Few entities in Canada originate more mortgages than M3 Mortgage Group. Its Founder & CEO Luc Bernard, therefore, knows more than your average bear about running a profitable mortgage operation.

With broad industry connections and access to a wealth of data, Luc intimately understands the trends driving Canada's mortgage business. That's why we wanted to interview him. MLN's discussion with Luc yielded an abundance of learnings, including new insights into:

1. Another major bank entering the mortgage broker channel
2. The threat of online brokers to banks and traditional brokers
3. How long before mortgage originations might make a comeback
4. The significance of exclusive lender partnerships
5. Cash burn among VC-backed online brokers
6. M3's brokerage acquisition plans
7. Whether brokers should start their own lenders
8. Sustainability of broker compensation.

Today's report...

Immigration policymakers catch heat

(Click the link above for the story)

Monday in the rate market

The Globe published yet another criticism of federal immigration policy today, as it relates to creating housing imbalances (that story).

Politicians are about to see far more coverage of this issue as Canadians get fed up with newcomers driving their housing costs higher, let alone taxing health care and education systems. Surveys show that most Canadians are pro-immigration, as they should be, but there's a limit.

From a housing standpoint, heat in the press will result in one of three outcomes:

It's no secret that average mortgage amounts surged in the last decade. The chart below illustrates that well.

But those rising balances hide an important fact, as noted in a recent report from RE/MAX.

Institutional traders believe the Bank of Canada is approaching a cul-de-sac on rates. Overnight index swaps price in two full cuts by October and almost one more in December.

It wouldn't be the first time this year that markets made this "prediction," so to speak. The difference now is that an array of economic warning indicators are suddenly flashing red. South of the border, for example, real-time GDP projections have abruptly plunged.

In February, MLN covered a Bank of Canada-published study on how mortgage brokers "steer" customers into riskier loans because it is "more profitable" for the broker. (Here's that story)

The paper even went so far as to suggest brokers should be better regulated to thwart this practice.

Well, our story seems to have caught the eye of the Bank of Canada and Professor Robert Clark, a co-author of that study and Steven J.R. Smith Chair in Economic Policy at Queen's University.

Most Canadians planning to buy a home in the next 12 months aren't too confident about their qualifications.

According to a new RATESDOTCA/LEGER survey:

• 7 in 10 claim they're concerned they may not qualify for the mortgage amount they want.
• 1 in 3 was "very concerned."

Bond yields surged early in the week as banking worries gave way to inflation worries. But thankfully, we ended March with better-than-expected U.S. PCE data. That took inflation anxiety down a notch (more on that below).

If you're a Canadian rate watcher, you know that U.S. inflation data matters as much as its domestic equivalent. That's why Friday's PCE progress helped Canada’s 4-year swap rate—a proxy for basic fixed-rate funding cost—dip six basis points.