Top executives discuss segment's growing prominence and market share
One of the most eye-catching trends in the Canadian mortgage market in recent years has been the emergence of mortgage investment corporations (MICs) and private lenders, both of which have seen market share surge as borrowing from a conventional lender becomes more difficult.
While its growth has slowed somewhat since 2023, the MIC space’s assets under management swelled during the pandemic and outpaced increases in the nation’s overall mortgage debt.
A panel at the recent Canadian Mortgage Summit in Brampton shone a light on the growing prominence of the private and MIC space. Participant Mike Forshee (pictured, top left) – president and managing director at Glasslake Funding – noted that among his company and those of co-panelists Armando Diseri (chief sales officer, Alta West Capital) and Jerry Wieliczko (broker relationship manager, Hosper Mortgage), billions of dollars of funding capacity and liquidity were at play.
That marks a drastic change, he said, from the past perception of private lending as a niche operated by smaller entities. “It’s no longer just mom-and-pop lending,” he said. “It truly is institutional.”
How should brokers be approaching the private and MIC spaces?
Forshee argued the sector is viewed as an increasingly viable option for borrowers who find themselves frozen out of qualification for a conventional product, rather than a smaller segment of the market. “I think we almost have to stop focusing on the words ‘private’ and ‘MIC,’” he said. “There are mortgage solutions out there from different lenders that provide different options that align to certain clients’ needs. In that regard, it’s not just shuffling the debt around – you’re making a change.”
At the Canadian Mortgage Summit, alternative lending executives reflected on the past year and the 2025 outlook, noting challenges ahead but also opportunities for mortgage professionals to showcase their value.
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 4, 2024
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Diseri (pictured, top middle) said mortgage agents and brokers who were not transacting in the private and MIC space were missing opportunities, particularly with a growing number of borrowers turning to those options to secure financing.
Taking an education-focused approach and learning as much as possible about the space, he said, is the best way for mortgage professionals to add value for their clients and present as comprehensive a suite of options as possible. “There are tons of MICs out there; BDMs are more than willing to help. If you’ve never done a private deal, educate yourself.
“I’m pretty sure that every deal that crosses your desk, you’re not getting 100% approval at a regulated institution. So where’s that client going? Are you sending them away somewhere else? Or is it something that you could put towards a [MIC or private] that bridges that gap?”
What solutions are available for borrowers who need longer terms?
In its latest residential mortgage industry report, Canada Mortgage and Housing Corporation (CMHC) highlighted that a growing number of private borrowers are unable to gravitate back towards the conventional space at the end of their term.
Diseri pointed to the role longer-term alternative products are playing in the current market, with the recognition that 12 months often isn’t enough time for borrowers to clear up whatever issues they may be experiencing. That can help them ultimately move back into the B or A space, he said. “That’s where we have to start thinking as mortgage professionals, ‘If I haven’t done one, I need to get educated to understand what needs to be done and how to structure a deal,’” he said.
“There’s more than enough people… that can help you out with that because it’s a lost opportunity [otherwise]. Think about a 10% increase in your volume just by doing that segment. That’s powerful, and I think that’s what everybody needs to think about.”
Wieliczko (pictured, top right) also highlighted recent speculation about a wave of mortgage defaults across the country, noting what he described as the greater flexibility that MICs and private lenders can offer their clients in contrast to conventional entities. “There are additional features [we can] present to the clients,” he said. “If the mortgage is booked for 12 months [but] something happened… in a couple of months, you can always come back to us and we can talk about how we can help your clients.
“We’re very flexible. We’re very open to find solutions for your clients and you can be a hero in the eyes of your clients. This is important, this relationship between lenders, mortgage agents and brokers. We’re partners and we have the same focus: help your clients.”
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