{"id":23104,"date":"2025-11-21T02:47:11","date_gmt":"2025-11-21T02:47:11","guid":{"rendered":"https:\/\/finderica.com\/?p=23104"},"modified":"2025-11-21T02:47:11","modified_gmt":"2025-11-21T02:47:11","slug":"a-surge-in-mergers-is-reshaping-the-mortgage-industry-heres-whats-driving-it","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=23104","title":{"rendered":"A surge in mergers is reshaping the mortgage industry. Here\u2019s what\u2019s driving it"},"content":{"rendered":"
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While mortgage activity may be down this year, a flurry of deals behind the scenes suggests the industry is far from standing still.<\/p>\n

The year kicked off with the merger of Fairstone Bank and Home Trust, bringing brands like Oaken Financial, Home Bank, Fairstone, EdenPark, and Fig together under one roof.<\/p>\n

More recently, Nesto Group partnered with alternative mortgage provider Maple Financial via its CMLS subsidiary. Around the same time, Fisgard Asset Management was acquired by fellow B.C.-based alternative lender Neighbourhood Holdings.<\/p>\n

Experts may not agree on one single reason behind the surge in M&A activity, but they point to several forces driving it. Most say there\u2019s likely more to come, with real implications for brokers and borrowers.<\/p>\n

Cost effective funding requires scale<\/strong><\/h2>\n
\n
\"Taylor
Taylor Little, CEO, Neighbourhood Holdings<\/strong><\/em><\/figcaption><\/figure>\n<\/div>\n

One factor behind the recent wave of M&As is growing regulatory complexity, which some say has made it harder for smaller lenders to compete, particularly in a cooling but crowded mortgage market.<\/p>\n

\u201cI think it\u2019s a sign of some macro trends,\u201d says Neighbourhood Holdings CEO Taylor Little. \u201cTwo really big ones that stand out are that the regulatory environment in Canada, which makes it very hard to compete without scale, and second is that in a slower housing market, competition for deals is very fierce, so you need to be well capitalized to compete.\u201d<\/p>\n

Little explains that a decade ago, most lenders with capital could find a borrower. But with Canadians holding back on big purchases, only those with access to large pools of institutional capital can stay competitive.<\/p>\n

Smaller lenders often rely on individual private investors to raise capital, while those with greater scale can access cheaper funding through the National Housing Act Residential Mortgage-Backed Security (RMBS) program.<\/p>\n

Earlier this year, CMHC tightened the rules<\/a> for its NHA RMBS program, making the popular funding tool more restrictive at the same time that housing prices pushed more borrowers into the alternative lending space.<\/p>\n

\n
\"Blake
Blake Dumelie, SVP, Capital Markets, Nesto<\/strong><\/em><\/figcaption><\/figure>\n<\/div>\n

\u201cWith the reduction in the CMHC NHA-RMBS issuance eligibility in the last few years, and with the more competitive house prices, we\u2019ve seen a large increase in the alt space for mortgages,\u201d explains Blake Dumelie, senior vice president of capital markets at Nesto.<\/p>\n

He adds that big banks aren\u2019t interested in using RMBS to back their mortgage products, as they can get better margins by funding mortgages with deposits and other internal sources. Alternative lenders with enough scale to tap into the RMBS market, on the other hand, can get a leg up on their competition by accessing these lower-cost funds.<\/p>\n

\u201cWe expect there to be an advantage for anyone who\u2019s in this space, if they can access RMBS,\u201d Dumelie explains. \u201cAs you go from a mom-and-pop shop where you\u2019re funding these riskier mortgages with other people\u2019s money to institutional size and securitization, you need a lot more guardrails in place than before.\u201d<\/p>\n

Compliance as a growing cost of entry<\/strong><\/h2>\n

Tapping into that institutional capital requires significant regulatory compliance, and operating in the alternative lending space in general comes with its own set of requirements \u2014 a combination that poses big challenges for smaller players.<\/p>\n

\n
\"Rafer
Rafer Strandlund, CEO, Fisgard Asset MAnagement<\/strong><\/em><\/figcaption><\/figure>\n<\/div>\n

\u201cDoing business in Canada is getting more and more expensive; the regulatory environment is getting more and more difficult,\u201d explains Rafer Strandlund, CEO of recently acquired Fisgard.<\/p>\n

He explains that prior to the recent acquisition, Fisgard lent money in five provinces, and each year every one of its underwriters had to have their licence renewed for each province, with some requiring annual training. \u00a0<\/p>\n

\u201cCompliance is becoming a full-time department in any company, so if you\u2019re small, affording a competent compliance department becomes much more difficult,\u201d Strandlund explains. \u201cIf you\u2019re small, you\u2019re going to struggle, and at some point you\u2019re going to either look for a partner to grow or find a way to wind down.\u201d<\/p>\n

