Subprime lending market in Canada skyrockets to record as banks tighten reins
Garry Marr and Barbara Shecter
FinancialPost.com
December 15, 2014
Subprime lenders’ share of the Canadian mortgage market has reached record levels, according to data obtained by the Financial Post, putting increased risk on the housing market.
Alternative lenders, who are major beneficiaries of that subprime market, now underwrite 2.2% of all mortgage loans — probably not enough to cause any major structural damage to the housing market in the event of defaults, but their market share has exploded.
The data, compiled by CIBC World Markets based on Statistics Canada figures, shows that the value of loans from alternative lenders grew by 25% during the past year while the overall market for mortgages increased by 4% during the same period. The Statistics Canada data was derived from information obtained from Revenue Canada.
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