Consumers Design $3 Billion Of Personalized Mortgages

November 18, 2010
Consumers Design $3 Billion Of Personalized Mortgages
Mortgage Alliance has sold $3 billion worth of its exclusive RightMortgage in the last 36 months.

RightMortgage is unique because consumers can pick and choose the features they want. Each feature they select has a direct impact on the interest rate.

The features affecting the rate include:

•Term (1-year, 3-year, or 5-year fixed)
•Prepayment options (ranging from 5% right up to the traditional maximum of 20%)
•Payment frequency (weekly, bi-weekly or monthly)
•Length of rate guarantee (generally ranging from 30-120 days)
For example: “If a purchaser wants to close in less than 30 days, then there are some savings there, “ explains Tony Bartolomeo, Product Manager for Mortgage Alliance. “Conversely, if the rate hold goes past the traditional 90 days to 120 days, then the rate is up slightly.”

Here are the rates as of today…

•1-year fixed: starts at 3.26%, fully-featured is 3.39%.
•3-year fixed: starts at 3.62%, fully-featured is 3.79%
•5-year fixed: starts at 3.78%, fully-featured is 3.99%
The RightMortgage is underwritten by Macquarie Financial, one of the biggest private label lenders (Paradigm Quest is another big white-labeller). Macquarie gives Mortgage Alliance brokers the choice of placement fees, either: trailers, “up-front” or a combination of both.

“Before the RightMortgage came along, consumers didn’t have the freedom to custom build their own mortgage rate, Says Bartolomeo. “ The ability to pick and choose features that impact the interest rate is a way to engage consumers and allows them to personalize their mortgage.”

When the product was first introduced it generated $2 billion dollars in sales in less than 24 months. Bartolomeo believes that sales in 2009 were just under $1 billion dollars.

One billion in production is no small feat for an exclusive brokerage product. It puts RightMortgage near the top of all white label mortgages in the industry.


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By Gina Monaco, CMT

BMO and the Housing Bubble

Housing: No Bubble, Just Pricey, Says BMO Wednesday, 10 November 2010 10:33 Written by Rob & Melanie McLister www.canadianmortgagetrends.com 0 Comments Claims that Canada’s housing market is ready to pop are exaggerated, say economists at BMO Nesbitt Burns.

Instead, they say the market can more realistically be labelled “moderately overvalued” based upon a comparison of house prices with personal income. They also note that mortgage servicing costs for “typical” homebuyers are running near the long-term norm of 34%.
“Barring a sharp spike in mortgage rates or a relapse into recession, a substantial price correction is unlikely to occur,” economists Earl Sweet and Sal Guatieri wrote in their research report.

They noted, however, that Canadians would have a hard time dealing with a sudden 3% hike in mortgage rates. That would weaken affordability “substantially” and in turn drive down demand and home prices.

They downplayed this risk, though, pointing to the prevalence of fixed rates in mortgage financing, which reduce fluctuations in borrowing costs.

Sweet and Guatieri also predict the normalization of interest rates could take several years yet, with Canadian rates rising 2 to 3 points in that time. They believe incomes should catch up to prices by then.

More worrisome, they argue, is prolonged low interest rates, which could “recharge the housing market and inflate a true bubble that ultimately bursts when rates normalize.”

Canadian Mortgage Trends (CMT) delivers the latest mortgage news in Canada for homeowners, online mortgage brokers, and real estate professionals. Please contact us at (800) 280-2460 or info@canadianmortgagetrends.com.

Housing Bubble??

.Housing: No Bubble, Just Pricey, Says BMO Wednesday, 10 November 2010 10:33 Written by Rob & Melanie McLister www.canadianmortgagetrends.com


Claims that Canada’s housing market is ready to pop are exaggerated, say economists at BMO Nesbitt Burns.

Instead, they say the market can more realistically be labelled “moderately overvalued” based upon a comparison of house prices with personal income. They also note that mortgage servicing costs for “typical” homebuyers are running near the long-term norm of 34%.
“Barring a sharp spike in mortgage rates or a relapse into recession, a substantial price correction is unlikely to occur,” economists Earl Sweet and Sal Guatieri wrote in their research report.

They noted, however, that Canadians would have a hard time dealing with a sudden 3% hike in mortgage rates. That would weaken affordability “substantially” and in turn drive down demand and home prices.

They downplayed this risk, though, pointing to the prevalence of fixed rates in mortgage financing, which reduce fluctuations in borrowing costs.

Sweet and Guatieri also predict the normalization of interest rates could take several years yet, with Canadian rates rising 2 to 3 points in that time. They believe incomes should catch up to prices by then.

More worrisome, they argue, is prolonged low interest rates, which could “recharge the housing market and inflate a true bubble that ultimately bursts when rates normalize.”

Canadian Mortgage Trends (CMT) delivers the latest mortgage news in Canada for homeowners, online mortgage brokers, and real estate professionals. Please contact us at (800) 280-2460 or info@canadianmortgagetrends.com.