Albert Collu, VERICO President, was interviewed on BNN on Tuesday June 6th. In this segment he talks about the rise of the grey lending market and how consumers have been affected by regulatory changes.
“There has been much discussion around the series of unfortunate events surrounding Home Capital Group who have been tremendous partners to mortgage brokers for a great number of years and have empowered Canadians to fulfill their dream of home ownership where they may not have otherwise. A point that has been sorely overlooked through all this.
Sufficed to say, the challenges facing Home Capital have manifested some unfortunate trickle downs in our market place that materially impact mortgage brokers and Canadians in need of home financing.
It is my strong view that a broader discussion needs to take place regarding the imbalances in supply and demand in the non-prime mortgage market due to the crisis of investor confidence which has created a “grey market” of sorts in order for borrowers to fill these market gaps. While other lenders in this space are doing all they can to cross this chasm they are simply unable to do so whether be it a lack of cash supply and/or a lack of capacity.
As such, prospective homebuyers who have needed alternative financing options suddenly find themselves with the proverbial rug pulled out from under them – which of course rolls in the overall regulatory tightening.”