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COVID-19, Its Effects On The Mortgage Industry And What You Can Do If You Need Help

Posted by Greg Syrota on March 23, 2020

COVID-19, Its Effects On The Mortgage Industry And What You Can Do If You Need Help!

COVID-19 is taking its toll on the world at present and the mortgage world has seen it’s own fair share of ups, downs and new policies in the month of March. Interest rates, policies on lending, speed of approval for new applications, appraisal requirements and mortgage payment deferral, to name a few are all changing on a day by day basis.

Fixed mortgage rates saw a sharp decrease for a short time, only to now be heading back upwards. A lot of lenders were inundated with applications, are now too overloaded, and are raising rates to quell the flow of applications.

The Bank of Canada saw 2 unprecedented rate decreases of 0.50% in a 12 day period, which has resulted in the Prime lending rate (the rate the affects variable rate mortgages) decrease by 1.00%. This in turn has led lenders to slash the discounts typically offered on variable rate mortgages to maintain their profit margins. If you got in on this before these cuts, at present having a variable rate mortgage will bode well for you, until the economy starts to recover. Some mortgagors will have rates in the sub 2% range.

The big news item everyone has been talking about is the ability to potentially defer your mortgage payment for up to 6 months. For those who have been directly impacted by COVID-19; currently self isolating or have been laid off, this could be crucial to their finances and ability to pay their other bills. If this is you, please call your mortgage provider to find out what your options are. The worst thing you can do for your future is miss a mortgage payment just because you do not have the funds: You’ll be hurting yourself for many years to come. Call and ask about deferral options, do not default on a payment because you do not have the funds in your bank account

To others this may sound like a good idea to take a mortgage holiday; it is deferring your mortgage payment, and not just eliminating that debt altogether, so ultimately it you will pay more in interest if take this route as they payment does not just disappear. If your financial picture has not yet changed due to COVID-19, this is not an option for you presently.

Lenders are currently looking at their clients on a case by cases basis to determine their eligibility for mortgage payment deferral and may not opt for the full 6 month deferral (or any deferral at all) if they do not deem it necessary.

One thing I implore you not to do is spend time on the phone to your mortgage lender now just because you want to find out what your options may be in the future if this starts to have a direct impact on you financially. There are people who need this assistance right now, so if we can do anything to help them, please stay off the phone lines so they can get their assistance as quickly as possible.

If you or anyone you know may need to consider deferring their mortgage because they are directly affected by COVID-19, please see the list contacts numbers for most of the major mortgage lenders below:

ATB 1-800-332-8383

B2B 1 800 263 8349

BMO 1-877-895-3278

Bridgewater 1-866-243-4301

CIBC 1-800-465-2422

CMLS 1-888-995-2657

Optimum 1-866-441-3775

Equitable 1-888-334-3313

Connect First 403-736-4000

Chinook Financial 403-934-3358

First Calgary Financial 403-736-4000

First National 1-888-488-0794

Haventree 1-855-272-0051

Home Trust 1-855-270-3630

HSBC 1-888-310-4722

ICICI 1-888-424-2422

Manulife 1-877-765-2265

MCAP 1-800-265-2624

Meridian 1-866-592-2226

Merix/Lendwise 1-877-637-4911

Marathon 1-855-503-6060

RBC 1-866-809-5800

RFA 1-877-416-7873

RMG 1-866-809-5800

Scotia 1-800-472-6842

Servus 1-877-378-8728

Street Capital 1-866-683-8090

TD 1-866-222-3456

You will more than likely be on hold for 1-2 hours before you get through to someone due to the extremely high volume of calls lenders are receiving regarding mortgage deferrals. Please be understanding of this, and patient with the person who answers your call. They are human too and are going through the same things are all of us are in these trying times.

Appraisal policies are changing for those who are refinancing at present. Lenders are permitting drive by appraisals, and trying even harder to do what we call a “desktop appraisal” in order to do their part in limiting appraisers from having to enter a property and put themselves at risk. Certain higher risk properties or mortgages may still require a full appraisal, and an appraiser may request to be left alone at the property and they will be taking extra precautions themselves.

Lenders policies are also changing, where some are now asking for additional proof of employment due to COVID-19, and want confirmation of ongoing employment in order to confirm longevity of income.

If you have any questions about the above, please do not hesitate to reach out to me directly. I would be happy to discuss what assistance may be available to you at this time as opposed to you calling your mortgage lender directly.

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