American lenders returning to Canada?

American lenders returning to Canada?

American lenders returning to Canada? After the 2008 crash, American providers of subprime loans tucked tail and went home – but with the loonie hovering around 75 cents US, the stage is set for their return.

“The strength of the US dollar and the money they would make on the exchange, it would be a phenomenal deal for them,” says Mickey Baratz, the director of finance and principal broker of Vector Financial. “I don’t know what the regulators would say about that, but for the first time, U.S. banks are co-lending in Canada. So if they want they can fund me, and I would be more than happy to co-lend with them.”

While Baratz sees limitless possibilities for American lenders in the Canadian space, he thinks most have learned valuable lessons since they unceremoniously packed up their subprime operations here following the mortgage meltdown in their home markets stateside.

“If I was Wells Fargo or any American bank I would be a fool to try and do business here on my own,” says Baratz, voicing the need for local expertise and partners. “I wouldn’t try to do it myself.”

Still, interest among American companies is growing. That’s not the case with Canadians looking at lending in the US, although some Canadian companies have looked to the U.S. for business opportunities, through the American Association of Private Lenders. When Baratz went looking, he was quickly turned off.

“I was scared away by how unprofessional they were,” he told MortgageBrokerNews.ca, “compared to how much work had to be done to satisfy our standards – so we decided against going that route.”