CBC Mortgage Agency, a housing finance agency, is expanding its low-balance mortgage products into low-cost communities in hopes of making low-balance mortgages more lucrative for its network of correspondent lenders.
The company was inspired by the New York Times article, “Where a small mortgage goes a long way.” The article indicated that mortgage lenders tend to be reluctant to take out loans in areas where mortgages are too small to be profitable. The report also noted that blacks and Hispanics looking to buy homes in low-cost neighborhoods are particularly affected by the trend.
“Home equity lenders struggle with the profitability of low balance loans due to the high cost of providing a loan,” according to the press release. “In the Association of Mortgage Bankers Quarterly Mortgage Bank Performance Report, the trade group said the average cost of obtaining a loan climbed to $ 7,982 in the first quarter of this year. “
“Our mission is to make home ownership possible for more low-income consumers,” said Radio-Canada Mortgage Agency President Richard Ferguson. “After reading Matthew Goldstein’s article, we saw an opportunity to continue our mission.”
Learn more about Radio-Canada Mortgage Agency.