History of Canadian Banks and Mortgage
The Bank of Montreal was founded in 1817. A number of other banks later followed. The British North America Act of 1867 (a.k.a. Constitution Act 1867) let the Crown grant rights to Canadians of land use. Today in Ontario the Crown owns the residual interest in land. Originally mortgages were provided mainly by insurance companies. Until recently when the Bank Act in 1954 was introduced, the banks were not allowed in the residential mortgage market, but they were allowed to charge only up-to 6% interest. In 1967 the Bank Act was amended to remove that 6% cap.
Today the biggest downfall of the Canadian Banks is their Branch network as more and more people simply do not go into the Branches on a regular basis. However, these legacy systems used by the Banks have increased their cost and are making them less competitive unless they are able to offer a variety of other financial products to their customers. Some Banks have been accused of tied selling (which is illegal) where they will offer a better rate if you take more of their financial products.
This is one of the reasons why Mortgage Brokers have really increased their market share as they have access to lenders that do not have the expensive Branch network and as such can be more competitive.
Mortgage Lenders We Work With
Industrial Alliance – Is a Canadian Insurance company that also offers mortgages through the Broker channel. A great lender with fantastic rates but they are very picky in terms of the client they are willing to take on and have very stringent underwriting policies.
First National – First National is Canada’s largest non-bank lender, offering both commercial and residential mortgage solutions.
Through a combination of their innovative mortgage solutions, Merlin – our industry-leading mortgage approval and tracking system – and the experts they have on their team, First National has earned the trust of mortgage brokers, commercial clients and residential customers.
These strong relationships are thanks to an unwavering commitment to delivering excellent service – a commitment shared by senior management and every member of the First National team.
Home Trust – Home Trust is one of Canada’s leading mortgage lenders offering an alternative to the major banks. Whether it’s helping you to buy your first home, consolidate higher-interest loans and credit cards to save money, or renovate your dream house, they’ve got the flexible alternative solutions to help you meet your goals.
They also understand that each customer is unique, and pride themselves on providing a personalized, hassle-free experience. They offer flexible income verification, and every application is reviewed by a person, not a computer.
Most of their customers usually fall into one of a few groups:
- Small business owners who cannot prove enough income to qualify with a major bank
- New immigrants to Canada who do not have a credit history
- Homeowners who have built up equity in their property but do not meet income requirements of the major banks
- Canadians with former credit difficulties that have since been resolved, including discharged bankrupts.
Scotia Bank – A main stream bank that is aggressive in the mortgage brokerage business, while they don’t always have the best rates, people are familiar with them.
Street Capital – Street Capital Financial Corporation (Street Capital Financial) is one of Canada’s largest non-bank lenders providing residential mortgages primarily through select independent mortgage brokers. Street Capital is owned by Street Capital Group Inc. (formerly Counsel Corporation); a financial services company listed on the Toronto Stock Exchange (TSX: SCB). We are an approved lender with the Canadian Mortgage and Housing Corporation (CMHC), Canada Guaranty Mortgage Insurance Company and Genworth Financial Canada. Street Capital Financial is also an approved issuer of National Housing Act Mortgage Backed Securities and an approved seller under the Canada Mortgage Bond program.
TD – Another main stream bank but their underwriting is more stringent than most other banks and are not always the most competitive in terms of rates, or loan amounts.
Merix – Whether you’re shopping for a new mortgage, refinancing or looking to switch your current mortgage, MERIX Financial has a solution to fit your specific need. Canadian owned, MERIX Financial specializes in residential mortgages, servicing mortgages across Canada. MERIX Financial prides itself on exceptional customer service, investing in technology, product development and people in order to provide the best possible customer experience.
National Bank – Is the sixth largest commercial bank in Canada with its headquartered in Montreal and has branches in most Canadian provinces.
Xceed Established in 1997, XCEED Mortgage Corporation offers unique and competitive residential mortgage products for both purchase and refinance to Canadians through an extensive network of mortgage broker partners. XCEED Prime mortgage products are available to borrowers with strong credit and income histories.
Equitable Bank – Equitable Bank is a federally regulated Schedule I bank with total assets under management of approximately $14.4 billion, over 400 skilled employees and proven capabilities in lending and deposit-taking. The Company’s integrated operations are organized according to specialty.
Within Equitable Bank’s Core Lending business, Single Family Lending Services funds mortgages for owner-occupied and investment properties across Canada, while Commercial Lending Services provides mortgages on a variety of commercial properties on a national basis.
Equitable’s Securitization Financing business originates and securitizes insured residential mortgages under the Canada Mortgage and Housing (“CMHC”) administered National Housing Act.
ICICI – (Industrial Credit and Investment Corporation of India) is an Indian multinational banking and financial services company head quartered in Mumbai, India. It offers a wide range of banking products and financial services for corporate and retail customers and operates in 17 countries including Canada.
Italian Savings – Offers sub-prime mortgages through selected brokerages in Ontario as well as through their Branch network in primarily the GTA.
Your Neighborhood Credit Union – Local Credit union with 18 branches focus on Neighborhood lending.
BMO – the Bank of Montreal no longer work with Mortgage Brokers citing that they cannot make any money through this channel as they cannot compete with the low interest rates offered by Brokers.. They have focused on their branch systems and the cross selling of products.
CIBC – CIBC and its subsidiary First Line Trust was one of the largest sources of Mortgage Financing to the Brokerage Market in Canada, however similar to Bank of Montreal they find that the competitive nature of the Mortgage Business does not allow them to make enough profit to justify the cost. So they have focused mainly on their branch systems and selling a variety of financial products including PC Financial.