Garth Ellis featured in Canada Mortgage Magazine – Person to Person with Garth Ellis

May 3, 2010

Person to Person with Garth Ellis, recipient of the National Bank Lifetime Achievement Award at the recent CMP Awards Gala.

JAC News Corp: Thanks for agreeing to the interview. As young as you are, we do go back a year or two. Congratulations on receiving The Lifetime Achievement Award at The CMP Awards gala on April 23rd. What does this mean to you?

Garth Ellis: Receiving the Lifetime Achievement Award means a lot to me because it represents just how far the mortgage brokerage industry has come since I started my career. When I first entered the industry, only 4% of Canadians used a mortgage broker for their real estate financing needs. Of that 4%, much of the business was sub-prime. So at that time, possibly only 1 or 2% of Canadians who could be classified as A-1 clients looking for an A-1 mortgage sought the help of a mortgage broker. It has taken a lot of hard work, by a lot of mortgage brokers, over a lot of years to convert the Canadian public one by one, to accept and embrace mortgage brokers as their preferred choice when securing real estate financing.
Amazingly, we have been able to double mortgage broker market share many times, and now we stand at 35 to 40% or more, of Canadians looking to brokers first to help them with their mortgage needs. It has been very rewarding for me to observe first hand, through the course of my career, this transformation of the Canadian mortgage market. I have had the rare and immense pleasure of witnessing the Canadian prime mortgage brokering industry rise from relative obscurity, to develop into a significant force in the Canadian financial marketplace.

JAC: Have you received any other industry awards?

GE: I have been very fortunate to be recognized by both the mortgage broker firms and the mortgage lenders that I have dealt with over my career. For me, the most satisfying awards are those that relate to my involvement with the Canadian mortgage industry as whole. These would include the 2007 CMP Broker of the Year Award, the MBABC Director Appreciation Award in 2009 and of course, this year’s CMP Lifetime Achievement Award.

JAC: When did you launch your practice in its current form?

GE: My business has always been in evolution. In the very early years, I worked alone. Back then, like most brokers who work by themselves, my duties consisted of a combination of business development, client relations, underwriting and general office administration. Over the years, I have been incredibly lucky to have people work with me who continue to grow and are eager to want to take on increasingly sophisticated roles in our firm. Whether they are talking to clients, underwriting mortgages, or taking on any other of the wide diversity of roles that comprise a mortgage broker’s job description, it’s the employees at our company that continue to fuel our growth and development.

JAC: In terms of the brand – VERICO Ellis Mortgages Canada: what encouraged you to align with Verico?

GE: When VERICO was just starting out, I was inspired by the entrepreneurialism reflected in its leadership and in its business model. From the very beginning, and throughout the years, Colin Dreyer and John Kelly have been very consistent in providing valuable tools and allowing the freedom for those within the VERICO network to grow their businesses. I attribute much of the development and success of my business to joining VERICO back in 2005.

JAC: When you look at the direction that your business has taken, is that what you envisioned when you launched?

GE: Like many, when I started my career as a mortgage broker, my most immediate goal was to simply earn enough money to survive and pay living expenses. Over the years, more success came and my priority became to secure myself financially for the future. When I got married and had children, my focus turned to ensuring the financial security of my family over the long term.

For some time now, I have had the good fortune to have the freedom to be able to take some chances and be creative with continuing to develop and grow my broker business. As well, I have had the time and opportunity to work more on mortgage industry initiatives over recent years. In a nutshell, no, I could never have envisioned just how significant the change in my business and the change in the mortgage broker industry would take, or just how incredibly rewarding the entire experience has been for me.

JAC: What tends to be the make-up of your business?

GE: Our firm has always been focused on attracting clients in need of a residential mortgage who possess excellent qualification capabilities – commonly known in the in the industry as “A” quality, or prime clients.

JAC: Why?

GE: Because the personalities of our staff and of our firm’s culture seem to have always been a better fit with fully qualified clients. Moreover, the bulk of our business has long been generated through our clients referring other clients to us. We have witnessed over the years, that people tend to associate with like-minded people. As a result, our initial core base of prime clients referred many highly qualified clients over to our firm. In turn, this now larger group of prime clients continued to refer the same and so on. Having high quality clients referred to us by existing high quality clients began to be very much a self-perpetuating phenomenon.

JAC: What routines do you have in place to source new business? How do you maintain repeat business?

GE: Most of our business is driven to us by clients who have used our services in the past. We have found for our model, that client referred business is many times more efficient and profitable than what we might otherwise generate through advertising. Over many years, we have worked hard to develop a culture within our company and with our clients that encourages a “word of mouth” mentality across the board.

JAC: Are you using social media?

GE: Our firm has just started to educate ourselves on social media and how to drive business from it and through it. In theory, social media should have a lot of potential for a firm like ours that is highly focused on driving referral based business. We recognize the huge potential that social media possesses and we are eager to try to find some solutions that will fit with the direction that we want our company to move in.

JAC: What are your thoughts when lenders talk of “efficiency ratios”? What does this mean to you?

GE: When we hear lenders talk of “efficiency ratios”, we are very encouraged that they are working towards the same goals as our firm. Even in my early years in the business, I was able to identify referral sources that would send me business that had lower closing ratios. Over time we developed the insight and the confidence to decline business from these sources. Soon, we found we were operating more efficiently and were increasingly able to allocate more and more overhead and resources to clients with higher and higher likelihoods of closing.

This in turn, increased our capacity to take on more clients and our annual volume of production increased significantly. In a nutshell, we found that in consciously making efficiency our top priority, we were able to deal with more customers and fund more loans. If we continued with our old ways, making volume our first and top priority, our efficiency would spiral downward continually resulting in fewer and fewer mortgages funded.

JAC: Where do you see yourself taking your practice in the next five-years?

GE: In the next five years, we see our firm continuing to grow in both number of employees and total mortgage volume fundings. We recognize that the most significant impediment to our growth is our operating inefficiencies.

Our first priority is to focus how efficiently we can run our firm. We want to continue to investigate new and better ways to increase our efficiency. Increased efficiency for us can come via higher quality leads for our brokers, seeking the most stream-lined relationships with like-minded lenders, appraisers and other suppliers and lastly, in honing our client relationship interactions, before, during and after every mortgage is funded.

JAC: How do you give back to the business?

GE: Over the years, I have been very privileged to be asked to participate in a wide a variety of roles in the mortgage industry. I was a Director of the MBABC for 4 years. For many years I have participated as an MC, a speaker, a presenter and as a panelist at both CAAMP and MBABC conferences. Through the MBABC and its excellent “AIC” course, I have been teaching marketing and helping new brokers get a head start on their careers in the B.C. mortgage industry.

Recently, I proudly passed this position over to a young and vibrant presenter who is doing a fabulous job helping the next generation of B.C. mortgage brokers enter our industry. It is pleasure for me to receive regular phone calls from others in the industry who are asking for my assistance in helping them grow their mortgage businesses. I always try to make myself available to others, as those who I have asked for guidance from over the years, have always made themselves available to me.

JAC: Do you have professional accreditation?

GE: AMP. Holding the AMP reflects the degree of commitment mortgage brokers have to their profession. Moving forward, more and more clients will only trust their mortgages with professionals who have an AMP designation.

JAC: Any words of wisdom for anyone starting out in the business?

GE: Be persistent, be confident in the value you offer the public as a mortgage broker, seek education and seek the advice of others often.