• How did you first get into your specialty?
Michel Durand started my career in commercial mortgages 27 years ago. My first real job, straight out of university, was as a commercial account manager at a national bank. I stayed on the commercial side and quickly moved to commercial real estate financing. While at the bank, I never knew mortgage brokers existed, as very few brokers ventured into the commercial space.
Nineteen years ago, I decided to leave the bank – after convincing my wife it was a good idea and started my own boutique brokerage as a broker dedicated the commercial mortgage arena. I have never processed a residential mortgage in my career, and if someone asked me to help them out, I wouldn’t know where to start, other than referring them to an expert broker on the residential side.
• What are the main challenges of your specialization?
MD: Lenders change their appetite for financing different asset classes every quarter.
[For example], if a lender booked a large amount of industrial properties during the first quarter, they will not necessarily be motivated to add to that asset class in their portfolio mix in order to balance out their risk across asset classes in their portfolio, and as such, the terms and conditions they offer will not be as competitive.
The same happens in reverse. If a lender has been repaid on a lot of multi-unit residential loans during Q1. they will tend to be much more aggressive and provide better terms and conditions on those types of loans in Q2 in order to replace that portion of their portfolio mix.
The only way to ensure that you are offering the best terms and conditions to borrowers with commercial mortgage requirements is to understand and know which lenders are motivated to provide better terms and conditions on different asset classes at different times during the year. In our case at MCommercial, the lenders contact us regularly to let us know which asset class they will be more aggressive on.
The only way to ensure that you are offering the best terms and conditions to borrowers with commercial mortgage requirements is to understand and know which lenders are motivated to provide better terms and conditions on different asset classes at different times during the year. In our case at MCommercial, the lenders contact us regularly to let us know which asset class they will be more aggressive on.
“Unless the [commercial] broker is doing the entire underwriting of the file before subn1itting the loan to the lender, then the broker is nothing but a glorified delivery person”
• What’s different about how you approach your role?
MD: Most lenders prefer not dealing with brokers on commercial mortgage
transactions. This is because most brokers believe that submitting a commercial mortgage to a lender means providing the lender with a series of documents and information and having the lender figure out what the borrower should get.
In my opinion, unless the broker is doing the entire underwriting of the file before submitting the loan to the lender, then the broker is nothing but a glorified delivery person. When the lender gets a properly underwritten commercial mortgage
request that mitigates and identifies all the challenges in the file, then the lender will collaborate gladly with the broker referring the deal, and the process will be expedited.
