>> Credit Policy Updates May 8, 2013

SLIDING SCALE MAXIMUM LOAN TO VALUE (LTV) CONVENTIONAL (1 TO 4 UNIT PROPERTIES)

Property Type Owner Occupied Property Mortgages Select Greater Vancouver Area (GVA)* 80% of the first $1,250,000 50% of the balance Major Urban Centre* 80% of the first $1,000,000 50% of the balance Urban Centre* 80% of the first $750,000 50% of the balance Non Urban 80% of the first $500,000 50% of the balance

Owner Occupied Property Mortgages

Maximum LTV Purchase up to 95% LTV for 1 to 2 unit properties Purchase up to 90% LTV for 3 to 4 unit properties Refinance up to 80% LTV for 1 to 4 unit properties

UNDERWRITING REQUIREMENTS (INCOME)

Salaried: Letter of Employment, Paystub that is dated no earlier than 60 days prior to the credit approval. If the applicant wishes to include any bonuses or commission earned in their total income in order to qualify for credit the documentation options are more limited. To use salaried income including bonuses or commission, refer to Fluctuating Income. Part-Time/Hourly Wage: Applicant who is employed part-time or who works full-time but receives an hourly wage must provide proof of their annual earnings via Letter of Employment, Paystub and Notice of Assessment (NOA) from the most recent 2 years Fluctuating Income / Overtime / Bonuses / Gratuities / Seasonal: If the applicant wishes to have these amounts included in the credit decision, supporting documentation must be provided. NOA from the most recent 2 years which must be supported by a current Letter of Employment and Paystub. Rental Income: Lease agreement(s) showing the gross rental income from all units will be used to qualify. Market rents will no longer be considered. Net rental shortfalls as calculated by the rental worksheet must be included as a liability in the total debt service calculation. Child tax credits or refundable tax credits for childcare cannot be included as source of income. Guarantor Income: No longer can be used to qualify. Only exception, if guarantor is spouse of the applicant and subject is being occupied as the matrimonial home.

DEBT SERVICING RATIOS INPUT RULES

Existing HELOC reported on the bureau as a revolving trade line the payment is 3% of the outstanding balance unless confirmation is obtained to confirm that the credit is a secured line. If secured existing payments may be based on credit limit and a Prime Rate Factor (4.35% interest over 12 months + 0.25% of limit over 12 months). Liquid/Margin Secured Revolving Line of Credit: When reported on the bureau as a revolving trade line the payment is 3% of the outstanding balance will be used unless confirmation is obtained to confirm that the credit is a secured line. If secured existing payments may be based on credit limit and a Prime Rate Factor (4.35% + 0.25% of limit over 12 months). All fixed installment, term, demand, and reserve loans as well as Letter of credit or guarantor debts on the credit bureau : Payment as shown on the credit bureau unless it can be determined that the remaining term is </= 3 months and if term remaining is confirmed to be </= 3 months then payment is not included in TDSR. (ii) 5% of the reported outstanding balance if no payment is shown on the credit bureau and if term remaining is confirmed to be </= 3 months then payment is not included in TDS.

APPRAISAL Conventional Mortgage

A full appraisal is required for the following; Credit Bureau Score <610 Loan amounts >$600,000 Property Values >$750,000 (GTA/GVA) Property Values >$600,00 (ROC) Rural Properties Purchase with Improvements Units >1 Acreage >5 Recreational/Cottage Properties Transfer In All Business For Self Deals

High Ratio (Default Insurance)

The Mortgage Default Insurer determines property valuation type

Interest rates, terms and products subject to change without notice. May 2013.

*UPDATED SLIDING SCALE DEFINITIONS OF GVA, MAJOR URBAN AND URBAN PROVIDED BELOW: SELECT GREATER VANCOUVER AREA (GVA) City Anmore Belcarra Select Greater Vancouver Area Burnaby (GVA) Coquitlam New Westminster North Vancouver MAJOR URBAN CENTRE As defined by Census Metropolitan Agglomeration per StatsCan City Abbotsford Colwood Delta Esquimalt Highlands British Columbia Langford Langley Maple Ridge Metchosin Oak Bay Pitt Meadows Calgary Calgary Edmonton Edmonton Sherwood Park St Albert Ajax Aurora Brampton Burlington Caledon (inclusive of Bolton) East York Greater Toronto Area (GTA) Etobicoke Georgetown King, Town of Markham Milton Mississauga Ottawa Nepean Gloucester Constance Bay Stittsville West Carleton

Inclusions Port Coquitlam Port Moody Richmond Vancouver West Vancouver

Inclusions Saanich Central Saanich East Saanich North Saanich West Sidney Sooke Surrey Victoria Victoria West View Royal White Rock

Newmarket North York Oakville Oshawa Pickering Richmond Hill (including Oak Ridges) Scarborough Toronto Vaughan (inclusive of Concord, Kleinburg, Maple, Thornhill, Woodbridge) Whitchurch-Stouffville Whitby Kanata Vanier Dunrobin Rockcliffe Manotic Orleans

Ottawa

URBAN CENTRE All other cities with population of 30,000 or more All communities with population <30,000 that are located within 50 km of an Urban or Major Urban area Provinces Cities Campbell River Nanaimo Chilliwack Prince George British Columbia Kamloops Vernon Kelowna Mission Beaumont Leduc Fort McMurray Lloydminster Alberta Ft Saskatchewan Medicine Hat Grand Prairie Red Deer Lethbridge Spruce Grove Grand Coulee Regina Saskatchewan Moose Jaw Saskatoon Prince Albert Brandon St Andrews Manitoba East St Paul Steinbach St Paul Winnipeg Ancaster Niagara Falls Barrie North Bay Belleville Orillia Brantford Peterborough Caledon Sarnia Cambridge Sault Ste Marie Cornwall St Catharines Ontario Dundas St Thomas Grimsby Stoney Creek Guelph Stratford Halton Hills Sudbury Hamilton (inclusive of Waterdown) Thunder Bay Kingston Welland Kitchener-Waterloo Windsor London Fredericton St John New Brunswick Moncton Dartmouth Sydney Nova Scotia Halifax Conception Bay Mount Pearl St John's Charlottetown -

Newfoundland and Labrador Prince Edward Island