Subprime lenders
I have read a lot of posts using the phrase "sub-prime". Home Capital and Equitable Bank are not classified as sub-prime lenders. They are in fact "prime" lenders that offer lending rates lower than banks but with much tighter underwriting guidelines. Up until Nov. 2016 (at which time OSFI brought in new insurance guidelines) virtually ALL the mortgages carried mortgage default insurance - either paid by the borrower or "backend insured" (premium paid by the lender.
They do offer mortgages that aren't gov't backed but those still must pass a rigid underwriting process and then the MAXIMUM LTV is 80% of the appraised value. This is based on a physical appraisal and not some automated model. I don't know what %'age of less than prime borrowers are approved but I suspect it is quite small.
If you think that banks are tighter lenders - think again. I have seen banks approve deals where they were turned down by Home or Equitable.
Both HCG and Equitable are OSFI regulated so they CANNOT lend more than 80% (if not mortgage default insured)
The real sub-prime market belongs to private lenders which are not regulated but these guys will only go to 75% in most cases. They lend solely on equity. Neither HCG or Equitable have an EQUITY mortgage only - they must prove ability to pay.
Just my 2 cents worth.