The media once again put mortgages in the headlines with the Office of the Superintendent of Financial Institutions (OSFI) releasing a letter July 7, 2016, addressed to all federally regulated financial institutions about its expectations for prudent underwriting.
“OSFI expects mortgage lenders to verify that their mortgage operations are well supported by prudent underwriting practices, as well as sound risk management and internal controls that are commensurate with these operations,” OSFI said.
The regulator will be monitoring institutions and comes as a warning to ensure they are in line with both B-20 and B-21 guidelines and that their risk mitigation practices are sufficient.
OSFI has identified five areas related to B-20 and B-21 that it will now scrutinize more heavily. They are; income verification, non-conforming loans, debt service ratios, appraisal and loan-to-value calculations, risk appetite and portfolio risk management. You can see a copy of the open letter here.
Thankfully it isn’t all bad news for deserving borrowers.
The warning only applies to federally regulated financial institutions including all banks and deposit-taking institutions. There are many lenders available at The Mortgage Advisors that are specialized in working with what are labelled “non-conforming” mortgages, lenders that are specialized in alternative lending as well as Credit Unions and private lenders who are not governed by OSFI.
The Mortgage Advisors are experts at navigating lenders products, programs, and guidelines to get you into a mortgage to fit your needs and helping you reach your financial goals today and in the future. Give us a call today to pre-qualify or review your financing options.