Trust to lead the national sales and lending team and its expansion across Canada, supporting brokers in the alternative lending space with a focus on technology, innovation, and organizational development.
Community Trust
Grant Armstrong
Dean Larson has over 25 years of successful management, sales, and business operation experience. Larson has a history of building and managing successful ventures, having put together several strategic multimillion-dollar contracts between some of North America’s largest technology companies and private- and public-sector corporations.
As a mortgage broker licensed for 17 years and the founder of Compass Mortgage Group and co-founder of Tango Financial, Larson has built a successful network of key relationships and many strategic initiatives in Canada's mortgage business. Larson has been an active board member for many business organizations and charities, bringing a wealth of knowledge and experience to Tango Financial.
Tango Financial
Dean Larson
In Partnership with
Why there’s plenty of room for optimism in Canada’s mortgage market
Despite facing headwinds in 2023, the mortgage industry is set to emerge all the stronger when the storm eventually subsides, according to two top mortgage executives
Read on
Dean Larson
Tango Financial
Grant Armstrong
Community Trust
Industry experts
Dean Larson has over 25 years of successful management, sales, and business operation experience. Larson has a history of building and managing successful ventures, having put together several strategic multimillion-dollar contracts between some of North America’s largest technology companies and private- and public-sector corporations.
As a mortgage broker licensed for 17 years and the founder of Compass Mortgage Group and co-founder of Tango Financial, Larson has built a successful network of key relationships and many strategic initiatives in Canada's mortgage business. Larson has been an active board member for many business organizations and charities, bringing a wealth of knowledge and experience to Tango Financial.
Tango Financial
Dean Larson
Grant Armstrong has been working in the mortgage industry for over 20 years, driven by a passion for delivering excellence to both clients and partners. While at RBC, he specialized in finding solutions for non-traditional lending clients, partnering with some of Canada’s top alternative lenders. Grant then moved to CIBC and led the mortgage options group to record-setting sales results by focusing on training and development. In 2020, Grant joined Community Trust to lead the national sales and lending team and its expansion across Canada, supporting brokers in the alternative lending space with a focus on technology, innovation, and organizational development.
Community Trust
Grant Armstrong
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Published 23 Oct 2023
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BEST IN MORTGAGE
SPECIALTY
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“I’m optimistic. I’m pretty comfortable with how the market is going to turn out. Canadians are resilient, and you never just see a market drop. You see it come back up, and same thing – when you see a market go up, you see it come back down. And it all balances out in the end.”
On the broker side, Larson said the current struggles faced by borrowers highlighted the value of the expertise and unparalleled advice that experienced mortgage professionals could bring to the table.
Broker priorities in the current market
Armstrong said lenders are likely to get in contact much more with their broker partners in the coming months, with business development managers (BDMs) – already a key element of the broker-lender relationship – set to see their value grow even further.
Looking ahead
“What you’re going to see is BDMs picking up the phone, calling and saying, ‘Can I learn your business better so I can help you?’” Armstrong said. “You’re also going to see lenders look at their policies.”
The fact that most lenders are continuing to look to the future and strengthen their sales teams is a sign that better times are ahead for Canada’s mortgage market, he added.
“Nobody’s scaling back. Nobody’s prepping for a downward market,” he said. “Lenders are investing in the future. They’re investing in their sales teams. You don’t invest in sales teams if you don’t think there are going to be sales.
“Lenders are investing in their technology. They’re investing in their processes … I think you’re going to see a good market in 2024.”
Larson agreed that nobody in the industry was “battening down the hatches and preparing for a long winter,” indicating that the long-term prospects of the mortgage market remained rosy.
Indeed, weathering the current storm and emerging on the other side will make the industry even stronger for the experience when the market heats back up again, he said.
“As we come out of this, I think we’re going to see a stronger overall mortgage industry than what we had before,” he said. “We’re going to see more competence, more professionalism, more knowledge … and I think we’re overall going to be doing the public a lot better service than what we were able to do before, when everything was easy.”
“That goes to our sales processes, origination processes, underwriting, funding – everything,” he said. “We’re looking at what processes work really well and how we can increase them, [and] what processes maybe are not giving us the results that we want”
Top of mind for Community Trust
The company has been focusing on its processes of late, Armstrong said, and assessing how it interacts with technology and its partners.
“Infrastructure means providing access to every available partnership and lender that’s available to us – making sure they have the maximum amount of product access, unique solutions that different lenders … are providing, [and] making sure they’re aware of them”
Top of mind for Community Trust
Providing the best infrastructure and environment for agents to be as successful as they can has always been – and remains – Tango Financial’s priority, Larson told CMP.