Good news for small mortgage lenders
The budget should allow more competition from smaller lenders which will keep banks competitive and make dealing with a mortgage broker even more important. "The government has promised that the smaller banks will have easier access to funding from CMHC. The corporation's new allocation methodologies will undergo restructuring to increase the access smaller lenders have to portfolio insurance and securitization programs." The finance Minister, Jim Flaherty has taken steps to arm "smaller banks" with the tools to better compete with the banks and this is a win for the consumer.
The 2014 Federal Budget will make it easier for new banks to enter the mortgage market and improve access to Canada Mortgage and Housing Corporation (CMHC) programs for small mortgage lenders, according to the Financial Post.
The budget, which was released on Tuesday by Mr Flaherty, promises to "improve the ability of new entrants and smaller banks to compete" while preserving the strength of the sector. In addition the Office of the Superintendent of Financial Institutions (OSFI) has appointed a new representative to contact the small banks and handle some to the issues that they currently face when in competition with the Big Five banks.
The government has promised the smaller banks easier access to funding from CMHC so they are more competitive. The corporation new allocation methodologies with be restructured to increase the access smaller lenders have to portfolio insurance and securitization programs. "I sure hope (there's more competition),: Gregory Thomas, executive of the Canadian Taxpayers Federation told the Financial Post. "Canada could use one or two strong national credit unions."
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