AMBA Matters Spring 2014

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Alberta Introduces New Home Warranty Legislation How Credit Card Debt Affects Mortgages

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Matters is a quarterly magazine which provides fundamental information to members of the provincial association, offering an opportunity for the industry members to be educated, updated and entertained.

Toll Free: 1.888.452.2652 Phone: 403.685.9652 Fax: 403.685.9682 Email: info@amba.ca Web: www.amba.ca Suite 150, 1209 29 Ave SE Calgary, AB T2H 2P6

8 9 10 12 14 16 20 24 28 29 31 32 37

contents

member Advisory update: changes to reciprocity policy RECA Spring update

WHEN CAN A MORTGAGE INVESTMENT CORP. DISTRIBUTE A DIVIDEND?

Alberta Introduces New Home Warranty Legislation

The ‘10 Questions’ of Alternate Lending

How Credit Card Debt Affects Mortgages

Giddy up!

2014 amba conference preview

2014 AMBA Curling bonspiel Wrap-Up

The Federal Budget Show 2014

Understanding Foreclosures Your Questions Answered

member Advisory update: Inter-Provincial Discussions Helping Brokers and Associates Sleep Easy at Night Private Mortgage Lenders Forum

OTHER FEATURES...

President’s Remarks 5 General Manager's Report 6 Industry News 26 Member Profile: Hali Strandlund 34 AMBA Calendar 38

Amba 2014

Board of Directors President Gord Appel TMG

Past President Ron McClenaghan Invis

Vice President Adil Mawji Invis

Treasurer Phil McDowell Mortgages Are Marvellous

Education Director Ryan Spence D+H

Government Relations Layne Walters TMG

Professional Development Frank Petrin CML Canadian Mortgage Lender

Regional Outreach Cathy Sehn Verico Brokers for Life Inc.

Events Erica Fikkert Equitable Bank

Risk Management Kevin Weeks Weeks Law

Membership Tracey Robinson Mortgage Protection Plan

Membership Dale Koeller Calvert Home Mortgage Investment Corp.

Magazine publisher: Amanda Roy-Macfarlane

Return undeliverable Canadian addresses to: Alberta Mortgage Brokers Association Suite 150, 1209 29 Ave SE Calgary, AB T2H 2P6 Art & Design: Erin Lehtisaari Photo credit for some photos used within this issue of AMBA Matters ©shutterstock.com

SPRING 2014

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SPRING 2014

President’S Remarks

SPRING 2014 Gord Appel AMBA President

As I sit in my office writing this ‘President’s Report,’ I can see the effects of the quick thaw and subsequent re-freeze experienced around the province, and it reminds me that everything is always in flux. The market is almost as difficult to predict as the weather, but one thing is certain — we will adapt.

This year, in particular, I am looking forward to the annual Alberta Mortgage Brokers Association (AMBA) conference. For those of you who embrace change, the date has changed. This was done for a few reasons:

1.

2.

3.

Many of our larger brokerage members have their own conferences in September, and we believe that our conference is best when it’s well attended. This includes large brokerage members, small brokerage members and members from all over this wonderful province.

Many of our sponsors come to Alberta for the ‘Greatest Outdoor Show On Earth.’ With a keen eye on expense management, we wanted to assist them in finding cost efficiency by combining our event with their Stampede commitments.

to work for you in the market. We work closely with regulator the Real Estate Council of Alberta (RECA), the other associations, and government on details that are always taking place in the background and are a cornerstone of what AMBA does for you.

Whether or not you chose to be a member, AMBA protects your marketplace, your profession and your livelihood. Adding your voice to the chorus helps AMBA to be more influential and effective with government, more meaningful with RECA and ensures the topics are more relevant with the other associations. I encourage you all to invite new brokers to join AMBA and to get personally involved in this great association.

With board nominations around the corner, now is a great time to get involved!

The beginning of September is crazy for many of us with the resumption of school and the start of fall activities, never mind the fall renovation and refi market.

While we know that we can’t keep everyone happy all of the time, we know that this year’s conference is likely to be the BEST WE’VE EVER HAD, and look forward to welcoming you July 3 & 4 in Kananaskis. And because we know that some are resistant to change, we are giving everyone who registers early a HUGE discount on registration fees.

Did you know that AMBA is the oldest (maybe longesttenured sounds nicer!) association in the mortgage industry in Canada? That’s because, in Alberta, we don’t like to have our destiny chosen for us, we like to lead the way. AMBA continues

Join Us! Kananasskkis

July 3rd to 4th at the Delta Kananaskis Lodge Visit amba.ca to register!

See Page

20

for Details

SPRING 2014

5

MANAGER’S REPORT

SPRING 2014 Deborah Keshen AMBA General Manager

AMBA Reaching out This month, the Alberta Mortgage Brokers Association (AMBA) executive group reached out to connect with the new Minister of Service Alberta, the Hon. Doug Griffiths, and his Deputy Minister Annette Trimbee. It was clear that the Minister welcomes input from the industry and wants an open dialogue. Ms. Trimbee also understands that many brokers represent small businesses and that our need to ensure practical legislation that enables business — not inhibits it —is essential. The most important news from that meeting was that the government has decided not to privatize the land titles registry. This is extremely important news for all of the industry to ensure the excellent system in Alberta is retained. A crown corporation is a possibility, but that would still provide for data integrity, system improvements and control by the government: all the elements the industry coalition asked for. This is an important victory for the mortgage broker industry.

AMBA continues to reach out to members on other key issues.

In the next month or two, the association will host networking events in Medicine Hat and Lethbridge that will incorporate presentations on Canadian Anti-Spam Law (CASL) and a regulatory update. Invis has helped to fund these two events and both RECA and the Mortgage Protection Plan will provide the content for the information sessions. Ensuring our members stay abreast of changes is essential on the regulatory front and RECA, as a partner with AMBA, wants to provide ongoing updates. CASL comes into effect July 1, 2014 and comes with hefty fines of up to $10 million. The law affects e-mail, SMS (text) messages, and social media. The core provisions of the regulations require the tracking of explicit or implicit permission to contact the individual by e-mail and the date of that permission. There is a need to begin gathering permission now.

Once the law is in force, you will not be able to solicit permission by e-mail.

In addition, the AMBA president has been reaching out to brokers and to past presidents. A broker of record meeting was held recently in Edmonton and others are planned for Grande Prairie as well as Calgary. These meetings provide an opportunity for the association to keep members current on what we are working on but also provide a way for us to get feedback on the issues that matter to you at the grass-roots level. Started in 2013, these meetings will continue to expand

6

SPRING 2014

and provide for outreach around the province. As a result of the meetings in Edmonton, a new Edmonton committee has been formed to provide networking, education and a focal point for communications between the AMBA office and members in the community.

Reaching out to the past presidents was also started in 2013 and has continued as a way to ensure continuity for the AMBA board and to leverage the collective wisdom and experience of those volunteers who have been the most active. The inter-provincial discussions continue and task force groups have been formed to delve into specific areas in more depth. All those involved in the discussions are focused on making sure the talks are productive, honest and focused on the best long-term interests of the industry. The collaboration in Alberta amongst different groups that form the Real Estate Industry on the issue of the Land Titles Registry showed how effective working together can be in discussions with government. AMBA worked with IMBA, MBABC and MBAAC to modify language in the Material Risks document from the MBRCC, indicating once again the power of the collective voice. AMBA continues to support the inter-provincial discussions and believes that one voice for the industry will provide the strongest and most secure future for the industry.

Time To...

Giddy Up!

Kananaskis

Our annual conference will be held in Kananaskis on July 3rd and 4th. While the networking, fun and entertainment will be spectacular, AMBA remains committed to ensuring practical, valuable education is also provided. In addition to the CASL and RECA regulatory updates, there will be sessions on B21, foreclosures, effective marketing and lead generation. Ensuring takeaway content that you can implement immediately to build or protect your business remains the key focus for any AMBA event. Big names have their place and we all need to be motivated but AMBA events remain dedicated to helping your business thrive. Registration will be open early in May, so set aside these dates.

AMBA continues to reach out to you, our members, and encourages you to reach out to us. Encourage your colleagues to be a part of our community, contact us with ideas or concerns, join a committee or come out for an AMBA event. This is your association, be part of our path forward.

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SPRING 2014

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MEMBER ADVISORY

Changes to Licensing Reciprocity Policy: In Effect Now The Real Estate Council of Alberta (RECA) issued the following with respect to reciprocity policy in the province of Alberta: Alberta residents who take mortgage and real estate licensing education courses in other jurisdictions are not eligible for reciprocity in Alberta. These individuals decide to complete their pre-licensing education in other jurisdictions and first become licensed there in order to sidestep Alberta’s education requirements. Only applicants who are from and carry on business outside of Alberta, and have a licence or qualify for a licence in that jurisdiction, are eligible to apply for reciprocity in Alberta.

RECA is a strong supporter of the Labour Mobility Chapter 7 of the Agreement on Internal Trade (AIT) and the New West Partnership Trade Agreement (NWPTA). These agreements help remove any artificial barriers for workers to find jobs in other jurisdictions. They allow for the free movement of labour from one province to another without unjustified barriers from a provincial regulatory body. RECA is committed to the principles within Chapter 7, and recognizes the professional or occupation certification of industry professionals that hold a licence or qualify to hold a licence in other provinces and territories.

RECA has become aware of schemes where Alberta residents complete licensing education in jurisdictions where the education requirements are lower than in Alberta.

Typically, they do this because of time and/or money. Courses in some jurisdictions are less comprehensive than Alberta’s education program. RECA’s program takes eight weeks and the other jurisdictions one week or less. Quality competency-based education with proper instructional and adult learning design, and delivery methods, takes significant resources.

RECA’s education program may be more expensive than some low cost courses in other jurisdictions. “Province hopping” is the term we use to describe this practice. Province hopping is contrary to the spirit and intent of the AIT. These individuals are not seeking to move from another province to Alberta, but rather Alberta residents are circumventing Alberta requirements to obtain a RECA licence. These reciprocity requests do not facilitate labour mobility, which is the title and core purpose of Chapter 7 of the AIT. RECA is of the opinion this activity lowers consumer protection.

AMBA had brought this issue to the attention of the regulator due to concern that regulation meant to facilitate legitimate movement of workers across provinces could be misused.

