Our update wouldn’t feel complete without a government update! OSFI (The Office of the Superintendent of Financial Institutions) announced last week that further tweaks are needed to the mortgage lending landscape. In its October press release OSFI stated that they will be contacting Federally Regulated Lenders to address equity lending saying “Although reduced, there continues to be evidence of mortgage approvals that overly rely on the equity in the property (at the expense of assessing the borrowers ability to repay the loan). OSFI will be taking steps to ensure this type of equity lending ceases.”
Until now Federally Regulated Lenders have been given latitude over income verification when borrowers finance 65% or less of a property’s value. OSFI are now making it clear that they want lenders to exercise proper diligence on income regardless of the loan amount. We will keep you posted on how OSFI’s proposed changes will affect our Federally Regulated Lenders and their programs as we learn more.