Vancouver’s Dominion Lending Centres (DLC) has acquired Mississauga-based Mortgage Architects for “tens of millions of dollars” in a transaction that will make it the largest mortgage originator in Canada, CEO Gary Mauris told Business in Vancouver December 31, hours after the transaction closed.
The newly expanded DLC will have a portfolio of mortgages valued at about $32 billion thanks to about $7 billion worth of mortgages coming from Mortgage Architects.
That's a higher value for mortgage originations than any of the big banks, Mauris said.
“We work with all the major banks, trust companies and credit unions across Canada,” Mauris said. “We originate loans underwritten by those lenders. They hold the loans on their balance sheets.”
DLC then generates revenue by charging the financial institutions a percentage-based commission on the loans.
DLC launched in 2006 and started to have storefronts under its own brand. It then bought Mortgage Centre Canada from the Canadian Imperial Bank of Commerce in 2013. Now, it will operate a third brand: Mortgage Architects.
The combined company will employ 4,800 accredited mortgage professionals, across those three brands, at more than 800 bricks-and-mortar storefronts across Canada. Pre-acquisition, the company operated more than 700 storefronts.
Even though DLC might seem like an unnecessary intermediary that would only add costs and therefore be less efficient than simply going directly to a financial institution, Mauris maintains that his company can help find customers better rates than they would get by going direct to a financial institution.
That’s in part because DLC supplies such a high volume of loans to the banks that it can shop its mortgages around and get the financial institutions to competitively bid to win the mortgages.
DLC also adds value for the customer, Mauris said, because his staff is aware of how different financial institutions provide slightly different loan packages.
One bank, for example, might be more restrictive for self-employed people. Another institution might be more accepting of early payouts.
Mortgage Architects president Albert Collu, described DLC an “unquestionable leader” and said that he was sure that his people would “thrive” working alongside DLC counterparts.
The merger process started six months ago.
