BILL: That’s a really great question, and I’m glad you asked the old guy because I remember back in the day when we first started as mortgage brokers in the 80’s that the banks started realizing in the late 80’s and early 90’s that if they could utilize the mortgage broker industry to supply them with clients, then they could pay them a finder’s fee and therefore they wouldn’t have any costs like employment cost, building cost, superannuation cost, and no production cost so to speak.

So therefore they only pay us if they we bring them a client. So what they did is they said okay if we can get these mortgage brokers to deliver us a client, we will then pay them a finder’s fee.

In the 90’s up until about 2003, most brokers would have anywhere from a half to a full one point less than what the branches would offer. When markets started getting hotter in 2003 and the 250 mortgage brokers back in the 90’s all of a sudden developed into significantly more mortgage brokers in the 2000’s, the branches realized they had to compete with these fellas at the same level. Therefore it’s no longer about rates, it’s about long term service and all those types of things.

Catch Bill Macklem of Dominion Macklem Mortgages at BilliMac.com every Saturday morning at 10am on the AM650 Radio Real Estate Show in Metro Vancouver with host Tom Lucas and Sheri Brown.