Tag Archive for: Home Trust

Setting the record straight!

This post is in response to an article in the business section of today’s Chronicle Herald newspaper. While I admire and respect the broker quoted in the story, I believe that some of the message can easily be taken out of context and I just want to set the record straight. 

I have been a mortgage broker for just over 6 years now. During this time a lot has happened and a lot has changed in the Canadian mortgage market. Canada started off with only one true sub prime mortgage lender, several had entered the market and now we are back to only one again. With the advent of rampant sub prime lending here in Canada; we were introduced to 100% financing, stated income products, interest only mortgages and products for clients with less than perfect credit. While 95% of Canadian mortgage holders are unaffected, the 5% who have a mortgage from a sub prime lender should have a game plan (to prepare them) for renewal time. 

The main reason that I place clients with sub prime or alternative lenders is to get them financing until such a time that they could qualify for a main stream insured lender. I look at the sub prime lender as a bridge lender, who will give the clients time to improve their credit and or pay off debt before qualifying for better rates and terms. It would be a disservice if I expected any client to renew their mortgage with their sub prime lender. 

Would I tell all my clients who hold mortgages with sub prime lenders to sell their properties? No I would not. We would have to look at the reasons why they are with these lenders, how much time before renewal and help them develop the proper exit strategy. I do plenty of private loans and this is not any different. Just as with any private loan, you should also know your exit strategy. 

If you are someone who has a mortgage with a sub prime lender (such as Xceed, and others), don’t panic! There are still things that can be done prior to your renewal time. Please call my office so we can look at your options. 

Cheers,

Pat

 

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Home Trust to offer traditional mortgages!

Alternative lender believes competing with banks will lower risk, allow it to pick up more business

LORI MCLEOD

 

00:00 EDT Wednesday, August 06, 2008

Alternative lender Home Trust Co. is launching a line of traditional mortgage products that will compete directly with those offered by the banks.

The Toronto-based lender hasn’t been pushed out of lending to riskier borrowers, a problem encountered by some of its competitors as a result of the U.S. subprime crisis.

Instead, the company, which uses a deposit-based funding model, believes the move will help fuel the growth of its core alternative-loan business and its relationships with mortgage brokers.

“What we can offer is a one-stop shop, particularly for brokers where time is of the essence for their clients,” said Gerald Soloway, chief executive officer of Home Trust’s parent, holding company Home Capital Group Inc.

To get the rest of this story from the source click here other wise here is my take on this. I want to start by saying that I love Home Trust. They have been great to my clients in the past, and I intend on doing business with them again. However that being said I don’t like the fact that they are getting into the “A” business at the expense of their core non traditional or sub prime equity lending background. Yes they are still doing some equity deals but they have pulled and or changed products in that line of business. With many players already leaving that market you would figure that they would be able to take more of the market instead of staging a retreat. Anyway since they do not sell ABCP to raise funds they should be able to come back to those products if the market demands. Only time will tell.

Cheers,

Pat

 

Home Capital hikes dividend!

The Canadian Press

August 5, 2008 at 7:18 AM EDT

TORONTO — Home Capital Group Inc. profit was $26.6-million in the second quarter, an increase of 20.6 per cent over $22-million in the same period last year. Basic earnings per share were 77 cents, up from 64 cents for the second quarter of 2007.

Return on equity was 27.7 per cent for the second quarter, compared to 28.9 per cent for the second quarter of 2007. Total mortgage originations were $886.9-million during the second quarter, an increase of 42.5 per cent over the $622.6-million advanced during the same period in 2007.

Home Capital’s board has approved an increase in the quarterly dividend to 13 cents per share on the outstanding common shares of the company, which is equivalent to an annual dividend of 52 cents per share.

Great for the investors, now how about getting back into the sub prime alt-a market again. I am pleased as punch that you are doing well but don’t take away options from borrowers. Honestly I love Home Trust, I just think that going after the “A” business when they are traditionally not an “A” lender is not the best move for them.  

Cheers,

Pat