Brokers react to RateHub announcement

RateHub.ca will join forces with an influential channel player to launch a new brokerage, with several brokers arguing the move is a betrayal.

Brokers react to RateHub announcement
RateHub.ca will join forces with an influential channel player to launch a new brokerage, with several brokers arguing the move is a betrayal.

“We’ve helped build the beast and now the beast has turned on us,” Jivan Sanghera of Dominion Lending Centres Home Capital Solutions told MortgageBrokerNews.ca. “This caught me completely off guard and I feel blindsided; they stand to alienate a lot of brokers by doing this.”

James Laird, who recently left his management post with True North Mortgage, will manage the as-yet unnamed brokerage which is set to launch later this year. Its rates will appear alongside the other 40+ brokers on the pages of RateHub.ca and will pay the same fees.

“We know that it’s essential if we want to retain our customers who have been amazing that we have to be 100 per cent transparent and fair, so RateHub needs to continue to operate in the way that it does today,” Alyssa Richard, CEO of RateHub told MortgageBrokerNews.ca. “It has to list rates from lowest to highest; the customer chooses which broker to work with and there will be absolutely zero skimming of leads.

“We understand that rate sites work today but the margins aren’t incredibly fat for brokers and so it’s very important for all of our brokers to get those large leads to make sure that the economics of purchasing leads from us still makes sense.”

The announcement has been met with optimism by Paul Poirier, a mortgage broker with Dominion Lending Centres Eagle Group, who sources approximately 30 per cent of his business through RateHub.

Continued...

#pb#

“I’m comfortable with it and I don’t think there is going to be a conflict of interest; if I’m a broker and … I’ve got the lowest rates and I’m not getting any leads if they’re diverting … why would I stay with the site?” Poirier said. “And if I only get the (lesser) leads, like the preapprovals or small mortgages, am I going to continue to pay fees every month when it’s not profitable?

“If they did that how long would they stay in business as a rate comparison site? They would just be hurting themselves.”

However, some brokers have questioned whether consumers will be swayed to choose the aggregator’s mortgage products over their own if the branding of the brokerage aligns with that of the rate site.

“I think it’s a conflict of interest and I’m not happy about it,” Ray Silvestri of Mortgage Architects told MortgageBrokerNews.ca. Silvestri said he isn’t sure if he will continue to use the rate site’s services.

For his part, Sanghera believes brokers will feel betrayed by the site that they believed acted as complementary partner in the past – drawing parallels to how his referral partners might feel if he were to usurp their business.

“As a mortgage broker who receives referrals from realtors how likely would I be to receive continued referrals if I were to become a realtor?”