Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Category Archives: Fintech and Real Estate
Clay Financial Closes $1.7 Million Pre-Seed to Offer Home Equity Sharing AltFi Product in Canada
Alternative Finance | Sep 12, 2023
Image: Unsplash/Francesca Tosolini
Clay Financial secures $1.7M for its innovative HESA product in Canada, offering homeowners a flexible, debt-free way to tap into home equity. Launching soon in Toronto.
$1.7 Million Pre-Seed Funding Secured to Offer HESA
- Toronto-based fintech, Clay Financial Inc., has successfully closed its pre-seed funding round, raising a substantial $1.7 million. This funding will be instrumental in completing the development of its innovative product and platform, expanding its team, and driving the company's strategic growth initiatives.
- Clay's HESA (Home Equity Sharing Agreement) is a pioneering solution in Canada, designed to allow homeowners to convert a portion of their home equity into cash. This is achieved by exchanging it for a share of their home's future appreciation. Unlike traditional debt products such as home equity lines of credit and reverse mortgages, HESA offers flexibility with no monthly payments and ensures homeowners' existing equity remains intact. Clay is gearing up to launch its HESA in the Greater Toronto Area by the end of 2023.
- With the introduction of HESA, Clay is venturing into creating an alternative asset class. This provides institutional investors with a unique opportunity to tap into Canada's $6 trillion owner-occupied residential real estate market. HESAs are designed to diversify investor portfolios, mitigate volatility, and offer a hedge against inflation, all without the conventional costs associated with residential real estate investments.
What is HESA and How Does It Work?
- The main problem that HESA solves is providing homeowners with a way to access the equity in their homes without incurring additional debt. Traditional methods, like home equity loans or reverse mortgages, allow homeowners to tap into their equity but come with the burden of monthly repayments, interest rates, and the potential risk of foreclosure if they cannot meet the repayment terms.
See: Real Estate Fintechs Feel the Heat as Macro Trends Unfold
- Instead of a loan, homeowners agree to share a predetermined percentage of their home's future appreciation (or depreciation) with the HESA provider. This provides immediate liquidity to homeowners, allowing them to use the funds as needed, while also ensuring they remain invested in the property's future growth or decline. It's a flexible, debt-free alternative for homeowners to leverage their property's value.
Initial Application and Valuation
- A homeowner, interested in tapping into their home's equity, approaches a HESA provider like Clay Financial Inc.
- They fill out an application detailing their property.
- The provider then gets the property independently appraised to determine its current market value.
- Based on this valuation, they calculate how much of the home's equity the homeowner can access.
Receiving Cash and Setting Terms
- Once the value is determined, the homeowner and the HESA provider agree on how much equity will be converted into cash. The homeowner then receives this amount as a lump sum.
- The unique aspect of HESA is that the homeowner doesn't need to make any monthly payments back. Instead, they're agreeing to share a part of their home's future value increase with the provider.
Settling the Agreement
- The HESA agreement has a set duration, like 10 to 30 years. When this period ends, or if the homeowner sells their house before that, it's time to settle the agreement.
- At this point, the homeowner gives back the initial cash they received to the provider. Additionally, they'll also share a previously agreed-upon percentage of any increase in the property's value.
See: Real World Implementation of Real Estate Tokenization
- If the property's value went down, the provider might also share in that loss, depending on what was agreed upon initially.
- After settling, the homeowner retains any remaining equity and continues owning their home without any HESA-related obligations.
What's The Catch?
- The main risk or challenge with HESA (Home Equity Sharing Agreement) for homeowners is the potential loss of a significant portion of their home's future appreciation. Since the homeowner agrees to share a predetermined percentage of the future increase in their property's value with the HESA provider, if the property appreciates considerably over the term of the agreement, the homeowner could end up giving away a substantial amount of the value they would have otherwise fully retained.
- For example, if a property's value skyrockets over the years due to market trends, neighborhood developments, or other factors, the homeowner will still have to share the agreed-upon percentage of that appreciation with the HESA provider. This could mean parting with a large sum of money that they would have kept had they chosen a different equity-access method.
- Additionally, while the homeowner doesn't take on traditional debt with HESA, they do enter into a long-term financial commitment that might limit their flexibility in future financial loans or property-related decisions.
Frequently Asked Questions
1. Is the Home Equity Sharing Agreement (HESA) model unique to Canada, or is it being adopted in the U.S. and other global real estate markets?
