Accredited Class® Private Lender Underwriting Standard (APLUS®)

Accredited Class® Private LendersTM (APL) are busy people.  They cannot have lender service agreements (which is required by law), with every mortgage brokerage or mortgage broker in Canada. Some brokers may only send one or two deals a year, so it would be operationally prohibitive, given the quantity of mortgage brokers in the industry. 

Additionally, not every mortgage broker does "good work". The average equity mortgage application may have a host of errors, ommissions or out-date information. The APL does not have the time or interest to invest time in a mortgage application, make sense of whatever information is presented, and then find out that the information is either wrong, out-of-date, or things are simply missing. 

The Accredited Class® Private Lending Standard is a system that was established by PrivateLender.org and takes an equity mortgage application and converts the information and contents therein, to a format that is easily recognizable to an APL.

The standard allows for a uniform way of delivering information to the APL which means they can "make sense" of the transaction quickly and can rely upon the contents of the APLUS® information package for decision making purposes. This translates into faster turn-around times for you and your client.

The core of the APLUS® system lies with Internal Underwriting


What is Internal Underwriting (IU)?


Internal Underwriting is the process that MortgageQuote Canada Corp., Private Lending Services employs, when preparing any mortgage transaction for review by an Accredited Class® Private LenderTM (APL). The internal underwriting (IU) process is the reason we have such a great track record for obtaining mortgage funds for clients in non-normal situations. IU will convert your standard mortgage application into meaningful information using the Accredited Class® Private Lender Underwriting Standard (APLUS®). This is the standard relied upon by Accredited Class® Private LendersTM, for reviewing and pricing private equity mortgage investment opportunities.

APLUS® consists of all three phases of a transaction: Pre-Underwriting, Underwriting and Post-Underwriting. The APLUS® system enables the Internal Underwriters to most effectively:

- Validate the mortgage origination process to ensure regulator compliance
- Organize Mortgage Application Documents
- Index Mortgage Applicant Credit Data
- Assess the Risk classification of a Mortgage Applicant
- Determine the Risk Premium of a Mortgage Applicant
- Maintain Quality and Continuous Improvement of the Origination, Underwriting and Fulfilment of the Mortgage Applicant's Transaction
- Present the file to the lender for further analysis and risk premium finalization


What is so important about Internal Underwriting?

The Internal Underwriting process provides the APL CONFIDENCE to know that the information they are looking at has been pre-viewed by a third party entity (namely mortgagequote.ca). Moreover, our firm has lender services agreements in place, such that the lender relies that we are acting as their agents (in either formal and informal terms), and has no interest in whether or not the transaction is funded; but rather, has the goal to "make sense" of the transaction for the lender. Once our IU team makes sense of the file, the team will summarize the contents in a format that the lender is familiar and happy with. This is of critical importance for private mortgage transactions that are not your "typical", "routine" mortgage transaction, since the underwriting process can neither be automated nor duplicated for each and every deal -- as you can with "normal" mortgages.


What happens when you send us a file?

Operationally, when your file is received by the underwriting team, our Internal Underwriting (IU) process automatically starts. The IU process has been designed from the ground up, to maintain quality and consistency, while ensuring that the private lender can quickly and efficiently understand the nature and substance of your mortgage transaction, without having to ask too many additional questions. The underwriting team does the following:

Pre-Analysis:

0 - confirms whether the originating broker is registered in the province where the property is located in; or, confirms that MortgageQuote.ca is licensed in the province in which the property is located. (contact us to learn more).

1 - identifies and renames the mortgage application documents using an indexing system that ensures that APL's can, at-a-glance, identify documents and make sense of what the documents contain. Sometimes, if your file has 10 unique document sets or more, this can be a time consuming, pain staking process. 

Underwriting Record:

2 - in to prepare a meaningful lender information package an Underwriting Record is created and your mortgage application will undergo a review for both veracity and currency of information. You may or may not be surprised that most mortgage applications for equity lending are riddled with errors and omissions. Sure, we don't mind taking risk, but we need to know the "full story" and make sure the application information supports the narrative.

3 - input the credit and security variables into a template called the Lender Information Summary, which consolidates all of your clients mortgage application information into one, meaningful summary document.

4 - extract all the credit and security variables, cross reference these variables with market valuation data and using a multi-variate modelling system; arrive at a risk profile of your client and in turn, create a premium pricing model based upon the assessed risk.

If your client is deemed low risk, you can expect pricing in this range - (contact us to learn more).
If your client is deemed high risk, pricing can reach the legal limit. Depending upon your jurisdiction, the legal limit can be as low as 60% APR (calculated half-yearly, not in advance) - (contact us to learn more)..

Lender Selection - Lender Search: 

5 - identify the available APL's based upon the results of the analysis phase.

6 - send a Lender Information Package to the selected APL(s) for review, and continue to send the file to successive APL's until either a lender is identified or until we determine that no lender likes the deal at the current time.

7 - Issue General Terms (pricing info), or a Conditional Commitment Letter or a Decline notice to the originating mortgage broker.

8 - Followup as required.