While much of the industry has been negatively impacted by last year’s mortgage rule changes, one small lender has benefitted.
Optimum, the mortgage lending arm of Canadian Western Bank, saw its market share grow by 40 basis points to 1.3% in Q2, according to a report by Canadian Mortgage Trends
based on Finastra’s Lender Insights report.
The reason for Optimum’s success -- which cracked the top-10 in market share for broker channel lenders for the first time -- was due to two main factors, according to Lester Shore, vice president of Optimum Mortgage
at Canadian Western Bank.
“Appreciate that there was a fairly significant market disruption in the second quarter. That market disruption resulted in a very large competitor of ours (having trouble funding new mortgages),” Shore told MortgageBrokerNews.ca. “There’s no question we picked up some business due to a market disruption in the spring.”
The market disruption Shore referred to, though preferred not to outright mention, was Home Trust
’s deposit and regulatory issues that impacted market confidence.
Indeed, Home Trust
saw its market share sliced by 310 basis points to 3.6%.
So it seems alternative deals that may have been sent to Home made their way to Optimum.
Shore said the additional in deals were a welcome challenge and that the lender has since increased its capacity to service even more deals in the future.
What’s more, as a balance sheet lender, Optimum avoided the impact of last year’s mortgage rule changes which targeted lenders that bulk insure their portfolios.
The Finastra report confirms what most suspected: That monolines were harder hit by last year’s mortgage rule changes than their balance sheet counterparts.
Banks enjoyed booms in Q2 led by Scotia
bank, which saw its market share increase by 1030 basis points to 26.7%.
Meanwhile, TD Bank’s share increased -- by 190 basis points (8.6%) -- as did B2B Bank’s (+140 basis points to 3.7%).