Offering Mortgage Solutions for Challenging Times

Blog-Date-1Apr 21, 2020

Across the country, lockdown measures and the shuttering of non-essential businesses are placing a challenging strain on the economy. For many Canadians, this is creating worries about solutions to making their regular mortgage payments. At Pillar, our team is working hard to support our borrowers, offering mortgage solutions through these challenging times. As some borrowers lose their jobs or see their employment scaled back, we are providing flexible mortgage solutions to ease their financial burden and help them in this difficult period.

Working flexibly with brokers

Pillar does not have the same level of financial resources as a bank, and we are not covered by the Canada Mortgage and Housing Corporation (CMHC). This means we face some constraints in how we can respond to the COVID-19 pandemic. For example, we cannot offer six-month mortgage payment deferrals like those available for CMHC-insured mortgages.

Nonetheless, Pillar has always been a solution-based lender, and that means we’re working flexibly with our borrowers to help them through this challenging time. Here are a few of the key elements of our flexible approach:

  • We want to help borrowers. We care about our borrowers, so we are acting with flexibility to help those with Pillar mortgages end up in a better position.
  • We always look at the personal story. Every Pillar borrower has a unique situation, so we are listening to their story and coming up with solutions that fit their needs on a case-by-case basis.
  • We respond quickly and directly. When borrowers call Pillar, a member of our team is on the other end of the line, ready to help – no endless phone queues and no emails into the abyss.
  • We understand that people are struggling. If a borrower has lost their job or seen their hours reduced, we are taking action without requiring documentation to prove loss of employment.

Adjusting mortgage payments

If a borrower is unable to make their regular mortgage payment, we work with them to come up with a solution. This can take various forms, including:

  • A split payment: We split their regular monthly payment into two, allowing the borrower to spread the cost across the month to match reduced cash flow.
  • A payment deferral: We defer part or all of their regular monthly payment, allowing the borrower to free up cash for other essentials.

Typically, Pillar charges a fee to split or defer a payment, but we are currently waiving this fee to support borrowers who are facing difficulties.

While a deferral can buy time and ease financial pressure in the short term, it’s important to note that the borrower will still need to pay the full amount. Also, the interest on their mortgage will continue to accrue during the deferral period, which means the overall cost of their mortgage may rise.

The best option for the borrower

For borrowers who can make their full regular mortgage payment, it’s in their best interest to do so. Deferral simply pushes their financial obligation to a later date.

In some situations, deferral may make it more difficult or costly for the borrower to secure takeout financing from another lender at the end of their Pillar mortgage term. If a borrower defers payments for several months while interest continues to accrue, it can push the loan-to-value (LTV) ratio of their mortgage higher, which can make banks less willing to offer them attractive rates on a new mortgage.

If a borrower can’t make their full payment, making a partial payment is better than a full deferral. It’s especially important for borrowers to pay the tax and insurance portions of their mortgage payment if possible, since these obligations cannot be deferred.

Timing is crucial

Timing is a key factor in how we are able to help. Borrowers who anticipate difficulties in making their regular mortgage payment should keep the following in mind:

  • Any payment changes or deferrals must be made at least 24 hours before the due date. This means borrowers should contact Pillar in advance to discuss their situation rather than waiting until the last minute.
  • We are prioritizing the most urgent cases. In general, this means we’re working with borrowers whose payments are due on the 15th during the first half of the month and helping borrowers with payments due on the 1st during the second half of the month.
  • We are working with borrowers one payment period at a time. This means any decisions on split payments, deferrals or other measures will apply to only one payment so that we can adjust to the market conditions and borrowers’ circumstances as they evolve.

Providing peace of mind

During these challenging times, it’s essential that we stand together and support one another. We encourage any borrowers who are struggling to reach out to us so we can come up with workable mortgage solutions and take at least one worry off their mind.

We encourage brokers to ask their clients to contact us directly to discuss their individual circumstances.

Mortgage Payment Inquiries:
Lindy Hay
1-877-279-2116 ext. 129

Construction Inquiries:
Kristina Hodges
1-877-279-2116 ext. 156

General Inquiries:
1-877-279-2116 ext. 100

W.A. Robinson: Important COVID-19 Announcements & Information    READ MORE