Rewind one year and you’ll find yourself in a mortgage environment where few want to lend to you unless you have a 600+ Beacon score and/or considerable home equity.
When a lender comes along in that kind of environment and offers up to 90% uninsured financing, without Beacon score restrictions, it’s a big deal.
That’s exactly what TD Financing Services (formerly VFC Home Mortgage) did when it launched on February 13, 2009.
TDFS’s sole mortgage offering is its Specialty Mortgage, a 3- or 5-year product for the underserved non-prime market. Its niches include:
- Clients with minimal established (or re-established) credit
- Stated income deals without NOAs and rigid income reasonability rules
- Clients in credit counselling
- Low-beacon rental deals
- Borrowed down payment situations
TDFS also has two other key advantages:
- A broad national lending area (most non-prime lenders are regional)
- A recognized brand
On that last point, one big problem with subprime lenders over the last few years has been staying power. We’ve seen the likes of Accredited, Xceed, HSBC Finance, GE Money, Money Connect, and others exit the non-prime market. That’s left countless borrowers stranded at renewal. In contrast, TDFS President, Erik de Witte, says “The TD brand gives customers and brokers a high degree of comfort that we will be there when it is time to renew.”
TDFS’s first year has not been devoid of challenges, however. Witte concedes that VFC’s service at times “suffered due to application flow as brokers learned about (VFC’s) programs.” TDFS is working diligently to improve its service commitment in 2010.
Overall, it was a very successful inaugural year for the company’s mortgage division. TDFS says volumes met its expectations for 2009, and given its unique offerings, we wouldn’t be surprised if it markedly exceeded its targets this year.
The bottom line: TDFS filled some very critical voids over the past 12 months, moreso than any other lender. It is therefore this year’s selection for Canadian Mortgage Trends’ Mortgage of the Year.
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Past CMT Mortgage of the Year Recipients
- 2008: National Bank All-in-One
- 2007: MCAP FlexStar
Last modified: April 26, 2017
Congratulations to TDFS. Hopefully more subprime lenders get back in the game this year.
In my experience I have found VFC to be pretty flexible. I only wish they had a 1 year term. 3 years is a long time to be saddled with a subprime rate.
Good for TD (and smart of them) that they saw this niche opening up. I expect many more entrants to this field in the coming year.
How about an open with a 1/2% premium like Wells Fargo had? I think Equitable has an open too.
Is this suitable for small business startup financing/loan?
What bank has the best “green” record?
Anyone know what their rates are like? Their web exposure for consumers is minimal.
They are typical for a B lender. 5-7%
What chu mean 90% and uninsured?
The Candian law requires insurance at 80% no?
In Alberta and only in Alberta we have the right to walk away from uninsured mortages if that is to our advantage (they can’t come after other assets for residential mortgages).
So some people might want to mortage a Mcmansion to 90% and if the bottom falls out in Alberta, walk away… Not me but some people might be interested.
Lenders can self-insure if they balance sheet the mortgages.
TDFS seems to be a good lender. They have decent rates and are able to handle clients with damaged beacon and past banko.
I enjoy working with them and the market that will be opening to them should be large.