Is cryptocurrency the future of the mortgage industry?

Fergal McAlinden
Mortgage Broker News

 For Shawn Allen (pictured), cryptocurrency and blockchain technology represents the future of the mortgage industry – and he’s determined that Matrix Mortgage will be at the forefront of it.

The company’s founder and principal owner told Mortgage Broker News that blockchain and decentralized finance were set to “take the whole industry by storm” as Matrix announced last week that it would accept cryptocurrency for payments of goods and services.

Read more: Alternative lender to begin accepting cryptocurrency

“If you’re not prepared for what’s to come [in terms of] automation and Smart Contracts, then you’re really going to get sideswiped with the amount of technology that’s coming down the pipeline,” he said. “I’m more confident now than ever with the market and the crypto space. I figured: it’s time to really put my foot forward and say, ‘We’re here to stay, let’s get this thing going.’”

The brokerage will accept Bitcoin, Bitcoin Cash, XRP, ETH and dollar-pegged stable coins for payments, with Allen saying that blockchain in particular – a record of transactions in the form of a digital ledger – will become increasingly prevalent in the mortgage industry in the coming years.

“CMHC [the Canadian Mortgage and Housing Corporation] is kind of spearheading that whole revolution as well, with blockchain as the public ledger,” he said. “It’s very transparent and secure, and CMHC’s blockchain initiatives [are] right in line with what we’re seeing in regards to utilizing cryptocurrency, Smart Contracts and the blockchain to transact and improve the mortgage process.

“We’re not trying to make a blockchain mortgage; what we’re trying to do is originate a qualified mortgage using blockchain. We’re using the technology to try to improve the process and shorten the sales cycle.”

Allen said that Matrix was among the first in the mortgage industry to embrace the technology, which offers the ability to verify credit, income and assets, as well as potentially registering clients with non-fungible tokens and using Smart Contracts to transact peer to peer “and eliminate the need for intermediaries.”

“There are a lot of strong use cases to make the mortgage business a lot more efficient, and mitigate against fraud,” he noted.

Embracing cryptocurrency as a payment method, a Matrix press release added, also expanded the company’s reach into international markets where credit card payments are not practical, with Allen saying that the move was equally motivated by the company’s intention to “better align ourselves with the shift towards the global adoption of digital currency.”

Some may wonder whether adoption of the currency for payments requires a sizeable upheaval of a company’s digital platforms and payment systems, but Allen emphasized that it had been a smooth transition.

“It’s just like accepting Visa or Mastercard through a regular merchant services account,” he said. “But this way, it’s received in crypto and settled into Canadian dollars in the bank account.

“It goes on the balance sheet like any other transaction, and we pay taxes on those funds, the same way we would with any other transaction.”

The company has held regular information meetings for its agents about different projects and options that are currently offered on the cryptocurrency scene, with Allen emphasizing the importance of familiarizing staff with the technology and key concepts.

Having already implemented its payment processing system for cryptocurrency, Allen said that Matrix’s next step was to build its digital infrastructure to facilitate Smart Contracts and other technology.

“The whole industry is changing,” he said. “It’s going to be interesting to see, especially with CMHC coming out and saying that they’re interested in learning more about blockchain and how to implement that.

“If people are thinking that crypto is a fad, or blockchain is not real, they’re in for a rude awakening – because it’s here to stay.”

 

Copyright © 2021 Key Media

Former CMHC boss lands top job

Tara Deschamps
Mortgage Broker News

Alberta Investment Management Corp. has named the former – and often outspoken – head of Canada Mortgage and Housing Corp. as its next chief executive.

The investment manager said Thursday that Evan Siddall will officially start in its top job on July 1.

He will succeed Kevin Uebelein, who has been AIMCo’s chief executive since Jan. 1, 2015, and will depart on June 30.

“Evan is a veteran of the financial services industry and a well-regarded executive with the skill, presence and acumen to lead AIMCo,” Uebelein said in a release announcing his successor.

“I have every confidence that Evan will lead AIMCo to even greater heights for the benefit of its clients and for all Albertans.”

In his new role, Siddall will be responsible for more than $118 billion in assets under management and investing on behalf of 31 pension, endowment and government funds in Alberta.

He will also have to restore confidence in AIMCo, after it revealed last year that it lost $2.1 billion or one-sixth of the investment returns it made in 2019 on a single public equity strategy called VOLTS – Volatility Trading Strategy.

AIMCo’s board said it was moving quickly to reduce damage from the strategy and confirmed that no other investment strategies could generate substantial losses in very unusual circumstance, but called in accounting firm KPMG to conduct an independent review.

