Brokers are expressing confidence that most monolines will stay and fight increasingly competitive banks in the A market, despite one of their lender recently retreating from that space.
“My clients are definitely in the A bracket. There are so many of them out there that at this point we wouldn’t feel the impact because we have so many of the monolines (focusing on A-lending) and half of my business goes to the monoline lenders and the other half goes to the big five,” Josefin Mutter of Mortgage Alliance
Cutting Edge Lending told MortgageBrokerNews.ca. “At this point there is no fear (of too many lenders leaving the A space), at least not yet.”
told MortgageBrokerNews.ca last week about its plans to focus more on Alternative lending going forward.
“Our goal is to provide solutions for customers who don’t qualify for traditional A-products and offering them more flexibility in the marketplace,” Todd Poberznick, assistant vice president of B2B Solutions with Bridgewater Bank said. “The A-market has shifted and our focus has shifted away from the A because it’s gotten so competitive and … it’s just a hard game to play anymore.”
Despite this big move, industry players aren’t worried about other lenders following suit and creating a dearth of A-lending options. The optimism is mostly due to the sheer number of A-lenders that are still available.
And although many have had to rely on a record number of alternative deals, it may be all part of a cycle that brokers are willing to adapt to.
“I’ve seen these cycles in the past, it’s cyclical. I think it’s positive in that it’s creating activity in the market,” Kelly Rowe of Verico
Lending Max said. “I think that once the economy continues to improve we’ll get out of this private cycle back into doing more qualified A-type stuff; it’s what I’ve seen in the past so I’m hoping history will repeat itself.”