Skip to main content

A new twist to the CMHC and Canadian Mortgage insurance drama…

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/





Comments

  1. Great Information sharing .. I am very happy to read this article .. thanks for giving us go through info.Fantastic nice. I appreciate this post. compare auto insurance reviews

    ReplyDelete

Post a Comment

Popular posts from this blog

Who is Computershare and why are they registered on title?

If you are using a non-bank lender for your mortgage, you may notice that your mortgage has been registered in the name of “Computershare Trust Company of Canada”. This registration does not affect the terms and conditions of your mortgage in any way. Computershare holds no beneficial interest or rights to the mortgage loan. This is merely a third party, custodial arrangement which means that your lender has used Computershare to review the mortgage and provide custodial certification to Canada Mortgage and Housing Corp (CMHC) for their government securities program. Computershare is the largest provider globally of many of the services they offer and the largest corporate trust service provider in Canada. They have successfully provided this custodial service to many Canadian bank and non-bank lenders for many years and they play a very important role in the Government of Canada’s NHA Mortgage-Backed Securities Program. Computershare has served as the exclusive Central Payor and Tr...

When is an appraisal required?

In mortgage financing, appraisals are required to confirm the value as well as the condition of a property. Here are the most common scenarios where they could be required: Private sales Unique properties (log homes, mobile homes ext) Non-arms length transactions (ex between family members) Acreages and/or rural properties (or properties with large outbuildings or animals) Properties where there could be structural issues (ex MLS listings referring to "handyman special" ext") Refinances or renewals Conventional mortgages (or for those putting 20% or more down) Rental properties New construction  Some lenders will rebate the cost however you should budget to have the funds available. Most banks who "cover" the cost, simply charge it back to you at closing. As the mortgage lending landscape tightens, we have been seeing more requirements for appraisals so it is best to be prepared in case one is required. www.christinebuemann.ca

What is compounding interest?

Compounding interest is when interest is charged on top of itself . For example, most mortgages are compounded semi-annually. That means that every 6 months, interest is calculated at the current balance AND accrued interest to that point. Interest only mortgages are typically compounded monthly however some lenders have started compounding their standard (often variable rate) mortgages this way as well.  The more frequently interest is compounded, the more interest you will pay in the long run.   It is important to know the fine details of your mortgage so be sure to consult a Mortgage Broker for impartial advice! www.christinebuemann.ca