Surprising poll results show brokers are still able to satisfy the majority of stated-income clients at prime lenders, despite tighter mortgage and underwriting regulations introduced last July.
The poll, available on today’s MortgageBrokerNews.ca web page, shows more than half of brokers are doing most of those types of deals with prime lenders compared to non-prime lenders. The findings suggest B-20 guidelines have not been the death knell for prime lenders approving stated income mortgages.
“Most of my clients I send to the prime lenders,” says Amy Wilson of Brokers for Life, Verico
in Alberta. “I deal almost exclusively with builders, so I need a prime lender who can work with me on drawdowns.”
Wilson works through ATB Financial, an Alberta prime lender that accepts the majority of her clients.
“As long as the client fits their structure, a client with a stated income of less than three years, we can make it work; more than three years, it gets harder,” she says.
Wilson does admit that within her own CRM and with referrals, she does place them with alternative lenders.
“I like the MCAPs, Alt lenders like that,” she says. “They can provide lines of credit and help with renewals.”
The non-prime or subprime lending sector has nonetheless flourished with the introduction of last July’s mortgage rule changes, affecting LTV ratios of more than 80 per cent and reduced the maximum amortization period to 25 years from 30 years.
“I’m surprised with the poll results. But then again, many clients are comfortable with the traditional lenders, the big banks,” says Wilson. “When you are driving down the street, you see the big banks. For the alternative lenders, it is us, the brokers, who are the ambassadors for their product.”