In addition, Xceed–another big subprime lender–has recently been facing challenges of its own in securing capital to loan out.
Much of all this stems from the problems related to Coventree Inc.–which, in turn, stem from the U.S. subprime debacle.
In short, it’s getting harder for non-bank Canadian lenders to obtain money to lend out. That’s because investors–who securitize Canadian mortgages, are growing increasingly risk-adverse (despite there being little evidence of Canadian credit deterioration).
If you need a mortgage and have poor credit, or cannot prove income, there are still options. However, you may want to be a bit more pro-active in the event the market tightens further. (Although there is no way of knowing for certain if it will.)
If you have good credit (approximately a 680 Beacon score or above), you have little to worry about for now. Canada’s housing market and economy are still healthy and “A-credit” mortgage rates are holding steady.
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