Home Trust 2.0 | Mortgage Weekly | May 13th, 2017 | Jason Roy | Mortgage Broker


All right mortgage weekly time It's a little bit windy out here but I thought I'd give you the beach shot

I'm in Italy this week staying at a little resort just outside of Venice which is probably the easiest way to describe where it is so yeah it's nice and sunny but it's a bit windy right now of course as I'm trying to do a video so I can't really move or I turn into the wind so I'll stand here and give you the waves in the background So this week I'm talking about Home Trust again, I talked about them a couple of weeks ago and the liquidity issue and crisis they're having where they basically all their deposits people putting their deposits which they turn around and lend out everyone has been taking that money out So they went from having over a billion dollars to only having a couple hundred million in there and they're quickly bleeding cash which make it an issue for them to fund their mortgages to bring on new business and keep business running there's some other things with the regulator's checking into some issues they had with some fraudulent broker and deals a couple years ago that is still plaguing them but now it seems like more the issue has become just a confidence thing so as more money pulls out more people feel they should pull their money out and then as more people do it just kind of snowballs and soon enough you go from one point some billion dollars in your bank account to only a couple hundred million They took a 2 billion dollar line of credit which was the video the other week which was at a quite high interest rate I think the effective rate was 22

5% So that obviously didn't help with confidence in the marketplace They've bleed through most of that Most of that has been allocated or spent already They have had some good news though

MCAP Services is taking over 15 billion dollars of existing mortgages and mortgages about to fund I believe I don't have the exact detail on exactly which mortgages 15 billion dollars so that will give them some money

CIBC has become the largest single shareholder by the tripling down on there position basically Buying more of the companies stock which shows some confidence from CIBC under the assumption that Home Trust we'll be able to turn this around and CIBC will obviously make profits on the stocks going back up Stocks have improved a little bit from where they were It interesting things are still very up in the air I hope they pull through I hope that they can get through this

It don't think it's necessarily that they are a bad lender or that they have a whole bunch of bad mortgages out there I think now it's a confidence issue in the market that is plaguing them So hopefully they pull through Some other lenders in that world, so they are more the B / subprime lenders they are doing alright but they are now of course swamped with applications as people stop sending applications to Home Trust These other lenders Equitable Bank, Optimum Mortgage and so fourth they are now running quite a bit behind because they have way more applications then they are capable of handling at the moment

So that causes another issue So if you are someone who either has bruised credit or your self employed and you're not necessarily reporting on your tax return a I don't want to say accurate but a reasonable income then you need to use these types of lenders Or maybe you're buying a rental property that you want to put in a company name Or maybe you just have lots of rental properties and it's difficult to find approvals in the A world Just makes sure that you know we still have solutions but it's going to take a lot more time with these other lenders being busy

So be prepared for more time No quick two day turn arounds on anything Refinances are going to take a lot of time so give yourself some more time Anyway I hope that Home Trust pulls through I've posted some more articles to the websites that talk about the current issues and what's going on if you want to read more about that

And if you have a Home Trust mortgage make sure you reach out to me and I'll let you know if there is anything you need to do or if there is anything you need to worry about Alright until next week I'm going to get out of the wind No rate changes substantial I've updated the rate sheet But we will talk to you next week Have a great weekend

Ciao

Source: Youtube


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AJ

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