Mortgage Alliance is presently in discussions with Paradigm Quest to continue the product, but the company hasn’t “finalized any details yet,” says CEO Michael Beckette.
As noted Monday, it would take a strong rebound in bond yields to derail further reductions in fixed mortgage rates…and that’s exactly what we got.
It has reduced the variable-rate discount to prime – 0.40% (from prime – 0.50%) and eliminated the promotional 3% cash back option on variable mortgages over $400,000.
These changes apply in all of CIBC’s distribution channels (i.e., Mortgage Centre brokers, CIBC branches, and CIBC/Home Loans Canada mortgage professionals).
This morning, the 5-year bond yield fell to 2%—a key psychological level.
Garry Marr did a piece that touched on client retention in the Post today. Further to his story, banks have been doing an incredible job of retaining customers. The fact that retention rates remain so high in the most competitive mortgage market of all time says something about the effectiveness of bank strategy.
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Lenders have long relied on two standard measures of one’s “ability to pay” their mortgage:
Gross Debt Service (GDS): The percentage of the borrower’s income that is needed to pay all required monthly housing costs (mortgage payments, property taxes, heat and 50% of condo fees).
Total Debt Service (TDS): The percentage of the borrower’s income that is needed to cover housing costs (GDS) plus any other monthly obligations that an individual has, such as credit card payments and car payments.
The acceptable ratios for both have generally been 32% and 40% respectively.
For people with very high credit scores, GDS requirements are often waived and the TDS maximum is slightly higher (44% as of January 2011).
That statistic and many others are in the just-released 2011 CMHC Mortgage Consumer Survey.
Among other things, the report also highlights emerging trends in online mortgage research. CMHC reports that over one in five consumers are now using the Internet as their sole source of mortgage information. That trend is still unfolding but as we’ve written before, the ratio of people who feel they can go it alone will grow—just as it’s grown in the online investing market.
Here’s a sampling of other key findings (italics ours):
In Concentra’s case, EVP Don Hansen said the move was prompted by a “decision to use an alternate source for originating mortgages.” He referred to that source as “wholesale operations.” (We weren’t able to get more details on that in time for this story.)
Paradigm Quest Inc. will now service all of Macquarie’s $8.5 billion mortgage book and 35,000 customers. Canadiana Financial, a partner company with Paradigm, will assume Macquarie’s broker origination functions.
Macquarie Financial’s current CEO, Grant MacKenzie, will join Canadiana Financial as CEO on July 1, 2011. Pamella Mulek will be Canadiana’s President & COO.