Executives in the space on recent trends and standards within MIC lending
The rise of private lending and mortgage investment corporations (MICs) in recent years has given mortgage brokers and their clients an ever-expanding range of solutions to meet borrowing needs. But lenders in the sector are urging Ontario agents to take a more diligent approach to the private space – and some feel education standards are lacking among the mortgage community.
Nick Kyprianou (pictured, top left), president and chief executive officer at RiverRock MIC, told an audience at last week’s Canadian Alternative Mortgage Lenders Association (CAMLA) expo in Brampton that he supported a higher bar to qualify for a mortgage agent licence across the board.
That applies to any aspiring agent, he added, and not just those who want to transact in private mortgages (who are currently required by the Financial Services Regulatory Authority of Ontario (FSRA) to pass an additional licensing exam).
“I’d like to see [FSRA} raise the bar a little better,” Kyprianou said. “I can walk into an automotive shop and say, ‘I’d like to be a mechanic.’ They’d go, ‘Do you have your Class A licence? Do you have any tools?’ No – well, you can’t be a mechanic.
“But I can apply for a [mortgage] administrator’s licence and provided I have OK credit and don’t have a criminal record, I can get a licence and then start raising capital. How does that make any sense?”
Current market presents challenges of its own
Mike Forshee (pictured, top right) said agents need to make sure they’re applying rigour and common sense to deal submissions to lenders, and called for higher standards among new lender entrants to the space.
“The sophistication has to improve,” he said. “If a client makes $1,200 a month and the mortgage payment’s $2,500, how do you close the gap? That’s not a deal if the other side is saying, ‘Don’t worry, we’re going to pay that in six months.’”
In recent years, borrowers were able to rely on ever-increasing property values to secure a loan in the private space with healthy loan-to-value options because of that jump.
Tracy Valko of Valko Financial called for stronger education and higher industry standards at CAMLA’s annual expo, responding to growing concerns over fraud and misconduct in Ontario’s mortgage space. https://t.co/UVD6CmmJUN
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 12, 2025
But a slower pace of homebuying activity and uptick of new supply means values have either stagnated or slid across most major Canadian markets – and that’s a reality that both brokers and borrowers need to keep in mind, Forshee said.
“I think for a while we’ve been spoiled by this rapid runup of values and that’s solved a lot of problems and masked a lot of problems,” he said. “Those can no longer be masked by increased valuations.
“Seven, eight years ago, you could mark your portfolio every month – regardless of asset class – on the 2% gain month over month. How do you mark that portfolio today? If you lend on a deal today at 70%, you can’t bank on that 70% loan to value being there at renewal.”
‘There’s no forward-looking process’
Competition in the industry and lending sector is healthy, as is more money in the market – but getting into the business for the right reasons is crucial, he added.
“I think some new entrants, not all, are coming in as a fun way to get money quick, to make a quick buck, and there’s no forward-looking process,” Forshee said.
“More coaching and more education, I think that’s all part of it – and more understanding about the cycle of money in this side of the segment.”
Affordability challenges and higher interest rates now mean that while a borrower in the private space might have been able to easily exit and move to a traditional lender in years gone by, they’re sometimes required to spend a longer time with a private entity today.
With that in mind, agents and brokers need to be able to map out a clear exit strategy and ensure their borrowers know exactly what they’re getting into when they agree to the mortgage, Forshee said.
“Ten years ago, you could graduate [from the private market] easily,” he said. “There are so many different moving parts that you can’t just look at one client, unless it’s like a tax issue that they just need to pay and then they can go back to the bank.
“But today [with] affordability issues, maybe you’re not getting back to the next level in six months or a year like a lot of people believe.”
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