Sub-Prime Lenders Becomes Involved With Uncertain Deals

The teaming up of sub-prime mortgage lenders in Canada seems to be on the increase as most work together with Mortgage Investment Corporations (MICs) that are not regulated, all because they are trying to escape the rules aimed at outlawing lending methods that are uncertain.

Reports from Reuters informed that the strict policies on lenders have caused the practice of teaming up major mortgages with subordinate loans from the MICs to expand. A 10 per cent downpayment can be given to borrowers who are planning on purchasing a home, half that of either privately insured mortgages or CMHC.

Comments were made by the finance sector in Ottawa to Reuters that they are keeping a close eye on co-lending but had nothing to say on the issue if stricter mortgage policies has caused the practice to increase.