The concept of Home Equity Sharing Agreements, while pioneered by companies like Clay Financial Inc. in Canada, is not exclusive to the country. Similar models are emerging in the U.S. and other global markets. In the U.S., for instance, several fintech startups have introduced equity-sharing products that allow homeowners to access cash without taking on debt. These models are gaining traction as they offer a flexible alternative to traditional mortgages and home equity loans, catering to the evolving needs of modern homeowners.
See: McKinsey: Tech Trends 2023 That Every Fintech, Bank, or Financial Service Provider Must Consider
2. How does the HESA model compare in terms of success and adoption to other alternative financial solutions in the real estate sector?
The HESA model is relatively new, but its adoption rate has been promising, especially among homeowners looking for non-debt solutions to access their home equity. In regions where it has been introduced, it's seen as a viable alternative to traditional home equity lines of credit and reverse mortgages. Its success can be attributed to its flexibility, lack of monthly payments, and the opportunity for homeowners to benefit from future property appreciation. While it's still early days, the positive reception suggests a bright future for HESA and similar models in the real estate sector.
3. Given the innovative nature of HESA, are there any regulatory challenges or concerns in implementing such a model in different countries?
Yes, like any new financial product, the HESA model can face regulatory challenges, especially in countries with stringent real estate and financial regulations. Each country has its own set of rules governing property ownership, equity distribution, and financial agreements. Therefore, fintechs and companies looking to introduce HESA or similar models in new markets must work closely with local regulatory bodies to ensure compliance. It's crucial to address any legal ambiguities and ensure that homeowners' rights are protected throughout the equity-sharing process.
Conclusion
The fintech landscape is ripe with innovation, and Clay Financial's recent capital raise and the introduction of HESA is a testament to that. As alternative financial solutions continue to emerge, they offer consumers more choices, reshaping the future of finance. However, as with all financial products, it's crucial for consumers to understand the implications fully and make informed decisions.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Future of Home Loans and Intercontinental Exchange’s Big Bet on Tech
Real Estate | Sep 9, 2023
Image: Unsplash/Brian Babb
Jeff Sprecher, the founder and CEO of the commodities and securities trading giant, Intercontinental Exchange (market cap: $64 billion), makes a bold $11.9 billion acquisition propelling the mortgage industry's digital leap, transforming age-old loan processes with data-driven platforms.
- Despite the mortgage market facing challenges with rates hitting two-decade highs and a decline in originations post-pandemic, Sprecher has showcased his confidence in the potential of digitizing the mortgage process.
- On September 4, Intercontinental Exchange acquired home loan servicing and data analytics provider Black Knight for a whopping $11.9 billion. This acquisition surpassed the $8.2 billion Sprecher spent on the 2013 purchase of the New York Stock Exchange.
- With the acquisition of Black Knight, Intercontinental Exchange can now offer homeowners a comprehensive platform that provides everything from AI-calculated home value estimates to updates on the best loan products available for refinancing.
- Sprecher's platform, ICE Mortgage Technology, holds dominant positions in various segments of the mortgage industry.
- Ellie Mae handles 50% of all originations;
- MERS manages 85% to 90% of registrations; and
- Black Knight dominates 65% of the servicing market.
The Role of Data in Modern Mortgage
Data-driven platforms, such as the one envisioned by Sprecher, can offer a plethora of benefits to both lenders and borrowers. By harnessing the power of real-time data analytics, these platforms can streamline the loan approval process, ensuring quicker and more accurate decisions. Additionally, for homeowners considering renovations, Home Remodeling Contractors San Jose can provide insights into maximizing property value through strategic upgrades.
See: New Mortgage Guidelines in Exceptional Circumstances: Implications for Fintech and Bank Mortgage Lenders
These platforms can provide:
- Real-time insights: Borrowers can receive immediate updates on their home's equity value, loan balances, and interest rates.
- Better loan products: With access to a wealth of data, lenders can design loan products tailored to the specific needs of borrowers.
- Informed decision-making: Comprehensive data analytics can guide borrowers in making decisions about refinancing, purchasing a new home, or choosing the best loan product.
Traditional Mortgage Process
- Paper-intensive and time-consuming.
- Involves multiple intermediaries, including lawyers, notaries, and lenders.
- Average cost of at least $8,000.
- Takes around two months from origination to closing.
See: Halal Mortgages Emerging in Canada’s Housing Market
Digitized Mortgage Process Introduced by Intercontinental Exchange
- Streamlined and efficient.
