Counsel Corporation CXSNF

question on roll overs?

[kingpost]

As others pointed out  here, it has been stated/promoted over and over how counsel will get higher spreads when mortgages roll over  after 5 years..... this does not make sense to me because cxs relies on the morgage broker chanel to originate,  how could they just take over the account after five years turning their back on the original broker? and also would not the original broker contact the mortgagee at roll over time?I think pushing the original brokers aside would upset the brokerage community and be negative....Any experts out there care to comment on this....?

[inventors]

Renewals may be open to go to other brokers not doubt... CXS no different than other brokers...except the chances are more favourable that one would just simply renew as a rollover...can't comment on any potential point discount... Yeah...go to go...hope for new accounts too.

[Hassel]

e-mailed Counsel to ask that question. Here is the answer: "There is a cost to switching – new legal work, time and effort. Renewing with Street is simple and easy and the interest rates are competitive. Why would a borrower want to change lenders?" Hassel

[alltruth]

Brokers understand that competing against lenders on renewals is a losing proposition as the lender has the power and can compete with rates in a way that the broker can't.  Also brokers are paid a commission from Street on any renewals for doing nothing...something they don't get from other lenders.

[kingpost]

Alltruth .. you answered my question .... and that makes sense if thats the case, lets use an example, if a broker brings street a $500,000 mortgage and gets a $5,000 commission on the first mortage , and then after five years on a roll over at street the broker might get another $2,000 but on the roll over yjr nroker is not even in contact with the mortgagee (he just gets a nice cheque in the

[alltruth]

Correct...and given that Street currently has over 50,000 customers  ($15B/avg mortgage of $300K)  that equates to $150M in broker comission savings over the next 5 years as the current $15B matures and rolls over.  That's why renewals are a big deal.