Brokers face tight-er deadlines

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Forget July 9. Brokers may have considerably less time to get their applications in ahead of a start date for new mortgage rules.

“I received notice from one lender this morning that brokers will have to get applications on July 3 in order to have them considered under the old rules, and not the new,” said Karen Monteiro, principal broker for Mortgage Alliance Maximum Results Financial Services. “I was a bit surprised.”

She’s not alone, with brokers across the country reacting to a similar email this week from at least one other channel lender. Others – among them mono-lines and banks – are expected to follow suit by Friday, setting application deadlines as much as a week before default insurers officially adopt the new rules.

That truncated deadline will likely send brokers scrambling to get client paperwork in order and before underwriters by the end of this week, an effort to ensure refi- and 30-year amortization deals have time to win approval.

At least one lender has argued the tighter deadlines as necessary to preventing last minute overload and client frustration.

Still, some industry insiders have viewed the early deadlines as arbitrary and a possible indication lenders are rushing to implement new underwriting standards in advance of their official implementation.

Luckily, the industry hasn’t seen any real signs that broker lenders have moved in that direction, said Chad Robinson, with Verico Best Interest Mortgages, in Ottawa.

Those that need and want the business aren’t likely to, either, said Monteiro, based in Cambridge, Ont.
 

  • Angela Wong-Liao, Invis Inc on 2012-06-27 2:56:19 AM

    I believe it is the intention of our finance minister to give us such a short notice as he believes that Canadians have too much debts, which I fully agreed. I applaude at the courage and decisive approach of our finance minister, it may be short term pain but long term gain for our industry and our country because we do not want to be in the same situation as our American friends south of our border.
    Canada's Day is around the corner and I love Canada.

  • Brandon on 2012-06-27 3:47:17 AM

    To the comment above. How do you see this as eliminating Canadian debt? It one tiny portion of the entire puzzle. Sure, shorter amortizations will cause borrowers to pay their debts off more quickly. But, who is officiating all the unsecured debt? Why are 19 year olds being approved for $5,000.00 credit cards without any proof of income?

    I don't really see this as a sure fire way to eliminate Canadian household debt. And DEFINITELY wasn't a measure to avoid what the Americans dealt with. That point is way off base.

  • tom on 2012-06-27 3:55:47 AM

    I agree Brandon, rein in credit card usage and HELOCs, that's the main culprit in over-indebtedness but it barely gets a mention, I wonder why?

  • Rob on 2012-06-27 4:55:37 AM

    It is amazing to me that mortgage rules are tightened but credit card interest rates continue to criple Canadians unabated.Look at the populace and the vast majority are in trouble due to their credit cards,not the mortgage.

  • Jeremy on 2012-06-27 7:49:14 AM

    I heard a situation recently where a client in a 5 year fixed term at 3.49% registered as a collateral charge and missed a couple payments back to back, guess what happened? Because the client broke the terms of his repayment as per the agreement, the bank increased his mortgage rate to 10%. Tell me that isn't robbery!!

  • Lew on 2012-06-27 8:06:37 AM

    I can't believe that the government is so willing to become the puppets to the banks.

    I can see the conversation now, "OK, let's pull back on 3% debt with regulations and let 20% debt run rampant. We will tell the public that we are saving them from themselves"

    "Why that's BRILLIANT!"

    I'm sorry Mr. Consumer, you don't qualify for a $30,000 LOC to renovate, but hey how about this $30,000 credit card, you can put it all on there.

    I honestly wonder if we are watching the next Enron - Kenneth Lay fiasco.

    This is sad.

  • Derek Rowly on 2012-06-27 9:53:53 AM

    Angela

    I applaud your enthgusiasm a nd positice attitude. However, the forces have spoken andspoken the truth.

    Derek

  • Gary Grant on 2012-06-27 1:28:58 PM

    Angela,
    It seems that you haven't been in this business very long because you have no idea what you are talking about.
    Canada is a great country. It is too bad that those in power have turned their authority over to the banks.
    The problem is unsecured debts.
    But the government will never address that as being the problem because it is a profit maker for the banks. Ed Clark's compensation for 2011 was $11,280,000.00. In 2011, Mr. Flaherty enjoyed a base salary of $157,731 plus an additional $75,516 because of his position as a Minister for a grand total of $233,247.
    Stephen Harper's annual salary is $317,574. Now here is the interesting thing....

    The position of prime minister is not outlined in any Canadian constitutional document and is mentioned only in passing in Schedule B of the Constitution Act, 1982.

    So who other than the banks are behind these decisions?

  • Caroline on 2012-06-27 9:57:34 PM

    I completely agree with Lew. Who these new rules will really be hurting is our young people and young families. If the government is so concerned with debt levels perhaps they should concentrate on the other side of the equation, where it is a well known fact that salary increases have fallen way behind in the past 20 years. This along with the 13% HST that gets added to almost every aspect of our lives, certainly only enhances consumer household debt. The only real increases in salaries have been bestowed upon the fortunate ones being paid by the government, whose salaries are being paid by those underpaid working for the private sectors. Why are these issues not being addressed in any new policy changes??

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