West Coast brokers may see it as a future opportunity, but for now it’s nothing but a challenge as a growing number of B.C. residents go into bankruptcy, sidelining home-buying dreams in the process.
The province is now saddled with a 42 per cent increase in the number of people entering bankruptcy over the past four years. That higher than the 11-per-cent national increase over the same period, according to new federal numbers.
The growth represents a real challenge to brokers already grappling with a slowing market and stagnant home prices that have limited the ability of many on the Lower Mainland to cash out and buy up.
The net result is fewer mortgage transactions for brokers. The growth of bankruptcy cases compounds broker troubles.
Still, there is opportunity.
A growing number of mortgage professionals are actively counselling and referring credit-challenged clients today in hopes they will produce the business of tomorrow. It means building referral relationships with debt counsellors and bankruptcy trustees, as well as growing their own professional understanding of debt issues and the impact on home buying and ownership.
Brokers may needlessly be passing up deals involving rehabilitated bankruptcy clients, says one agent servicing that niche and routinely arranging A deals only two years after a financial crisis.
“Certainly, there remains a challenge, but it’s not as challenging as people think it is,” Ajit Hundal, a mortgage associate with DLC Canadian Mortgage Experts in B.C, told MortgageBrokerNews.ca earlier this year. “It does require more work of the broker, but I regularly get clients into prime rates in two years after filing for bankruptcy.”