Hi. I'm Jacquie Bushell.
We received feedback from a member, Frances Hinojosa, the AMP mortgage broker and managing partner of Tribe Financial Group. She said that since the B20 rules, the qualifying standards in lending policies for most of the major financial institutes, or A-type lenders, have been removed, along with the ability to use the child tax credit and non-taxable spousal or child support. Therefore, very few lenders, and only a couple, ICICI and Manulife, will allow a variation of this type of income to qualify. The choice of lenders has dramatically been reduced since the introduction of B20, removing options and competition. Lenders are required to prove affordability with provable income or income that is allowable under their guidelines. Most of the major lenders removed the child tax credit as they felt it was not sustainable over the long term and, therefore, could not be used to mitigate affordability. When the child tax credit or the spousal support is used, it is often cut back to 20% to 40%, depending on the lender policy and the age of the children. As you can guess, this hampers the applicants in their ability to qualify when a large portion of their income includes spousal support, child support and child tax benefit.
She said that the bottom line is that the options for the lenders that allow these types of incomes to be used is greatly reduced since the change. This, in turn, gives the consumer fewer lending options and terms, and they typically receive higher interest rates for use of these programs. Not only can they not use income that helps them move on in their new life, but they are also penalized for this by getting a higher interest rate. The new rules do not allow for character-based lending, common-sense lending, or cash flow based on real income figures.
While her association would like to give more insight into the desperate shelter issue, they have to consider the government's stress test. It indeed stresses this particular group of applicants far more than others. It stresses quite a few of those you are studying: the women who want to move on from awful conditions, but are limited by regulations. Their members and their clients clearly tell them these rules have made it harder for the Canadians for whom this committee is seeking to find the freedom and independence that they need and deserve.
Thank you.