Opinion divided following one client's mortgage denial

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“For those siding with the lender, right on; credit is a priviledge for which you have to qualify, not a right,” one anonymous commenter said. “The applicant that is pregnant is currently a non-permanent resident … absolutely the lender has to evaluate the risk inherent in the situation and determine whether this fits within their risk tolerance.

“This is not about someone being pregnant - this is about risk.”

And when it comes to maintaining relationships with lenders, it’s better to disclose all the details, suggested a number of readers. Though they also suggested asking for an exception on special cases such as this one.

“At the end of the day brokers should be realistic and respectful of who's money is at risk but we also must be the public's champion with the lender, I never see anything wrong with asking for an exception even if there is only a slim chance of getting it,” Ron Butler of Verico Butler Mortgage said.

“Ask for an exception certainly & provide full supporting details so they are able to review it fairly," Pamela Wyant of Dominion Lending Centres Northern Mortgage Solutions added. “But my recommendation is: don't forget the disclosure if you wish to retain the lender relationship.”


Lender denies client because of pregnancy: Broker

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  • John Benstead on 2014-04-10 11:51:33 AM

    I think the lender, in this case, is acting in a prudent way. Work Visa applicants, by nature, are considered differently. Has anyone considered why, after 4 years someone's status is still Visa based and not permanent resident.

    I would like to throw another case into the mix! I had 2 young clients attempting to purchase their 1st home. It was clear from the outset that the ratios would not work. As this was before the need to have a cosigner live in the property, big sister stepped up and agreed to "join" the deal. She worked for a global organisation, where approx 25% of her income came from bonus. I did not need the bonus but I submitted 3 years of NOAs to prove anyway. It was declined and the underwriters reason..........."what would happen if she got hit by a bus"

    Still scratching my head on that one!!

  • Omer Quenneville on 2014-04-10 12:07:58 PM

    Responsible lending... if it were your money, what would you do.

  • Nick D. on 2014-04-10 1:23:08 PM

    How do we actually KNOW that the lender declined it becasue she was pregnant? We only have the word of the broker - who is in truth just trying to use the publicity angle to get the deal approved. The fact is that the client is not a permament resident and is here on a work visa – that alone changes things. The fact that her income will be dropping – regardless of the reason – is important for the lender to know. If the clients cannot service the mortgage on the reduced income then it is reasonable that the lender should have concerns over the risk associated with the approval of the mortgage. The client will potentially out of the workforce for a period of 12 months. How are they going to maintain the home during that period with the very high costs of having a new child? What happens if her work visa expires during that time? Anyone consider that remification? Perhaps the broker should think before going on a stupid public rant.

    This story is all about a broker who got a decline that is trying to sensationalize the situation and force the lender into approving a deal. If I was that lender, this deal would not only be declined, the broker would be cut off for life from ever sending business to me again. Why would I want to partner with a broker that is so quick to throw me under the bus?

    Brokers wonder why lenders get so frustrated… as someone who used to once underwrite for a lender, I can tell you this… brokers are BY FAR the most difficult to deal with. 1000% more difficult than dealing with the consumer directly. I have yet to meet a broker that at one time or another has not been rude to an underwriter because they could not get their way. I can name several that have yelled at underwriters, some of them have posted on this very string of comments. This is just another case of a broker being elitist and ranting because they could not get their way – and shame on them for doing it.

  • Nick D. on 2014-04-10 1:36:23 PM

    *to clarify, I pasted the above from the original story with regards to my comment about broker who have yelled at underwriters.

  • Faye Drope on 2014-04-10 5:35:30 PM

    Years ago I called CMHC to ask about pregnancy and disclosure. Their answer: until the baby is born there is no reason to disclose. Think about it what if she loses the baby?

  • Ron Butler on 2014-04-10 6:40:44 PM

    @ Nick D, I am not going to rehash this particular story that I have posted on before but I will address one point you made: I have absolutely raised my voice and had heated discussions with underwriters. Let's be clear on this, I respect the fact that the lender is entitled to their rules because it's their money but every minute of every day across Canada there is a lender's sales rep calling on a mortgage broker urging them to send the lender business therefore the lender knows underwriting a mortgage is a two-way street, give it your best underwriting shot because Mr. Lender you ASKED for mortgages to lend on. Let's not forget for one second that brokers are the reason some underwriters have their jobs at all and it is simply required that we mortgage brokers be powerful advocates of the consumers who use us to get their mortgages. That means fighting on the client's side to get the best deal possible.

    So I plead guilty to being obstinate and aggressive on behalf of the consumer who trusted me to get them a mortgage at the best rate. If it's a borderline call with the lender's rules I am here to fight for my client. That's my job.

  • Jon on 2014-04-10 7:08:41 PM

    I've read & agreed with many comments on this and other websites from Ron Butler & must say Im surprised that he has resorted to "I have absolutely raised my voice and had heated discussions with underwriters". It reminds me of the time that I worked in various casinos and High Limit players threw their weight around to have preferential treatment, which were little more than bullying tactics. I would have thought that he would be able more eloquent without using those tactics.

  • Ron Butler on 2014-04-10 7:23:40 PM

    @Jon this is the new trend in social media "play the bully card" when someone posts saying they are aggressive and a fighter BOOM: they are a "bully". I will tell you this: when our clients needs a positive answer on their mortgage application quickly and I have to push for best rate I am not afraid to press for the best results. I am not playing a "high roller" in a casino, I am pushing to get the best result for the consumer. Most people who have gone through the stressful experience of buying a house and getting a mortgage want a powerful advocate on their behalf. At the end of the argument lender underwriters do understand that brokers must be working hard for their clients, without the consumer we are all unemployed.

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