Home Trust the Toronto-based alternative lender has decided to launch a range of traditional mortgage products that will be competition for the major banks.

Most lenders have been unable to lend to riskier borrowers due to the U.S. Subprime crisis, but this is not the case for Home Trust, which use a deposit-based funding model, and will increase the growth of its core alternative-loan business, and help build relationships with mortgage brokers.

Gerald Soloway, chief executive officer of Home Trust’s parent, holding company Home Capital Group Inc said that they are offering a one-stop shop, this will speed up the process for the brokers and their clients.

The aim is to give brokers the chance to put their clients who are on the edge of qualifying for a traditional mortgage the option of pursuing that route first.

This way if their credit score lets them down to qualify for the traditional mortgage than we can just turn to the more expensive product offered by Home Trust.

Most of the competitors rely on bundling and selling uninsured loans to fund new mortgages, Home Trust is a deposit-taking organisation, and their eligible deposits and products are insured by Canada Deposit Insurance Corp.

Unlike some of its competitors that relied on bundling and selling uninsured loans to fund new mortgages, Home Trust is a deposit-taking organization, whose eligible deposits and financial products are insured by Canada Deposit Insurance Corp. The alternative loan business continues to go from strength to strength, with souring profits up by 20 percent in the second quarter from the previous year.

Source: Theglobeandmail

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