When Strandlund and his sister, Hali Noble, considered their options after the 2023 passing of their father and Fisgard founder, Wayne Strandlund, he says an acquisition felt like the best way to secure the company\u2019s future in a more competitive environment.<\/p>\n

\u201cWhen we looked at our options, we said \u2018well, if this is going to happen in the industry, wouldn\u2019t it be better to be early out the gate with a quality partner, rather than watching great companies come together, and then finding ourselves on the outside looking in?’\u201d<\/p>\n

If everyone else is doing it\u2026<\/strong><\/h2>\n

Strandlund\u2019s perspective reflects a sense of necessity that appears to be fuelling the momentum behind the M&A trend. While it may not have sparked the initial wave, once consolidation started, each deal seemed to add more fuel to the fire.<\/p>\n

Daniel Webster, president of Maple Financial, believes it was his organization\u2019s recent partnership with Nesto Group through its CMLS subsidiary that helped accelerate the trend, partly due to the industry profile of his father, John Webster, the former head of Scotia Mortgage Authority.<\/p>\n

\n
\"Daniel
Daniel Webster, President, Maple Financial<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n

\u201cJohn gets an outsized amount of attention, and my view is that they see us and they\u2019re all thinking about how they\u2019re going to fight that competition off, because we\u2019ve been so quick to scale up over the past five months,\u201d he told Canadian Mortgage Trends<\/em>, suggesting other players in the alternative lending space wouldn\u2019t be able to match that scale without consolidating. <\/p>\n

\u201cWe have a unique product shelf that is now being emulated around the industry, and we\u2019re very flattered by that \u2014 because what that tells me is that we\u2019re the market leader \u2014 so I look forward to more copycats,\u201d he added.<\/p>\n

Part of what makes the Maple and CMLS partnership so intimidating to competitors, according to CMLS Senior Vice President of Residential, Andrew Gilmour, is that it gives the combined lender national reach, widening the field of competitors in every market.<\/p>\n

\u201cA lot of these institutions have been hyper regional and they\u2019re just never going to scale [organically],\u201d he says. \u201cNone of these institutions have the ability to scale, to bring products to the market, they\u2019re entirely reliant on a small funding base. And that naturally restricts what they\u2019re able to do.\u201d<\/p>\n

What it all means for brokers<\/strong><\/h2>\n

Those making deals often point to the potential for new products and services to emerge from consolidation, but Ryan Sims of TMG has his doubts.<\/p>\n

\n
\"Ryan
Ryan Sims, TMG The Mortgage Group<\/strong><\/em><\/figcaption><\/figure>\n<\/div>\n

\u201cVery seldom has less competition meant good things for the broker and\/or the borrowers,\u201d he says. \u201cThat\u2019s always my concern; when you have less choice and less players, supply and demand dictates that prices generally go up.\u201d<\/p>\n

Sims, for one, expects some of the less profitable product lines to disappear, particularly among what he calls \u201cat-the-margin lenders\u201d who may be less willing to offer loans on rural properties.<\/p>\n

\u201cI hope it leads to more choice, more products, a deeper bench and a deeper product offering, but I\u2019m skeptical,\u201d he says.<\/p>\n

At the same time, Sims believes there the consolidation wave has not yet crested, and that we may see more blockbuster deals in the coming months. \u00a0<\/p>\n

\u201cIt\u2019s forced competition, because if you don\u2019t get bigger, and you don\u2019t become more efficient, you\u2019re probably not going to be as competitive in the next couple of years,\u201d he says. \u201cI still think there\u2019s probably a couple of deals that come out of the woodwork in the next six months where unlikely bedfellows team up.\u201d<\/p>\n

Visited 1 times, 1 visit(s) today<\/p>\n

CMHC CMLS financial fairstone bank Fisgard Asset Management Corp maple financial mergers mergers and aquisitions mortgage industry Neighbourhood Holdings nesto NHA MBS Oaken Financial Residential Mortgage-Backed Security rmbs Taylor Little<\/p>\n

Last modified: November 20, 2025<\/p>\n<\/p><\/div>\n

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While mortgage activity may be down this year, a flurry of deals behind the scenes suggests the industry is far from standing still. The year kicked off with the merger of Fairstone Bank and Home Trust, bringing brands like Oaken Financial, Home Bank, Fairstone, EdenPark, and Fig together under one roof. More recently, Nesto Group<\/p>\n","protected":false},"author":1,"featured_media":23105,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[216],"tags":[2188,255,2121,6596,417,3824,2506,339],"class_list":{"0":"post-23104","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mortgage","8":"tag-driving","9":"tag-heres","10":"tag-industry","11":"tag-mergers","12":"tag-mortgage","13":"tag-reshaping","14":"tag-surge","15":"tag-whats"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/23104","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23104"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/23104\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/23105"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23104"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}