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Mortgage Broker News | 15 Sep 2016, 08:15 AM Agree 0
Following a report by the national newspaper alleging two major banks favour foreign homebuyers, the country’s banking regulator weighs in
  • Mark Brennan | 15 Sep 2016, 09:11 AM Agree 0
    "OSFI expects mortgage lenders to verify that their mortgage operations are well supported by prudent underwriting practices, as well as sound risk management and internal controls"

    Banks are lending on equity-based policies and whether at 35% or 50% down, they are comfortable with the level of risk that even in a depressed marketplace that their security position would not be eroded should they have to foreclose. This satisfies OSFI. There may be other factors in play, such as having at least 12 months of mortgage payments on deposit, or other investments to support also for the internal controls piece.

    These policies are not new, but the fact that it is fueled by current outrage of foreign investment exacerbates them even more.
  • BC Broker | 15 Sep 2016, 09:19 AM Agree 0
    Well said Mark. I am very concerned about the media fueling racism here, and the politicians responding by taking the bait, being vote hungry and lacking integrity
  • DMM | 15 Sep 2016, 10:06 AM Agree 0
    What is the rate they are paying on those equity deals? I know my clients have to go to Hometrust or Equitable and they tell me there is no more equity lending. This is a discrimination situation.
  • Mortgage Agent | 15 Sep 2016, 10:07 AM Agree 0
    Both lenders mentioned are exercising compensating controls where income verification is inadequate. By demonstrating the mitigating circumstances in which these loans are approved, it would appear that they are in compliance with the standards set by OSFI (not in opposition).
  • Mark Brennan | 15 Sep 2016, 12:12 PM Agree 0
    @DMM - it may not be called equity lending per se, as that speaks to an older before B20/B21 that are requiring "prudent underwriting practices, as well as sound risk management and internal controls" required today.

    Modified guidelines of existing policies or revamped verbiage corrects this to be compliant with the Fed regulator.
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