Brokers in Alberta may be feeling the pinch, with last summer’s severe floods leaving some lenders apprehensive about lending in certain areas.
“There's some (lenders) that are flat out—right now—saying we will not entertain financing in High River because we don't know what the market is going to do,” Yousra Jomha of Western Mortgage Services Inc. told a local Alberta publication, the High River Times Monday. “No matter what, when it comes to mortgages, it's an investment … they look at the town, the market, its proximity to the city, the services it has and (if) there (is) anything that can hinder a mortgage.”
And some lenders believe the floods -- that cost a collective $1.7 billion in damages and caused 32 separate states of emergency – may negatively impact the value of real estate in areas in and around the flood zones.
But in High River at least, the municipality is doing everything it can to reinstall confidence among the lenders.
“The town is really trying everything we can, not only to accommodate policies and procedures, but the livelihood of High Riverites,” Jomha said.
Meanwhile, even brokers whose business has not yet been adversely affected by the floods are keenly aware of the fact that lenders are uneasy about lending in flood zones.
“I had one deal where a lender questioned if it was in a flood zone so they are aware of certain areas,” Marc Crossman of Dominion Lending Centres
Mortgage Mentors told MortgageBrokerNews.ca. “The fact that they were asking and the fact that they were asking, I assume (there would have been an issue securing financing).”