Spring 2006

How to succeed in an increasingly competitive marketplace

As the Canadian mortgage industry grows and changes, all players are looking for ways to win today — and moving forward. Hardly a season passes without another headline announcing the consolidation of a lender, service provider, or broker. Superbrokers have emerged, and some have subsequently been acquired by lenders. Large U.S. lenders have entered the Canadian market.

The result of this shake-up? Greater choice for the consumer and intense competition among the key players.

Whether you’re a lender, broker, insurer, or supplier, you’re bound to be touched by these changes. Here’s our view of how to be competitive in this industry.

Trend to consolidation

In the race to retain and expand market share, alternative lenders have been aggressive not only on rates, but also on product development. The banks have responded with greater product range in their own operations, but have also chosen acquisition as a way to get a share of the alternative market.

As mortgage brokers become a bigger force in the industry, lenders — bank and non-bank — have begun acquiring them too. Usually, the goal is not to fold these companies into the buyer’s operations, but to gain participation in a new segment of the market.

Value beyond rates

Building scale through consolidation and competing on rates are not the only answers. Innovation — whether in product development or business model — offers a method of success for companies of any size.

For lenders, innovation has led to an avalanche of new product development in the traditional mortgage business, and expansion into other lending products. For some, innovation also means new ways of finding business, such as partnering with real estate development companies to capture borrowers in new developments.

Brokers, for their part, are increasingly taking a client-centred, consultative approach — training employees to focus more intently on discerning the client’s individual needs and finding ways to meet them. By being aware of clients’ unique needs, brokers can better bring together the portfolio of products required to meet those needs.

Lenders and brokers alike are recognizing that educated employees are a key strength and are helping sales professionals to better understand the buyer’s perspective and buying cycle.

Genworth innovations

Genworth has long been an innovator in the marketplace and remains committed to helping lenders, brokers, and realtors build their businesses with new and unique products and services. Here are just a few examples of some of our recent innovations that can help you create an enhanced offer for your clients:

Energy-Efficient Housing Program. Under this new program, Canadians purchasing energy-efficient houses (or upgrading existing homes to be more energy-efficient) receive a 10% premium refund on Genworth mortgage insurance. Participants also get access to Genworth Homebuyer Privileges™, which offer discounts on major appliances, moving services, electronics, and other household items.

CreditAssist™ and CreditAssist™ for Self-Employed. The first program makes homeownership more accessible for people with a less-than-perfect credit history who are trying to rebuild their profile. The second is designed specifically for self-employed Canadians who may be unable to verify their income using traditional methods.

30- and 35-year Mortgage Loan Options. For homebuyers concerned about the affordability of monthly mortgage payments, loans can be insured for up to 35 years. The longer amortization can reduce monthly payments significantly.

We’d like to know what innovative strategies are working best for you — new products? Focus on the customer? Or supporting your sales force? Tell us what you think by answering our online poll.