"We want to make sure that there's a sound exit strategy prior to even getting that mortgage underwritten"
The Bank of Canada’s sustained commitment to hiking its overnight rate – which currently sits at 3.25% – is pushing private lending to the fore as a reliable source of funding for consumers.
However, the rapidly evolving fiscal environment means that private lenders have to constantly keep on top of potential developments, said Shawn Allen of Matrix Mortgage Global.
Among these is exit strategy disclosure, which Allen said is on the top of his mind a lot of the time.
“When we’re putting together private mortgages at Matrix, we want to make sure that there’s a sound exit strategy prior to even getting that mortgage underwritten,” Allen said. “That is the fundamental part of our underwriting strategy: having that sound exit strategy in place, and then full disclosure, is paramount.”
”We want to make sure that our clients are coming in knowing what the exit strategy is and providing full documentation,” Allen added. “Because I think over the next 12, to 18, even 24 months from now, the regulators – if they haven’t done so already – should have a plan to come in and start auditing those mortgage brokerages within the private lending space to make sure that we are trying to weed out bad apples.
“We just want to make sure that we have a consistently level playing field to make sure that we’re all playing by the same rules and offering Canadians the security that they need in these times.”
For more of Allen’s thoughts on the industry, click here.