Latest in Mortgage News: Dominion Lending Centres Unveils New Deals

Dominion Lending Centres continued its growth trajectory this month with several new announcements.

Earlier this month, Founders Advantage—which bought a controlling share of DLC in 2016—announced it has entered into an agreement to acquire 100% of DLC as part of a larger restructuring that will see DLC and Founders merge to create a new entity known as Dominion Lending Centres Inc. If approved, the new public company would trade under the symbol DLCG.

As part of the proposed deal, Dominion Lending Centres co-founder Gary Mauris will assume the role of Chief Executive Officer and Executive Chairman, while co-founder Chris Kayat will become Executive Vice-Chairman.

Recapping the company’s journey in a call with investors, Mauris touched on the initial reason for selling 60% of the company to Founders Advantage, saying at that point they were looking to de-risk somewhat, feeling it was the “prudent and responsible” thing to do.

But Mauris added there were frustrations along the way after the sale, despite believing that the management team at FA had “very, very good intentions.”

“From the early days, we felt we weren’t being recognized for the value we brought to the market,” he said. “From almost day one, Dominion Lending Centres Group, including Mortgage Centre Canada and Mortgage Architects and Dominion Lending Centres, were knocking it out of the park. Quarter after quarter were were doing amazing things, but yet we weren’t being recognized for the value we were bringing, especially in the market, under the symbol FCF.”

Mauris added that he and Kayat have personally made sizeable investments in the company this year, proving that they are “100% focused on the future.”

“What it means for us is, we’re going to be purely focusing on Dominion Lending Centres. We think it will have a meaningful impact for our company going forward,” Mauris said.

Pending approval from the TSX, the deal could close by the end of 2020.

And in a second announcement earlier this week, DLC Group announced a franchise agreement with Premiere Mortgage Centre, which counts more than 180 mortgage professionals throughout its network in Ontario and Atlantic Canada.

“We are incredibly pleased to be working with the Premiere Group,” Mauris said in a release. “They are highly respected industry veterans with some of the top mortgage professionals in Canada.”

DLC, with more than 6,000 agents working under its brand name, last year originated $40 billion in funded mortgage, and is on track to originate nearly $45 billion this year, Mauris said.

Meridian Credit Union Unveils Interest-Only Mortgage

Meridian Credit Union became the latest mortgage provider to unveil a new interest-only mortgage product.

Meridian, which is the largest credit union in Ontario and second-largest in Canada, positioned its new Hybrid Mortgage as a solution for well-qualified borrowers to increase their buying power.

One of the key benefits of an interest-only mortgage is its ability to lower your monthly payments (since you’re only paying the interest portion) and makes it easier to qualify, even though the mortgage is restricted to those putting down at least 20%.

“Even with a 20% down payment, purchase options for first-time home buyers can be restricted with conventional mortgages, especially for young professionals and recent graduates who may be starting their careers and already have other financial obligations like student loans,” David Moore, Chief Marketing Officer and Senior Vice President Retail Banking, Meridian, said in a release. “Meridian’s Hybrid Mortgage is a creative solution for members who are just starting out on the path of home ownership, so they don’t need to put their dreams for the future on hold.”

And unlike banks and other lenders that qualify borrowers at the mortgage stress test of 4.79%, Meridian qualifies borrowers by ensuring they can afford the monthly minimum payment.

Meridian’s Hybrid Mortgage consists of a variable-rate portion (currently 3.83%) and a 5-year fixed portion (3.92%). Borrowers can only use the interest-only option on up to 60% of their home’s value. Given its non-competitive rates, the Hybrid Mortgage is meant to be a short-term solution, with the intention that most homeowners would transition to a standard mortgage product “as their financial capacity deepens, Meridian notes.