Street Capital has made key changes to its conventional mortgage lending, including the removal of its stated-income product – what its president calls a credit risk decision.
“To Our Valued Mortgage Broker Partners: Effective on any active preapprovals and pending applications, regardless of the date received, the following are our new Conventional guidelines: Owner Occupied - Full doc only. No Rentals. No Equity. No Stated Income,” reads a Street letter sent to brokers Thursday. “Please Note – If a conventional deal does not meet the requirements listed above, the option of a client paid insurance premium is available, please speak to your underwriter.”
The move follows on the heels of FirstLine’s decision this week to ditch all state-income programs -- high-ratio and conventional. While its parent CIBC will maintain that niche offering at its branches, other lenders in the broker channel are expected to move away from business-for-self lending, especially conventional loans.
For Street, the move is all about minimizing credit risk.
“This is a credit risk decision and has very minimal impact on our overall volume,” President Paul Grewal told MortgageBrokerNews.ca.
Still, Street and FirstLine have likely opened the door wider for not only alternative lenders such as Home Trust, but A lenders like B2B and Meridian Credit Union and other credit unions.
“Home Trust is definitely going to see more business coming its way,” John Panagakos, principal broker at Dominion Lending Centre Home Financial, told MortgageBrokerNews.ca.