B2B switches up successful HELOC

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B2B Bank is the latest lender to drop the LTV ceiling on its HELOCs in keeping with OSFI guidelines, but the lender has left the door open for brokers seeking up to 80 per cent LTV for their clients.

“Effective Oct. 12, our maximum LTV ratio on HELOC will go down from 80 per cent to 65 per cent,” said Christine Zalzal, vice president for marketing at B2B. “We are doing this in accordance with OSFI regulations.”

Earlier this week, B2B sent out an email to brokers detailing those and other changes forced by the guideline changes.

Brokers who submit credit applications with an LTV greater than 65 per cent on a HELOC, have to submit all underwriting documents by October 18 in order to avoid having their clients complete a new application based on the new maximum limits, according to the bulletin sent out by Gary Wilhelm, vice president of credit for B2B

The bulletin also mentioned how brokers can help clients obtain an LTV up to 80 per cent even under the new rules.

“If your client has a Homeowner’s Kit and wants additional financing, up to an LTV of 80 per cent, they can amortize up to 15 per cent of the mortgage portion,” said Wilhelm. “A Homeowner’s Kit allows borrowers to have a revolving HELOC portion of 65 per cent and an amortizing mortgage of 15 per cent.”

After Oct. 12, cashbacks will also no longer be eligible for use towards a down payment, according to Wilhelm.

“For credit applications submitted by Oct. 12, the 5 per cent cash back refunded as part of the Cash Back program and applied as down payment will be authorized at the time of disbursement,” he told brokers. “Your client must provide proof of down payment for all applications.”

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  • Andy on 2012-10-04 5:00:41 AM

    Then there’s the not so savvy attempted fraudsters: I had a client last month ask me if she could just “white out” the CRA balance owing on her NOA. I said “Well, I’m certain that you have the ability to do it, but if you send it to me I have to call the RCMP.” Then I fired her explaining that I would now have to treat all her supporting documents as questionable and that I just wasn’t prepared to continue our relationship if I couldn’t trust her AND I wasn’t prepared to put any of my lenders, and my very valuable lender relationships, at risk.
    All of us want to get paid, but if any of us ever gets even a whiff that something’s not right, the best thing to do is err on the side of caution and walk away because our hard-earned reputations are worth far more than any amount of money, and the hassles of an investigation would end up jamming up valuable time that could be used to service honest clients.

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