I had the honor to meet Kevin O’Leary and ask him a few questions about his thoughts on the Mortgage Industry and O’Leary Funds. For readers that do not know, in mid-December Kevin O’Leary will launch O’Leary Funds, a mortgage company that only offers five year fixed term mortgages. I started by asking Kevin what his take on the mortgage industry is and why he decided to enter into the market. He believes that people with mortgages are unaware of the debt that they are taking on and do not know how vulnerable they are to rate changes in the industry. O’Leary Funds will not offer a variable rate mortgage because most people with a variable rate mortgage can barely afford to pay their monthly fee and when the Prime rate changes, which he believes will be soon, will default. He stated twenty five to forty percent of people with VRM will default once the Prime rate changes. This is the same problem that caused the US housing market to crash. Currently O’Leary funds only offers qualified income mortgages but hopes in a few years to expand and offer mortgages for entrepreneurs. As for “bypassing the broker process” and operating the same way TD or RBC do with their Mortgage Specialists, he assured me that this was NOT the case. His mutual funds company uses both advisors and brokers and he will do the same with O’Leary Funds.

Kevin presented in front of a crowd of 200 people and told stories of Dragon’s Den failures and Shark Tank Bloopers but also focused on the cold hard facts of the Canadian housing industry. Now granted most of his facts and topics of conversation were based on the housing market in Toronto, it still somewhat related to the Vancouver Market. Jim Flaherty, Canada’s minister of Finance has put mortgage rules in place to try and reduce the risk of people securing mortgages who cannot afford them, a decision which O’Leary supports.

Meeting Kevin O’Leary was an honor. He is a dollars and cents man and he will be the first to tell you that. And if you dont believe me watch an episode of the Dragon’s Den or Shark Tank. Upon concluding our interview he left me with this “look my mutual fund company is worth Billions, why shouldn’t my mortgage company be too”. Well I guess we will have to wait and see.

For more information on O’Leary Funds click this link – http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/11/kevin-oleary-on-oleary-mortgages.html