The association supports this move by RECA to ensure the high professional standards of education and consumer protection in Alberta are upheld.

The April Regulator article can be found at: http://www.reca.ca/Flash-Regulator/April2013/Flash/Default.html

Yours Sincerely,  Gord Appel AMBA President

8

SPRING 2014

RECA Spring Update T he Real Estate Council of Alberta (RECA) recently met with the Alberta Mortgage Brokers Association (AMBA), Service Alberta, Alberta Treasury Board and Finance, and the Alberta Securities Commission (ASC) to continue the discussion of the regulation of syndicated mortgages. These stakeholders have come together in a cohesive manner to provide more clarity about the regulation of syndicated mortgages.

The February meeting was a chance to have a frank, open discussion about the current state of syndicated mortgage regulation. A syndicated mortgage falls under the definition of a “security” under the Securities Act. As such, ASC regulates the product – but RECA regulates the activities of mortgages brokers who are persons dealing in mortgage. “Mortgage” is a defined term under the Real Estate Act and captures syndicated mortgages.

AMBA wants clarity on the regulation of syndicated mortgages and is concerned with the cost to its mortgage broker members of complying with ASC requirements. AMBA also indicates it would like additional information from the ASC that will assist it in providing further clarity to its members.

RECA carried out extensive consultation on possible Real Estate Act amendments in early 2013. As part of that consultation, RECA explored the concept that the ASC would be the only regulator of syndicated mortgages. Feedback was overwhelming that mortgage broker industry members that deal in syndicated mortgages do not want to be dual regulated; they would like ASC to be the sole regulator. RECA has since made a request to Service Alberta that the Act not apply to syndicated mortgages; there is broad support for that recommendation and Service Alberta is moving forward on this basis.

All of the stakeholders want better clarity while waiting for Real Estate Act amendments to move forward. The group continues to explore and discuss alternative short-term measures that would provide additional clarity to mortgage brokers, and the ASC has committed to working with AMBA to provide educational tools such as FAQs, guidelines with practice examples and speaking engagements. RECA continues to dialogue with AMBA to provide clarity on syndicated mortgages.

RECA is seeking an amendment to the Ministerial Regulations with Service Alberta to remove the regulation of syndicated mortgages from RECA’s responsibility. A regulation amendment is faster than an Act amendment.

If a Ministerial Regulation amendment is not possible, RECA will implement new Rules for the activities of mortgage brokers who deal in syndicated mortgages. This is an interim step until the Act amendments take effect. RECA will also be implementing new Rules for mortgage brokers who deal with individual private lenders. Watch for further updates on these issues.

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SPRING 2014

9

WHEN CAN A MORTGAGE INVESTMENT CORPORATION DISTRIBUTE A DIVIDEND?

By A. Neil Hutton A Mortgage investment corporation (MIC) is a unique entity in the corporate world because the provisions of the Income Tax Act (Tax Act) compels a MIC to deduct from its income the amount of taxable dividends it pays to its shareholders. The Tax Act also permits a MIC to pay out substantially all of its net income and net realized capital gains every year as dividends. Thus, a MIC’s profit is flowed to its shareholders by way of dividends, where it is taxed in their hands.

meeting the Liquidity Test it will be left with an asset value less than the value of its stated capital. Thus, the Liquidity Test also serves to protect the erosion of shareholders' capital. A shareholder receiving a dividend under these circumstances will be left in a less favourable situation, from a tax perspective, than if a MIC’s Board had applied the tests and declined to issue a dividend. This is because the dividends are taxable but the return of capital upon redemption is not.

While this advantage is permissible under the Tax Act, MICs must still comply with the provisions of the Alberta Business Corporations Act (ABCA) prior to distributing a dividend. Section 43 of the ABCA outlines the statutory tests that a MIC’s Board of Directors must ensure are satisfied before a MIC can issue a dividend to its shareholders.

Furthermore, a MIC’s director(s) may be personally liable to the corporation’s creditors and shareholders for any amount of monies paid out where the MIC was unable to satisfy these statutory tests.

These statutory tests are comprised of two arms: (1) a ‘Solvency Test;’ and (2) a ‘Liquidity Test.’ The Solvency Test requires a board to establish that "there are no reasonable grounds for believing that the corporation is, or would after payment be, unable to meet its liabilities as they come due." If such reasonable grounds exist, the MIC is effectively insolvent and a dividend should not be issued. One of the primary purposes of the Solvency Test is to ensure that shareholders are not given preference over a MIC’s creditors. Debtor-creditor laws have established that shareholders’ rights to receive assets from a corporation are subordinate to rights of its creditors.

The Liquidity Test requires a board to establish that "there are no reasonable grounds for believing that the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.” If there is insufficient realizable value of the assets, the MIC is not liquid.

This is a more difficult and less obvious test in its application than the Solvency Test. The rationale behind the Liquidity Test again addresses creditor protection by requiring a Board to factor in a MIC’s liabilities, but it also requires a Board to consider a MIC’s stated capital.

With a finite value to its assets, and creditors having first priority to them, if a MIC distributes a dividend without

10 SPRING 2014

Given these critical requirements and consequences, where does a MIC board begin with its analysis of whether it can distribute a dividend? Both the Solvency and Liquidity Test contain the phrase "no reasonable grounds". This wording provides a MIC Board with discretion on what is ‘reasonable’ when applying the tests.

The board must, however, act in the best interest of the MIC’s stakeholders (i.e. creditors and shareholders). A consistent stepby-step approach is required in application of the tests. Although not intended as legal advice, the following offers guidance on the application of the Solvency Test and Liquidity Test: The Solvency Test is generally straightforward. If the dividend payment will immediately result in a MIC being 1 unable to pay its other liabilities as they come due, the MIC is insolvent and a dividend should not be distributed.

The courts have held that the test is to be applied at the time when the dividend is both declared and paid. Thus, a dividend should not be distributed unless it can meet these tests at the time of payment. The courts have also established that this analysis must be based on the current financial position of a MIC and a board should not rely on past financial statements.

If the Solvency Test is met, a board must then apply the Liquidity Test. This test must also be based on the MIC’s current financial information. The Liquidity Test has more elements to consider and requires an additional layer of analysis.

2

The Liquidity Test requires a board to establish the "realizable value of the corporation's assets." There is no statutory definition for this phrase but the Courts have adopted the position that ‘realizable value’ means the fair market value of a corporation's assets based on either liquidation or a going-concern basis.

A board should first establish whether a MIC is a going-concern or whether it is in a liquidation situation. Simply put, a "goingconcern" is a business that carries on operations without the threat of liquidation for the foreseeable future, usually a period of at least 12 months. If a MIC cannot declare itself to be a goingconcern then liquidation is reasonably foreseeable.

To assist with this determination, the courts have confirmed that the going-concern valuation is appropriate when one or more of the following external circumstances are present: • the corporation is growing; • there are increased royalty revenues; • the corporation has a definite business plan; • purchasers continue to invest in the corporation; • application of the liquidation approach essentially eliminates the corporation’s value; • there is no reasonable possibility of liquidation; or • there is no evidence that the corporation has sold assets with the intent of liquidating.

If there are ‘storm clouds on the horizon’ which would lead the board to believe that liquidation was a reasonable possibility, then a MIC’s assets cannot be valued on a going-concern basis and should instead be valued on a distress basis. This result will prevent most dividends distributions.

If a going-concern valuation is reasonable, the courts have supported the traditional approach to establishing fair market value in the open marketplace. In other words, “what price a willing and knowledgeable vendor and purchaser, neither acting under compulsion, would agree to.” The courts have confirmed that the assets should be valued on a goingconcern basis if that would maximize the price. “Distress liquidation values would only come into play if the storm clouds were on the horizon.”

3

While the specific method of establishing fair market value is left to the discretion 4 of a Board and its advisors, guidance can be taken from the courts on using a going-concern approach that employs a reasonable method to maximize the value of the assets. For a MIC, it may be possible to maximize the value of the mortgage contracts based on what willing third party is prepared to pay to assume the contract, rather than valuing the mortgage contract based on its book value (i.e. the outstanding principal).

The Liquidity Test is satisfied if the realizable value of a MIC’s assets exceeds the aggregate of the liabilities and the value of the MIC’s stated capital, and, if the Solvency Test has also been satisfied, a dividend can be distributed.

5

It is imperative for a board to recognize that if a dividend is distributed when one or both of these tests cannot be met, the courts will find there to be a misrepresentation by the directors which may give rise to legal action against such directors. If a director voted for, or consented to, the payment of dividends when a MIC was unable to satisfy these statutory tests, that director may be liable for the amount paid out and the directors are exposed to personal civil and criminal risk.

It is also important to note that a board is obligated to reach a reasonable assessment of the financial condition of the MIC at the time when the dividend is paid. Once a reasonable assessment is made, a Board will have discharged its duty and as long as any future losses of a MIC were not anticipated at the time when the dividends were paid neither the directors nor the shareholders are liable to repay the dividend to the corporation. Boards are not responsible for forecasting future losses of a MIC, unless there are reasonable grounds for anticipating that such losses will occur.

It is strongly recommended that a board exercise proper corporate governance and take care to document its analysis to demonstrate and support the methods used and their reasonableness. This can help protect directors from personal liability by establishing that proper due diligence was conducted and that appropriate and reasonable steps were taken by a board in arriving at its results on the statutory tests.

Neil is a partner in the Corporate & Commercial group of McLeod Law. He has over 20 years of experience providing comprehensive business-focused legal advice. He strives to provide his clients with responsive advice with an emphasis on “getting the deal done”. Working with entrepreneurs, owner-operators and midsized enterprises, Neil provides legal advice on mergers and acquisitions, initial public offerings, exempt market financings, equity financing, debt financings, stock exchange listings, corporate governance, regulatory compliance, re-organizations, shareholder agreements and contractual drafting. Neil also has extensive experience structuring and setting up real estatebased joint ventures, limited partnerships and management agreements. Neil has been a member of McLeod Law’s Executive Committee since 2007.

For further information please email anhutton@mcleod-law.com.

Neil would like to acknowledge Brett Turnquist and Matthew Burgoyne, both associate lawyers at McLeod Law LLP, for their research, contributions and assistance with this article.

