Unlocking new paths to homeownership

Narrator  00:00:03
CMP talk, the Canadian Mortgage Professional Podcast.

Fergal McAlinden  00:00:18
All right, well, hello again, and thanks for joining us on another edition of CMP talk. I'm Fergal McAlinden. I'm the News Editor over here at Canadian Mortgage Professional. No matter the financial challenges that they may face, it's clear that home ownership remains a top aspiration for a huge number of Canadians. Mortgage lenders and brokers have a big role to play in turning that dream into a reality, and today, we're going to be speaking with one of the most prominent lenders in Canada's mortgage industry to hear about some of the solutions that they're putting forward for Canadian home buyers. MCAN has recently launched new mortgage offerings that it says are reframing the possibility of home ownership for Canadians with uninsured Mortgage Solutions designed to help Canadians overcome past financial challenges and make home ownership a reality. So here to speak with us about those products today and explain how they're geared towards providing hope and opportunity to Canadians in the housing market, I'm very pleased to welcome from MCAN Home. Leanne Conroy, Regional Director of Sales, Leanne, thanks for joining us today. How is everything going with you?

Leanne Conroy  00:01:17
Everything's great. Fergal, thank you so much for having me.

Fergal McAlinden  00:01:20
It's great to have you on with us today and really looking forward to the discussion. So first of all, Leanne, I want to ask you, I mean, what inspired MCAN’s decision to expand its uninsured mortgage options, and in your eyes, how do those changes kind of, in fact, address the needs of Canadians who feel underserved by traditional banks and lenders?

Leanne Conroy  00:01:38
Well, I mean, our tagline is, every story begins at home, and that's really what we're talking about, and it's going to be the theme of my message throughout this whole podcast, and that's educating the homeowner. And so how do we do that? We are continuously checking with our brokers, who tell us what they see in their business, what's changing and what's coming. And so we talk a lot about our purpose, how we can help in different ways, and what more we can do to help Canadians who think that they can't get a mortgage because of maybe some past credit issues, or because they've been carrying some debt and they feel like private is the only answer. But there's a way forward, and there is a way that we've that we can help. So we also look at our data that shows us what works and what doesn't, and it's actually can be very surprising. The end of the day, what we do is pretty similar, but it's how we do it that's going to make the difference. So we try to keep improving our programs to reflect the markets and the needs of Canadians, while still managing our strong business, because, by the way, MCAN is the biggest mortgage investment corporation in Canada based on total assets, so we look at how we can add value to our partners through programs like our icon, where we reward clients and we award brokers and and then how we can create partnerships based on collaboration. So basically, all of this levels up to a company that's dedicated to helping Canadians make it home and helping Canadians think a bit bolder about the future and what it can hold.

Fergal McAlinden  00:03:09
Okay, great stuff now, Leanne and higher debt servicing ratios and the one year open mortgage. Can you explain a little bit more about how they work and maybe as well, just about the types of customers that those solutions are best suited for?

Leanne Conroy  00:03:23
Sure, but what I will do is I'll start with a program that we call the score program before I get into those two other options. So what we had is we were trying to think outside of the box. How can we help Canadians or encourage Canadians to improve their credit? So we launched this program in the spring. It's called score. And basically what we've done, and since then, we've qualified nearly 50 clients under this program, which actually stands for support, credit optimization, rehabilitation and education that rewards clients after two quarters, and again, after four quarters, when their credit score actually improves. So we take clients that have had a full debt consolidation, we re look at their credit scores, and if their credit score is improved, we make payments toward their mortgages, not just once, but twice, and then if they qualify, we actually reward our brokers too. But why it's an important program is because it emphasizes education to the clients to motivate them to to improve their credit. We talk a lot about credit, but do we actually do something that forces and motivates those clients to actually improve their credit? So this is what this program will do, and some data that we've compiled over the last few months through these 50 clients is actually interesting when you dig down deep, because the average age of these clients is between 48 and 55 the average credit score isn't really that low, but it's. Are in around the mid six hundreds, but the average ratios are in the around 55 so it really shows you at what point individuals in their lifespan are struggling with debt consolidation. So it's a really great program. So that feeding into our our extended ratios, we've expanded our tolerance for higher debt ratios on a case by case basis. And so it's really about reasonability and the story how do the clients manage these obligations of the mortgage? And that's really what we as a company and the underwriters need to understand. We look at the entire picture holistically, and I think that's it absolutely is key with these higher ratios, because there is a lot of story in the background. There's typically alternative income from maybe a side gig. There's alternative income from contributory individuals, family members living in the household. So it really helps us to get these clients qualified. And of course, it increases the allowances for their ratios. And so it's really all connected. And looking at the current trends that impacts Canadians, it all comes together, and then moving, of course, to our one year opened. We this is really new for us, but we had seen a ton of data, and had even just in conversations with with BDMS, with underwriters, with brokers. Do you have an open product? Is there an open product available? Maybe the clients are looking to move. Maybe they're renewing, anticipating rates coming down. They're just in this state of flux where they don't know what's going to happen next. And of course, our media doesn't help us too much with that, and so this one year over, open product gives them an option. So again, it's all about trying to listen to the market and provide options.

