MortgageBrokerNews.ca has pieced together an insider's look into the reasons behind the shut down of FirstLine and how one the channel’s biggest lenders has come to its end.
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CIBC has decided to wind what remains of FirstLine down rather than sell it, said one mortgage professional close to the process and speaking on condition of anonymity. “In discussions, the senior management of the Bank decided not to proceed."
Those reasons, according to sources, but not yet confirmed by CIBC, centre on three key points and led the big bank to shut down the operation, although its goal is to convert FirstLine borrowers over to CIBC upon their renewal dates:
1. Employee numbers have fallen, making it easier for the bank to deal with buyouts.
2. Funding volumes have taken a hit, as indicated by the latest D+H market share report, points out another source, and with all renewals now being replaced by CIBC mortgages, a prospective buyer was hard-pressed to identify the value still available in the company.
3. Wind-down costs have been effectively contained to buying out the points liability of brokers, as discussed in an earlier MortgageBrokerNews.ca article.