Mortgage Broker

CmB magazine cmba-achc.ca spring 2017 | 13 given that other offers were at the table? I would think so. So what brought us to last week's disarray, even though Home Trust and all other alternative lenders have seen record volume that undoubtedly resulted from the mortgage rule changes imposed by Federal Finance Minister Bill Morneau back on October 17, 2016? Was it the recent announcement on the OSC matter, which has yet to be heard and that HCG is openly cooperating with, or was it the persistence of the U.S. hedge funds that continue to reach out to brokers, the media and many more all in the name of seeing through their goal of battering down HCG's stock at the expense of our industry? Whatever the catalyst behind the unwarranted run on HCG's deposits that led to the arrangement of a $2 billion facility, we all need to step up and do our part to educate consumers and clients not only on the salient points above, but also on the following common concerns clients may have preconceived notions on, simply because they lack proper information or understanding. First and foremost, it is important to note that Home Trust has approximately $20 billion in mortgage assets under administration, which as one of the largest industry lenders should not be discounted. Second, a mortgage through Home Trust is an "asset" to them, and is a binding contract for a fixed term that will not be forgotten. A borrower should only be so lucky to have their mortgage forgiven or abandoned by any one lender, let alone Home Trust. ird, depositors are well protected with a government guarantee of up to $100,000 under CDIC for each legal deposit-taking entity, and Home Trust had deposits under both Oaken Financial and Home Trust Company. So why the massive panic, which has had unintended consequences on other industry lender partners? Fourth, any unimaginable failure of an institution of the size and importance of Home Trust, should the unwarranted panic persist, will lead to continued increased borrowing costs for consumers and further liquidity issues in the alternative space, both of which have now taken effect. So regardless of what ends up happening in the final analysis with all that's transpired, we need to remain calm and well informed so that we can do our part in better educating our clients on this unfortunate circumstance (which I believe we will overcome), as well as our industry as a whole. Ultimately, we are all in this together with our lender partners, and must always be mindful that "UNITY EMPOWERS!" John Bargis Coalition of Independent Mortgage Brokers of Canada Home Trust — Still Solid I don't do the soapbox thing very oen, but there is something I need to get off my chest. ere has been a lot of news lately about Home Capital/Home Trust, and none of it is positive. I'm a mortgage broker and have been a strong supporter of Home Capital for the past 10 years. ey are solid lenders, especially for those individuals who don't qualify for a mortgage at a traditional lender like a bank. In my opinion, this is just a bad PR battle they are facing, because of large "players" in the U.S., thinking they are like the subprime lenders that brought down the U.S. economy about a decade ago. ere are a few points that I have to make, because the media will never report it: 1) Home Trust's default rate is better than most banks. Home Trust knows how to lend and how to collect. ey know real estate and are SOLID. When Home Trust lends on a deal, the first thing they evaluate is the strength of the real estate. eir loan amounts NEVER exceed 80 per cent of the property value. 2) If you look at their core business, which is known as "B" lending (meaning they provide mortgages for people who don't qualify at banks by traditional means), their portfolio is performing very well and there has been no dip in performance. 3) e only reason their stock has dipped, in my opinion, is large investors in the U.S. that have the ability to influence a market and see them like the subprime lenders in the U.S. that brought the market down. e difference is, Home Trust's loans/mortgages are being paid on time and are not in default like the subprime lenders in the U.S. 10 years ago. 4) In the past two years, dealing with Home Trust has become increasingly tough, because their underwriting guidelines have tightened. I also put my money where my mouth is. I still have money saved in their high interest savings account, which pays 1.75 per cent; and they are insured by CDIC! I've been a strong supporter and will continue to be. ey are solid and I expect them to get through this rough patch. Don't believe the media; talk to those who actually deal with this company. Geoff Carnavale CMBA Ontario Past President Minding the books I read your "Obey the Clock" article in the last magazine about the importance of responding to regulators within legislative time limits. It got me surfing the FICOM website and I saw an order made against a broker. Two out of four of the findings were about keeping books and records. I know I have to keep books and records, but where does it tell me what exactly I have to keep? BC Broker Reply: Mortgage Brokers Act, section 23(2)(g) gives the Lieutenant Governor in Council (in effect, the cabinet) the power to make regulations respecting any matter necessary or advisable to carry out the intent and purpose of the Act. is power has been used to make Mortgage Brokers Act Regulations, section 6 to require that every mortgage broker:

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