How alternative lenders are adapting to falling home prices

Canadian alternative lenders are adapting to changing economic conditions and falling home prices. Mortgage Investment Corporations (MICs) like Magenta Capital Corp. and Fisgard Asset Management Corp. have stopped taking loan applications or are adjusting their product offerings to focus on their core business of residential mortgages. They are being more selective in deploying their limited capital and are tightening their product categories, which could mean reducing loan-to-value ratios. Despite the low arrears rate among non-bank lenders and mortgage investment entities, lenders are still cautious about the potential impact of declining home values on their portfolio.