ING DIRECT’s Broker Business Announcement

Alyssa Furtado
by Alyssa Furtado January 16, 2013 / 5 Comments

In an email sent to Canadian mortgage brokers and agents, ING DIRECT Canada announced today what some in the mortgage broker industry may have already seen coming: the financial institution will be transitioning all of its broker business to Scotiabank.

“We have completed a thorough evaluation of our mortgage business and have come to the decision that ING DIRECT will concentrate its origination efforts on its DIRECT channel and transition its broker business to Scotiabank,” explained Kim Luxton, National Director of Broker Sales for ING DIRECT.

The decision is a result of Scotiabank’s acquisition of ING DIRECT Canada in August 2012. At the time, ING had $40 billion of high quality assets, including more than $29 billion of residential mortgages. And while ING will continue to offer mortgage products under its own brand, the institution will no longer be partnering with brokerages that wish to source their rates.

Tweet from ING DIRECT Canada

But what does that mean for homeowners who are currently looking to buy or refinance? For anyone working with a mortgage broker who sources rates from ING DIRECT, you need to be aware of a couple things.

First, ING will continue to accept new mortgage and HELOC applications up to 8:00pm EST on February 16, 2013. However, ING is no longer accepting new rate holds or pre-approvals – this is effective immediately. If you have an existing 30-day rate hold certificate, it is valid until its expiry date. And existing pre-approvals must turn into completed transactions within the remaining guarantee period.

For the brokers themselves, questions and answers will be worked out with their dedicated Regional Sales Managers. Although only announced today, predictions of Scotiabank taking over ING’s broker channel have circulated for months. In Q3 2012, Scotiabank had 23.6% of the broker lender market share, while ING had only 4.6%. Because of this, ING is confident the procedures to get broker partnerships and product offerings in place will be successful.

“Scotiabank is Canada’s largest broker lender doing business across Canada, offering their broker partners a comprehensive suite of competitively priced mortgage products.” Luxton added, “We are confident that Scotiabank has the capacity to meet your needs and your clients’ needs, providing you with the level of service you have become accustomed to with ING DIRECT.”

  • Glad to hear that ING will still be offering mortgages direct to consumer but dissapointed to hear they will no longer be selling through the independent broker channel.

    Brokers – do you think ING will now adopt posted rates going forward?

    If so, will be sad to see more price discrimination and increased IRD (interest rate differential) penalties in the market.

    • It’s never a good thing when a lender leaves the broker channel. This ultimately leads to less competition which means higher rates for consumers.

      I don’t think ING will adopt the posted rates going forward but ING customers will be paying more now by working direct. For example, ING Direct rates offered through status brokers were 10 basis points less than they advertised on their website to direct customers.

      • Scott you are correct. Status brokers start with a discounted rate, and they also have the ability to use some of their commission to offer the consumer an even lower rate. For example my brokerage, True North Mortgage, is currently offering a 5 year fixed rate through ING at 2.84%. This will be lost on February 16th, when ING withdraws from the broker channel.

  • Why do banks in Canada have to buy up the good stuff, e.g. MBNA, and then ruin them? This anti-competitive behaviour is the reason we can’t have nice things.

    Admittedly, I don’t think anybody is under the false pretense that the Canadian mortgage market is particularly competitive — certainly not in comparison to the bastion of economic freedom and low, fixed rates to our south.

    But companies like ING Direct and FirstLine have at least created some semblance of efficiency. Now we’re left with a patchwork of brokers and services for seeking out the lowest prices (RateHub being at the forefront, of course). I’m glad we have these services; nevertheless when the “big players” that specialize in low rates disappear it’s bad news for consumers.

    ING Direct’s 5-year fixed is 3.08% today while Scotia’s ‘special’ five-year rate is 3.99%. I suspect, holding all things equal, rates offered through the Direct service will soon be a lot more like the latter number than the former. Mortgage rates will be moving up soon enough on their own as the US comes roaring back and Canada’s housing market implodes into its cavernous foundation. Blend and extend while you can, folks.

  • We all knew this was coming the minute Scotia announced they were taking them over last August. Nothing we can do about it and we need to support and focus on the lenders that have a true Partnership with us and want to build a long lasting relationship with Brokers and our valued clients. ING pulled out of the Broker channel on the insurance side as well even before they were bought by Scotia, so our firm was well aware this was in the pipeline from the beginning. We need to spread the volume across a number of Broker focused lenders and increase efficiencies so that the cost of doing business is less for all… The strong will survive and thrive in this market!