While not very well-known among consumers and home buyers, Xceed Mortgage Corporation is a very popular choice among mortgage brokers, especially when they have clients looking for sub-prime mortgages, something that very few lenders are now offering in Canada. Now though, Xceed has been sold, and the sale had many brokers worried that, like ING and FirstLine, they would no longer offer mortgages through the brokerage channel. Now though, they – and their clients – can rest easy, knowing that those fears are, for now anyways, unfounded.
It was last week that it was announced Xceed Mortgage Corporation would be purchased by MCAN, the parent company of MCAP. The transaction will close in about three months, and MCAN paid a whopping $53 million for the deal. Mortgage brokers were mostly concerned that, being a broker-only channel, that would soon stop, and brokers would once again be left in the cold by lenders that wanted to charge higher rates and make more off their customers.
But Xceed’s CEO, Michael Jones, says that brokers have nothing to worry about.
“I do think it is going to be a positive for mortgage brokers,” Jones said, who wanted to make it very clear that the deal still need to be voted on and approved by the company’s shareholders. “It’s still early days, but broker shouldn’t worry about us suddenly disappearing from the channel. If you read the press release from MCAN, they specifically say that they acquired Xceed to add scale to their business, like our origination capability on single-family mortgages.”
If you haven’t read the release just yet, in it MCAN president and CEO, William Jandrisits, did allude to the fact that the company would still operate under the guidelines and policies that Xceed currently does.
“[The acquisition of Xceed] will add scale to our operating platform and expand our origination capability for single family residential mortgages,” said Jandrisits. “We expect the addition of Xceed’s CMHC origination and underwriting capabilities combined with MCAN’s existing operations and superior access to capital will contribute to long-term, sustainable earnings.”
Jones also added that the deal was structured so that the two companies could complement each other, but consumers and brokers will both have to wait a bit longer to find out exactly what that structure will be.
“MCAN and Xceed have synergies; this was a complementary deal,” Jones said. “We are going to do our level best to service mortgage brokers – all I can really say for certain is ‘Stay tuned.'”
