Validating sale of mortgage

For example, a credit bureau score, offered by the major credit bureaus, is an indicator often used to support credit granting.However, a credit score should not be solely relied upon to assess borrower qualification, as such an indicator measures past behaviour and does not immediately incorporate changes in a borrower’s financial condition or demonstrated willingness to service their debt obligations in a timely manner.The Board should require timely, accurate, independent and objective reporting on the related risks of the residential mortgage business, including the procedures and controls in place to manage the risks, and the overall effectiveness of risk management processes.The Board should be aware of, and be satisfied with, the manner in which material exceptions to policies and controls related to residential mortgages are identified, approved and monitored, the nature of reporting to the Board, and the consequences and processes when exceptions are identified.FRFIs should update the borrower analysis periodically (not necessarily at renewal) in order to effectively evaluate their credit risk.

FRFIs should have adequate processes A senior officer of a FRFI should make an annual declaration to the Board confirming that the FRFI’s residential mortgage underwriting and acquisition practices and associated risk management practices and procedures meet, except as otherwise disclosed in the declaration, the standards set out in this Guideline.Home equity lines of credit (HELOCs), equity loans and other such products that use residential property as security are also covered by this Guideline.This Guideline articulates five fundamental principles for sound residential mortgage underwriting.However, the Board of Directors (Board) of the FRFI has a critical role in providing high-level guidance to, and oversight of, Senior Management with respect to matters relating to mortgage underwriting and portfolio management.The Board of the FRFI should review and discuss the RMUP or any changes to the RMUP.

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