Bank welcomes BFS clients, just not from brokers

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A top TD exec's praise for stated income clients may be cold comfort to brokers no longer able to send those clients for the bank, but could also signal the lender's intention to hold onto that business.

“These customers for every other reason show great credibility,”Farhaneh Haque, director of mortgage advice and real estate-secured lending at Toronto-Dominion, told reporters this week. “They have excellent credit, good cash flow, however they cannot produce the same income documentation.

“You look at that person and, say he’s an IT consultant, there are industry standards on what they make.”

The comments follow the decision by several broker channel lenders this year to pull or pull back on their business-for-self offerings, TD among them.

Analysts have blamed the collective move on the CMHC’s intention to ration bank access to bulk insurance. Lenders rely on that backing to securitize their conventional mortgages and so free up capital for new loans.

That result has been a shift in deals to institutional alternative lenders, although even they has tightened up their own guidelines. TD, itself, opted to fold its B and C lending arm last month, cutting brokers off from that lending source for BFS clients.

Haque’s comments suggest the bank’s branches will continue to accept those types of deals. They also support broker observations about the relatively minor difference between delinquencies among those stated-income borrowers and their salaried counterparts.

Still. TD is among those lenders now requiring more paperwork for BFS deals.

“We are looking for more confirmation of business financials that you are making this amount money,” Haque said.

 

  • Jimt T..... Advent Mortgage on 2012-04-06 8:04:04 AM

    The broker world is changing fast. We are losing lenders and many of the ones that are remaining are becoming less broker friendly by making their products less broker-client friendly (collateral charges, 100% registration, etc.). This trend does not bode week for our channel. Buckle up for the ride.

  • Rob Campbell, Verico The Mortgage Wellness Group on 2012-04-07 2:16:40 PM

    I agree with you, Jim. The proof that the market has changed for us was reflected in the re-licencing results as of the end of March. 30% drop off is huge. Gone are the days of easy peasy deals to be funded by agents. Time to roll up the sleeves.
    And TD's move is definitely a clear message, as with FLM and CIBC. We need to support those who support us. Period.
    The game has changed.
    How long before Scotia and TD just pull out of the game completely?
    Stop. Sending. Deals. To. Branches.
    The ONLY business I am willing to do with brick and mortar at the moment is Meridian, for res. and commercial.
    Just my thoughts.

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