The new customer profiles emerging in alternative lending

[00:00] Nowadays, you're seeing a bankable profile of client that sees the benefit of dealing in the alternative space. We're seeing high-quality clientele. So that speaks volumes as to how the client profile has shifted away from the bank into the alternative space.

[00:30] Fergal McAlinden: Hello everybody and welcome to Mortgage Fest 2026. Can't believe we're finally here. We've been talking about it for feels like months, but really excited to have everybody with us for the event today. Kicking off our interview series is our moderator or our chair rather for day two, Reaza Ali of Hardward Financial. Great to have you with us. How's everything with you? It's been a big year for you.

[00:52] Reaza Ali: It's incredible to be here. You said a few months. I remember at the end of last year's event. I think you guys have already started planning. So, it's almost a year in the making. I'm excited because it's a different look to the Mortgage Fest. It used to be one day, now we're at two full days, which is incredible. So, I'm really excited to be here.

[01:15] Fergal McAlinden: And we're approaching the event at a really interesting time for the industry as well. We've seen turbulence obviously over the past few years. That's kind of continuing, but as all of our attendees know, there's still plenty of opportunity as well and you're in a good place to speak about that in your role with Hartwood Financial. How's everything going for you guys and what have been some of the big opportunities you're seeing this year?

[01:35] Reaza Ali: Definitely a big year of change and I joined Hartwood at the end of March. Since then, so it's 5 months. It's been a great development actually as we build out the company. If people are not familiar with who we are, we're a non-B20 lender. So, we fall in that space between the traditional B lenders and A lenders and the true private space.

[02:01] For us, we're seeing enormous opportunity. Although there are headwinds to this year and the mortgage market, there are great opportunities out there when it comes to the price points for new buyers, people that are looking to pick up property as investment property as well, looking more into the future. Although it's been a tough year, I would say for most, I think if people keep their heads down, do the right things, we're all going to come out better at the end.

[02:31] Fergal McAlinden: These events, I'm sure for you, they're a great opportunity to speak with agents and brokers not only from Ontario, but we have people from across Canada at these types of events. When it comes to the conversations you've been having in 2026 and today, what are some of the main things that you've been talking about with brokers or what do you want them to know about you guys?

[02:49] Reaza Ali: What I would like them to know about us is the fact that we are not a private lender, number one. We fall in that space that is in between the B and the private space. From a lender opportunity piece, when you look at what Hartwood can offer our consumers, and our consumers being the brokers, first of all we're 100% broker focused so we're not direct to consumer and we offer multiple streams of income that we speak to our consumers with.

[03:20] There's great opportunity for them to look at us as just another true partner in the business. And as we build the company out, that's what we're looking for. We're looking for people that really understand what we're looking for and we get to know each other's business and how each other operate. So that's truly what we're looking for this year.

[03:42] When it comes to really what we offer, residential is where we're building the company out on that platform. So, first mortgages and second mortgages. And we also offer jumbo mortgage amount, which is an area that not a lot of lenders like to play in, but we're more than willing to entertain. We have a great capital base to access. So, there's no worries when it comes to that. But again, just the message out there is give us a chance.

[04:14] We're just over a year old when you think about it and we've made some great strides and we're looking to continue that. Right now we're in Ontario and BC and we're looking at our next phase of expansion going into next year.

[04:30] Fergal McAlinden: That's great. Well, you've been in the alternative space for a long time now. So it must be interesting for you, Reaza, to see some of the trends that are evolving in this space and the continued growth of alternative lending as well because we all remember whenever it maybe wasn't as mainstream as it is now. It was an option of last resort. I know that perception has just changed completely. So it must be interesting for you especially in your new role to see that continue to evolve.

[04:53] Reaza Ali: Yes, the perception is still there more so on the consumer side. So the challenge for our broker partners is always how does their consumer perceive the opportunity of the option as alternative versus when they came to the broker thinking in their mind they're a prime bankable client. There's a lot of language around that and positioning.

[05:21] But the reality, as you mentioned, it's no longer a second thought. This is a mainstream lending source that provides a great solution and opportunity for many consumers out there, whether they're looking to get into the market as a first-time buyer or they have been an owner for quite a while and their circumstances have changed that they're no longer a bankable client.

[05:56] There are so many more opportunities out there for them to just satisfy whatever monetary needs they have. And I always position it this way, it's rate is important but it's not the only thing. The most important piece is can we satisfy the needs of the consumer and provide a solution that's viable, number one, and something that the consumer can feel comfortable with as well.