- Reduces the need for intermediaries through electronic platforms.
- Significant cost savings for borrowers.
- Reduces the time from origination to closing to just a few days.
- Provides real-time data to both lenders and borrowers, enhancing decision-making.
Final Thoughts
The acquisition of Black Knight by Intercontinental Exchange marks a significant milestone in the digital transformation of the mortgage industry. With a focus on data-driven decision-making, streamlined processes, and enhanced customer experiences, the future of the mortgage industry looks promising. As more industry players recognize the potential of digitization, we can expect further innovations and improvements in the way mortgages are processed and managed.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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How Local Housing Laws Shape Residential Property Management
Aug 29, 2023
Image Unsplash/Chuttersnap
Homeownership and residential rentals are deeply rooted in the societal fabric of many countries. But, not all housing landscapes look the same. Different regions possess unique housing regulations that deeply impact how property owners manage their real estate.
In this article, we will delve into the relationship between local housing laws and their impact on residential property management.
The Complex Landscape of Housing Laws
Consider the myriad of laws governing residential properties: tenant rights, health and safety standards, rent control, and more. Each of these laws has been established to create a fair and balanced housing market. However, the impact of these laws is deeply felt by both property owners and residential property management services.
A case study worth noting is the impact of rent control laws.
1. Understanding the Rent Control Laws
One of the most discussed and potentially contentious housing regulations in many parts of the world is rent control.
These laws limit the amount a landlord can increase the rent for a tenant. While they have the noble intention of keeping housing affordable, they can also have unintentional consequences. Some landlords might avoid major property improvements, knowing they can't raise rents to cover the costs. This might lead to aging and potentially unsafe housing stock.
Moreover, for landlords operating under tight margins, these laws can lead to potential financial strain. The inability to adjust rent in line with market rates or in response to increasing property taxes or maintenance costs can make some rental properties less economically viable. From the perspective of residential property management services, such scenarios pose challenges in ensuring property upkeep and tenant satisfaction.
2. Knowing the Tenant Rights
Another significant area of housing law revolves around tenant rights. Many jurisdictions have enacted laws that provide tenants with protections against unjust evictions, rights to essential services, and certain standards of living conditions.
These laws cover key areas such as security deposits, lease agreements, and repairs. Property managers must navigate these legal frameworks to ensure compliance while maintaining positive tenant relationships. Clear communication and adherence to legal obligations are essential to prevent conflicts and legal disputes.
3. Navigating the Zoning Laws
Zoning laws, or land-use regulations, dictate the nature of developments permissible in certain areas. Residential, commercial, industrial, and agricultural are the most common zoning types. For property managers, these laws can dictate the potential uses of a property.
Landlords must navigate these regulations to ensure their properties are being used in compliance with zoning designations. For instance, a landlord looking to convert a single-family home into a multi-unit rental property must adhere to zoning laws that govern property density and usage. Thus, zoning laws significantly shape a landlord's property acquisition, rental strategies, and overall residential property management approach.
4. Fulfilling Landlord Responsibilities
Local housing laws often define the specific requirements that landlords must adhere to within a particular jurisdiction. These laws are put in place to ensure that rental properties are safe and habitable and that tenants' rights are protected. Here are some responsibilities to know:
- Property Maintenance and Repairs: Local housing laws often mandate that landlords maintain rental properties in a habitable condition. These laws define specific requirements for property upkeep, including addressing issues such as plumbing, heating, electrical systems, and structural integrity. Landlords must comply with local building codes and regulations to ensure the safety and well-being of tenants.
- Eviction Process: The eviction process is governed by local laws, which outline the specific procedures landlords must follow. These laws ensure that tenants' rights are protected during the eviction process.
- Health and Safety Standards: Local housing laws set health and safety standards that landlords must meet. These regulations may require the provision of working smoke detectors, carbon monoxide detectors (if applicable), and safe living conditions that are free from hazards that could harm tenants.
- Security and Locks: Many local laws require landlords to provide secure locks for all exterior doors and windows. Ensuring the security of rental properties is crucial for tenant safety, and these laws aim to prevent unauthorized access.
- Utilities: Local housing laws often define the minimum utilities that landlords must provide. These regulations may stipulate that landlords need to ensure tenants have access to essential utilities such as water, heating, and electricity.
- Rent Collection: Rent collection practices are typically guided by the lease agreement and local laws. These laws may address issues like grace periods, late fees, and acceptable methods of rent payment.
