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Special Reports
Branch Development
Canadian Firm Sees Opportunity in U.S. Turmoil
By Brad Finkelstein
The head of MortgageBrokers.com Holdings Inc. said the troubled mortgage market
in North America represents a growth opportunity for his company, a consolidator of small- and medium-sized originators
on both sides of the border (although it has been more active in Canada so far). "Recent reports of a slowdown
in the mortgage and housing market due to overinflated home prices, rising interest rates and subprime weaknesses
present considerable opportunities for escalating the pace of growth for our company," says Alex Haditaghi,
chief executive of MortgageBrokers.com. In its second-quarter earnings statement, the company said the upheaval
in the U.S. gives it a "tremendous opportunity to enter and expand its business model" in this country.
He believes that his business model will encourage the over 40,000 (small and midsized) mortgage brokerages to
join in order to get cost and technology advantages "so they can survive the slowdowns and re-evaluations
in the lending and housing markets."
By being part of MortgageBrokers.com, originators have lower overhead and fixed costs because there is a shared
environment for accounting, payroll, compliance, human resources, technology, marketing and loan processing.
There is also a branding advantage, which it believes allows these firms to compete with larger originators. It
will also allow them to hire, train and retain more loan officers and expand their business. MortgageBrokers.com
is a publicly traded company on the over-the-counter bulletin board, and thus employees can receive equity ownership
participation.
The company makes the traditional argument of similar organizations that consolidation of the books of business
from a number of mortgage originators will enable it to better leverage with lenders for revenue and rate discretion,
through the pooling of origination volumes and control over channeling of mortgage volume.
MortgageBrokers.com also provides a lead generation system, national brand and technology platform, which it said
will allow its brokers to acquire new customers, better serve their current customers by focusing on sales and
provide scalability through the reduction of back-office responsibilities.
Mr. Haditaghi commented, "We believe that the challenges facing the industry should ultimately benefit MortgageBrokers.com
as the mortgage brokering and lending industry continues to consolidate. While we are certainly excited with the
current and future growth and execution of our business plan, our executive team remains very much focused towards
our goal of becoming one of North America's largest and most respected mortgage brokerage firm."
Recently, Dutton Associates raised its rating on MortgageBrokers.com to "strong speculative buy."
According to Dutton, the company has 275 licensed mortgage agent/loan officers in Canada, with a goal by year-end
of 400.
For the first time, the company had a quarterly profit in the second quarter.
Yet, according to Dutton, "MortgageBrokers.com's common stock price has not recognized this progress. Investors
should realize that being Canadian based, MortgageBrokers.com is not affected by the U.S. real estate and mortgage
problems. The Canadian mortgage market continues to grow, helped by low mortgage rates that make homeownership
possible, even as housing prices rise, according to a report released by the Canadian Association of Accredited
Mortgage Professionals."
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