First National’s Excalibur program was introduced in the spring of 2018 to serve business-for-self and other creditworthy borrowers who fall just outside traditional prime mortgage parameters. Since then, the market has spoken: mortgage brokers have made Excalibur a recommended choice for their clients. In this year-end retrospective, we ask Elena Robinson, Excalibur's Regional Sales Manager, to account for the program’s popularity in 2019 and provide insights into what lies ahead for 2020.
Elena let’s start with results. How did Excalibur perform in 2019?
We still have a couple of weeks so I can’t provide definitive numbers but even so I can say originations and renewals are well ahead of plan. It’s been an incredible success with all credit due to our mortgage broker partners for recognizing the merits of using Excalibur to help qualified borrowers get a foothold in the housing market.
Why is there a need for Excalibur?
Changes to B-20 underwriting rules disqualified many Canadians, particularly business-for-self borrowers, from securing a prime mortgage. CMHC estimated that in 2016, outstanding mortgages in the uninsured alternative space amounted to $11-12 billion, growing to $13-$14 billion in 2018. It wouldn’t surprise me if that number is now closer to $15 billion. B-20 updates had the impact of enlarging our addressable market as the big banks chose not to serve it and supported additional growth in the broker channel – which is good news for First National and our broker partners.
That same CMHC report says there are 200 to 300 lenders serving this market. Why do brokers select Excalibur for their clients?
With all modesty, because the program is better and we’re committed to keeping it that way by listening to and learning from brokers, refining our offering and investing in service.
How is it better?
From a product perspective, brokers tell us Excalibur is industry leading in several areas. It’s available for home purchases and re-financings, we offer bridge financing, has flexible repayment options including an early payout feature that does not unduly penalize the borrower, which is a commonplace downside of other lender's offerings and features product extensions such as the ECHELON Home Warranty and Life Insurance Program that borrowers value when taking out a mortgage. Excalibur’s mortgage rates are also highly competitive. Then there is our graduation program for those wishing to move from Excalibur to a First National Prime mortgage. There are no legal fees and it’s incredibly easy to use. Beyond product differences, we’ve sought to make Excalibur service for brokers identical to what they receive when they submit a Prime mortgage.
Let’s talk about resources. You said you are investing. How so?
The Excalibur team now numbers over 20 and we are delighted to announce that Szilard Kolozsvari was recently appointed Director. Szilard is a First National veteran who started with our company 13 years ago. Over that time, he has made a significant contribution to serving the broker channel, first as an underwriter, then as a team manager with First National and in our third party residential underwriting division. Szilard’s skills and experience complement those of our new team managers, Anne Regan and Candice Endacott. Putting experienced people in place is the best and most important investment we can make because it ensures we offer service that meets First National’s high standards established over the past three decades as a prime lender.
Can brokers realistically expect the same level of service they get on the prime side?
That’s certainly our objective and because Excalibur uses the MERLIN system for submissions, we gained an instant advantage over other lenders in terms of our turnaround times. Now that we’ve got more experience in the space, we’ve decided to make it our goal to respond to all broker submissions within four hours. This is the gold service standard set by First National in the prime space and we’re confident we have the Excalibur people and the processes in place to mirror or model all the best features that have made First National a service leader for brokers.
You said you are committed to refining the offering. Give us an example.
In response to requests from brokers, particularly in the Greater Toronto Area who work with buyers of high-value properties, we recently increased the maximum loan amount we will underwrite to $1.5 million from $1 million. This decision significantly broadens the market we can address for brokers so it’s a refinement that matters.
What’s on your 2020 to do list?
We want to be recognized as the best lender for brokers in the Alt A space. It’s our top objective. Achieving that will support continued growth in our book and will require us to continue to add experienced, energetic professionals to our team who are service driven. We’re also investigating expansion opportunities to take us beyond the Ontario market and potentially introducing a rental program.
Final thoughts?
We can’t be more pleased with the reception and support we’ve received from our broker partners. We know brokers have lots of good lenders to choose from and when they choose First National it means we’re doing the right things at the right time and in the right way. Speaking on behalf of all of us at Excalibur, I’d like to thank every participating broker for showing confidence in our team and affinity for our product and service. We will do our utmost to reward your patronage in 2020.
To learn more about Excalibur, email elena.robinson@firstnational.ca or call 416-320-3138.