Why does the Mortgage Broker want so many docs? We actually don’t want to ask for so many. Why does the Mortgage Lender want so many docs? They actually don’t, and would rather go through much less.
So who wants all these docs, and who is it that does not trust what you are saying? That would be the government, more specifically OSFI, the Office of the Superintendent of Financial Institutions, and they have a very specific mandate which is not to make getting a mortgage easy. Their mandate is to protect the Canadian banking system and make sure those lenders have prudent systems in place to follow. In essence it's the federal government implementing what they can, through policy and procedures for banks to follow in order to avoid a financial melt down; such as what happened in the United States of America in 2008.
The thing is, back in 2008 Canada's banking system actually came out just fine, and we had much looser rules then, compared to what we have today with the "Stress Test." However that hasn't stopped OSFI from every year making it a little bit tighter on mortgage regulations. So every year since 2008 we have seen a bit more tightening and a bit more documentation needed to cover for the tightening of rules.
My personal opinion is that the government is actually putting real stress on everyone from first time buyers, to people that want to move out and up to bigger homes or people that want to refinance. The tightening of rules year after year is just slowing down the Canadian economy at large and pushing Canadians to high interest private mortgages. My hope is that someone in the government will have their finger on the undo button for some of these mortgage rules, to once again make it easier on Canadians and stimulate the economy.