The Globe says lenders’ cost of funds are now roughly half what they were at the start of the year. But they’re still much higher than last August.
GE Money, who is pulling out of Canada, is now reportedly setting its sights on lending in India and other emerging markets. GE Money tried to sell its Canadian operations earlier this year, but found no buyers.
Merix‘s Xtended compensation structure has become quite popular. In the first half of 2008, 7 out of 10 brokers who signed up with Merix chose it.
Home Trust has rolled out its Accelerator Program, a series of CMHC and AIG insured products for “A” clients. Home promises 24-hour maximum turnaround times on deal submissions, good incentives, and “competitive” rates. On purchases, LTVs go to 95% with 35-year ams and no GDS maximum for Beacons over 680. It’s good to see Home join the A-lending crowd. We wish them well, although their rates seem only average so it will be interesting to see what kind of uptake they get.
IMBA is warning brokers against sophisticated con artists posing as mortgage agents. The industry group says “these ‘agents’ join brokerage firms only in order to get access to credit reports via the brokers’ electronic delivery system. The information gained from the reports is used to apply for credit cards in the names of the unsuspecting victims.”
FSCO offers this compliance checklist for Ontario brokers. Did you know, Ontario brokers cannot pay for referrals unless they’re considered simple referrals (basically name, email, and phone number only)?
Canada’s 2nd biggest mortgage default insurer, Genworth Financial, sold 40% more insurance in Canada last quarter versus the prior year. Its Canadian earnings grew 29%. Full Release
“Genworth is taking broad actions to manage risks…In Canada, we’ve tightened underwriting and implemented product changes were appropriate and will continue to do so.” — Genworth Financial Q2 2008 Earnings Call
33% of Genworth Financial’s insured mortgages are over $250,000. 58% are between $100,000 and $250,000. Figures are from Genworth’s Q2 earnings supplement.
First National, Canada’s largest non-bank lender, saw originations grow 14% last quarter. Its parent company’s revenue grew 23% year-over-year. First National says its market share rose in the single-family residential mortgage broker channel.
HSBC Canada‘s profit is up 5% over last year. The Globe says HSBC has originated more mortgages in 2008 than it did last year. Yet it has $470 million less residential mortgages on its balance sheet due to $1.9 billion in securitizations.
Equitable Group, parent of alternative lender Equitable Trust, posted record earnings Thursday. Here’s some nuggets from its report and conference call:
Equitable funded $969 million of mortgages last quarter, up 38.2% from Q2 2007.
Single-family lending rose 169.9%
Equitable securitized $410 million of CMHC insured mortgages.
Commercial lending dropped off to 70.7% of total funding, from 78.9% a year ago. CEO Andrew Moor says that’s because Equitable became “more selective” in its commercial lending. (Selectivity is the buzzword in commercial lending lately.)
Moor also says Equitable is “gaining mindshare with the broker community very rapidly.”
64% of Equitable’s commercial lending was on CMHC-insured multi-family residential properties. This type of business has become a big priority for Equitable.
Equitable also said it has tightened lending criteria in Alberta, but not in Ontario (yet).
Moor says single-family lending is now more attractive thanks to other lenders exiting the segment. He says Equitable will be targeting single-family lending more in coming quarters.
Abode Mortgage has taken out a $900,000 loan for working capital.
Firm Capital made a seemingly nice purchase: $12.5 million of “performing first mortgages” at a 27% discount to face value. The company says the mortgages have a 47% average LTV and will yield 14% annually, plus the gain from buying at a discount.
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