- Security Deposits: Local laws often specify how security deposits should be handled. This includes rules about the maximum amount that can be charged, how the deposit should be held, and the conditions under which it can be withheld.
- Privacy and Entry: Local laws establish guidelines for landlord entry into rental properties. These laws often require landlords to provide advance notice and obtain tenant consent before entering the property for non-emergency reasons.
5. Meeting the Building and Safety Codes
Building codes ensure that structures meet certain safety and structural standards. Over time, these codes may be updated to reflect new safety standards or technologies. Residential property management services must ensure that the properties they manage adhere to these codes. Non-compliance can result in fines, legal action, or even the eviction of tenants in extreme situations.
6. Understanding The Fair Housing Act
The Fair Housing Act, at its core, safeguards individuals from discrimination in housing based on race, color, national origin, religion, sex, familial status, or disability.
This legislation imposes a responsibility on landlords and housing providers to ensure that all individuals have equal access to housing opportunities. Landlords are legally obligated to treat all potential tenants fairly and equitably, refraining from any form of discrimination or biased practices when renting out their properties. This entails that landlords cannot deny housing, set different terms, or treat people unequally based on these protected categories. The Fair Housing Act underscores the importance of promoting diverse, inclusive, and non-discriminatory housing practices in the rental market.
The Role of Residential Property Management Services
Property management services act as an intermediary between the property owner and the tenant. Their role is multifaceted. They ensure properties meet local housing laws, maintain properties to keep them attractive and safe, and manage relationships with tenants. As laws become more complex, their expertise becomes even more invaluable.
They emphasize the importance of maintaining the property to ensure it complies with health and safety regulations. Additionally, these services have a vested interest in understanding local laws to advise property owners on potential pitfalls or changes that might impact their investment.
Let's take a look at some real-life examples to better understand the tangible effects of local housing laws.
Sarah, a property owner in New York City, once received a heavy fine for not adhering to a new safety regulation she wasn't aware of. She was required to install specific window guards in her rental apartments. It was her residential property management service that advised her about this law, helping her avoid further penalties.
On the other side, we have Ben, a landlord in Los Angeles. Due to rent control laws, he couldn’t increase the rent on his property despite the rising maintenance costs. However, with the advice of his property management service, he was able to apply for a justified rent increase, citing major renovations that significantly improved the property's value and safety.
See: Real World Implementation of Real Estate Tokenization
Local housing laws deeply impact the world of residential property management. These laws, while often well-intentioned, can have a range of consequences, both positive and negative. Being proactive, continually educating oneself, and seeking legal counsel when necessary are the keys for property owners to navigate this intricate legal landscape.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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A Guide to Real Estate Investing through Crowdfunding in the US and Canada
July 13, 2023
Image: Unsplash/Chuttersnap
Real estate crowdfunding has transformed how people invest in real estate and given US and Canadian investors new opportunities. Let's dive deep into this exciting investment strategy and explore how it might benefit you.
Understanding Real Estate Crowdfunding
Simply put, real estate crowdfunding is pooling money from multiple investors to invest in a property. It's like joining forces with friends and family but on a much larger scale! This approach differs from traditional methods, as you don't need to manage the property or put down a significant amount of money—crowdfunding platforms present investors with various investment opportunities to choose from.
The Real Estate Market in the US and Canada
At the moment, the housing markets in the US and Canada are growing like never before
The Growth Spurt
What's the secret behind this skyrocketing growth? Well, a couple of things: low-interest rates and high demand for houses. You know, many people want homes, but they're way too costly. That's where investors come in.
Low-Interest Rates
Interest rates are super low. I mean, historically low! With such low rates, people are more motivated to borrow money and buy properties. Having low-interest rates makes more individuals interested in investing.
High Demand for Properties
Oh, and did I mention homes are in high demand? In both the US and Canada, everyone desires their own space. With so many people wanting to buy, housing prices just keep going up and up.
Decreasing Homeownership
In both the US and Canada, everyone desires their own space. Acquiring a home is harder than in the past. In fact, homeownership rates are dropping. A growing number of individuals can't pay for a house. It's getting pretty tough out there.
Opportunities for Investors
Despite the challenges, there's a hidden opportunity. The current market situation is excellent for investors. They can make some serious money without having to fork up a massive amount of cash upfront. Sounds like a win-win, right?
Benefits of Real Estate Crowdfunding
There are numerous advantages to investing through crowdfunding.
