Documents relating to the mortgages of millions of Canadians will be split between two companies after a 30-year monopoly…and will be digitized.
Mortgages backed by CMHC are documented by a third-party provider, Australian-owned firm Computer Share Inc. but now mortgage lenders will be able to deposit documents with Canadian-based alternative CST Trust Company.
The firm, which has offices in Toronto, Vancouver, Calgary and Montreal, was given approval earlier this month to be a National Housing Act Mortgage-Backed Securities (NHA MBS) custodian and title custodian.
It will now also create a digital registry of Canadian mortgages which will track beneficial ownership of every mortgage from origination through its sale to investors and subsequent securitization.
This will provide issuers, originators and investors with easily searchable, on-demand access to specific asset information whenever they need it. It is also an important step in making the mortgage origination process more streamlined.
“CST is poised to reinvent the process of mortgage custody in Canada, using proprietary technology to create efficiencies in a market that has long been bogged down by paperwork and manual processes,” said Mr. Turzanski, Senior Vice President at CST. “Our goal is to move beyond the physical document storage system that currently exists, and advance the market towards an ‘e-signature’ model. Issuers, originators and investors alike will benefit from increased efficiency and reduced risk.”
CST says it already has a top-three Canadian bank in mortgage securitization signed up.
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