The Role of Liquidity in the Alternative Mortgage Space
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December 22, 2022 |
The Role of Liquidity in the Alternative Mortgage Space
Discover how liquidity can impact the success of mortgage brokers in the alternative mortgage space and how Neighbourhood is leading the way.
Liquidity plays a crucial role in the success of mortgage brokers in the alternative mortgage space. Without access to liquidity, brokers may not be able to provide funding to their alternative clients, which can hamper their ability to do business. This is where businesses like Neighbourhood Holdings come into the picture, led by CEO Taylor Little. Neighbourhood is focused on providing liquidity to the market, enabling brokers to access better deals and generate higher returns for their investors.
As Taylor explained during a recent webinar hosted by AIMA on Alternative Perspectives in Real Estate Investing,
"One thing that Neighbourhood is looking to do going into 23 and 24, especially in an environment where we are seeing liquidity dry up, is to be that provider with liquidity and find out really great investment opportunities. Because if you are the liquidity provider when others don’t have it... you get better deals at a lower risk, higher return, and your fund is going to perform better at a time when others perhaps are not."
This statement highlights the significant role that liquidity plays in the alternative mortgage space and how businesses like Neighbourhood can benefit from providing liquidity to brokers. By being the provider of liquidity in times of economic uncertainty, Neighbourhood can access more attractive deals at lower risk and generate higher returns for their investors.
Despite the potential for short-term challenges, Taylor remains optimistic about the long-term prospects of the Canadian real estate market. He believes that while the market may be "boring" over the next few years, the underlying strength of the housing market will ultimately prevail. This is a positive outlook that suggests that the Canadian real estate market has the potential to bounce back and thrive, even in the face of economic challenges.
Overall, the importance of liquidity in the alternative mortgage space cannot be overstated. Businesses like Neighbourhood can secure better terms and higher returns for their investors by offering liquidity to brokers. Although there may be short-term challenges, the long-term outlook for the Canadian real estate market remains positive, thanks to the underlying strength of the housing market.
Author Profile
Jared Stanley is the Senior Director of Originations at Neighbourhood Holdings. He has been in the industry for nearly 15 years. In 2015, Jared was awarded Underwriter of the Year by the Canadian Association of Accredited Mortgage Professionals. He is also a motorcyclist and dog lover.