A finance sector business management "unmet demand" issue first identified by PrivateLender.org®: Canada's Private Lending Network® at least as early as April 9,  2005 and confirmed by a Crown Corporation of the Government of Canada: Canada Mortgage and Housing Corporation (CMHC) on July 16, 2019.

• there are no prescriptive underwriting criteria, participants [alternative lending space industry sub-group respondents to a round table session, organized by CMHC in Toronto, Montréal and Vancouver, Canada] agreed upon the importance of well-defined exit strategies to determine borrowers’ eligibility to the loan.

Where do the standards come from?

Underwriting Standards:

for Mortgage Investors and Lenders Only 

Mortgage industry-specific standards that enables mortgage investors and lenders to properly evaluate and assess (underwrite) a mortgage application. The standards cover the processes from receipt of Lender Information Package, risk assessment, risk-price determination and decision making.

Underwriting standards are designed for, and may only be applied by, mortgage investors and lenders or their mortgage underwriting agents.

Learn More: Origination and Underwriting Standards

Origination Standards:

for Licensed Mortgage Brokers and Agents Only

Mortgage industry-specific standards that enables licensed mortgage brokers and agents to prepare mortgage applications in a manner that is acceptable to mortgage investors and lenders for underwriting purposes. The standards cover the process of origination which includes: obtaining a mortgage applicant, interviewing the applicant, assessment of the applicant's mortgage request situation, collection of supporting documentation, validation of application contents and preparation of Lender Information Package.

 

This standardized approach towards preparation of mortgage applications ensures efficacy, efficiency and accountability for all stakeholders. This effort reduces wasted time and resources caused by incomplete, disorganized or poorly prepared mortgage applications (those applications that are riddled with instances of inconsistences, faulty logic, false inclusions, errors and omissions).

Learn More

Dual Registration to both the Underwriting & Origination Standards:

for companies whose scope includes the business of Mortgage Brokering, Mortgage Lending and Third-Party Mortgage Underwriting

Some companies are simultaneously licensed as mortgage brokers and may also be in the business of mortgage lending and underwriting for third-party mortgage investors and lenders. In order to qualify for dual registration to both the Underwriting and Origination Standards, these companies must provide the following:

    - proof of license as a mortgage brokerage within the jurisdiction that they operate
    - proof that the company acts only for its mortgage investor and lender clients
    - proof that the company has an errors and omissions insurance policy and the scope of the policy includes recognition that the company is an agent for mortgage investors and lenders

    - proof that the company has implemented a formal quality management system certified to be compliant to ISO 9001:2008 or equivalent standards

Why are standards important for mortgage underwriting?

Standards reduce errors, save time and money.

When a person applies for mortgage, they often go to a bank and the banker asks the applicant to fill in a mortgage application and answer a series of questions. The application process is customized for that one bank and if the bank ends up declining the mortgage applicant, the applicant must go to another bank and go through the process of applying for a mortgage with the new lender, as per the new lender's customized criteria. This takes much effort and time.

Often, a better way for the mortgage applicant is to work with a mortgage brokerage firm because the brokerage firm will obtain the needful mortgage application information and then work with a number of lenders in order to obtain a mortgage approval for the applicant. The benefit for the applicant is that they only need to go to "one stop" for their mortgage needs. One common problem that mortgage brokerages face when obtaining mortgage approvals is that not all lenders necessarily want or need the same information from the mortgage applicant when determining if a mortgage is necessary or not. This absence of standardization will often slow the mortgage approval process because the mortgage broker must customize their mortgage applications for each lender that they send a mortgage submission to. 

Moreover, mortgage applicant requests from mortgage brokers are often riddled with errors and omissions (which is why most countries require that mortgage brokers obtain errors and omissions insurance in order to practice within their jurisdictions). Erroneous applications waste the time of professional private mortgage lenders and mortgage applicants who might have an excellent application end up being declined simply because the mortgage brokerage firm did not prepare the lender information package in manner that is either current or an accurate reflection of the applicants situation

Additionally, in today's economy, in response to the great credit crisis of the early 2000's, mortgage brokers and mortgage borrowers are finding it more difficult to obtain mortgage funds from traditional, institutional lenders, namely banks and trust companies.  With the introduction of more rigorous borrowing criteria, greater numbers of mortgage applicants are being served by the private equity investment sector; namely, through non-bank, private individuals and corporations that loan money against real estate. 

Non-bank and private lending organizations are not traditional institutions, they often do not hire business development officers (individuals who are used by banks as a marketing and service conduit to the mortgage broker community). The role of a business development officer is to both market the capital that the lender has available for mortgages and to educate the mortgage origination community on what format and what contents a mortgage application (lender information package) should contain and in what format they should appear.

GAMUS.org provides standards that are generally accepted by mortgage lenders (bank, non-bank or private) throughout the world, so that mortgage brokers who submit mortgage applications to these lenders will have a greater degree of success in obtaining mortgage approvals for their mortgage customers.

Mortgage consumers don't know about it, but appreciate it

Mortgage consumers don't typically understand the process of underwriting, but want to know that a mortgage broker has all the tools that they need to ensure that a mortgage application will receive a warm reception by a prospective lender. A poorly prepared mortgage application, or one riddled with errors and omissions places the mortgage applicant in a bad light or at worse, results in applicants being declined when in fact, they might have been approved. With GAMUS.org, mortgage applicants know that their mortgage brokers are working in a manner that is both efficient and effective to a "generally accepted" standard.

Standards; Bank, Non-bank and Private mortgage Investor-Lenders demand it

Whether a lender is a bank, non-bank or private mortgage lender, they all want mortgage applicants that fit a defined format. From narrative summary to property valuation, there are hundreds of steps involved when a lender needs to determine if a mortgage application is worth approving or not. Without standards in place, the mortgage lenders would be wasting their time and in the mortgage business, time truly is money.

GAMUS.org is a co-initiative of PrivateLender.org, the definitive source for all things related to investing in non-bank credit instruments (private lending) and home to the Accredited Class^® Private Lender (APL) designation:

How do I know I have am dealing with a GAMUS.org Registered Mortgage Broker?

All GAMUS.org registered mortgage brokers can be found at our list of Registered Member Mortgage Brokers. Only registered members of GAMUS.org can advertise the GAMUS.org logo and only registered members can advertise that they prepare GAMUS-Certified^® Lender Information Packages.

What is a GAMUS-Certified^® Lender Information Package (LIP)

A GAMUS-Certified^® Lender Information Package (LIP) is what mortgage brokers and agents present to a mortgage lender when they are introducing your mortgage request. The LIP is prepared in accordance with the generally accepted mortgage standards of GAMUS.org and gives you the confidence that your mortgage broker and agent is working at the highest levels of efficacy, efficiency and accountability.

If your government regulated or non-regulated or regulatory exempt mortgage broker is not GAMUS.org-registered, then your mortgage broker is simply not serious about the game!

Click here to find a mortgage brokerage firm that adheres to GAMUS.org mortgage underwriting standards.