Alternative lending has the flexibility to offer ‘people first’ solutions

Alternative lender has the flexibility to offer “people-first” solutions

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Stepping out of the box to offer loan arrangements with a “common-sense approach”

IF THE last two years have taught mortgage professionals anything, it is the unpredictability of the industry when faced with the unknown effects of a lengthy pandemic. What brokers and lenders have been able to rely on during this unprecedented time, however, is a continued flurry of mortgage activity. With interest rates hovering at historically low levels over the last year and a half, and a housing shortage not seen in years, there has been a steady supply of interested borrowers wanting to hop on the property ladder, as well as

CWB Optimum Mortgage is a full-service lender, providing mortgage brokers with lending solutions in the alternative lending space and in the lending markets of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick, Newfoundland, and Prince Edward Island. We offer a full range of products to serve our brokers, including alternative mortgages, high-ratio insured mortgages, conventional income-confirmed mortgages, and a very competitive HELOC. We follow a Sensible Lending® philosophy to ensure that each client's application is considered based on its own specific merit and circumstances, including but not limited to business for self, salaried, commissioned, and bruised credit clients.

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“We are always pushing the envelope. This year is a big year and we have invested immensely in our technology”

Frank Giacomini, CWB Optimum Mortgage

existing homeowners holding on to their properties as they see their equity grow significantly. These external factors that have determined the direction of the housing sector have also played out against a backdrop of tightened mortgage criteria imposed by the big banks, in addition to increasingly difficult-to-pass mortgage stress tests in place for borrowers to qualify for traditional mortgage financing. People-centered alternative solutions For CWB Optimum Mortgage, a leading alternative lender, the narrowing of traditionally structured loan parameters has opened the door to increased broker interest in the alternative mortgage solutions and flexible mortgage options that it is able to provide its broker partners. “We are not your typical lender – let’s call it the big five or big six banks – because we know that life happens,” says Frank Giacomini, AVP national sales, sales & marketing, CWB Optimum Mortgage.

“We really do take a people-first approach, not just with our own people but with our own banking,” Marcia Lindberg, director, sales & marketing, CWB Optimum Mortgage, adds. Basing most of its lending criteria on the property itself, Optimum Mortgage is willing to “make it work” by “being a little more flexible with income types and what that actually looks like for clients,” Lindberg says. “The other thing we understand is that the home is everything for Canadians,” Giacomini says. “We have programs for people who have their own businesses, and we have programs for people who have bruised credit or have gone through life-changing bankruptcies or consumer proposals,” he elaborates. Lindberg is quick to point out that the broker relationship is also paramount for Optimum Mortgage. By finding ways to foster this integral relationship, brokers’ clients will benefit from tailor-made solutions to suit their unique financial pictures. “We are always thinking about how we can help our brokers the most. How can we make them look like rockstars?” Lindberg says. “This is how we structure our business. [We ask] how can we make that experience the best for them, and their clients.” “Alternative” trends and initiatives Always cognizant of the trends that are affecting the lending space, Optimum Mortgage has taken steps to capitalize on one glaring trend that is here to stay: the increased need for technological streamlining to bridge the broker and lender relationship.

“We are always pushing the envelope. This year is a big year and we have invested immensely in our technology,” Giacomini notes. “We are moving away from the platform and system that we had before. The hope is that this will not only bring us efficiencies but will also allow us the flexibility to sync with other systems that are coming.” In addition to increasing the speed of applications and the ease of partnering with brokers, Lindberg adds that Optimum’s investment in its technology will also open the doors to auto underwriting down the technological path.

Prioritizing its employees also remains top of the lending agenda for Optimum Mortgage. “We have invested quite a bit in our employees. I mean from a different perspective, besides increasing benefits, besides increasing the support that we give them, besides increasing compensation. It is in the number of people in those chairs, which represents more support,” Giacomini says.

“We really do take a people-first approach, not just with our own people but with our own banking”

Marcia Lindberg, CWB Optimum Mortgage

“Alternative” routes forward When asked how a changing interest rate environment may play out in the lending space as the year progresses, both Lindberg and Giacomini agree that a bottoming-out of the housing market is probably not in the cards. “I think that we will continue to see the market remain stable with the values; we may even see an uptick in this. Low inventory will still be a theme in 2022,” Lindberg asserts. “I think as rates go up, I see more of a [market] flattening. There might be some corrections in some markets. But for the most part, I just see that curve flattening,” Giacomini agrees.

Although the direction may not be easy to predict, Optimum Mortgage is firmly working toward embracing whatever that lending trend may be. “We have to look at what we have always been: a common-sense lender. We have to continue to stretch those common-sense lending attitudes. We have to look at things differently,” Giacomini says. “We are looking at alternative ways to qualify, but still be compliant and prudent and still realize that the world is a little different,” he concludes.

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“We are not your typical lender – let’s call it the big five or big six banks – because we know that life happens”

Frank Giacomini, CWB Optimum Mortgage

Promising housing statistics are good news for Canadian lenders

24%

Increase in new listings from Jan. to Feb. 2022

4.6%

Increase in home resales in Feb. 2022

699,000 units

Total home sales in Feb. 2022

29.2%

Year-over-year increase in Canada’s composite MLS Home Price Index in Feb. 2022

3.5%

MLS Home Price Index Increase from Jan. to Feb. 2022

Source: RBC February Housing Report

3.8%

Year-over-year increase from 2017

Percentage of mortgage refinancing transactions from private lenders in 2018

20%

Percentage increase of market share compared to 2017

37.8%

Mortgage market share for private lenders 2018

Private lending options gain traction among Canadian consumers

Source: 2018 CMHC Market Survey Report, Teranet October 2018 Market Insights Report