[06:26] And if we can meet all of those criteria, the bottom line is we can facilitate the monetary need that they have and satisfy it for them. Quite frankly, if you look at the consumer profile nowadays, that's dramatically changed I would say over the last 10 years where you would really traditionally have the profile of a poor payer, someone that just does not handle their bills well or potentially it's just how they report income.

[07:00] Nowadays, you're seeing a bankable profile of client that sees the benefit of dealing in the alternative space and maybe they're not qualifying for other reasons, but we're seeing high-quality clientele when it comes to the credit side. So that speaks volumes as to how the client profile has shifted away from the bank into the alternative space.

[07:12] Fergal McAlinden: Yeah, it's been a really interesting growth over the past few years. How about when we talk about the market looking ahead? I don't think anybody's expecting it to roar back next year or anytime soon. We have political headwinds obviously, economic concern and all of that kind of thing. But whenever you're looking ahead to the next few months or the next year, how do you see things going for the market as a whole?

[07:33] Reaza Ali: It's my personal take on it, but that's also formed by a lot of industry insight. When you look at markets, we look at markets as a whole across Canada, but then there's also a regional story behind that and even within a provincial story as well.

[07:59] The market where it is, you mentioned a couple things. I always focus in on the economics piece and what does that look like for a consumer. Are they struggling to pay their bills? Are they struggling to put food on the table? And then what are their priorities?

[08:21] Those that may have a family or you're single, you still have the same challenges of putting food on the table and keeping up with whatever bills you have. We've seen, as far as the market is concerned, to me the market has come into a position now that those with resources, it's a fantastic opportunity to jump in.

[08:46] Some are waiting for lower rates. I wouldn't anticipate that as much. What I would focus in on is the affordability piece there because the price points on these properties are more in line, I would say, with where they should have been. And will they go back up eventually? Yes. Do I see that into next year? Not really.

[09:08] We're still seeing appraisals coming in lower than anticipated value. And again, it can also come back to a regional story. If you look at a place like Ontario, which is a massive market, you can go into whether it's southwest or eastern Ontario or northern Ontario, and you're going to see different real estate activity that's happening.

[09:30] Some places a house goes up for sale and depending on the price point it's gone in a week. Other places it's sitting on the market for months. So really depends on a few factors there. But I think overall the market, I don't anticipate any significant changes going into next year.

[09:39] Fergal McAlinden: And how about the renewal outlook? It seems like we've talked about that so much over the past few years. We saw this renewal wave which was on the way in 25 and 26. What's your outlook on how that's gone? A lot of people have said that it's maybe not the cliff that we thought it was going to be, but still a lot of pain for borrowers, especially in Ontario and BC. What's your own take on it?

[09:57] Reaza Ali: I think first of all that our broker community across Canada has done a phenomenal job in handling that consumer conversation piece and not just look at a renewal for face value but really dig in to the consumer picture at the time and well ahead.

[10:20] In my estimation, it should be 6 months ahead now, not a month before renewal, to really figure out is there an opportunity to help these consumers go from, in some cases, a 2% interest rate to well into the fours in some cases and even higher in others. And that itself can be quite a payment shock.

[10:46] But we have a number of levers there that can be pulled, whether it's the opportunity to refinance and reamortize and that softens the blow of that payment increase. I think most people, and as you mentioned it hasn't been the cliff that everyone was anticipating, the media, the mortgage broker industry, all the professionals out there essentially getting the message out to consumers that this is something that needs to be at the top of their mind and not be dealt with last minute.

[11:18] Fergal McAlinden: Well, last thing before I let you go, I mentioned that you're going to be chairing day two of the event tomorrow. Just whenever we look around and we talked about the market and how it's all going, why is it so important for the industry to gather at events like this and discuss shared strategies and problem solve and all that kind of thing? It's more important now than ever, I guess.

[11:37] Reaza Ali: Yeah, I know there are different outlooks on events like this and some people don't see it in a favorable light. I will tell you, and it's been almost 30 years in the business, I've always seen value in showing up, reconnecting with industry partners and really learning what's new, what's cutting edge, what's coming up.

[12:01] That's where you can take your business to the next level. Sitting behind a desk at home or in an office space, you can only see so much. So even to take half a day and get out to these events, listen to some of these speakers that have insight, a different perspective, I think there's always something that you can take away and implement into the business the very next day or at least throw into the business plan for the following year.

[12:34] I always see these events as very valuable. Everyone's going to take something away that means something to themselves.

[12:41] Fergal McAlinden: Great stuff. Well, it's great to catch up with you. Good luck on day two and hope you have some great conversations with the agents and brokers over the next several days.

[12:48] Reaza Ali: Wonderful. I appreciate the time, Fergal. Thank you so much. Cheers.