What happened.
Reviews of mortgages sold by Laurentian Bank identified documentation, client-representation, and eligibility issues. The resulting repurchases created a control and reputational problem even though the bank said the affected loans were performing.
The bank’s clarification stated that it had not identified an implicated employee or a concentration involving a single broker. That distinction matters: evidence quality and eligibility can fail through a broader process weakness, without establishing a single bad actor or proving that the loans will default.
Credit quality and sale eligibility are separate tests. An institution needs to demonstrate that required documents, verification steps, and insurance conditions were satisfied at the relevant decision point.
From individual facts to a fuller picture.
- Portfolio sampling and reviews identified document and eligibility issues.
- The bank said the affected loans were performing and did not identify a single-broker concentration.
- Is every required document present, current, and linked to the correct loan?
- Are eligibility rules supported by evidence before sale or securitization?
- Do exceptions reveal a recurring branch, channel, or process issue?
The review questions are analytical prompts. They do not establish that particular data was available to the institution at the time, or that a different process would have changed the outcome.
A different decision starts here.
Prevent a successful payment history from standing in for the verification evidence required for a mortgage decision.
Authorized mortgage files, income and identity evidence, debt obligations, and the eligibility requirements supplied by the institution or purchaser.
01 Check evidence against the requirement
- Evidence to connect
- Required verification items, supporting documents, source provenance, and the underwriting record.
- Amlok output
- A traceable evidence checklist with missing, contradictory, or outdated items left unresolved.
Decision it could supportRoute incomplete files for remediation before the institution marks the required verification as complete.
02 Reassess capacity and identity
- Evidence to connect
- Independent income records, debt commitments, account ownership, and supported applicant relationships.
- Amlok output
- A source-linked affordability assessment and identity graph that preserve uncertainty.
Decision it could supportReview the evidence gap even when the loan is paying on time.
03 Carry the evidence into transfer review
- Evidence to connect
- The versioned file, completed checks, open exceptions, and purchaser requirements.
- Amlok output
- A review package showing what was verified and which evidence supported the determination.
Decision it could supportGive the institution a defensible basis to clear, remediate, or exclude a file under the applicable eligibility rules.
Put numbers behind the opportunity.
These scenarios apply Amlok’s supplied comparison rates to the review described above. They are projections, not measured results at Laurentian Bank. Count-based scenarios use an assumed population, not the institution’s actual records.
Debt-service coverage assessability
Assumed population: 1,000 eligible mortgage evidence reviews.
More files could support a debt-service assessment backed by current evidence.
Calculation & assumptions
Comparison inputs: 70% → ≈85%.
Population calculation: 1,000 × 70% = 700; 1,000 × 85% ≈ 850. Difference: ≈150 additional.
Relative change: (85 − 70) ÷ 70 × 100 ≈ +21.43%.
15 percentage points higher than the input baseline. Assumes comparable income and debt records. This measures financial assessability, not CMHC or purchaser eligibility.
View the supplied comparison inputsGraph relationship precision
Assumed population: 1,000 accepted applicant and account links.
More accepted identity and account relationships could be accurate within the review set.
Calculation & assumptions
Comparison inputs: 80% → ≈95%.
Population calculation: 1,000 × 80% = 800; 1,000 × 95% ≈ 950. Difference: ≈150 additional.
Relative change: (95 − 80) ÷ 80 × 100 ≈ +18.75%.
15 percentage points higher than the input baseline. Holds accepted-link volume constant and requires independent labels. Correct identity links alone do not establish a loan’s eligibility.
View the supplied comparison inputsFrom a projection to a validated result.
Replay files before transfer using the requirements and evidence then in force. Test assessability and relationship precision; separately measure file completeness and actual eligibility outcomes.
Mortgage repurchases are not automatically credit losses. The model does not apply a reduction percentage to repurchase amounts or claim a measured eligibility improvement. The supplied comparison rates are approximate scenario inputs; no institution-specific replay or confidence interval is available for these estimates. The two metrics describe separate dimensions and should not be added together.
Read the source material.
Repurchase amounts are not equivalent to realized credit losses. The case focuses on the 2017–2018 mortgage review, not the bank’s separate later operational events.
- 01DBRS: rating release on the mortgage disclosureRating-agency document
- 02Laurentian Bank: clarification of the mortgage reviewCompany disclosure
- 03Laurentian Bank: progress on the mortgage review, May 2018Company disclosure
Amlok’s interpretation is independent of the institutions discussed. Public records are limited to their stated scope and period. Historical figures describe the source events; the separately labeled Amlok scenarios are calculated projections. Institution names and logos do not imply affiliation or endorsement.
