When the new federal budget came in about a month ago we discussed two things:
1. The first being that the governance of CMHC was being moved from the human resources department to the Office of the Superintendant of Financial Institutions (OSFI). Essentially control of CHMC was being moved so that the financial department could have direct audit and control of its policies and programs.
2. Due to CMHC increasing its portfolio insurance holdings (insuring mortgages for banks at less than 80% loan to value), the media created uninformed and overblown fears about the amount of mortgages insured by CMHC. CMHC is nearing its limit of total amount of mortgages it is permitted to insure, forcing lenders to expand their insurance relationships with Genworth and Canada Guaranty. The speculation was that the government, due to CMHC's low portfolio loan to value would increase its insurance limit.
So, the news:
It looks like Jim Flaherty is moving quickly to sink his claws into CMHC and has discussing the future viability of the organization. In comments (attached below) to the National Post it appears as though:
1. CMHC's is near the limit of its ablility to insure and might not be increased.
2. OSFI has started to increase its governance of CMHC and its practices
3. The government might decide to do away with CMHC all together and allow the two private insurers (and doublessly others) to have control of the Canadian default insurance market.
Here are a few articles on this topic...
Financial Post - CMHC could be pulled out of mortgage insurance business, Flaherty says http://business.financialpost.com/2012/04/27/cmhc-could-be-pulled-out-of-mortgage-insurance-business-flaherty-says/
MortgageBrokerNews.ca - Flaherty throws CMHC future in doubt http://www.mortgagebrokernews.ca/news/breaking-news/flaherty-throws-cmhc-future-in-doubt/123676/
CanadianMortgageTrends.com - The retreat of housing's greatest Ally http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/04/the-retreat-of-housings-greatest-ally.html#more
http://www.christinebuemann.com/
1. The first being that the governance of CMHC was being moved from the human resources department to the Office of the Superintendant of Financial Institutions (OSFI). Essentially control of CHMC was being moved so that the financial department could have direct audit and control of its policies and programs.
2. Due to CMHC increasing its portfolio insurance holdings (insuring mortgages for banks at less than 80% loan to value), the media created uninformed and overblown fears about the amount of mortgages insured by CMHC. CMHC is nearing its limit of total amount of mortgages it is permitted to insure, forcing lenders to expand their insurance relationships with Genworth and Canada Guaranty. The speculation was that the government, due to CMHC's low portfolio loan to value would increase its insurance limit.
So, the news:
It looks like Jim Flaherty is moving quickly to sink his claws into CMHC and has discussing the future viability of the organization. In comments (attached below) to the National Post it appears as though:
1. CMHC's is near the limit of its ablility to insure and might not be increased.
2. OSFI has started to increase its governance of CMHC and its practices
3. The government might decide to do away with CMHC all together and allow the two private insurers (and doublessly others) to have control of the Canadian default insurance market.
Here are a few articles on this topic...
Financial Post - CMHC could be pulled out of mortgage insurance business, Flaherty says http://business.financialpost.com/2012/04/27/cmhc-could-be-pulled-out-of-mortgage-insurance-business-flaherty-says/
MortgageBrokerNews.ca - Flaherty throws CMHC future in doubt http://www.mortgagebrokernews.ca/news/breaking-news/flaherty-throws-cmhc-future-in-doubt/123676/
CanadianMortgageTrends.com - The retreat of housing's greatest Ally http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/04/the-retreat-of-housings-greatest-ally.html#more
http://www.christinebuemann.com/
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