Simply Approved Mortgages expands from Canada to the U.S

The partners behind Simply Approved Mortgages are looking to bring the same things that made them successful in Canada to the U.S.

The company is headquartered in Los Angeles although it will initially do business in Florida and Colorado.

In building its Canadian business, headquartered in the Toronto metro area, Matthew Nichol and Tristan Kirk had their eyes on expanding south.

"We're going…[to] prove our market with our digital share and our value proposition, as well as the brand that we built up here," said Nichol, the chief operating officer, in an interview. "We really built the model up here that we could transition into the States, and knew that we would end up coming across the border."

Kirk, the CEO, and Nichol believed their best chances for corporate growth were in the U.S. market, because of its larger population and more opportunities for people to purchase homes.

Given the dynamics of the market north of the border, "it's very hard for people to purchase homes in Canada, especially right now," Nichol said.

Their Canadian brokerage operates in all provinces except for Quebec, which is the nation's second most populous.

Nichol and Kirk had been looking to bring their business into the U.S. for some time, starting in the second half of 2019 but pausing the plans amid the Covid-19 pandemic. About a year-and-a-half ago, they decided the time was right to start the move into the U.S again, and it has taken until now to be ready for launch, Nichol said.

Their Canadian mortgage brokerage opened in 2019, but Nichol has been in the mortgage business since 2007, while his partner has 14 years of experience.

Simply Approved, already experienced in reverse mortgages in Canada, has now received FHA and VA approval in the U.S.

 "We feel that [reverse mortgage is] a large part of the market that is underserviced and underappreciated," Nichol said. "We think that, with the right knowledge, skill set and trajectory, that it could be a great portion and segment of the market to help U.S. homeowners, to tap into their equities for their needs and retirement."

It plans to help purchasers who need it secure down payment assistance.

Simply Approved will offer mortgages for LLCs purchasing properties. That business will start with a broader footprint because of the lower restrictions on that form of lending, he added.

It will also serve foreign buyers, especially Canadians, purchasing U.S. homes. Eventually, they plan to bring the insurance brokerage into the U.S. as well.

"Naturally, getting into a different market than what we're used to, we want to make sure that we don't over-launch in the beginning," Nichol said.

Simply Approved enters the U.S. market with a strategy built on consumer-first lending, learning from past examples of Canadian companies expanding south. Cross-border expansion in the mortgage industry has had mixed success, with some major players thriving while others struggled.

One positive example is Toronto Dominion Bank, which does business as TD Bank Group. The bank entered the U.S. mortgage and banking sectors in 2004 by acquiring Banknorth. Commerce Bancorp was purchased three years later and that added to its mortgage footprint.

On the other side of the scale is Royal Bank of Canada, which bought Prism Financial of Chicago in 2000, made several other acquisitions and sales before divesting entirely to New Century Financial in 2005. But as a legacy to its problems in the U.S., RBC paid almost $11 million to settle False Claims Act allegations regarding Federal Housing Administration mortgages that were originated between 2001 and 2005.

Meanwhile, Rocket Cos.' north-of-the-border expansion has come to an end following the March 6 announcement that it was shutting Rocket Mortgage Canada, just days before the deal with Redfin became public.

Nichol pointed out key differences in how mortgage brokers operate in Canada versus the U.S. In the U.S., borrowers typically pay a portion of the mortgage broker's compensation, unlike in Canada where banks cover these costs. Canadian commissions are lower than in the U.S. 

"So our unique style of helping people, ensuring they come first, and charging less than others helps the American consumer with us coming into the market with a lower loan fee for the brokerage side on every closed mortgage that we fund," Nichol said.