The information provided in this article is not meant as legal opinion. Viewers are cautioned not to act on information provided in this article without seeking specific legal advice with respect to their unique circumstances.

SPRING 2014

11

Alberta Introduces New Home Warranty Legislation Dale Koeller Calvert Home Mortgage Investment Corp.

Kevin Weeks Weeks Law

Have you heard? As of February 1, 2014, all new homes

Who’s Covered?

Single-Family Homes

built in Alberta require a new home buyer protection warranty policy. The Alberta Government’s New Home Buyer Protection Act encourages higher quality standards to protect buyers.

Duplexes

Under the new legislation, all home builders—with the limited exception of owner-builders—have to buy a warranty policy, estimated at $1,700 to $2,000 on an average home, before being eligible for a building permit. While home builders that had building permits issued to them prior to February 1, 2014, are not required to register and obtain a warranty policy for the buyer of the new home, one can expect buyers to insist as a condition of purchase that the home be registered and a warranty policy be issued to them. Warranties must be purchased for single-family homes, condos, manufactured, modular and mobile homes, as well as recreational properties such as cottages. Warranties are currently available from one of five registered private firms which are listed below.

Condominiums

Builders also have to register each property online for $95, creating a public record of the status of the warranty for future buyers. The registry will be managed by the government’s New Home Buyer Protection Office. The standardized warranty terms include protection for a minimum of one year on labour and materials, two years for plumbing and electrical systems and five years for building envelope protection against water damage. While most home builders already provide those basic warranties, the major change is a doubling of coverage term on major structural parts from five to 10 years.

Multi-Family Homes

Manufactured Homes Recreational Properties

Coverage includes: first year

Issues with the way a home was built or the materials it was built with, such as flooring and trim.

two years

Defects in labour and materials related to heating, plumbing and electrical systems.

five years

Building envelope means the exterior shell of the home, including the roof and exterior walls.

Covers key structural components of your home including its frame and foundation.

ten years

Key structural components of your home, including its frame and foundation.

There are five certified warranty providers in Alberta that builders may partner with for coverage: Aviva Insurance Company of Canada represented by National Home Warranty Group Inc. www.nationalhomewarranty.com Blanket Home Warranty Ltd. www.blankethomewarranty.ca Progressive Home Warranty Solutions Inc. www.progwar.com/progressivewarranty The Alberta New Home Warranty Program www.anhwp.com Travelers Insurance Company of Canada www.travelerscanada.ca/new-home-warranty/index.aspx

12

SPRING 2014

What the Homeowner Needs To Know Before They Close Homeowners need to do their research. They need to get to know their potential builder’s record, including years in business and references. They should also familiarize themselves with the warranty provider, key warranty dates, and steps to take if they ever need to make a claim.

Once the new home is built, they’re responsible for basic maintenance and upkeep, such as cleaning out eaves troughs and changing furnace filters. They’re also responsible for maintaining appropriate grading with any new landscaping work.

Buyers of homes which are less than 10 years old must have warranty which transfers to the new owners. Ensure you check who the builder and home warranty provider are, and ask if the former owner has had any work done which was covered by the home warranty provider. The public registry can be found at http://homewarranty.alberta.ca/public-registry/

Builder & Warranty Provider Responsibility Builders are responsible for partnering with a registered warranty provider, becoming an authorized user of the online home registry and entering all new construction projects into the registry. They are then a homeowner’s primary point of contact during the construction of their home and are responsible for making sure that building permits are in place and that the house is built to the standards set out in the Alberta Building Code.

Warranty Providers are responsible for creating policies and responding to claims.

The Government’s Responsibility Alberta’s New Home Buyer Protection Act mandates and regulates new home warranties in the province. The Government of Alberta is responsible for compliance of the legislation.

Alberta Municipal Affairs will also provide tools to municipalities to ensure warranty coverage is in place before new construction permits are issued. The government will enforce penalties against builders, warranty providers and others not complying with the Act — up to $100,000 for first offences and up to $500,000 for subsequent offences.

If you have clients with more questions than you can answers, they can contact Municipal Affairs toll-free at 1-866-421-6929.

Are ‘self-builds’ exempt from requiring home warranty?

If a property is built by a builder intending to move in upon completion, then they can be exempt from requiring home warranty, but they must apply for such exemption. If they sell the property prior to the end of the first 10 years, they will need

to provide the new buyer with the balance of the home warranty that would have been in place from the completion date.

If you are an ownerbuilder constructing your own home to live in, you have two options. You can obtain the required home warranty coverage for your home or you can apply for an ownerbuilder exemption authorization, which will allow you to build your home without a warranty policy being required. If you transfer your house within 10 years, you will need to obtain and provide to the transferee a warranty policy for the balance of the 10 years containing at least the required minimum warranty coverage.

Failure to comply is serious business!

Contravention of the Act by any person or company can result in a maximum fine of $100,000 for the first offence and $500,000 for subsequent offences. There are additional administrative penalties and fines between $250 and $10,000 or up to $1,000.00 per day for various infractions of the Act to a maximum of $100,000. One should also note that liability of the acts of a corporation extends personally to its directors, officers and every other person who authorized, permitted or acquiesced in or participated in the commission of the offence, and they are all guilty of the offence and liable to the fine provided for the offence, whether or not the corporation has been prosecuted for or convicted of the offence.

What does this mean for mortgage brokers and how they approach a new build deal?

Mortgage brokers should expect that lenders will be checking to ensure that all new builds have been registered and a new home warranty policy issued on a go-forward basis. Check the registry on new builds to ensure you know in advance the status of this issue.

How can brokers help clients understand what research they need to do to protect themselves? homewarranty.alberta.ca.

The content of this article is intended to provide a general guide to the subject matter only. Specialist advice should be sought about your specific circumstances.

SPRING 2014

13

The ‘10 Questions’

of Alternate Lending Grant Plunkie Provided by Paradigm Mortgage An alternative lender shares their insights to help you ask the right questions and package your ‘B’ deals for faster and easier approvals!

So many times in my role as senior underwriter for an alternate lender, I get off the phone or finish reading an email from a broker presenting a new deal and think: “That was a great presentation … for a 'bank' deal.” The only problem is alternative lenders are not banks.

Presenting a deal incorrectly wastes a lot of time, especially yours. I was a broker for 12 years, so I know how much time it takes to put the package together properly. If the underwriter doesn't have the correct information to make a prudent lending decision, they’re frustrated and you’re no further ahead. Trust me on this: although it takes a bit longer to put together a very good application, it saves you countless hours compared to following up on a mediocre application. It also gets your deals to the top of the underwriter’s pile.

The ‘10 Questions’ that follow will give clarity as to what alternative and private lenders look for when underwriting an application so you can make your presentation to the lender more efficient and effective. The better you know your lenders and their criteria, the better you can tailor your application to give you the highest possible chance of getting your deal approved and funded.

As an ‘equity lender’, the priority for us is, obviously, equity. That doesn't mean that income and credit are unimportant. Rather, we look at them differently than an 'A' lender would. A lot of brokers start out by telling me what the borrower’s Line 150 or T-4 income is. Of course I'm curious, but most private lenders don't require those documents, nor do we use GDS/TDS ratios. I would rather hear the ‘story’ of the file: for example, that the borrower has employment, what they do for a living and how it is that they have the ability to make their payments.

The same goes for credit. Again, I'm curious about how the borrower handles their obligations, but we don't have minimum beacon requirements. For us, credit history is an indication of default risk and is used more for pricing or LTV decisions rather than for 'approval' decisions.

If you can answer the following ‘10 Questions’ and gain an understanding of how your lender underwrites using the answers to these 10 questions, your deals stand a far better chance of being approved in less time and with fewer follow-up questions.

This is a win for everybody!

14 SPRING 2014

1. Where is the property located?

Is it urban or rural? Each lender has specific areas where they like to lend. Some only lend in urban areas while others like rural areas. Sometimes, the urban area must meet a minimum population threshold. Lenders tend to focus on areas they are familiar with, so know your lender’s comfort zone.

2. What type of property is it?

Is it residential, commercial, land or mixed-use property? Is it owner occupied or a rental? Many lenders only do residential loans and some only like commercial. Again, lenders focus on what they know, so choose the right lender.

3. What type of transaction is this?

Is this a purchase, refinance, ETO, construction or development Loan? Lenders have a different view of borrowers if they are purchasing and putting hard-earned dollars into the downpayment vs. borrowers that use their home as an ATM. Borrowers using cash they worked for as a downpayment are more likely to get an exception to a lender's policy than someone whose home value has ridden the market up and now they're using their equity to pay off their overused credit cards.

4. What is the use of funds?

This ties in with the last question but digs a bit deeper. If the loan is a debt consolidation, does it pay out all debts or is it a BandAid that may only delay the inevitable? No one really wants to be ‘the last lender,’ ultimately sending it to foreclosure because the loan didn't really fix the issue. Don’t forget to include your fee, the lender's fee and costs such as legal and appraisal fees. I’ve seen a lot of deals die because borrowers were short of funds once costs were added in.

5. What is the value of the property?

We need to have a starting point when looking at the value of the property, so what is it? An old appraisal, the purchase price, a Realtor’s opinion or the property tax assessment is a good place to start for a ‘working number.’ It won't be bang-on, but it’s better than an estimate by the borrower or nothing at all. Ultimately, an appraisal is usually required. Alternative lenders typically have a short list of ‘approved appraisers’ so check with your lender to see who is on their list before you order the appraisal. There is a lot of crossover between various private lenders’ lists, but they aren’t identical.

6. What is the amount of the loan and LTV requested?

Combined with the valuation of the property, the requested loan amount gives the expected LTV. Although a lender indicates that 75% is their maximum LTV, if they see the property as not very marketable, they may scale back the LTV for that deal.

Factors that affect marketability are: location, condition, age and use. These factors will affect the price and time to sell a property if the lender ends up with the property. Different lenders have varying risk tolerances so, again, get to know your lenders. Even pricing can be tied to LTV. Some lenders will give great rates at 50% LTV but not even look at a deal at 80% LTV, so if you pick the right lender, everyone wins.

meet the borrower personally, so we rely on your ability to tell us honestly and accurately about the deal, both good and bad points.

