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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."

If you would like to know more about small bank loans please call me at 250 862 1806 or email me [email protected].

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About the Author

Laurie Baird is a Mortgage Broker with Verico Complete Mortgage Services. She has been in the mortgage business since 1991 and a broker since 1997. 

As a Mortgage Broker she is able to match her clients' needs with a lender who will provide them with competitive rates and products.

Laurie has a Bachelor of Education degree from UBC.

Contact Laurie at 250-862-1806 or visit:

Visit Laurie's blog at: https://www.okanaganmortgages.com/blog

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.

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