ING Shelves its “Low Doc” Mortgage

ING-DirectING Direct is cancelling its “Express Income Qualifier” (EIQ) mortgage.

It’s the latest bank to pull back on conventional non-income qualified mortgages. This is a trend that became more pronounced earlier this year as word broke that regulators were becoming increasingly concerned with these products.

Martin Beaudry, Vice President—Lending, told us ING made this change because:

  • It aims to comply with FSB guidelines, which stress the importance of provable income in mortgage underwriting.
    • This was a “primary consideration”, Martin said, as the bank sees these global standards becoming the norm everywhere, including Europe where ING Direct Canada’s Dutch parent, ING Group, is located.
  • It was getting a “disproportionate amount of applications” for this product.
    • That’s due to ING being one of only a few prime mortgage lenders left servicing this market.
    • Underwriting EIQ deals was becoming increasingly time-intensive
    • EIQ deals stressed broker relationships when ING was occasionally required to ask for supporting income documentation.
  • Non-income qualifying mortgages are more capital-intensive and ING was unable to bulk insure all these files to keep funding costs down.

Martin-Beaudry-INGMartin confirmed that ING was very happy with the performance of its EIQ portfolio. He said EIQ clients were “high quality” customers and that defaults were absolutely not a problem.

ING’s EIQ mortgage was a product that allowed no income confirmation if the borrower met certain credit standards and the loan-to-value was 65% maximum.

ING will continue to offer insured stated income mortgages through Genworth and Canada Guaranty.

Looking forward, “low-doc” mortgages may become more sparse in the banking world, Martin said, at least for a few years.


Rob McLister, CMT

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