Street Capital’s new owner is gushing about the mono-line’s contributions to its bottom line, using its latest financials to highlight a 29 per cent jump in the lender’s quarterly earnings.
"We're extremely pleased with Street Capital's performance under Counsel and the consistent revenues and earnings it has provided," said Allan Silber, Chairman and CEO of Counsel Corp, in year-end financials released Wednesday. "It is now among the leaders in mortgage broker market share."
The numbers may back up the boast, with Street, acquired by Counsel on May 31, 2011, raking in revenue almost 30 per cent higher than it did the previous quarter.
“Comparative figures for the same period in 2010 are not available due to Street Capital being a private company and having a different fiscal year prior to its acquisition by Counsel,” the corporation points out in the financial statements.
That report doesn’t directly pinpoint mortgage origination numbers, instead counting Street success in growing its sale of mortgages to institutional investors. The lender does, however, "sell everything we originate, so the difference from period to period is timing; i.e., the lag between origination and sale," Counsel CFO Stephen Weintraub told MortgageBrokerNews.ca
Street, in fact, sold $3.7 billion of its mortgages to institutional investors last year. It had sold $2.86 billion in its previous fiscal year, from November 1, 2009, to October 31, 2010.
In the seven months of 2011 following its acquisition by Counsel, Street Capital sold $2.5 billion of mortgages and ended the year with $7.5 billion in mortgages under administration.
Selling on mortgages to those type of institutional buyers is key for mono-lines, and, say analysts, was the driving force behind the recent move at Street and others to restrict their BFS and rental programs. Those lenders traditionally use CMHC portfolio insurance to back those mortgages. The Crown corp. has now moved to ration lender access to the fund.
The industry is waiting to see what if any impact that collective move will have on the balance sheet of those institutions, although Street, now ranked fifth among broker channel lenders in terms of volume, is focused on growing market share, according to its new owner, not losing it.