Job Loss at BMO shows Mortgage Specialists not Working Out for the Bank
It doesn’t seem like it was that long ago when RBC cut dozens of jobs and decided to outsource, and caused a global controversy over the move. They soon apologized afterwards and spoke of trying to keep jobs in the country, and we seem to have largely forgotten about it. Now, Bank of Montreal is making a move that’s similar in the fact that they are cutting hundreds of mortgage specialists jobs, after saying last year that these individuals were the key to the bank’s success. The question is now, will they open up once again to the broker channel?
Last year when announcing that they were exiting the broker channel, BMO CFO Thomas Flynn said, “We’re going to have to take some business from others as the market is slowing around us. We plan on doing that through the activation of the investment in our sales force, our mortgage specialist sales force, which continues to grow.”
But just a year later, CEO Frank Techar announced that 1,000 jobs were cut at the bank on Tuesday of this week. But he does say that the number might have been too much, and with so many empty desks to fill, he believes that the bank will be looking to do so.
“For the quarter we overshot a little bit,” says Techar. “We do have some outstanding vacancies that I would expect will fill as we go into the first quarter.”
But, if the bank wants to continue cutting costs and increasing business, Kelvin Seepersad of Mortgage Intelligence says that they’ll need to re-enter the broker channel.
“Absolutely it is a victory for the mortgage broker channel,” he says of this most recent move by BMO. “They have used the broker channel and supported us in the past and I think it would be smart if they returned to doing so.”
And, he says, it’s cheaper in the long run for all banks, even though they may believe such a move costs them in profits.
“I still think it’s cheaper for the bank to originate through the brokerage channel,” he continued. “They don’t have to pay for the overhead, the salary, the percentage basis point payout. There is a greater benefit for them to use a mortgage broker.”