How to Prepare a MIC Mortgage Application for your Lender How to Sell a MIC commitment to your Clients

Presented by:

Will Granleese: M.B.A. Business Development Manager Antrim Investments

Christine Perkins: BA AMP Business Development Manager Cove Mortgage

Why you’re all here…

•  Sold out Event !! •  Today’s Market

•  Mortgage Rule Changes push more deals to MIC Lenders

•  Partner with a Professional Organization •  Set you up for Success

Agenda

•  Difference between MIC’s and Private Lenders •  Identifying a MIC deal •  The Underwriting Process •  What you see on a MIC commitment •  How you get paid •  Presenting a solution to your client •  What happens when the file is instructed?

MIC value proposition

•  Short term solution for your clients who are experiencing difficulties receiving approval at traditional lenders

•  Our fiduciary Duty… ( Provide clients with the best possible solution)

•  Focus on solutions not rates… •  Short term (typically 1 Year) •  Goal to have clients migrate back to institutional lenders within 1 or

2 years

The Difference between MIC’s and Private Lenders

•  Professional organizations as opposed to individuals •  Knowledgeable Underwriters vs. Limited Knowledge •  Fast turnarounds •  Committed to the deal as presented…will not back out •  Detailed lending guidelines

•  Registered with FICOM •  Clear renewal policies

Identifying a MIC deal

Duty to client is to try institutional lenders first. •  Some clients fall through the cracks •  Self-employed •  Mortgage Rule Changes •  Unique Properties (Co-op, leasehold) •  Damaged Credit •  Pre-paid Mortgage •  2nd and 3rd Mortgages

Identifying a MIC deal

•  Inter-alia •  Land Deals •  Unique Locations •  Quick Close •  Debt Consolidation •  Foreclosure Relief •  Vendor Take-Back Mortgage

Identifying a MIC deal

The “Story” makes the deal. •  Yes they are self-employed… BUT… this is why it’s a deal…

•  Lots of equity •  Back to work after injury •  Many other reasons

How to Increase your chance of an Approval

•  Know your client •  Focus on the solution not the rate •  Be upfront with the real reason the client needs the mortgage

•  Know your Lender •  Each MIC has a unique product offering •  Review the file with a MIC underwriter before submitting •  Application should be complete

The Underwriting Process

•  The more equity the less stringent the underwriting •  Max 75 – 80% LTV in most cases

•  On higher LTV Deals MIC’s are more concerned with credit •  Capacity •  Collateral •  Character •  Capital

The Underwriting Process

Underwriter looking for the following •  Application – e-mail or Filogix •  Bureau •  Appraisal – Check approved appraiser list for each MIC •  Story – What makes this a deal •  Exit Plan (some MIC’s) – How will the client migrate back to

prime rates in the future? •  Geographic Location

What’s on the Commitment

•  Higher Rates than Traditional Lenders •  Lender Fee / Broker Fee •  Less Red Tape •  Less Docs and conditions •  Faster Closings •  Good Faith Deposit •  Appraisal •  ILA may be required

How you get paid

•  Earn More than ‘Bank’ deals •  1 – 3% Lender Fee •  1 – 3% Broker Fee

* Fees are negotiable depending on the size and challenges of the file

•  Majority of Brokers charge a min. $1000 fee

•  Paid on funding directly from lawyers

How to Present the Commitment

Before you Submit the deal…

•  Set expectations in the beginning…Do your clients know the rate and fee will be higher?

•  Make sure you have not promised bank rates. •  Have you reviewed the reasons why traditional financing is not

available at this time? •  Present the commitment as a solution

Presenting a solution to your client

This Mortgage is a Solution…

•  They can move forward •  Make a positive change •  Clean up credit to reduce monthly payments •  Make a purchase now •  Not lose a down payment

Presenting a solution to your client

•  Don’t focus on rate…focus on solution

•  MIC’s are open to some level of negotiation… might be some wiggle room depending on the file

•  Limited pool of capital… decisions must be made quickly. Cannot hold rate and funds for extended period.

What happens when the file is instructed?

•  May require Certificate of Independent Advice •  Client responsible for Legal Costs

•  Title Insurance

•  Funding •  Very quickly… •  Title – leased land, prior charge confirmation… •  Lawyers - month end •  Conditions – appraisal, Form B… •  Sometimes within 24 hours

Other considerations…

•  Respect a lender turndown •  Avoid sending the deal to multiple MIC’s at the same time

•  Know your lender and know the file to increase closing ratios •  Avoid contacting the lenders lawyers to instruct changes

Conclusion

•  More-than-ever your clients need options

•  MIC’s are a great solution

Contact info:

Will Granleese: M.B.A. Business Development Manager Antrim Investments Will@antriminvestments.com 604.530.2301

Christine Perkins: BA AMP Business Development Manager Cove Mortgage Ltd. christine@covemortgage.com 778-988-8940