Lender jumps into Alt-A lending

January 9, 2014

A key broker lender in the A-space is now saying increased competition in that realm is part of the reason it has moved to focus on Alt-A lending.

“Our goal is to provide solutions for customers who don’t qualify for traditional A-products and offering them more flexibility in the marketplace,” Todd Poberznick, assistant vice president of B2B Solutions with Bridgewater Bank told MortgageBrokerNews.ca. “The A-market has shifted and our focus has shifted away from the A because it’s gotten so competitive and … it’s just a hard game to play anymore.”

Industry players are finding it harder to place clients in conventional mortgages and many have called for lenders to step up to fill the need for more alternative options.

“The only lenders we have access to are A-lenders (and) we have to turn customers away who don’t qualify for A-deals and it’s costing us big time,” Dan Burke of the Burke Mortgage Group told CMP Magazine in October. “There is a huge opportunity for a B-lender to come to our market.”

Burke’s wishes – and, likely, the wishes of a great deal of his peers – have been granted, with Bridgewater bank promising to expand its Alt-A offering to more brokers.

“In the last two years we have played in that marketplace a little bit to get our fingers into the pie and we’ve felt that we’ve been fairly successful in that program that we ran with selected brokers that we dealt with over the last couple years,” Poberznick said. “What we’re going to do is expand that program to a larger amount of brokers that we want to deal with.”

The lender, however, is quick to quell fears it is turning its back entirely on A-lending.

“It’s not like we’re getting out of the A-business; we still have a tremendous book of A-business, but what we’re looking at doing is just riding the proverbial storm out while trying to help other people in the market and we think it’s a niche in the marketplace that will help the brokers,” Poberznick explained. “We’re currently in the process of finishing up our risk analysis of the changes we want to do and understand we’re not going to go into this and start doing loans that are so high risk they’re going to jeopardize our positioning.

“We’re coming back into the Alt-A and the 65 per cent loan to value, the lower income qualifiers and stuff like that so we can fill that niche.”

The process will be slow and steady, but industry players will be able to reap the rewards as soon as first quarter 2014.

“We’re not jumping off a cliff to get in here; we’ll talk it on in pieces as we commit to it and we’re looking to open it up in the first quarter and grow it from there,” Poberznick said. “We’ll continually monitor it and we will find a spot where we’re happy in and we’ll ride it out.”