The mortgage industry has endured its share of tribulations over the past decade – which makes it all the more remarkable when an organization can not only emerge as a stronger version of itself, but also substantially increase revenues. That’s exactly what Community Trust has done under the tutelage of Chris Humeniuk.
Humeniuk joined Community Trust’s board of governors in 2009; a year later, the board decided the organization needed to recalibrate its strategic direction. As part of that new direction, Humeniuk was named president, and it was also agreed that when the current CEO’s tenure ended, Humeniuk would assume that role, too.
“We wanted to shift away from being a niche commercial lender to a more diverse lender,” Humeniuk says. “Our single-family residential program was developed in 2011 and launched in 2012. We shifted the risk profile of our commercial portfolio, and we have expanded our off-balance-sheet strategies to diversify our revenue stream.”
When Humeniuk joined Community Trust, the company had $180 million in assets and only $30 million in assets under administration; today, Community Trust has $1 billion in assets and another $2 billion in assets under administration. Moreover, under Humeniuk’s leadership, Community Trust has grown from 24 employees to 110 – and he believes there’s still room to grow.
To understand Community Trust’s growth trajectory, one needs look no further than Humeniuk himself. In 1997, he joined a mortgage banking firm called Canada ICI before becoming a founding partner in Canadian Mortgage Strategies and Investments, a company that grew to a national presence with offices in Vancouver, Toronto, Montreal and Edmonton. Humeniuk helped CMSI underwrite and originate $1.2 billion in commercial mortgages.
“I was very fortunate in ’97 to join a firm that, although the agency relationship was with the borrower, they were very strong believers in developing, maintaining and respecting relationships with lenders,” Humeniuk says. “At the time I learned to see the world through the lenders’ eyes, even though I wasn’t a lender. I think that lesson served me well while I was a broker at Canada ICI and then as a managing partner of CMSI, and that phase of my career very much built on that premise.
“By maintaining positive relationships with the commercial lending community, we were able to establish and maintain a very successful commercial mortgage banking practice,” he continues. “We learned that being short-sighted and trying to push through a deal that was substandard and not being transparent with our lending partners would affect us tremendously. The long game was understanding lenders’ risk appetite and finding deals that fulfilled their appetite. As we built that relationship, we built trust in each other – and trust is imperative in a lender-broker relationship. As a lender today, that hasn’t changed. We aim to help [brokers] grow their business in kind.”
Reaching residential borrowers
While commercial mortgages are Community Trust’s bread and butter, the company is making a major splash in the residential space. It also launched a mortgage securitization program in 2015 and expanded its trustee program for registered accounts of self-directed investors, who can choose to invest in syndicated mortgages or MICs. In the wake of mounting mortgage regulations, this is a growing segment of the market.
Community Trust is also making headway in the single-family market this year. In particular, self-employed and immigrant homebuyers are an underserved yet robust borrowing cohort that Humeniuk believes Community Trust can better assist.
“I think some of the strongest borrowers are self-employed people who work hard and create careers for themselves,” he says. “We’re active with borrowers who are consolidating debt or are perhaps new to Canada and haven’t had a chance to build long-term income streams or credit profiles. From an underwriting perspective, it’s a different space than the CMHC or insured prime space, where it’s more transactional. With every Alt-A deal, there’s a story, and it’s the job of our underwriting team and team leaders to get to the bottom of the story and to determine that we have a reasonable borrower to deal with
“Our growing market share shows we’ve been able to build strong working relationships with the broker community that have been mutually beneficial,” Humeniuk adds, “and if this is our coming-out year, so be it. We’ve been working at this for a number of years, and we have every expectation that we’ll grow our market share in the Alt-A space.”
An industry partner
One reason Community Trust is confident it will take the Alt-A segment by storm is because the company has positioned itself as a flexible alternative to big banks by offering shorter-term deals on quality real estate.
“The properties may need seasoning, or they might be in transition – and that’s where the value is – but their long-term income stream may be challenging to demonstrate,” Humeniuk explains. “There’s a story to be told, and we work hard with our broker partners and borrowers. We think it’s an excellent space to be coming into. Those deals are done at lower loan-to-value than more conventional loans. We work very closely with asset management partners who are co-lenders in those transactions.”
As mortgage brokers struggle under the weight of the newest B-20 guidelines, Community Trust holds frequent information sessions to make sure no one is left behind. Ultimately, the company sees itself as a collaborative partner in the industry rather than a stand-alone entity trying to absorb market share.
“One thing no one can predict right now is consumer behaviour, and consumers have some options,” Humeniuk says. “The average duration of our mortgage portfolio previously was 14 months, but today we see more borrowers take two- or three-year mortgages. We expect to see a shift of consumers from the prime space to the Alt-A space. It will be an interesting six to 12 months.”