The Canadian Home Income Plan Corporation (CHIP) - the operating subsidiary of Home Equity Income Trust - has applied to the federal government for chartered bank status, with the goal to be operating as HomEquity Bank by the third quarter of 2009.
"Being a bank will allow us to raise money by way of term deposits and GICs, for which the market is deep and very liquid at the moment," said Gary Krikler, senior vice-president and CEO of CHIP. He added the additional source of funds will help CHIP meet the growing demand for reverse mortgages, its main product offering.
HomEquity Bank will not have retail locations, and CHIP will continue to operate with business development managers across the country. The company's change to a bank status will not affect CHIP's relationship with brokers, said Krikler.
"Mortgage brokers have been and continue to be a reliable and valuable source of referral for us, and we don't see that changing at all," he said. "In fact, business could improve for them because the more business we do, the better they could potentially do."