If you can answer these ‘10 Questions,’ you will find your applications give the underwriter the facts they need to understand and fund your deal. These questions are a valuable starting point. With experience, you will learn how to dig deeper into a file to find important and necessary information to get your alternative applications funded. Don’t be afraid to ask these and even more questions when you’re meeting with a potential borrower. They’ll realize that you are being thorough and working hard on their behalf. Better questions lead to better information, which leads to more funded deals!

7. What is the financial strength of the borrower?

What do they do for work? What is their credit like? Do they have assets? If it is a construction loan, do they have the necessary experience and a record of success? Whether it is a $25,000 loan or a $1,000,000 loan I am underwriting, I want to know the borrower I am dealing with and that there’s more than just a hope that they can make their payments. Either way, mortgages represent significant sums of money and we have investors that want to know we are lending their money wisely.

8. What are the twists to the deal?

We all know there is at least one, which is why your favourite financial institution didn’t fund this and now you're calling me!

What got them into a situation requiring alternative financing and how will they get out of that situation? Just because they need money from an alternative lender doesn’t mean they’re bad people; they just ran into some challenges that made them ‘un-bankable’ for a while. We've been able to work through some seemingly impossible deals because the broker was forthright about the twists of the deal. This way, we knew what we were getting into when we issued our offer to loan and were able to find a solution that benefitted the borrower but still protected our investors.

Grant Plunkie has been a licensed mortgage broker in B.C. since 1998. For 12 years, he brokered residential 'A' and 'B' mortgages and small commercial loans. In 2010, Grant joined Paradigm Mortgage, a Western Canadian MIC, as Paradigm’s business development manager and senior underwriter. As the former owner of a small brokerage, he enjoyed training numerous subbrokers over the years. In his role at Paradigm, Grant continues to be a resource and trainer to brokers throughout Western Canada.

If you would like Grant to host a training session at your office or via webinar, he can be reached at 1-800-979-2911.

Exclusive group rates More ways to save on your home and auto insurance

9. How will the loan be repaid and when?

Near and dear to an alternative lender’s heart: ‘The Exit Strategy.’

Private lenders like their funds to be loaned out, but also like to see them come back in. We generally favour shorter-term loans in the six month to two year range rather than longer terms such as five to 10 years. The borrower usually has a specific issue that brought them to us, such as lack of verifiable income or bruised credit. One to two years should allow them to get back on track and hopefully you will work with the borrower to get them to an 'A' lender as soon as possible. That way, you have another loan to place for that borrower! Good for them, and good for you.

10. What are the intangibles?

Quite often, these can save the day and the deal. Do they have another property to use as collateral? Perhaps an inheritance or an insurance settlement that can be verified? New work or a new spouse to add to household income? This is where you have to go deeper in understanding your borrower’s total situation so that you can tell us why this is a deal we should fund. We don't

The right fit.

Start saving thepersonal.com/amba | 1-888-476-8737 Discounts and savings are subject to eligibility conditions. The Personal refers to The Personal General Insurance Inc. in Quebec and The Personal Insurance Company in all other provinces and territories.

Auto insurance is not available in Manitoba, Saskatchewan or British Columbia due to government-run plans. Loyalty Savings only available in Ontario, Alberta, Nova Scotia, New Brunswick and Prince Edward Island. Winter Tire Discount not available in Quebec.

SPRING 2014

15

Share this helpful article with your clients

a PDF OF THIS ARTICLE IS AVAILABLE IN THE MEMBER ZONE UNDER MEMBER RESOURCES

How Credit Card Debt Affects Mortgages Article Sponsored by Jody Robbins, Special to AMBA Matters

There is good debt and then there is bad debt. Trouble is, many Canadians don’t understand the difference. If you buy whatever you want, you may have sell what you need. Or as Warren Buffet put it, “If you can’t pay for it, don’t buy it, and first get yourself in the position to pay for anything.”

Consumer debt (excluding mortgages) is set to hit an average of $28,853, according to TransUnion’s latest forecast. Debt levels stand at 35% in Western Canada compared to 20% out East. With debt loads consistently going north (Canadian debt-to-income ratios sit at 163% compared to 104% a decade ago), homebuyers are putting themselves in precarious situations.

Many adults swipe their Visa without fully grasping the consequences of their spending habits. According to a survey by Harris/Decima for Hoyes, Michalos & Associates, almost half of Canadians who have credit card debt say they always or often carry an outstanding balance. What many don’t realize is how credit card debt affects ones credit rating and the ability to borrow on a mortgage.

“Small problems created by credit cards if not handled well can cause you to pay more on your mortgage,” cautions Dale Koeller, vice-president and senior mortgage underwriter at Calvert Home Mortgage Investment Corporation.

Here’s an in-depth look at how credit card debt affects mortgages.

16 SPRING 2014

The Link Between Credit Scores and Mortgage Rates While some amount of credit card usage is helpful to demonstrate to the credit bureaus that you can responsibly use revolving credit, it needs to be managed properly. That means more than paying off your balance in full at the end of each month.

“Protecting your credit score is a fine balance. You should never have more than 30% of your annual income for your credit card limit, or your debt service ratio will be greatly affected,” warns Tyler Lorenz, of Canadian Credit Tips, a consultancy that assists mortgage brokers and their clients correct credit reports.

Like all debt, credit cards affect one’s credit rating.

“If you’re a good user of credit, it will positively affect you. If you’re a poor user, it could cost you a few percentage points in your mortgage – which can relate to tens of thousands of dollars in your interest rate,” says Koeller.

A person carrying $3,000 in credit card debt, who regularly miss making monthly payments, get punished on their credit score. This can result in interest rate differences of 2% or more. That $3,000 problem can affect a $200,000 mortgage by $217 in interest each month, which adds up to $65,000 on a 25-year amortization.

Example: difference between a 3% mortgage and a 5% mortgage with a 25-year amortization.

“Paying five percent interest from the bank is better than 15 percent from a credit card company,” he notes.

Credit counselling is also an option, but consumers need to ask lots of questions and ensure they get the correct advice, as many agencies get paid to help clients restructure their debt. While this benefits many, some are put into programs they don’t need.

The Real Cost of Credit Card Debt If you put a $1,000 plasma TV on your credit card, which has an 18% interest rate and only make the minimum payment of 2%, it would take almost 20 years to pay it off. You would’ve spent $1,931.11 in interest payments on top of the television cost. Why pay twice the price for a TV? Some folks think they have perfect credit and can’t figure out why their credit score is low. That’s because one third of credit scores are based on balances on credit cards. It’s not uncommon for credit consultants like Lorenz to see multiple cards carrying low balances, which in turn produces a lower a score.

“If you can’t keep your balance below 75 percent of your limit, it will pull your credit score down, even if you make payments on time. Keep balances below 50 percent and that will help build your score up,” recommends Lorenz.

What to Do When You Run into Trouble Every situation is different and requires a unique approach, but when dealing with debt, it’s wise to gather all the facts before deciding which course of action to take. Begin by calculating your net worth by totalling all assets minus liabilities. From there, cash flow can determine if you’re able to dig out on your own.

“Some folks may be sinking, but if spending habits are changed and overhead cut, it’s possible they can climb out. If they can’t, a good mortgage professional can come up with alternatives, such as consolidation,” says Eric Putnam, managing director of Debt Coach Canada – The Health Club For Your Wallet.TM Consolidating credit card debt into a mortgage or line of credit changes the cost of the debt and the repayment terms in several ways. When the interest rate is reduced and the debt is amortized, the payment amount decreases on the same outstanding balance.

“It can help stabilize your cash flow, reduce monthly expenses and decrease the total life and cost of the debt,” says Koeller.

By carrying less consumer debt (when its all put on a mortgage), folks can often improve their credit score, especially if they shift to more responsible use of credit and stay lower than the maximum limit.

“If you’re consolidating and don’t change your habits, you’ll just run your credit cards up again,” warns Putnam.

Lorenz recommends taking out an RSP loan, then taking the income tax refund to pay off as much of your credit card debt as possible.

How Mortgage Brokers Can Help Forget thinking credit card debt is strictly a credit counsellor’s role. The mortgage market has changed significantly in Canada and brokers need to think differently to remain competitive, advises Putnam.

“This is when the value of the broker comes into play — by putting a strategy in place that ties into a financial plan. It’s not just about the mortgage, but how credit affects other aspects of their client’s life.”

When folks aren’t offered advertised rates, they’re often frustrated. Mortgage brokers can help clients understand why they’re getting the rate they are now and how they can improve it in the future, by pointing them towards additional resources.

Brokers are in a unique position to demystify the process to potential clients and yet, not all are taking advantage of this opportunity. “A lot of mortgage professionals aren’t giving their clients the tools they need to improve their credit. It’s an easy and important value add, that will help them retain these clients down the road,” notes William Charlton, Senior Mortgage Underwriter, Calvert Home Mortgage Investment Corporation.

5 Ways to Use Credit Cards to Improve Credit Score 1. Pay off the credit card with the highest interest rate first, even if it carries a lower balance than your other cards.

2. Close down unnecessary credit accounts, but be sure to keep your oldest card. The more credit history you have, the higher your score.

3. Use less than 30% of your credit card limit. The higher credit lines are to the limit, (even if you pay them off in full each month), the harder it is on your score.

4. Settle any accounts in dispute. Even if you disagree with a bill, the amount owing will become much greater once a collection agency gets involved. A $500 dispute can become a $5,000 penalty if you can’t access the preferred bank rate for a mortgage.

5. Banks aren’t required to report your credit card use to the credit bureau if they’re not used monthly.

Use your credit card every three weeks, but do so judiciously.

SPRING 2014

17

How Many Credit Cards Should You Have?

What to Advise Clients There are several options mortgage brokers can present to clients with credit card debt. First is having them negotiate interest rate terms with their credit card company.

“When someone asks for better rates, the credit card company knows they’re shopping around and wants to prevent their customer from seeking an alternative card. That’s why asking for and receiving a lower interest rate is rarely a problem,” says Lorenz.

He also recommends calling credit card companies every few years to negotiate a lower interest rate, even if you pay your balance off in full every month.

Next is looking at alternative financing and consolidation. Private mortgage funds are often an advantageous resource. In some cases the client may need an agency to negotiate on their behalf or be enrolled in a debt management or settlement program. It’s a good assumption they won’t know where to begin, so providing contacts and resources is key. By walking clients through this murky process, you not only provide a valuable service, but differentiate yourself from other brokers and institutions.