An audit later found AIMCo’s risk management systems to be at fault and a board report said, “The breadth and depth of risk governance controls, collaboration and risk culture, while evolving and improving over the past 2-3 years, are still unsatisfactory.”

While AIMCo was dealing with the situation, Canada was plunging further into a pandemic, putting pressure on the country’s housing sector and plenty of eyes on Siddall.

He stepped down as CEO of CMHC earlier this month after serving at the federal housing agency since 2014. He was replaced by Romy Bowers, a former managing director at the Bank of Montreal.

Before joining the national housing agency, Siddall was a special adviser to the governor of the Bank of Canada.

He spent 20 years with investment banking firms in Toronto and New York and two as a senior executive with Irving Oil Limited.

At CMHC, Siddall had a reputation for being outspoken.

He triggered criticism from Realtors and their associations when he urged the industry to “call out the glorification of home ownership for the regressive canard that it is” early in his time in the role.

Realtors were quick to push back and shared surveys that proved the majority of millennials or future homebuyers were keen to own homes.

When the COVID-19 pandemic hit towards the end of his tenure, Siddall attracted attention again for forecasting the fall of housing prices and the rise of mortgage arrears.

Neither materialized and he eventually took to Twitter to acknowledge his critics.

“We never pretended to have (a) crystal ball. Nor are we all-knowing on housing,” he wrote. “We meant to contribute to a discourse, even though it was hard to be precise about future. In hindsight, we could have made that clearer.”

On Thursday, Siddall appeared to be excited about his new job.

“I am delighted to join Alberta Investment Management Corporation as chief executive officer and to further strengthen the organization’s commitment to its clients across all aspects of its business,” Siddall said in a release.

“I am looking forward to working with AIMCo’s talented team of professionals in delivering consistently superior investment performance on behalf of our clients.”

The Canadian Press

 

Copyright © 2021 Key Media

Canadian housing sees hottest month ever

Ari Altstedter
Mortgage Broker News

 The Canadian housing market hit a new record with more properties changing hands in March than any month in history, as sky-high prices lured more homeowners to try to cash in.

The number of homes sold across the country rose 5.2% on a seasonally adjusted basis, according to data released Thursday by the Canadian Real Estate Association. The 76,000 houses that were sold was 14,000 more than the previous monthly sales record set last July. Benchmark home prices rose 3.1% from the previous month, adding to a record gain in February as more supply hit the market.

The continued strength in the market comes amid a debate in Canada over whether a housing bubble is building and what policy makers should do about it. Last week, Canada’s banking regulator said it will examine whether to setup a new benchmark interest rate used to determine whether people can qualify for uninsured mortgages, and Prime Minister Justin Trudeau’s government has said it is looking to impose a tax on foreign, non-resident homeowners. Some economists have argued these steps aren’t enough, though March’s increase in supply may ease some of these concerns.

“Now is a good time to talk about pent-up supply, which may be the answer to the question everyone is asking right now,” Shaun Cathcart, the real estate association’s senior economist, said in a press release. “As the uncertainty caused and danger posed by Covid wind down, some owners who would not sell during a global pandemic will emerge with properties for sale, while at the same time some of the urgency on the demand side could dissipate.”

The increase in supply saw the rate at which newly listed properties are sold fall to 80.5% from a peak of 90.9% in January, though still well above the long-term average of 54.4%, the real estate association said. Another measure of the balance between supply and demand, the number of months of housing inventory available, was at 1.7, the lowest on record.

–With assistance from Erik Hertzberg.

 

Copyright © 2021 Key Media

Vancouver DTES 3,050-square-foot retail sites sold for $1.3 million

Western Investor Staff
Western Investor

Vancouver DTES 3,050-square-foot retail sites sold for $1.3 million

Western Investor Staff
Western Investor

Single-tenant building in Vancouver’s Downtown East Side – Strathcona neighbourhood sold for $450,000 below the asking price.

Property type: Retail
Location: 450 East Hastings Street, Vancouver
Number of units: 1
Size of lot: 3,050 square feet
Lot size in acres: 0.07 acres
Zoning: DEOD sub-area
List price: $1.75million
Sale price: $1.3 million
Date of sale: March 10, 2021
Brokerage: Corbel Commercial Real Estate Services, Vancouver
Brokers: Willow King, Marc Saul and Robert Tham

© 2021 Western Investor

North Vancouver 22-suite multi-family rental sells for $10.8 million

Western Investor Staff
Western Investor

The central Lonsdale luxury apartment building was rebuilt from the studs with a complete retrofit, including the addition of two floors.