- Lower entry costs: With a smaller initial investment, you can own a fraction of a property rather than having to bear the entire cost.
- Diversification: You can spread your investments across various properties, reducing the risk associated with owning one single property. Crowdfunding participants can invest in student rentals, single-family homes, multi-family, and more.
- Passive income: You can earn income through rental yields without having to deal with the daily management of the property.
Consider Sarah, who contributed $5,000 to a crowdfunding campaign for a multi-family housing complex. She enjoys monthly dividends and potentially increased property value over time, all without having to manage the property or deal with tenants directly.
Risks and Challenges of Real Estate Crowdfunding
Like any investment, real estate crowdfunding comes with its risks and challenges.
- Market volatility: As property values fluctuate, so will your investment returns.
- Liquidity issues: It's harder to sell a portion of your investment compared to a traditional property investment; you may be locked in for a specified period.
To mitigate these risks, conduct thorough research, select reputable platforms, and diversify your investments. Remember, never put all your eggs in one basket!
How to Get Started with Real Estate Crowdfunding
Ready to invest? Follow these steps.
- Determine your budget and investment goals.
- Research reputable platforms, such as Fundrise (US) or NexusCrowd (Canada).
- Sign up and complete the necessary due diligence for each platform.
- Review available investment opportunities and select ones that align with your goals.
- Invest in and monitor your portfolio's progress over time.
Real estate offers various investment options. Purchasing a home isn't the only option! To kick off your journey, consider these ideas.
- Real Estate-Centric Investment Trusts (REITs) - REITs are like stocks for real estate. Basically, you buy shares in a fund that buys properties. Bypass the nitty-gritty and reap the financial benefits.
- House Flipping - Buy a rundown house, fix it, and sell it for a higher price. Sounds simple, right? It's definitely risky, but the payoff can be big.
- Renting Out a Room - Consider renting a room in your living space. It's an easy technique to make some additional income. Plus, you'll have company!
- Crowdfunding - Join up with other investors on crowdfunding platforms. Pool your money together, and fund a real estate project. You all share the profits!
Final Thoughts
Real estate crowdfunding is changing the landscape of property investing. With lower entry costs and increased diversification, it's an exciting opportunity not to be missed. However, make sure to assess the risks and challenges, do your research, and always invest wisely.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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CIBC’s Mortgage Underwriting Troubles: A Long Road to Full Compliance
The Globel and Mail | James Bradshaw | Jun 20, 2023
Image: Unsplash/PiggyBank
The Canadian Imperial Bank of Commerce (CIBC) continues to face remediation orders over the bank's mortgage portfolio from Canada's banking regulator, the Office of the Superintendent of Financial Institutions (OSFI).
- Ongoing Regulatory Remediation:
- These orders have been in place for over a year, after an audit revealed that CIBC had breached rules limiting how indebted borrowers can be.
- The bank's mortgage portfolio included thousands of clients who, when combining their home-secured lines of credit with CIBC mortgages, exceeded the permitted regulatory ratios for debt.
- Although these issues did not involve fraud, they have required extensive review and system retooling, with CIBC enlisting the aid of consultants from Deloitte.
- The bank is still discovering problematic mortgages in its portfolio and anticipates up to two more years to fully rectify the situation. However, these cases are not expected to result in significantly higher losses on loans or have a substantial financial impact on the bank.
See: Fintech Opportunities in the Wake of Tightened Credit Liquidity in Canada
- Regulatory and Leadership Pressure:
- This protracted resolution process has strained relations with the regulator and increased pressure on CIBC's senior leadership.
- OSFI expects bank management and boards of directors to identify risks and ensure sound loan underwriting for residential mortgages.
- The issues identified by CIBC and OSFI only affect a small part of CIBC's $266-billion Canadian mortgage portfolio, largely due to administrative oversights and IT system flaws.
- However, their discovery has generated turbulence in one of CIBC's core businesses, given CIBC's high exposure to Canada's mortgage market, with around 55% of its loan book being mortgages and other real estate-secured loans, these issues have rekindled old investor anxieties.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Support NCFA by Following us on Twitter!Follow @NCFACanada |
Fintech Opportunities in the Wake of Tightened Credit Liquidity in Canada
Better Dwelling | Jun 20, 2023
Canada's bank regulator, the Office of The Superintendent of Financial Institutions, has increased the Domestic Stability Buffer (DSB) to 3.5% of risk-weighted assets in response to rising delinquencies and overleveraged households, which may create opportunities for fintech lenders offering alternative finance solutions.