Alberta’s Private Mortgage Lender

On this the experts agree, most people shouldn’t have more than two (including store cards). “If you have too many, it has a weighting on the algorithm for calculating your credit score,” says Lorenz.

Tip

If credit cards are your weakness, try allocating one piece of your budget to a specific card. For example, use MasterCard for gas and Visa for groceries. If used for only that one activity and paid back in full every month, this will help your credit in the best possible way.

Read Canadian Credit Improvement: Your Blueprint to Better Credit, available online at www.canadiancredittips.ca Download Understanding Credit Reports and Scores, a free booklet from the federal government that makes for an excellent client resource.

Available at http://www.fcac-acfc.gc.ca/Eng/ resources/publications/creditLoans/Pages/ Understa-Comprend.aspx

WE PROVIDE NICHE LENDING FOR: » FLIPS/REHABS » 2ND MORTGAGES » QUICK CLOSINGS

» CONSTRUCTION » SHORT TERM NEEDS » DEBT CONSOLIDATION

Call us today for more infomation

888.752.4642

Dale Koeller, William Charlton & Dean Koeller

info@chmic.ca

18 SPRING 2014

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Giddy Up! Conference Preview

Kananaskis

July 3-4, 2014 at the Delta Kananaskis Lodge To register go to amba.ca.

Schedule of Events - Day One

Thursday, July 3rd

8:00 am - 4:30 pm

Group arranged activities in the mountains

11:00 am - 5:00 pm

Conference Registration (Main Lobby)

4:00 - 6:00 pm

Hospitality Suite Gatherings (by invitation)

6:00 - 11:00 pm

Welcome Reception and Dinner – Boundary Ranch Please Note: Boundary Ranch will only accept cash at the bar. There is no ATM onsite.

6:15 pm

First Shuttle Bus Leaves Delta for Boundary Ranch

6:00 - 7:15 pm

Bus shuttles from Delta to Boundary Ranch

7:00 - 7:20 pm

Band opens event

7:20 pm

AMBA Welcome

7:30 - 8:30 pm

Dinner (BBQ Buffet)

8:30 - 9:00 pm

Band & Bonfire/Smores

9:00 - 9:45 pm

Gunfight Presentation

9:45 - 10:45 pm

Band

9:45 - 11:30 pm

Shuttles back to Delta

11:30 pm

Final bus departs Boundary Ranch

Boundary Ranch

Please Note: Boundary Ranch will only accept cash at the bar. There is no ATM onsite.

Long before Kananaskis Country was recognized as a destination, the Guinn family was riding and guiding the same trails used today. It was in the 1930′s that Guinn Outfitters Ltd. began a rich legacy of sharing special wondrous places with guests from around the world.

Over 70 years of experience in mountain horseback riding ensures your valuable holiday time will not only be memorable but also a safe experience to treasure.

Delta Kananaskis Lodge Nestled in the majestic Canadian Rockies at an elevation of 1,522 meters (5,000ft), the Delta Lodge at Kananaskis offers a true combination of world-class, year round activities with distinguished comfort and hospitality. Adjacent to Nakiska Ski hill and 36 holes of premium golf at Kananaskis Country Golf Course, the Resort is home to 412 guestrooms and suites, multiple dining and entertaining options, a full conference facility, and is home to the Summit Spa and Fitness Centre.

20 SPRING 2014

Schedule of Events - Day 2 7:30 - 11:30 am

Registration

8:00 - 9:00 am

Breakfast & Trade Show

9:00 - 9:15 am

Welcome and Conference Opening

9:15 - 10:15 am

Breakout Sessions - Five breakout session options:

Friday, July 4th

• Don’t Hit Send Just Yet – CASL Privacy Rules & Regulatory Update Charles Stevenson, Director of Professional Standards RECA & Miro Bracic, Director INContact • Roadmap For Foreclosures — Denise Hendrix, Hendrix Law • Building Tomorrows Business Today — Mike Cameron, Axiom • “B” Prepared —B-21 & B-20—Les Shore, Optimum Mortgage • Growing Your Business In A Changing Market Fred Sarkari, professional speaker and consultant 10:15 - 10:30 am

Nutrition Break

10:30 – 11:30 am

Keynote: Drew Dudley, Professional Speaker

11:00 am - 12:45 pm

Lunch and Industry Awards

12:45 - 1:45 pm

Breakout Sessions - Five breakout session options: • Don’t Hit Send Just Yet – CASL Privacy Rules & Regulatory Update Charles Stevenson, Director of Professional Standards RECA & Miro Bracic, Director INContact • Roadmap For Foreclosures — Denise Hendrix, Hendrix Law • Building Tomorrows Business Today — Mike Cameron, Axiom • “B” Prepared —B-21 & B-20—Les Shore, Optimum Mortgage • Growing Your Business In A Changing Market Fred Sarkari, professional speaker and consultant

1:45 - 2:45 pm

Breakout Sessions - Five breakout session options: • Don’t Hit Send Just Yet – CASL Privacy Rules & Regulatory Update Charles Stevenson, Director of Professional Standards RECA & Miro Bracic, Director INContact • Roadmap For Foreclosures — Denise Hendrix, Hendrix Law • Building Tomorrows Business Today — Mike Cameron, Axiom • “B” Prepared —B-21 & B-20—Les Shore, Optimum Mortgage • Growing Your Business In A Changing Market Fred Sarkari, professional speaker and consultant

2:45 – 3:15 pm

Afternoon Speaker: Branding —Not Just For Cattle, Horse’s Asses And Sports Columnists! — Eric Francis, Calgary Sun Sports Columnist, Calgary Morning Show Host (JACK FM) and author

3:15 – 5:15 pm

Trade Show—Midway themed fun & $5K Broker Break The Safe Giveaway, sponsored by Axiom

7:00 pm

Sponsor Appreciation Dinner (Invitation Only) Private Engagement with Fred Sarkari

SPRING 2014

21

Kananaskis

Speaker Bios Drew Dudley — Professional Speaker

Drew Dudley is a professional speaker, writer, educator and entrepreneur.

He is the former Director of one of Canada's largest university leadership development programs, and has helped raise over $5 million as the Founder or Chair of several organizations dedicated to supporting scholarship funds, social entrepreneurship, and charitable initiatives. This includes a record-breaking term as the National Chair of Canada’s largest student fundraiser—Shinerama: Students Fighting Cystic Fibrosis – which mobilizes 35,000 students at 60 colleges and universities to raise a million dollars annually to support the work of Cystic Fibrosis Canada.

Now the Founder and Chief Catalyst of Nuance Leadership Inc., he works with dozens of corporations, universities, colleges, and charities around the world to empower people to increase their leadership capacity. He has shared the stage with some of the world's most dynamic speakers, high-profile musicians and athletes, and even with a winner of the Nobel Peace Prize.

Early last year he appeared on the main page of TED.com, where his talk has been viewed almost a million times.

He has been featured on the Huffington Post and on Forbes.com, hosted one of the world’s largest TEDx Conferences, will soon be releasing his first book, and has what his friends refer to as an embarrassingly large stuffed penguin collection for a grown man.

Eric Francis — Calgary Sun Sports Columnist, Calgary Morning Show Host (JACK FM) and author Eric Francis has been a Calgary Sun sports columnist since 1994, covering everything from the Flames and Stampeders to the British Open, Super Bowl and Olympics.

Eric is also a best-selling author and local morning show host on JACK FM. He also spent two years as an analyst on Hockey

Night in Canada before moving to Sportsnet, where he is an analyst for all Calgary Flames home games. Francis is extremely active in the community, emceeing various charity events including his beloved Pizza Pigout which raised $83,000 for KidSport this year. Eric and his wife Sarah have two young children, Kelly and Cole.

Fred Sarkari—Professional Speaker and Consultant Fred has spoken for employees including: Microsoft, Wells Fargo, BMW, Scotia Bank, Coca-Cola, Home Depot, CIBC, Royal Bank, Genworth Financial, Hilton Hotels, and many more.

With a background in Psychotherapy, Fred has lived and researched Human Behavior Patterns with a focus around emotional engagement in personal and

FIND OUT IF YOU GOT THE CODE TO WIN THE

22 SPRING 2014

professional relationships. He has been dubbed by the media as a human behavior expert.

He is also a best selling author of: How The Top 5% Think Principles of great leaders Courage to be Naked 101 Exercises That Will Change Your Life and Business

sponsored by

Exhibitor Lineup

Kananaskis

Equitable Bank

Home Trust

Capital Direct

Axiom

Mortgage Alliance Mortgages Are Marvellous

Lanyard Group

Caplink Financial

LMS ProLink

Cedar Peaks Mortgage

The Real Estate Council of Alberta

Optimum Mortgage

WestPoint Capital

CMLS

D+H

FTC

Merix Financial

B2B Bank

Home Equity Bank

Romspen

Canada Guaranty Mortgage Insurance Company

Benesure Canada

Antrim

TD Broker Services

VRW Capital Corp.

Canadiana Financial

Calvert Home Mortgage Investment Corporation

The Personal Insurance Company

First National

Stewart Title Guaranty

If you’re interested in sponsorship for the conference, or to purchase a booth, please contact Renee Price at 403.685.9652 ext. 101.

Accommodation Information

Delta Kananaskis Lodge Conference Hotel

Call the Delta Kananaskis Lodge at 1.866.432.4322 to book your stay. Be sure to tell the booking agent you’re with the AMBA group, July 3-4 to receive the group booking rate.

Delta Room —$189

Deluxe Room —$229

Signature Club —$239

Suites—$239

In order to receive the special room rate, you must secure your room

by May 31, 2014.

Conference Package Details Early Bird Price AMBA Members Only

*Hotel is filling up fast. Reserve your room to ensure you get your choice.

price valid until May 31st

Overflow Hotel — Stoney Nakoda Resort & Casino

Non-Member Package

Call the resort at 1-888-862-5632 to book your stay. Be sure to give the booking agent the code: AMBA. We will be running a shuttle Thursday evening to the Delta and back.

There will also be a shuttle Friday morning.

Campground Bookings Available We’ve secured a few RV spaces at Sundance Lodges – Kananaskis.

The campground is located a short distance up the road from the Delta Kananaskis Lodge.

These spaces must be booked by May 31, 2014.