Type of property: Multi-family rental
Location: 1629 St. Georges Street, North Vancouver, B.C.
Number of units: 22
Size of land: 9,299 square feet
Land size in acres: 0.21 acres
Sale price: $10.8 million
Date of sale: April 1, 2021
Brokerage: CBRE national apartment group, Vancouver.
Brokers: Greg Ambrose, Lance Coulson and Kevin Murray.

© 2021 Western Investor

Is a stress test hike the wrong move?

Fergal McAlinden
Mortgage Broker News

 he prospect of the mortgage stress test level being raised “does not make a lot of sense,” according to Mortgage Alliance president Peter Aceto.

The Office of the Superintendent of Financial Institutions (OSFI) announced last week that it intends to raise the current test level to 5.25%, or two percentage points above the market rate, whichever is higher, and is currently seeking submissions from stakeholders ahead of possibly implementing the new rules on June 01.

Aceto said that the stress test, first implemented in 2018, was a good idea to ensure stability in the housing market, but that increasing the threshold for homebuyers was the wrong step.

“For me, making that buffer even bigger doesn’t seem like the most logical tool to help borrowers and lenders, and to cool down the housing market,” he told Mortgage Broker News.

The current stress test level is 4.79%, based on the current average five-year posted rate at Canada’s biggest lenders, as per the B-20 Guidelines. The Bank of Canada slashed its five-year conventional mortgage rate from 4.94% last August, but that trajectory has been reversed due to continued sky-high demand in the housing market.  

Instead of hiking the stress test, Aceto said that federal, provincial and municipal authorities could pursue other measures, including addressing the difficulties that new homebuyers have in entering the market.

“One of the biggest struggles concerns new homebuyers, and families trying to get into the housing market,” he said. “Making it harder for investors to participate, in a more surgical way, might be a better way to solve the problem.”

Aceto said that the proposal to hike the stress test level also did little to rectify the fact that demand is currently far outstripping supply of housing in Canada, one of the reasons for the currently madcap market.

“Creating more supply to match the demand is a very hard thing to do,” he said, “but I think it’s something that would be better [than increasing the stress test]. It’s definitely something that we should be working on now.

“I think the government has the largest role to play in terms of getting the supply and demand dynamic right. I think that the affordability that exists today, that was put in place with B-20, made a lot of sense – but making that buffer bigger does not make a tremendous amount of sense to me.”

Ways that the government might address that supply shortage, Aceto said, include incentivizing developers to build houses and initiating the government sale of land. “I think that’s a better, more sustainable way to solve the problem,” he said.

That support for federal intervention to address the current supply shortage in the Canadian housing market was also echoed recently by Michael Bourque (pictured below), CEO of the Canadian Real Estate Association. He told Mortgage Broker News that with the federal government currently spending some $15 billion annually on infrastructure, it could create conditions around allocation of those funds to municipalities in order to ensure that land becomes available for building and red tape is reduced.

 

“Most of the impediments to new buildings are at the municipal level, and municipalities are the ones that are always asking for infrastructure dollars to help them,” he said. “This is the best way to get municipalities to change their behaviour as soon as possible.”

Possible intervention to cool the housing market has become a hot-button issue of late, with federal minister of families, children and social development Ahmed Hussen asserting last week that reforming the capital gains tax exemption is not on the agenda following some speculation that action on that front could slow down the market’s rapid pace.

 

Copyright © 2021 Key Media

Timber and tech merge in Mount Pleasant office build

Frank O’Brien
Western Investor

— Vancouver’s first mass-timber offices will be similar to this Hines’ T3 building in Minneapolis.

Texas-based megadeveloper Hines, which recently announced a recent joint-venture to build a new 32-storey office tower at 1166 West Pender, has now linked with PC Urban of Vancouver on the largest and tallest mass-timber office building in Western Canada.

Located at 123 East 6th Avenue, T3 Mount Pleasant will be built of mass timber, where engineered wood replaces concrete. The building will also be certified Wirescore, which means it will have the world’s most robust digital and communications technology and be “future-proofed” to link into whatever new technology becomes available.

“T-3 stands for timber, transit and technology,” said Syl Apps, senior managing director at Hines, in an interview from his Toronto office. Apps said Hines has developed five buildings using T-3 – a Hines’ proprietary office product – in Toronto and nearly a score of them across the U.S. since its first such project in Minnesota in 2006.

T3 Mount Pleasant will be a 10-storey structure with 196,000-square-feet of leased office space. Construction is expected to begin in 2022, and be completed in 2024.

Apps said many office tenants like the authenticity of old brick-and-beam buildings, but such structures do not work well with contemporary technology.

Hines mass-timber buildings, Apps explained, are super quiet and are Wirescore certified, meaning they are wired with the very latest in communications and digital technology.

Building with mass timber offer more than aesthetics, he added.

