Lender does due diligence

Lender does due diligence

Lender does due diligence Home Capital has an entire team dedicated to reviewing each of the files originated by the 45 suspended brokers.

Much of the leading alternative lender’s conference call Thursday centred on the process of reviewing the flagged mortgages submitted by the suspended brokers, and why the process won’t be complete until 2016.

 “Every part of the file we wanted to see where we stood,” Gerald Soloway, CEO of Home Capital, said during the lender’s quarterly conference cal. “That’s why it’s taking some time.”

According to Soloway, the company has reviewed a quarter of all mortgages originated by the 45 suspended brokers. The total value of outstanding mortgages from those brokers is $1.72 billion and 90% of mortgages so far reviewed are eligible for renewal.

“This is the key point: These mortgages are performing very well – in line with, or better than, our broader mortgage portfolio,” Soloway said. “There have been no unusual credit issues.”

Soloway said Home Capital is looking at those loans with increased scrutiny. The company is going through every piece of documentation and re-verifying income, which is the reason why the process is taking months to complete.

“There is a whole team working through that portfolio,” he said.

Home Capital’s dedicated team is parsing each and every mortgage originated by the 45 brokers. They are contacting employers to verify income on each of the files.

Soloway also addressed how files that don’t meet the renewal requirements will be handled.

“We are not prepared to renew anyone who does not have proper documentation,” Soloway said, noting that the Home Capital will not “just throw them out in the cold.”

“You work with them, you tell them [which] others sources can help them.”

Soloway noted that the $1.72 billion outstanding does not represent the value of loans based on substandard documentation. Those files represent a much smaller subsect.
  • KJL 2015-11-06 11:56:08 AM
    so as "Mortgage Professionals" - lets get these name out there . Get the governing bodies on board and kick their asses out! Is tough enough with all the great people we have, these others need to be dealt with. Recent story today where a TD road rep was fired in BC for fraud and is now a mortgage agent in Ontario .. Really !! These greedy fools make us all look bad ....
    Post a reply
  • Ron Butler 2015-11-06 2:23:30 PM
    The one single brokerage that represents close to 50% of these numbers is still sailing along with no interruption so you have to ask yourself how the regulation of our business is really being conducted. I am not beating up the regulator, the regulator needs legislation with teeth. What you may question is why would any other institutional lender in Canada still be dealing with the brokerage because a couple of them still are..............
    Post a reply