“I … believe that those who embrace the regulatory changes that have occurred in the past two years will reap great rewards,” Albert Collu
, president of Mortgage Architects
told CMP in its Hot List issue. “These rewards will be attained by brokers who have widened their appetite and proficiency of alternative mortgages.”
The federal government has implemented more than a dozen mortgage rule changes in the past five years, including lowering the maximum loan-to-value on refinances and requiring a 35 per cent down payment for stated income self-employed programs.
And while many brokers have found it harder to secure financing for clients in the wake of tighter guidelines, many have found success focusing in the alternative lending sphere.
“Over the last year we have definitely been training our brokers on the B-side to understand who those players are, their guidelines and their rules and making sure they know who their BDMs are,” Steven Brouwer of Dominion Lending Centres
Entrust Mortgage told MortgageBrokerNews.ca. “If I look at our commission statements coming in the door we’re definitely doing a lot more B-business.”
And Brouwer believes the focus on alternative lending will continue to play an integral part of his business in the years ahead.
“The B-side is definitely going to be picking up and even the C-side especially for people who, in the past, may have just been on the border; they’re going to struggle to get A-lending for sure,” Brouwer said. “This year will be a make or break year for a lot of people (and) a lot of (clients) are going to have trouble qualifying for new mortgages or even qualifying on renewals.
“So for new people getting into the market it’s going to be a lot tougher,” he said. “The mortgage rules are pretty stiff.”
Brokers prepared to dismiss B and C lending may be handicapped in 2014, with one major network head suggesting those brokers who embrace alternative lending will find themselves at the head of the pack.