Employees exposed to wood during their workday have higher levels of well-being and take less sick leave, studies have shown. Timber also has natural anti-bacterial and anti-microbial properties.

A state-of-the-art HVAC systems will provide superior indoor air quality, and the building design will maximize energy efficiency and natural light, according to Brent Sawchyn, CEO of PC Urban.

The current site of the T3 Mount Pleasant is on land owned by the City of Vancouver and occupied by the Simon Fraser University Annex, a 1928 heritage structure that will be incorporated into the new office building.

“We were selected by the city to acquire and redevelop the property based on our previous work in the area and our experience with heritage revitalization,” Sawchyn said. “We looked at the site as a perfect opportunity to bring mass timber office construction to Vancouver, and there is no one in North America with as much experience with this building form as Hines.”

The concept is for a building with the authentic appeal of century-old architecture but the smarts of the 21st century and beyond.

“Wirescore certifies that the building has the most advanced technology, especially regarding redundancy and resiliency. This includes multiple telecom pathways into the building , multiple sources of back-up power and robust connectivity throughout the building to boost the cell signal,” Apps explained. “It means that the Internet connection, or the power, will never go down.”

Abbs said Hines suspects the Wirescore certification leads to superior lease rates and longer tenancies, but said it is too early to quantify that, though he said it does cost more to provide the redundancy systems, such as back-up power generators and wiring for multiple Internet hubs.

“It is money well spent,” Apps said, “We do it because it is important to our tenants, and therefore it is important to us.”

Hines is also doing the first retrofit of Wirescore in Canada, with its reconfiguration of the 40-year, 27-storey First Tower at 411 First Street SE, Calgary, which Hines bought with a partner in 2018. Once tenanted by Telus, the office tower was already equipped with modern telecom connectivity, Apps noted.

Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 25 countries. With approximately $144.1 billion of assets under management, the firm has 165 developments currently underway around the world.

 

© Copyright 2020 Western Investor

New Westminster commercial site sells for $1.8 million

William Wright Commercial
Western Investor

Freestanding, two-tenant, 2,170-square-foot, triple-net leased building on a 4,356-square-foot lot is in the popular uptown area of the Royal City.

— William Wright Commercial, Vancouver, for Western Investor

Property type: Retail

Location: 538 Sixth Street, New Westminster, B.C.

Number of units: 2

Size of property: 2,170 square feet

Size of land: 4,536 square feet

Zoning: C-3

List price: $1.87 million

Sale price: $1.8 million

Date of sale: March 15, 2021

Brokerage: William Wright Commercial, Vancouver

Broker: Nathan Armour

 

© Copyright 2020 Western Investor

RBC to give staff extra day off

Kevin Orland
Mortgage Broker News

Royal Bank of Canada and Toronto-Dominion Bank are giving employees an extra paid day off this year, as a lengthy pandemic shows signs of worsening in Canada.

RBC Chief Executive Officer Dave McKay acknowledged that staff are more exhausted now than at any time during the Covid-19 pandemic. The bank needs to “eliminate the stigma associated with asking for time to focus, concentrate, and in some cases, log off and recharge,” McKay said in a companywide memo on Thursday.

Toronto-Dominion also told employees they would get an additional day off, with Chief Executive Bharat Masrani encouraging staff to take it when they need it most. “After a year of sacrifice and disruption, we must all endure these challenging circumstances for a bit longer,” Masrani said in a memo. “I know that this has not been easy, and everyone is tired.”

Burnout has become a more pressing issue for financial firms as the pandemic moves into its second year and some lines of business, including mergers and acquisitions, see a sustained boom in activity.

Last month, Goldman Sachs Group Inc. CEO David Solomon said the firm would improve enforcement of a rule designed to ensure junior bankers don’t have to work on Saturdays. His memo came after junior analysts gave managers a presentation showing that some worked 100 hours in a week.

RBC, Canada’s largest lender, is also giving its roughly 86,000 employees worldwide a free, one-year subscription to Headspace, a meditation and sleep app. An annual subscription costs $69.99, according to Headspace’s website.

“Beyond this extra day off, we recognize the ongoing pressures of the pandemic, especially for those in regions that have reverted back into lockdown,” McKay said in the memo. Those regions include RBC’s home province of Ontario, which declared a statement of emergency on Wednesday for the third time since the beginning of the pandemic.

The CEO encouraged the bank’s employees to take their vacation time and to book the extra off day with their managers. He said that during the pandemic, he has taken a couple of vacations and used them to spend more time outside, learn new songs on his guitar and read more than he has in years.

“I encourage all of you to prioritize your personal time and continue to be mindful about work-life boundaries wherever possible,” McKay wrote.

 

Copyright © 2021 Key Media