279

$

$

379

June 1-July 3, 2014 After Early Bird Deadline

Member and $ Non-Member Package 379

If you’re interested in a space, please contact Amanda Roy at 403.685.9652 ext. 102.

SPRING 2014

23

Bonspiel Champions (Gold)

(From left) Mark Pullin, Cedar Peaks Mortgage — Sponsor of the winner award,Tanya Appel, Gord Appel, Tom Daumler and Aaron Rainville

Hurry Hard!

Turkey Shoot Winner Jesse Bobrowski

24 SPRING 2014

50/50 draw Thank you for supporting our annual 50/50 draw for charity. This year’s raffle raised $1,060 in support of KidSport Calgary. Thanks you Mike Wolfe of Equitable Bank for donating back your 50/50 winnings!

B-Side champs (Silver)

(From left) Paula Hutton, Capital Direct — Sponsor of the B award, Dean Koeller, Heather Wytnick and Russell Mendonca.

C-side champs (Bronze)

Jesse Bobrowski, Steve Haggard, Marilyn Bodnar and Mark Pullin.

D-side winners (Tim’s cards) Kyle Hansen, Tim Hurlbut and John Reid

! e n o y r e v E s n o ti la tu a r g n o C A big Thank-you to all our dedicated sponsors:

SPRING 2014

25

Industry News OFSI Releases B-21 Draft The Office of the Superintendent of Financial Institutions (OFSI) released its Guideline B-21 Residential Mortgage Insurance Underwriting Practices and Procedures last week, which include six fundamental principles for sound mortgage insurance underwriting.

The six principles are:

Principle 1: Residential Mortgage Insurance Underwriting Plan A (federally-regulated mortgage insurer) FRMI that is engaged in residential mortgage insurance underwriting should have a comprehensive Residential Mortgage Insurance Underwriting Plan (RMIUP). The FRMI’s insurance underwriting practices and procedures should comply with its established RMIUP. Principle 2: Establishing Standards for the Initial Assessment and Qualification of Mortgage Lenders A FRMI should establish sound standards for the purpose of initially assessing and qualifying mortgage lenders for mortgage insurance coverage.

Principle 3: Mortgage Insurance Criteria and Insurance Coverage Requirements for Lenders A FRMI should establish prudent underwriting criteria, which specify the characteristics and parameters of insurable mortgage loans for lenders. In addition, a FRMI should promote sound mortgage underwriting and loan management practices by mortgage lenders by establishing prudent requirements in its insurance policies (e.g., Master Policy Agreements) for the purpose of controlling risk.

Principle 4: FRMI’s Periodic Assessments of Lenders’ Underwriting Practices A FRMI should exercise reasonable due diligence regarding lenders’ underwriting practices, on a periodic basis, in order to assess consistency with the FRMI’s criteria for insuring mortgage loans and compliance with the requirements contained in the FRMI’s policy coverage documents. A FRMI should establish clear policies for identifying, escalating, and as needed, addressing weak or non-compliant lender practices.

Principle 5: Assessment and Validation of Underwriting Systems, Models, and Underwriters’ Processes A FRMI that is engaged in residential mortgage insurance underwriting should periodically assess and validate its insurance underwriting systems, models, and underwriters’ processes, to ensure sound insurance underwriting outcomes and consistency with the FRMI’s RMIUP.

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Principle 6: Effective Portfolio Risk Management and other Risk Mitigation FRMIs should have effective portfolio risk management practices, including the use of stress testing and, as appropriate, the use of reinsurance. Given the objectives and risk appetite established in the RMIUP, a FRMI should consider the outcome of stresstesting and risk mitigation in appropriately setting or adjusting its mortgage insurance underwriting criteria.

The B-21 draft, which is based on OSFI’s internal review as well as the Financial Stability Board and the Joint Forum, will now enter a consultation period that is open until May 23.

(Jeff Whyte / Shutterstock.com)

Alberta leads Canada through next wave of construction According to a recently released report, Alberta will lead Canada’s construction industry through the next decade, with major new oilsands projects and residential work driving job growth in virtually every year between now and 2023.

BuildForce Canada’s 2014-2013 Construction and Maintenance Looking Forward forecast said the pace of expansion has resumed, with construction employment across all markets growing past the 2008 peak by 2013.

Major resource and engineering projects lead non-residential job growth in every year over the next decade. The start-up of new major oilsands projects this year and hiring related to flood damage repair will boost hiring in 2014.

The report said Alberta will need to replace up to 45,000 workers, as up to 22 per cent of its workforce retires over the next decade.

It also said Alberta leads the demand for skilled and specialized labour in major projects across Canada: the oilsands industry matures and capacity grows larger, shifting employment from new capital projects to increased ongoing maintenance work and sustaining capital projects over the long term; industrial, transportation, electricity generation and transmission and pipeline work add to labour demands with most of the current scheduled projects adding jobs from 2015 to 2019; commercial and institutional activity grows slowly from 2016 to 2019 and then provides a steady increase in jobs from 2020 to 2023; and residential construction spending and employment will exceed the 2007 peak, with a rise in renovations and repairs.

Albertans look to homeownership as primary means of retirement income

Finance minister dead at 64 Jim Flaherty's colleagues, political opponents and friends are remembering him for his commitment to public service, his playful sense of humour and his devotion to his family.

With house prices continuing to rise in Canada, a new survey reveals nearly 26 per cent of Albertans plan to use their homes as their primary source of income after they leave the workforce.

The 2014 Sun Life Canadian Unretirement Index also found that 17 per cent do not know if their investment in their home will serve as their primary source of income during retirement.

Flaherty, who resigned in March as federal finance minister, died of an apparent heart attack on April 10, 2014 at age 64.

The survey also found that 12 per cent of Albertans expect retirement income to come from home equity; 28 per cent to come from government plans; 29 per cent to come from personal savings; and 21 per cent to come from employer plans.

Flaherty leaves behind his wife, Ontario MPP Christine Elliott, and the couple's triplet sons, John, Galen and Quinn.

According to the Calgary Real Estate Board, the average MLS sale price in the city was $490,882, up 7.33 per cent from a year ago while the median price has risen by 7.68 per cent to $425, 350.

In the single-family home market, the average price has jumped by 7.33 per cent as well to $554,011 while the median price has increased by 8.83 per cent to $480,000.

He was laid to rest on April 16, 2014 at a state funeral.

Flaherty's state funeral is the first such honour since 2011, when former NDP leader Jack Layton was laid to rest. State funerals are customarily only given to current or former prime ministers, governors general, sitting cabinet ministers or members of the Royal Family.

The survey also indicated that 28 per cent of Canadians expect to be retired at 66 while 56 per cent are expecting to work past the traditional retirement age. It said 65 per cent of Canadians feel they will need to work past traditional retirement age.

Flexible lending when you need it.

At Antrim, being flexible allows us to create the custom mortgage solutions your clients require. We provide a broad range of residential 1st and 2nd mortgages tailored to the needs of your self-employed, stated income, and low beacon clients. Approval turnaround is fast, keeping pace with Albertans’ efficient and common sense approach to business.

Our friendly and knowledgeable underwriters look forward to helping you.

Contact us today 1.888.550.6039 · applications@antriminvestments.com

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The Federal Budget Show 2014

By Phil McDowell, AMBA Board Director, Mortgage Alliance Mortgages Are Marvellous

The 2014 Federal Budget introduced the Office of the Superintendent of Financial Institutions (OFSI) is aptly called, “The Road to Balance”. For fun, try doing an internet search for a community called balance.

It seems this document has the elements of a road to nowhere. It reminds me of the TV show, Seinfeld, now found in re-runs. It, too, had no specific direction or plot. But, it did have memorable episodes. So it is true of this budget.

These are the recommended episodes for a mortgage broker to watch:

Love Trap Most surveys say Canadians love their Bank. But, is it an abusive relationship, at times? One of the scenes in this episode says, “consumers need sufficient information to clearly understand the costs and consequences of collateral charge mortgages ... costs and alternatives to payday lending and other high interest lending products, collateral loan charges ...”. In the Budget, a bank mortgage product has been put in the same sentence frame as a payday loan by the Finance Department! Shall we mention the mortgage prepayment code of conduct, to alleviate some of the abuses, too? It was also in the budget script. This episode has lots of chuckles, if you are in-the-know.

Dating Game Your grandfather dealt with a bank, I dealt with a bank, therefore for you my child, I am arranging you get married to a bank for your mortgage. The Federal Finance department seems to be creating greater social awareness there should be more choices than traditional. OFSI has been tasked to find ways to streamline the process for approval of new banks. Canada Mortgage and Housing Corporation (CMHC) will consider flexible funding options for smaller lenders. OFSI wants to improve the ability of smaller banks to access funding for CMHC portfolio insurance and securitization. OFSI is to look for ways to support provincial Credit Unions that wish to move to Federal Credit Unions through amalgamations. Even the reference to helping facilitate Covered Bonds, which uses uninsured mortgages as collateral, may be an easier additional cash pool for mono-lines.

All these encourage lenders that have typically used mortgage brokers as a component of their out-reach program. In the end, in this episode there are mortgage marriage choices for every family type.

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We ain’t in Damascus, Dorothy This is a rather dark comedy episode. Even though substantial changes have been made to the mortgage environment, which have resulted in moderated residential mortgage debt, there is no change in direction of the slow over-all squeezing of credit available for residential mortgages through changes of lending policy. Don’t look for a “Road to Damascus” change in attitude in this budget that promotes residential mortgage growth.

In 2008, residential mortgage growth was 13% year-over-year, which was quite a whirlwind of activity. The year 2013 showed 5% growth, under the 1990-2013 average of 7.5%. This reduction comes even though house prices have increased. The trend to larger down payments and accelerated pay down of existing mortgage balances helps these statistics. OFSI references residential price growth, but singles out Toronto and Vancouver because of land scarcity. They may not soon be making a fifth insured mortgage rule change to isolate the Toronto/Vancouver risk, but requirements of lenders to analyse property risk within their portfolio under B-20 will be the method of dealing with local market conditions through OFSI audits of lender portfolio management. OFSI continues to focus on residential mortgages by continuing to increase “market discipline” to reduce taxpayer exposure to the housing sector. Part of the message is CMHC reducing its annual issuance of portfolio insurance from $11 Billion to $9 Billion; and, reducing securitization programs while increasing fees payable to the Federal coffers for the taxpayer guarantee of insured mortgages.