- Regulatory Measures and Credit Throttling:
- Canada’s bank regulator, the Office of The Superintendent of Financial Institutions (OSFI), has increased the Domestic Stability Buffer (DSB) by 50 basis points to 3.5% of risk-weighted assets (RWA). This move, which follows a similar-sized increase in February, is designed to curb credit and raise borrowing costs amid concerns over a potential risk event. The increased DSB implies banks will need to set aside more capital, which could tighten credit availability and drive up costs for borrowers.
- This development presents a potential opportunity for fintech firms to fill the credit void left by traditional banks. By offering alternative lending solutions, fintech companies can step in to meet the demand for credit, potentially gaining market share in the process.
- The move to raise DSB marks the end of an era of low rates.
See: As Interest Rates Climb and the Tide Goes Out, BNPL’s Resiliency Will be Tested
- The financial environment is becoming more stringent, with regulators demanding higher levels of capital buffers. Fintech firms could capitalize on this by offering more flexible and accessible financial products and services. Fintech innovations such as risk modelling, credit scoring and AI can be utilized to provide customized, affordable credit solutions.
- Response to Overleveraged Households & Rising Delinquencies:
- The regulator's decision comes at a time when Canada’s systemically important banks are extending mortgage repayment terms longer than typically allowed.
- This move seems to be an attempt to avoid causing hardship for overleveraged borrowers. Increasing the DSB forces banks to become more conservative with their lending practices.
- By leveraging technology to assess risk, fintech firms could provide loans to customers who may be considered overleveraged by traditional standards, yet still have the capacity to repay.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Support NCFA by Following us on Twitter!Follow @NCFACanada |
How Nobul is Enhancing Customer Experience in Real Estate
Jun 14, 2023
Image: Unsplash/Rodnae Productions
The real estate experience used to be fraught with complexities, opacity, a lack of choice, and the ever-present threat of fraud.
It’s the largest purchase most people made in their lifetimes, yet it remained regrettably stuck in the pre-digital age. If you wanted to find the right agent, you had to crack open the Yellow Pages and pray for a little luck on your side. If you were on the hunt for a dream home, you were at the mercy of whatever listings your agent shuffled across your desk. It was an incomplete, inefficient and largely consumer-ambivalent experience. And thankfully, it’s changing.
Nobul, the world’s first end-to-end real estate digital marketplace, emerged onto the scene roughly five years ago. And in those five years, the company has racked up awards, positive press and – most importantly – a devoted following of happy real estate consumers.
Here’s how Nobul is enhancing the customer experience in real estate by bolstering choice, transparency, convenience and security.
Agent Reviews
The right real estate agent for you will not necessarily be the same one another buyer needs. It’s important to connect with the agent whose budget, services, experiences, and prices best match your needs.
All you need to do is list your budget and describe what you’re looking for in a home. Then, agents will flood your inbox with offers like free cash back or services to get your business. You can peruse and compare their profiles and select whichever you like best.
You don’t need a relative or a friend who works as a realtor to get a leg up when buying a home. The digital innovator Regan McGee built Nobul to give anybody an advantage when buying property.
Algorithms For the Win
When buying a home, you need an experienced expert at your side to help navigate the process and find you the best deal. However, you can’t afford not to leverage Nobul’s AI to crunch numbers quickly and effectively.
Once you input a few numbers and give it some data, the listings it will serve back at you feel so personalized, they’ll seem curated. Tailor listings to your specifications to find your dream home within your budget sooner.
Don’t waste time manually trawling the listings. You’ll waste hours trying to find the right home, and when you finally do, it may not be available anymore. AI can make a huge difference when trying to cut through the Gordian knot that is the real estate market.
Security and Privacy Matter
Nobody wants to feel like the digital edge they’re gaining comes at the expense of their privacy or security. Nobul incorporates some important built-in privacy features.
For example, the agents you speak to are all connected within the app, so they don’t get your phone number or email address. Communicating within the app makes it easy to share listings, send pictures, text messages, and more. Only after you select an agent to work with and decide to give them your contact info will they have it.
Any information that Nobul collects about the device and how it’s used is collected in aggregate and de-identified, so it informs the platform and improves its performance without being tied to specific users.
Buying a home involves much more than purchasing a roof over your head. It determines the neighbourhood in which your family lives and impacts your long-term finances. When you’re looking for a home, get the best customer service possible by using Nobul to find a realtor and get a mega digital boost.
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