WHY SO MANY DOCUMENTS FOR APPROVAL ???
Saturday Mar 09th, 2019Share
A Question We Are Often Asked As Mortgage Brokers By Clients & Realtors:
Why Do We Require So Many Documents?
We Actually Don't.
Why Does Then The Mortgage Lender Require So Many Documents?
They Actually Don't.
So Who then wants all these documents?
That would be OSFI --> The Office of The Superintendent Of Financial Institutions.
Their mandate is not to make getting a mortgage easy and it's not even driven by consumers.
OSFI's mandate is to protect the Canadian Banking System. OSFI regulates all Financial Institutions (Banks, Trust Companies ...etc. but NOT the credit unions.)
As you know, over the last 10 years, each year we have been seeing things getting tighter and tighter. This has been driven largely by fears from the government of a banking meltdown. Hence, you have seen the introduction of the stress test...etc.
When you think about it, we have already gone through a 'real stress test' in 2008-09 during the global economic meltdown and our banking system came out on the other side intact! In fact, The whole Canadian Real Estate Market came through this real stress test intact.
Nevertheless, as mentioned, each year OSFI has continued to tighten lending guidelines each year since then.
If you have any questions, please reach out to me via email/call/txt anytime.