Back to the Future This is a bitter-sweet comedy episode, when you think of the proliferation of alternative lending and increase of other consumer debt facilities ... all at higher rates and fees to consumers. If you are not taxed enough to income qualify, or you are not reducing the risk of other taxpayers supporting government guarantees, (And it’s not just the default insurance, but the deposit insurance that is taxpayer backed) you will end up paying more interest. But, look on the bright side: if you are getting that higher rate now, it just prepares you for the higher rates the Finance Minister is trying to prepare Canadians for now through the default insurance rule changes and B-20 audits of Federal supervised lenders. You will be laughing all the way to the Bank. For some reason, this script was not in the budget.

Apparently the sponsors thought it was not politically correct.

Understanding Foreclosures Your Questions Answered

By Chuck McKitrick and Fahn Bacon Foreclosure Defined - Foreclosure is a legal action that a money-lender can take if the person who borrowed money using a mortgage stops paying back that mortgage. Foreclosure allows the lender to take or sell that person’s house by first getting a Court’s permission to do so.

When a property-owner misses a mortgage payment or makes a late payment, the property owner will not automatically lose their property. Lenders don’t want to foreclose if they don’t have to because it is expensive and is a lengthy process. A lender will probably not start to foreclose until two or three months after the borrower has stopped paying. Normally, a lender will first send letters demanding payment. Then, if they don’t receive a reply, the lender will usually start to foreclose and to sue at the same time. The foreclosure process differs from province to province in Canada.

There are two main ways for lenders to recover mortgage debt in Canada. They are judicial sale and power of sale. Judicial sale is the primary recovery method used in the province of Alberta.

Below, Chuck and Fahn answer some common foreclosure questions:

Does another financial institution lender WANT to take a current property out of foreclosure? If not, who? Financial institutions (FI) typically don't want to take another lender out of foreclosure. Perhaps if the LTV is low enough or the story is good enough, a FI would consider it, but they don't need that blemished borrower on their books. Bad borrowers aren't insurable. That leaves subprime and private lenders as options. If there is equity in the property, any lender may be willing to take a current property out of foreclosure.

How many stages of foreclosure are there in Alberta?

1. Issuance of the Demand Letter 2. Statement of Claim Issued 3. Notice of Motion prepared — Affidavit of Value and Affidavit of Default completed 4. Redemption Period 5. Judicial Listing 6. Final Order of Foreclosure 7. Lender now has possession

What stage does the refinance typically occur? Refinance happens during the redemption period.

What underwriting conditions does a lender look for? Why was it in foreclosure in the first place? Could it happen again? Has the borrower’s income changed? Can we get job letter to verify income? What is the equity picture?

What does the borrower have to look like? Ultimately the borrower has to have a plan. Do they have an exit strategy? How do they plan to make payments?

What are the chances of the property going into foreclosure again? Historical precedent suggests that there is good likelihood that the borrower will default again. In some scenarios people borrow money from other resources to get themselves out of foreclosure. This can sometimes delay the inevitable, which is that they can’t afford to be homeowners.

What are some unique issues in Alberta?

1. The judicial system is sympathetic to borrowers and will often make it difficult for lenders to foreclose quicker than what they would like.

2. The debt recovery is limited to the property unless it is an insured mortgage or the borrower has signed a guarantee (commercial loans). In some provinces you can realize a judgement against the borrower. A judgement would allow the borrower to seize assets or garnish wages.

3. You can’t just sell the property at the price equivalent to your mortgage debt. An appraisal is required prior to having the property listed for fair market value.

What happens when a lender takes possession of the property? All subsequent charges on title are removed. So if a property has a first and second mortgage on title and the first mortgage obtains Final Order of Foreclosure that means that the second mortgage holder will be removed.

If there is equity in the property how long does the borrower have until the lender can list the property for sale?

If there is a reasonable amount of equity the borrower will get a six month redemption period.

Chuck McKitrick, B.Sc. Principal and Chief Executive Officer: Chuck provides vision and direction for the company and, through his extensive experience in the industry, gives Alta West Capital a competitive advantage in the marketplace. Chuck has excellent negotiation skills and a fine-tuned business acumen that is clear from his training and 20 years of business experience.

Fahn Bacon, B.Sc. Investor Relations Manager: Fahn has been with Alta West Capital since 2008. Fahn is responsible for liaising with our investors and managing their accounts. She works closely with the chief compliance officer in creating a compliant environment for the company and its investors. She is also responsible for the oversight and analysis on foreclosure files.

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Romspen Investment Corporation is a non-bank mortgage lender specializing in commercial real estate across Canada and the United States. With over $1 billion under administration, we offer customized mortgage solutions for term, bridge and construction financing from $4M to $100M. Blake Cassidy | 800 494 0389 | romspen.com

GET THE SHOVELS READY.

Inter-Provincial Discussions You spoke and we listened. The goal at the Alberta Mortgage Brokers Association (AMBA) is to ensure effective representation for our membership within the province.

In pursuing this endeavor, we have developed close working relationships with the other provincial associations in B.C., Ontario and Atlantic Canada, as well as with the provincial government and regulator. We have increasingly heard from you over the past year that the missing link has been coordination amongst the provincial bodies and the national entity. We listened carefully to this discussion and took action.

MEMBER ADVISORY

In November 2013, a first meeting was held in Toronto with the executives of the Canadian Association of Accredited Mortgage Professionals (CAAMP), the Mortgage Brokers Association of British Columbia (MBABC), the Independent Mortgage Brokers Association of Ontario (IMBA), the Mortgage Brokers Association of Atlantic Canada (MBAAC) and AMBA to discuss whether there was interest in working together to coordinate our efforts, reduce duplication and ensure the best interests of the memberships are well served. We are pleased to say that all those in attendance agreed that the time is right for this discussion to happen and that the goal of integration in some form is needed.

To those ends, AMBA has been involved in an additional two meetings since November. A provincial association is best served to meet members’ needs with respect to regulation, but there are large national issues for which the larger body can be responsible. There are many other areas such as communication, events, sponsorship and fees being reviewed as part of this discussion process. How all this will work, what the cooperation will look like and the end structure all need to be further discussed, but the conversation is happening.

Rome was not built in a day, but it would not have been built at all if nobody sat down and crafted the blueprint.

AMBA’s board has voted unanimously to be supportive of these efforts and is hopeful that a coordinated approach to the industry can be achieved. A national-provincial structure that works together with defined roles for each can only result in more effective and efficient representation of member interests.

Regards,

Gord Appel AMBA President

Have You Renewed Your Membership?

Don’t miss out on AMBA events, communication, education and community. Be sure to renew and update all your information in our system.

We value your membership and opinions. Stay connected and renew today!

Go to amba.ca to renew.

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Helping Brokers and Associates Sleep Easy at Night Derrick Leue President, LMS PROLINK Ltd. In ancient times, the Romans forced engineers to sleep under a bridge once it was completed. In today’s complicated and litigious mortgage industry, the equivalent might be relying on your documentation to sleep easy at night.

Location, location, location is the mantra when buying real estate. Documentation, documentation, documentation is the mantra when supporting your professional mortgage brokering services from allegations of negligence.

Who is Suing Mortgage Brokers?

The statistic is simple but alarming. Private individuals investing in mortgages are responsible for 95% of the Errors and Omissions (E&O) claims that we see lenders launch against brokers. In our experience, lenders represent approximately 75% of the total number of E&O claims brought against mortgage brokers in Alberta, so we are dealing with a significant source of exposure.

It is important to note that the private lenders suing our mortgage broker clients are typically individual private lenders and not mortgage syndicators or Mortgage Investment Corporations.

Mortgage brokers will often tell us that they only work with individuals if they are accredited investors. The financial security of the private lender does not appear to reduce their willingness to sue the broker or associate who arranged the mortgage.

We are witnessing both accredited and non-accredited private lenders making claims against brokers. The problem is that private lenders do not want to take responsibility for a financial loss, they are looking to blame someone else.

We have defended lawsuits from both individuals who funded their first mortgage of $50,000 and from investors who have funded multiple mortgages for decades. In theory, defending

claims from an experienced lender should be simpler because your E&O insurer can try to demonstrate that the sophisticated lender understood the risks related to mortgages, but it is not always that easy.

AMBA Provides Risk Management Tools The best defence is documentation. The mortgage broker/ associate must have thorough documentation supporting their case even when the investor has significant experience lending.

The Real Estate Council of Alberta (RECA) does not mandate that a specific disclosure form must be utilized when arranging mortgages with private lenders. The Real Estate Act simply stipulates that an agreement must be in place between the broker and the private lender.

AMBA has always been committed to helping members and the industry improve policies and procedures. AMBA assembled an experienced team of board members, brokers, lawyers and insurance professionals to develop an industry acceptable disclosure form that could be used by mortgage brokers and associates arranging mortgages with individual private lenders.

AMBA has posted this new Individual Private Lender Disclosure Statement on its website www.amba.ca, in the member zone, under the button Private Lender Disclosure Statement.

How Does E&O PLUS Help You? The E&O insurance specialists from PROLINK will complete a thorough analysis of your brokerage business. PROLINK will invest the time to ensure you receive the right advice and protection. Members insured through Liberty under the AMBA E&O PLUS Program will receive a 10% discount on their E&O premiums if they commit to using the AMBA Individual Private Lender Disclosure Statement.

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Reducing the Cost of E&O Insurance We hope that brokers and associates find this new disclosure form valuable as it provides a consistent approach to documenting your interactions with individual private lenders. The longerterm goal is to reduce the number claims from private lenders and therefore reduce E&O premiums for the members arranging mortgages with private lenders.

Learn More about the AMBA E&O PLUS Program The PROLINK Insurance Group Inc. is the proud manager of the AMBA E&O Liability program.

Please contact a representative from the PROLINK Insurance Group’s AMBA Service Team in order to learn more about how E&O PLUS protects you.

