Spectrum-Canada Mortgage Services Inc.
Spectrum-Canada Mortgage Services Inc. (Spectrum) is a financial intermediary with 20 years’ experience in the alternative residential mortgage market during which time it has developed unique expertise in sourcing, processing and funding a range of 1st and 2nd mortgage product.
This experience has allowed the company to form Origination Partner relationships with more than 70 banks and credit unions across Canada enabling these financial institutions to refer their clients to Spectrum for mortgage assistance when a mortgage falls outside of the institution’s own lending guidelines. This unique origination channel generates a high volume of mortgage referrals to Spectrum from reliable and highly trusted sources.
Alternative Mortgage Borrower
The alternative segment of the mortgage market, broadly defined, deals with mortgage borrowers who do not meet typical and increasingly conservative bank lending criteria. Reasons may include the difficulty in assessing self-employment income, the desire for a higher loan-to-value ratio or a debt service ratio than the more conservative lenders can approve or because of past credit problems. It may also be a combination of these factors.
Recent changes to Canada Mortgage and Housing Corporation’s (CMHC) mortgage lending guidelines and new B20 legislation governing banks, have further restricted many borrowers’ ability to source mortgage financing from their own Financial Institution creating further opportunities for Spectrum via its bank and credit union Origination Partners.
Lenders in the alternate segment may price their mortgages higher in order to recognize the potential of a higher risk associated with these borrowers.
Spectrum currently funds these mortgages in one of two ways:
Spectrum has supported its Origination; Lending and Mortgage Administration Divisions by developing its own custom designed and built mortgage management software to provide the company with state-of-the-art workflow management and reporting systems and internal quality control processes.
With over $10 Billion of mortgage throughput, Spectrum has a proven track record of experience and expertise originating, underwriting, funding and administering alternative mortgages.
In working with new investors Spectrum’s first role is to fully understand the investors risk profile and then to create the lending parameters which will allow the investor to achieve their objectives.
Once the guidelines are created, Spectrum will present investing opportunities to the Investor based on these criteria by way of a Review Sheet which provides an overview of the file. If the Investor expresses an interested in the file Spectrum will then assign the file to the Investor and continue with the underwriting process.
Spectrum issues the Commitment Letter to the mortgagee(s), obtains all the conditions and, assuming the conditions are met, a ‘Sign Off’ package is sent to the Investor for final approval.
Spectrum then instructs the lawyer and arranges for document signing and the Investor forwards funds as required.
A copy of the Final Package from the solicitor is forwarded to the Investor post funding.
Servicing and Administration
Spectrum will act as Originator, Underwriter and Administrator for the Investor in the same manner and under the same terms as for its established investor clients.
As originator, Spectrum will source applications from its bank and credit union partners and selected external mortgage brokers. This allows Spectrum to carefully choose individual mortgages to ensure that each mortgage matches the Investor’s underwriting criteria and risk profile. Spectrum then underwrites each mortgage to the prescribed Underwriting Guidelines of the Investor using the established systems and processes currently in place for established investors.
Spectrum’s Administration Operation employs dedicated staff to fund, collect, discharge, renew and manage these loans and maintains relationships with legal firms across the country to efficiently manage its recovery process for defaults and delinquencies – this rigorous mortgage administration program allows the company to maintain a well performing portfolio.
Spectrum collects all payments from the borrowers and remits them to the Investor on a weekly or bi-weekly basis (depending on the portfolio size) directly into their bank account.
Our fee for these services is 100bps of the mortgage amount annually, deducted from the weekly or bi-weekly) deposit.
These established systems and processes allow the Investor to be fully involved with important issues such as legal proceedings and renewals, but relieves the Investor of the general day-to-day administration of the mortgages.
Benefits of working with Spectrum
What is Spectrum-Canada’s track record?
Spectrum’s strong history and accomplished 20-year track record originating and managing alternative mortgages has given it the specific knowledge and experience necessary to support the objectives and needs of its investor partners and it continues to develop new origination, funding and servicing programs to build upon its proven expertise.