‘Joe Schmo’ Lenders Double Stake in Canada’s Mortgage MarketBy
Shadow lending booms as banks step back from riskier loans
Business owner with spare C$300,000 attracted by big returns
Alternative lenders in Canada have doubled their share of the residential mortgage market in the past decade, increasing risks in the housing sector where they operate with limited federal government oversight.
These mortgage providers, which fall outside the responsibility of Canada’s main banking regulator, increased their share of the C$1.4 trillion ($1.06 trillion) mortgage market to about 13 percent last year from 6.7 percent in 2007, according to the finance department. The lenders, also known as the shadow or private market, cater to the self-employed, new immigrants and those turned down by regular banks. They include publicly listed companies, investor groups and retirees who borrow against their homes to provide funding…
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