Laurentian's mortgage exit is already reshaping broker origination patterns in Quebec
Laurentian Bank stopped taking new mortgage applications in late 2024. By Q2 2026, the portfolio had contracted at a high-single-digit annual rate. The bank isn't trying to grow mortgages anymore — it's trying to sell them. But the real shift isn't on Laurentian's balance sheet. It's in the broker channel that used to feed it.
For Quebec-based mortgage brokers, Laurentian was infrastructure. Not the best rate, not the easiest approval, but a lender that would take files the Big Six didn't want: self-employed borrowers with messy tax returns, Quebec civil code properties with title quirks, rural homes in the Laurentides where appraisals take three weeks. When Laurentian started winding down origination, those borrowers didn't disappear. The files went somewhere else. The question is where, and that answer is rewriting how mortgage distribution works in the province.
The vacuum credit unions are absorbing
Desjardins picked up some of the obvious volume — it's the natural heir to Laurentian's Quebec retail footprint. But Desjardins has underwriting standards that look a lot like National Bank's, and National Bank was already turning down the files Laurentian used to approve. The gap widened.
Smaller credit unions filled part of it. Caisse Populaire Desjardins de l'Est de Montréal and similar regional institutions saw broker submissions jump 20-30% in early 2026, according to conversations with brokers working the Montreal exurbs. These aren't monoline lenders. They're deposit-taking institutions with local knowledge and tolerance for properties the majors won't touch. A duplex in Joliette with a non-conforming basement suite? Laurentian would have priced it. So will a regional caisse, if the broker structures it right.
The shift creates execution risk. Credit unions operate on slower timelines than Laurentian did. A file that used to close in 18 days now takes 28, because the underwriter at a 12-branch caisse in Trois-Rivières has 40 other files and no automated valuation model. Brokers adjusted by padding their close timelines and pre-screening harder. The approval rate on submissions dropped, but the fallout rate on conditionally approved deals also dropped. It's a different trade, not a worse one.
Monoline lenders aren't replacing the capacity
The obvious candidate to absorb Laurentian's retreat was the monoline channel — MCAP, First National, RMG. These are lenders built for broker origination. They don't have branches. They price aggressively. In Ontario, they've been eating the Big Six's lunch for a decade.
In Quebec, it hasn't happened the same way. Monoline market share in the province is roughly half what it is in Ontario, even after Laurentian's exit. The reason is structural, not competitive. Quebec operates under civil code, not common law. Collateral enforcement is different. Title insurance penetration is lower. Monolines, which rely heavily on automated underwriting and standardized securitization pathways, have less tolerance for properties that don't fit the CMHC mold. A century farmhouse in the Eastern Townships with a detached guest structure and a gravel driveway? That's a Laurentian file. It's not an MCAP file, even at 5.89%.
The result is geographic fragmentation. In Montreal proper and Laval, monolines picked up share. In regions east of the Saint Lawrence and north of the Laurentides, credit unions absorbed the flow. Brokers now maintain relationships with seven or eight lenders instead of four. That's friction. It's also why the concentration risk in Canadian mortgage origination didn't actually decrease when Laurentian left — it just moved from one mid-tier lender to a fragmented mix of smaller ones with less capital and slower systems.
Laurentian exited because it couldn't compete as a generalist. What it left behind isn't a cleaner market. It's a messier one, where execution depends more on broker skill and less on lender capacity. That might be fine in a stable rate environment. In a volatile one, it's a gap.