Contact The PROLINK Insurance Group: P. 800-663-6828; Peter McCabe: AMBA Program Business Development Manager; PETERM@LMS.CA Website: www.lms.ca/amba

Richard Earles

Business Development Manager 1-866-907-5407 richard@vwrcapital.com Twitter: @VWRCAPITALCORP

Your Private Mortgage Solution Funding Mortgages In: x x x x

British Columbia Alberta Manitoba Ontario

x Competitive rates and nominal lender fees x Purchases, refinances, ETO, and renovations x Rental properties, owner occupied, raw land, serviced land, small multi-family x No income qualification x No minimum beacon score

Your Underwriting Team: Dimitri Kosturos: VP Underwriting Richard Earles: Business Development Manager Leah Wilson: Underwriter

Send Deals To: info@vwrcapital.com Or Call:

1-866-907-5407

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AMBA MATTERS Member Profile

Hali Strandlund

Hali Strandlund is a founding director and the SVP Residential Mortgage Investments and Broker Relations of Fisgard Capital Corporation, one of Western Canada’s largest private mortgage investment corporations.

She was born and raised in Victoria, B.C., and is a graduate of Olds College. While studying at Olds College, she wrote the Alberta Real Estate and British Columbia Real Estate and Mortgage Brokers exams and obtained both licenses in 1989. She remains licensed as a real estate agent, property manager and mortgage broker, and is a member of many industry related associations. She also holds an AMP (Accredited Mortgage Professional) designation.

She is currently the Chair of the Canadian Association of Accredited Mortgage Professionals (CAAMP) Foundation, a Past Chair of CAAMP and a Past President of the Mortgage Brokers Association of British Columbia (MBABC), after having served two consecutive terms as the MBABC President.

Tell us a bit about yourself …

Where are you from?

I was born and raised in Victoria, B.C., where I still live today.

What are a few of your hobbies?

I am an avid boater, golfer and traveller. I love to fish and spend time on the ocean.

How did you get started in the business?

I was literally born into the business! My father, mother, both brothers and many other family members are mortgage brokers and Realtors. My dad was licensed in 1968 and I was born in 1969, so I really don’t know anything else. We lived and breathed real estate and mortgage finance. I formally started working in my parents’ office in my early teens and in 1989 at age 19 became licensed in B.C.

What do you love about mortgages?

I love the people and the problem solving. As a private lender, every deal we see has a twist and a story. Nothing is ever the same and the feeling of creating a solution and helping a borrower out of a tough spot is second to none.

Please tell us a little about your company …

Founded in 1994, Fisgard Capital is one of Western Canada’s largest private Mortgage Investment Corporations (MIC’s) which provides reasonably priced, flexible and creative, residential and commercial mortgage solutions borrowers in BC and Alberta. Fisgard’s mortgage products range from residential first and second mortgages to multi-million-dollar commercial, construction and mezzanine loans. Fisgard's strengths are its experienced underwriting team and innovative approach to difficult or unusual mortgage situations. It is a one-stop shop for mortgage brokers. www.fisgard.com

What is your vision for the mortgage industry?

Ideally, mortgage brokers become the No. 1 source of mortgage financing for Canadian mortgage consumers. The value of using the services of a professional mortgage broker has truly not been tapped yet. With the constant tightening of mortgage regulations in Canada, there has never been a more opportune

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time for mortgage brokers to shine. Sourcing mortgage funds from conventional, alternative and private lenders, providing mortgage solutions that take into consideration the short and long-term goals of the borrower—not just best rate—bring the industry full circle to where true mortgage brokerage began.

I would also like to see greater cooperation and sharing of services by the national and provincial associations. Both have so much to offer the industry and we need a strong unified voice.

A work in progress!

What other professional associations do you belong to?

My many industry-related memberships include: the Mortgage Investment Association of B.C. (MIABC), the Canadian Home Builders Association (CHBA), both of which she served as a Director, the B.C. MIC Managers Association (BCMMA), the Alberta Mortgage Brokers Association (AMBA), the Victoria Real Estate Board, the British Columbia Real Estate Association and the Canadian Real Estate Association.

In such a competitive market, how do you stay ahead of your competitors and remain successful?

As a Mortgage Investment Corporation (MIC) we are not regulated

by OSFI and do not fall under the recent B-20 rule changes. This gives us greater flexibility when creating mortgage products that meet the needs of mortgage brokers and their clients.

We have created a niche market and strive to provide reasonably priced short-term mortgage solutions within the risk tolerance of our investors. It’s a constant balancing act but we are proud of the service our mortgage investment team (underwriters) provides to the brokerage community and to our investors.

It is my job as SVP Residential Mortgage Investments and Broker Relations to create and maintain strong relationships with our broker clients. These relationships are paramount to our success! I spend the majority of my time on the road attending office meetings and industry events, but have also created an interesting and information AMP approved webinar series that I offer to mortgage brokers across the country that covers topics such as Packaging and Presenting Private Mortgage Applications, Commercial 101,

the Residential Foreclosure Process and Residential Construction Financing.

I am extremely passionate about assisting mortgage brokers become more educated and professional and hope to create more webinars over the next few months.

What aspects of the mortgage industry do you find most challenging?

Balancing the borrowing needs of Canadian private mortgage consumers with the risk tolerances of our investors. We are a conservative private lender (75% LTV max) in a time where there is an insatiable need for higher risk/ higher LTV lending. This is not a niche that we participate in nor do we plan to enter in the near future, but the need is there.

Please share three fun facts about yourself.

When I was a young girl (maybe 8-10 years old) I wanted to be a famous matador/bullfighter. My plan was to move to Spain and become the world’s best and most famous female matador. My parents bought me a Spanish style coat (short and embroidered) that I wore EVERYWHERE! It must have been hilarious for them to watch me dance around in that coat with my red cape swooshing round and round the house.

I am a bit of a speed freak. I like fast cars, fast boats and fast horses! For many years after I graduated from Olds College in Olds, AB, I barrel raced at amateur rodeos throughout B.C. and Alberta. When it became too difficult to keep my barrel horses fit and ready to go (because of work travel) I bought my first boat and started participating in Poker Runs all over B.C., Washington, California and Arizona. From horses to horsepower!

One day I hope to travel the world and write about the places I go, people I meet and all of the cuisines I am fortunate enough to try.

Maybe even write a book or be published in a magazine!

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Member Profile

Hali Strandlund

My first day of school. I always loved horses and rode my stick horse to class.

Please share three facts about your company.

We currently have 19 employees, including myself. Over half are either directly related or close family friends.

We currently have just over 3,500 investors and over $230,000,000 in capital (including our LOC).

When my father founded the Fisgard group of companies in 1994, we worked out of a 600 sq. ft. one-room office on the second floor of an OLD building in Chinatown. Definitely low key and extremely basic but a great place to learn. Learning was somewhat by osmosis as I heard everything that was going on and soon found myself sounding exactly like my parents when they were making deals or talking to investors. Very much a newsroom environment!

We fund a broad spectrum of property types and loan situations.

Purchases, refinances, residential & commercial    

24 hour response time Competitive rates and fees Expert advice, consistent reliable Service Lending area, BC, Alberta, Saskatchewan

Caplink now offering FIRST mortgages up to 85% in major urban centres.

Contact us for more information.

Have you ever been recognized for any industry accomplishments?

Most notably, Hali has received the 2013 WXN Canada’s Top 100 Most Powerful Women (Trailblazers & Trendsetters category) and the 2010 MBABC Pioneer Award for Lifetime Achievement in the Mortgage Industry. Hali is the youngest recipient of this prestigious award.

Notable awards include:

2013 WXN Canada’s Top 100 Most Powerful Women - Trailblazers & Trendsetters

2012 CAAMP Founders Award for Leadership, Motivation and Commitment to the Mortgage Industry

Submit your applications through Filogix, fax 1-888-226-8834 or by email documents@caplink.ca Or give us a call to discuss your deal 1-888-429-0114 Residential Helen Neufeld ext. 215 Helen@caplink.ca Commercial Gay Andrews ext 236 gay@caplink.ca

2010 MBABC Pioneer Award for Lifetime Achievement in the Mortgage Industry

2009 MBABC Past Presidents Award for Outstanding Dedication to the Association and Mortgage Industry

2008 MBABC Past Presidents Award for Outstanding Dedication to the Association and Mortgage Industry

2007 CAAMP / MBABC Award for Outstanding Contribution to the Mortgage Industry

2007 MBABC Past Presidents Award for Outstanding Dedication to the Association and Mortgage Industry

Caplink Financial Corporation | Suite 2200, 10104 103 Avenue, Edmonton, AB T5J 0H8 |

36 SPRING 2014

www.caplink.ca

YWCA Woman of Distinction Awards Business & Entrepreneurship Nominee

!

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amba calendar May 2014 Edmonton AMBA Networking & Industry Update May 29, 2014 Earls Tin Palace 11830 Jasper Ave NW, Edmonton, AB 3:00 p.m. - 5:30 p.m.

MARK YOUR CALENDARs!

June 2014

July 2014

Medicine Hat AMBA Networking & Industry Update

AMBA Conference

June 3, 2014 Medicine Hat Lodge Hotel Casino Convention Centre CASTL & Regulatory Updates 4:00 p.m. – 6:00 p.m.

Lethbridge AMBA Networking & Industry Update June 4, 2014 Lethbridge Lodge Hotel and Conference Centre CASTL & Regulatory Updates 4:00 p.m. - 6:00 p.m.

July 3 - 4, 2014 Delta Kananaskis

october 2014 AMBA Fraud Symposium October 8, 2014 MRU

Our first winner was Alicia Delougherty of CML – Canadian Mortgage Lender. She won a $50 Starbucks gift card.

Michael Havery of Mortgage Architects won a $50 Future shop gift card Doug Whelpton of Worry Free Mortgage was the lucky winner of a $100 prepaid Visa, and

LEARN MORE:

38 SPRING 2014

Michael Brady of Verico—CML recieved a free 2014 membership.

Cut through the barriers.

Extraordinary brokers with extraordinary clients need an extraordinary lender.

When traditional lending options leave you feeling boxed in, let us help cut through the barriers.

• 1st and 2nd Mortgages • British Columbia, Alberta, Saskatchewan, Manitoba • Residential, Commercial, Construction, Rental Grant Plunkie

Ryan Lee

Business Development / Senior Underwriter

Relationship Manager

Let’s talk solutions.

Find out how Paradigm can help find alternative lending solutions for your clients Call 1-800-979-2911 or visit paradigmmortgage.ca

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