To The Pointwith Boris Bozic
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2 Comments Trailer Fees: Defending the Obvious

Article written by Boris Bozic on the 19 Jun 2015 in Merix Financial

Over the last few weeks there’s been chatter in the industry about a lender in the mortgage space deciding to no longer offer trailer fees. The lender in question articulated their rationale for doing so, and it’s not for me to question their decision or pass judgement. Over the last two weeks I’ve been asked the following two questions, on a number of occasions.  Firstly, what do I think about their decision? Secondly, are we contemplating the same?  The answer to the first question is “Interesting, but I don’t really care”.  The answer the second question, “Absolutely not”.

The notion that Merix might consider revisiting its core value proposition, and no longer offer trailer fees to mortgage brokers, would only come to pass if Merix decided to rip the soul out of the company. Trailer fees are a part of the Merix DNA.  Trailer fees are what set Merix apart from its competitors. Merix is the pioneer of trailer fees. We can debate the economic merits of trailer fees versus being paid up front. But one thing that is not up for debate is the commitment Merix has to trailer fees. I’m not one to say “never”, but as I sit here today, in the role that I occupy, trailers are here to stay. To draw a visual for you, google actor Charlton Heston, NRA (National Rifle Association).  Heston, a former president of the NRA, delivered a speech at an NRA convention, he held up a rifle and said, “from my cold, dead hands”.  Meaning?  You will have to kill me to take my gun away from me…okay, enough of the hyperbole and over dramatization.

One of things that Merix takes great pride in is that we introduced, and legitimized, an alternative compensation model for mortgage brokers.  Today, a number of lenders offer a hybrid of trailer fees by paying recurring revenues. They do so by paying a fee on a mortgage renewal. I suspect these lenders didn’t decide to do this out of simple generosity. So even though Merix is the only lender today paying trailer fees to brokers on a yearly basis, brokers can point to Merix, and ask the lenders they’re supporting, “What are you doing to help me create future wealth?”  Without an example for brokers to point to, the discussion would be theoretical and categorized as wishful thinking.  You may chalk that statement up to self- aggrandizement; all I know is that prior to the creation of Merix, no lender was paying on renewal. Choice is not only good for consumers; it’s good for mortgage brokers as well.

For those who know me, know that I ‘m a pragmatist. I know trailer fees are not for everyone. It’s a mindset, and how one looks at their business today and into the future. It is for this reason that Merix introduced an alternative compensation model, Lendwise. It mirrors traditional compensation models in the industry today, and it speaks to those brokers who want all their compensation up front, now!  Lendwise was not introduced because of lack of confidence in trailer fees. It was introduced because we want more volumes – greedy me.  Shareholders are funny, they expect us to grow the enterprise value, and ensure they get a return on their investment.   Having two compensation models gives us an opportunity to cast a wider net. But once again, Merix is offering something which is different from the norm. Mortgage brokers supporting Merix can now choose from two different compensation models, on a deal-by-deal basis. The broker can decide how he or she wants to be paid on a particular file.

I’ve never used this blog to extoll the virtues of Merix, until today. If I’ve offended anyone, I’m sure you’ll get it over it by Monday. But if I struck a chord with any broker, who no longer has the option to earn trailer fees from another lender they supported, Merix will welcome you with open arms.

Until next time.



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Layth Matthews @Twitter ID Website Reply

Thanks Boris. I am so grateful for the trailer fee option you have championed!

marvis olson @Twitter ID Website Reply

I regret every deal I ever sent to FirstLine instead of Merix:)
I’m a big supporter of trailers -it takes a while to reap the benefits but when you do——–it pays off in spades.
I’m not doing all the work of churning my accounts by moving them to new lenders at maturity——–instead—I assist retention on renewals by helping clients choose from a great variable rate product to a full benefit fixed.
Win/ Win.

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