With B-21 set to go into effect soon, Canada Guaranty has released new guidelines for its self-employed program; but brokers have nothing to worry about, according to one industry player.
“These are not unreasonable requests; they are standards I have been applying to applicants for several years right up front to help filter where a file will go,” Dustan Woodhouse
of Dominion Lending Centres
told MortgageBrokerNews.ca. “Clearly stating an applicant’s income at a number greater than the gross revenues of their business is problematic. Even the most ‘overly-optimistic’ of applicants can understand that this would defy logic.”
Canada Guaranty released new guidelines for its Low Doc Advantage program for self-employed Canadians Friday.
The following information must be included in the submission notes of the application, for each self-employed borrower:
- Income amount confirmed by line 150 on the most recent NOA.
- Gross revenue of the borrower’s business.
- Type of business being owned and operated (e.g. landscaping, bookkeeping, etc.).
- Ownership structure (e.g. sole proprietor) and the percentage of ownership.
Brokers waited with bated breath prior to the release of OSFI’s latest guideline changes, but breathed a sigh of relief when the draft was eventually released.
The changes were considered minor, especially when compared to the prior-released B-20 guidelines.
And with this first round of changes announced by one lender, it seems business will continue as usual for brokers.
“It has been my experience that the majority of lenders are currently underwriting these applications to these standards as things stand,” Woodhouse said. “And have been for some time.”