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Latest in Mortgage News: Newton to Provide Free TransUnion Access to its 6,000+ Velocity Users

Starting today, the more than 6,000 mortgage brokers who use the Velocity mortgage operating system will gain free access to TransUnion credit reports for the remainder of the year.

The offer is part of a campaign by Newton Connectivity Systems, which operates Velocity, to encourage greater diversification in the use of credit bureaus.

With Equifax as the dominant player in the broker space, and undergoing a number of its own changes related to report layout, pricing and lender credentialling, Newton CEO Geoff Willis says now is the time to change the competitive landscape a little bit.

“One of the things we learned from the Filogix outage is that you really can’t run whole industries with single points of failure, meaning one supplier is probably not the best choice,” he told CMT. “Equifax is kind of the de facto credit reporting agency. We felt the best way to change the behaviour was to actually give [access to an alternative credit provider] out for free.”

Willis said roughly 25% of deal submission activity goes to lenders who don’t currently accept TransUnion reports, which is why many brokers may be hesitant to use TransUnion when doing credit checks on clients.

However, Willis adds that his team has been doing a great deal of lender advocacy work in recent months and expects to onboard nearly all of the remaining lenders with TransUnion by the end of the year.

Internal OSFI Emails Made Public Detailing Stress Test Tweaks

access to information act canadaConservative MP Tom Kmiec has released internal emails from the Office of the Superintendent of Financial Institutions (OSFI) detailing discussions among staff on how to tweak the stress test on uninsured mortgages since it was “no longer working as intended.”

The discussions took place around the same time the Finance Department announced tweaks to its stress test on insured mortgages in March, which would have set the stress test rate to the weekly median 5-year fixed insured mortgage rate plus 2%, as opposed to the benchmark qualifying rate. At that time, OSFI said it was only “considering” similar changes to the benchmark rate used to qualify uninsured mortgages.

As first reported by, the emails indicate staff understood the original stress test was “less stringent” compared to similar stress tests adopted elsewhere in the world, and wanted the public to know they were making efforts to “get it right.”

“In the prep meeting…there was a question about how our ST (200 bps) compares to other regulators, as we believe we are less stringent,” wrote one staff member.

“…it strikes me that if we ever change the benchmark [rate used in the stress test], others may need to do the same,” another wrote.

As Ben Gully, OSFI’s Assistant Superintendent, Regulation Sector publicly stated in January, using the benchmark qualifying rate as the floor of Guideline B-20’s stress testing for uninsured mortgages was “not playing the role that we intended” due to the big banks keeping their posted rates artificially high.

The stress test changes were ultimately scrapped due to the COVID crisis, but RateSpy reports “industry types want to see OSFI announce a new implementation date soon.”

78% of British Columbians Support Banning Foreign Home Ownership

More than three quarters of British Columbians would support banning foreigners from owning Canadian real estate, according to a survey from Research Co.

Just 15% would be opposed to following New Zealand in enacting legislation banning foreign homeownership, and another 7% were undecided.

“The notion of forbidding most foreigners from owning real estate in Canada is popular among all demographics in British Columbia,” Mario Canseco, President of Research Co. said in a statement.

Canseco noted the groups that voiced the highest level of support for such a law are residents of Vancouver Island (88%) and those aged 35 to 54 (also 88%).

New Zealand isn’t the only country where homeownership is reserved for citizens. Switzerland, where home prices have also risen rapidly, restricts the purchase of residential property by “persons abroad” into certain parts of the country.

The issue of high home priceseven with the recent pullbackis clearly still top-of-mind for many British Columbians. Nearly four out of five (79%) B.C. residents also said they agree with the decision to increase the foreign buyers’ tax to 20% from 15%, and would also support expanding the tax to include foreign homebuyers outside of Metro Vancouver.

The average home price in B.C. last month was up 3% to $727,000 compared to last year. In Greater Vancouver, the composite benchmark price (for all home types) is $1,028,400, up 1.4% from last year.

OSFI Maintains Capital Buffer Levels at 1%

OSFI announced this week that it would maintain the Domestic Stability Buffer (DSB) at 1.00% of total risk-weighted assets, which is the amount of capital the Big 6 banks must set aside during good times to help them get through economic crises.

The DSB was lowered by 1.25% in March, which freed up about $300 billion worth of lending capacity for the banks.

“OSFI expects banks to continue to draw on this capacity to support Canadian businesses and households,” OSFI said in a release.

“OSFI will continue to monitor economic and financial conditions, vulnerabilities and signs of risks to the banking system, and the impact of COVID-19 policy responses,” the regulator added. “If conditions warrant, OSFI is prepared to release the DSB further.”