File an application in the morning, get a response by afternoon and a commitment by evening
The brokering landscape has changed drastically over the last 13 months, with originations growing substantially in the private channel, and if anyone can attest to that it’s Canadian Mortgages Inc.
The private channel lender has seen business increase 30-40% since Jan. 2018, but with it has come higher incidences of incomplete applications from brokers still acclimating to C lender requirements. According to Canadian Mortgages Inc.’s Director of Underwriting and Broker Relations Daniel Joseph, being cognizant of a few salient details will help brokers get same-day commitments from CMI.
“We like to have a full application; we’re no different than an A or B lender,” he said. “We need all relevant information disclosed up front, like a credit bureau report from Equifax or TransUnion; if you’re coming for a second mortgage, we need the first mortgage statement as well. If an appraisal has already been done, we need that too, even though we may use an appraiser from our list.
“We need three or four point lines explaining why the client needs the first or second mortgage, and we’d like to see that you have done your due diligence. Make sure you ask your client the right questions so that there are no surprises when we get to the lawyer’s office.
“And a good brief summary in the email of what’s going on with the borrower, why you guys are coming to us with this deal and what the borrower’s circumstances are,” continued Joseph. “The more information you send us, the faster we can get back to you.”
Indeed, turnaround times are fast. Brokers who submit complete applications receive commitments the same day. Still, some brokers new to the private channel don’t always submit perfect applications right away.
“We have senior underwriters who assist them and tell them how the deal should be structured,” said Joseph. “We’ll spend the time assisting brokers and agents structure their deals if they need it, whereas a lot of other lenders will brush them off and tell them to come back when they’ve gotten their ducks in a row. We don’t mind assisting them.”
Provided a property is marketable—meaning it doesn’t have hidden deficiencies that would require more money to simply recoup the loan—and has promising equity, Canadian Mortgages Inc. is flexible. The lender’s loan-to-values on first mortgages is in the 75% range, and that jumps to around 80% on second mortgages. And in addition to lending Canada-wide, CMI works with clients to repair derogatory credit.
“If their credit score is low, we may still take the deal, but the price will reflect the risk and marketability. We have no cut-off on the Beacon score for credit bureaus,” said Joseph. “In your comments, tell us your exit strategy—will they consolidate the second mortgage with the first? Will you take them out and put them in a bank? Our investors have certain criteria, so be transparent about everything.”
To learn more about Canadian Mortgages Inc.’s lending guidelines, click here.
