MILE STONES

This year is a milestone in the history of Tridac Corporation Limited, marking our 30th anniversary.

Looking back over these 30 years, my strongest impression is one of change. It seems as if we began in a time of relatively slow change, then we tossed away our quill pens and accelerated into the modern age of frenetic widespread change and instant communication.

Until only a few years ago banks operated much as they always had. Secure, powerful and unchanging they operated under the “Three-Six-Three” rule, which meant paying depositors three percent for their money, lending it out at six-percent - and closing the doors at 3:00 PM.

When banks limited credit to a select few, and when it was still possible to start up a Trust Company with only $3 million, mortgage brokers supplied those small, innovative Trust Companies with high ratio mortgages. It was a time when banks reserved CMHC insured loans for “risky” borrowers – and then only if they could afford a 25% down payment.

Never hotbeds of innovation, banks stuck with five year term mortgages, 25 year amortizations and no provisions for early pay out. To cope with this inflexibility, we frequently employed “Vendor Take Back” (VTB) mortgages, which were often traded to eager private investors. The VTB and mortgage broker access to private money helped to lubricate the system for borrowers.

Over the years, borrowers and lenders have experienced some difficult times! A real shock occurred during the oil crisis of the late 70’s, when interest rates rocketed to 21%. But in spite of those phenomenal rates, few people lost their homes. The recession of the late 80’s was much worse because many people lost their jobs and the income necessary to pay for shelter. G7 governments finally learned that deficits and inflation do not mix well and we have since seen interest rates sink to progressively lower levels.

Canadian Credit Unions were the first institutions to innovate when they introduced weekly and bi-weekly payment options to facilitate accelerated mortgage repayment by their members.

The events of 9/11 precipitated a further rapid fall in interest rates which have been down to the mid four percent range three times in the last five years.

Recognizing that Consumers wanted choice, rather than simply taking what their financial institutions offered, I had Tridac join the The Mortgage Centre franchise network ten years ago. The Mortgage Centre, with a network of over 100 locations from coast to coast, operates an exclusive mortgage market system through which lenders compete for mortgages via an electronic bid process that makes their best offers available to purchasers.

The evidence seems to indicate that this was a wise move because the share of mortgages originated by mortgage brokers has increased from less then 1% to about 35%.

In the old days, when lenders called the tune, consumers were more or less obliged to accept the 25 year amortized standard mortgage, as the only flavor available. Now that banks have been forced by the market, to provide the flexibility introduced by Credit Unions and mortgage brokers, we have raised the bar. Today, we help borrowers to save money and to get out of debt as soon as possible. In fact, our Mission Statement is:

“We are committed to helping you
achieve debt free home ownership,
at minimum cost, in minimum time.”

We now see our role as more like that of a financial advisor. We recommend that home buyers exploring mortgage financing not begin with the question: “What is your mortgage rate?” but rather, “How do I position myself to pay the least amount of interest over the life time of the mortgage”. Unlike lenders, who naturally benefit if borrowers pay more, rather than less interest, we benefit if we have happy clients whose good experiences lead them to refer their family, friends, neighbors and colleagues to us when they need a mortgage.

This way of doing business is called “By Referral Only” and I am delighted to be able to say that, by constantly trying to exceed my client’s expectations, more than 90% of my business comes from returning clients and referrals. I am so pleased by the level of referrals that, in order to express my thanks, we will be having a draw on December 31, called “Skip or double up a payment”. Consistent with the above Mission Statement, the draw will have three prizes, each equal to the highest monthly mortgage payment of the three winners.

Every client, for whom we have arranged mortgage financing in 2007, and everyone, who has given us a referral leading to a completed application in 2007, will be entered in the draw.

Tridac Corporation, which was originally formed by myself and two partners, expanded over time to three locations in Toronto, Mississauga and Ajax. Then circumstances changed and we consolidated to our one attractive and conveniently located office at Danforth and Broadview. The most recent significant change occurred when my son Christopher joined me in the business after graduating last year with a degree in Business and Economics. He decided he would like to join me after enjoying a summer job with Firstline Trust.

This year is also the 15th anniversary of another of my companies, Hansa Mortgage Investment Corporation. Hansa is a “Mortgage Investment Company” or “MIC”, a private mortgage investment fund, which lends mortgage money in niche situations, which do not conform to institutional lender guidelines. Most of the money in the fund comes from investors self directed RRSPs. Over 15 years the RRSP investors, who previously invested their money in individual mortgages, have made an average annual return of 10.36%, without the problems associated with managing their own funds. If you have RRSP funds available and would like to consider becoming a shareholder of Hansa Mortgage Investment Corporation, please give me a call. We have room to expand and can accommodate a few more investors.

My career as a mortgage broker has been challenging, satisfying and rewarding so I wish to not only thank you with the “Skip or double up a payment” draw, but also ..

You are invited
to celebrate with us
during the “Taste of The Danforth” festival
Friday August 10 and Saturday August 11
between 6.30 and 9.30 pm
To enjoy some delicious food and drinks