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Mortgage Broker News | 11 Jun 2015, 09:15 AM Agree 0
Brokers are reporting slower deal conversions on the B-side as lenders are requiring more documentation in the wake of new regulations.
  • John Van Driel | 11 Jun 2015, 09:54 AM Agree 0
    Just another one of life's challenges!!
  • Ron Butler | 11 Jun 2015, 11:03 AM Agree 0
    Our B lenders have been fighting the good fight with OSFI for many years now. Most brokers don't know that OFSI has pressed for the current levels of documentation for years and our B lenders pushed them off. Sooner or later in the face of relentless government pressure even the toughest B lender has to succumb.

    The are always unintended consequences of government actions. By forcing traditional trust or bank B lenders to act more like A lenders OSFI has caused the growth of barely regulated small MICS. There have been so many new MICS in the last 2 years you need a spreadsheet to keep track of them.

    This will end in tears for the investors in these tiny lenders. B lenders like Home Trust and Equitable are very careful about property underwriting and very skilled at managing default. The truth is that some of the new MICS treat these issues lightly, some of folks who run the MICS are just taking a skim off the top and frankly are not aligned with investors on the final outcomes of the lending. The folks who run some of these new MICS make money from lending and are not tied to the default outcome so the more lent the better for the MIC owners.

    Don't get me wrong there are many great, old MICS who do a brilliant job and possibly some of the new ones will be well run. But realistically, when the property market does finally turn the investors in some of these MICS will be gutted.

    If the government had just left Home Trust and Equitable etc. to do the jobs they were very good at, this future bad outcome could be avoided.
  • Kevin | 11 Jun 2015, 03:47 PM Agree 0
    BOO HOO brokers have to provide documentation to support the information that they submit to lenders. The nerve of the government to expect that people actually provide verification of the information that they provide.

    Maybe if the levels of fraud stopped rising at alarming rates it might be less of an issue.
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