Business for self deals are all about relationships

Business for self deals are all about relationships

Business for self deals are all about relationships Industry players are frustrated by the lack of options for self-employed clients but the best way to navigate this area, according to one broker, is to assemble a solid stable of a few lenders willing to go the extra mile.

“The attack on self-employed clients is really bothering me; you have to make a compelling case to the lender to prove they are good candidates,” Jake Abramowicz of Mortgage Edge told MortgageBrokerNews.ca. “When I have a self-employed client I go to three underwriters who have worked on these types of cases in the past and who are willing to do the work.”

Options for business for self clients – especially those who require a high ratio mortgage – are shrinking. Effective May 30, CMHC will no longer insure self-employed homebuyers who do not have third party income verification.

However, Canada’s other two insurers – Genworth and Canada Guaranty – have stated they will not be making changes to their respective self-employed programs.

“Upon review of the current Business for Self Program we will not be making any amendments to current product guidelines,” a Genworth letter to lenders sent in early May read. “There will be no amendment to the maximum number of Genworth-insured properties per borrower.”

Still, brokers have expressed exasperation at the limitations placed on self-employed clients.

“If you really look at how many people are self-employed in the country they really are the backbone of the economy,” Zoltan Padar told MortgageBrokerNews.ca following the CMHC’s recent changes. “That’s a good product and it has been proven over time that the two (private) insurers can be very competitive.

“CMHC cutting their business for self program will be a lesson to businesses – some lenders only work with CMHC but if I’m a lender I would start supporting the other two immediately."

There are options for brokers with these types of clients, however. Especially for those professionals who are willing to build a rapport with certain lenders.

“It’s all about relationships with lenders, underwriters and BDMs,” Abramowicz said. “I have to work with who I have and who I know.”