Fergal McAlinden  00:07:02
You know, it's especially interesting that you've rolled out these products I mentioned in my intro, and Ken's mission to help Canadians achieve home ownership. And we all know that. You know, the current economic climate is fraught, but I'm wondering, Leanne, how you think these Mortgage Solutions kind of align with that mission in the current climate.

Leanne Conroy  00:07:23
Well, you know, I'll say again, I feel like the media doesn't help anything. You know, it's all about doom and gloom and oh gosh, what is coming next? Canadians are feeling uncertain. Markets are volatile. We all feel a little bit off keel when this happens. And so these product updates and our continued efforts to enhance solutions are how we're here to help and that's our mission, you know. So we ask ourselves, are we doing enough to make sure that Canadians have access to the mortgage products that they need that may not be offered by our traditional institutions, and then making sure that people have access to affordable options before they end up on a costly path because they didn't know they could come to us after, let's say, a consumer proposal, or come to us when they have super high debt ratios or struggling with lower credit scores. You know, it's our way of putting our arms around them and saying it's okay. You know it's, it's not doom and gloom. We have options for you. So in that we're continuously recalibrating how we balance risk management, of course, with product development in ways to help people and help grow our business as well. So it's, it's all about possibility. We would work with brokers to make sure that Canadians understand what is possible for them.

Fergal McAlinden  00:08:42
Okay, great stuff. Now, I know that we talked a little bit earlier about, you know, getting your crystal ball out and looking to the future 2025 is just around the corner. So what do you think Leanne the future holds for Canadians who are seeking alternative Mortgage Solutions? And I mean, how is MCAN position to support them in the long run?

Leanne Conroy  00:09:01
Well, I think, in my opinion, I think it's extremely positive. The fact that lenders like MCAN that continue to adapt expand, shows our commitment to ensuring our citizens can buy or stay in their home. The market changes. We react. The rules change, we adapt. It's really a matter of getting this information down to the end consumer. And so again, that that I feel like this is the theme for me, the homeowner is the end consumer that needs to know they have options. You know, again, we watch the news. I've said this a few times in my in my talk here, we watch the news and there's good and bad advice on what we should do. When we should buy, we should hold out no you should buy. Now, you know, we're either encouraging or discouraging people to buy a home or to wait for rates to fall. Interesting. I have a quote, and I heard a fellow who was a mortgage broker chatting about this. On on social media. And I don't know if it was his quote or a quote of a quote, but he said, date the rate and buy the house. And I think it makes so so much sense, if you can afford the payment and qualify, then the home finds you. And so we, as an alternative lender, we give homeowners that ability to afford the home or to get into that home, even when rates are higher, right? It ebbs and flows. And the reality of the mortgage and the housing market is that it ebbs and flows, but at least we have to pivot and give options for home ownership.

Fergal McAlinden  00:10:34
Absolutely. Okay, wise, wise words and Leanne, before we wrap things up, anything that you want to leave with brokers, maybe a message about the mortgage options that we've been discussing and how they're going to prove beneficial.

Leanne Conroy  00:10:47
I mean, I guess again, to reiterate everything I've said is that we're here to help, and we're here to educate, and we're here to discuss scenarios, and I think that we're all partners, but at the end of the day, we need to get this information back to the homeowner. So it's all about partnership and education.

Fergal McAlinden  00:11:08
All right, great stuff. Well, look, that is, I think, the perfect place to lead things up today. Leanne, thanks for taking us through what MCAN has to offer, and I'm sure that there were, you know, plenty of useful takeaways there for our broker listeners. So as always, we really appreciate you being with us on today's show, and I'm sure we'll talk soon.

Leanne Conroy  00:11:24
I hope so. Thank you so much.

Fergal McAlinden  00:11:26
All right. Well, that is just about all we have time for on today's show, and my thanks once again, to Leanne Conroy of MCAN home for joining us. Thanks to you for listening, and we will see you next time.

Narrator  00:11:35
Thank you for tuning in to CMP Talk. You can listen to the latest episodes on Apple, Spotify, Amazon and all major listening channels, just search for CMP Talk.