Home Trust bullish on its BFS horizons

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Home Trust is backing up the assessment of most mortgage brokers, suggesting it does indeed view the channel’s retreat from business-for-self lending as a potential boon for its own book.

“We have also made tweaks in our underwriting,” CEO Gerald Soloway said Wednesday, during a conference call to discuss Q4 financials. But “we see incrementally more business coming to us as those (BFS deals) are shut down by the various lenders. We feel that is a very positive trend for Home.”

That jives with the analysis of many brokers in reacting to CIBC’s decision to kill FirstLine’s stated-income lending while maintaining it as an option for its branch network. Other broker channel players have since moved to eliminate or dramatically limit their own exposure to BFS originations going forward.

“It may be slow and gradual, but I think we’re seeing a return to the 1980s when there was a greater distinction between A and B lending,” said James Robinson, an agent with The Mortgage Centre Mortgage Watch Inc. “Home Trust is likely to be the winner in all this.”

That lender is one of the channel’s few continuing to straddle both the A and B spheres, although its latest financials indicate that it continues its retreat back to the Alt-A side.

The total value of mortgages originated in the fourth quarter of 2011 was $1.25 billion, Home Trust added $948.8 million in “traditional” mortgages in the fourth quarter -- compared to $683.5 million a year earlier. In contrast, it’s new A loans for the quarter came in at $188.5 million, compared to $755.6 million in the comparable 2010 period.

Soloway is suggesting the lender future Alt A lending will be bolstered by an increasing narrow field of broker channel lenders actively courting BFS business.

Home Trust won’t, however, be lowering its own underwriting standards to win it, he said.


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