Category Archives: Mortgage Regulations

September 8th, 2014

Oliver Meets With CAAMP

Finance Minister Joe Oliver met with the Canadian Association of Accredited Mortgage Professionals (CAAMP) on Friday. The meeting covered a range of mortgage hot-topics.

CAAMP President & CEO Jim Murphy tells CMT, “CAAMP’s key messages were to provide consumer choice, for example the need to support smaller lenders and monolines, a view that we have had enough regulatory changes and the economic importance of housing and real estate finance in terms of jobs and tax revenues.”

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September 4th, 2014

Collateral Pitfalls Disclosed

Collateral-MortgageBanks are improving their disclosures on the drawbacks of collateral charge mortgages.

Effective January 31, 2015, the Department of Finance says banks will start warning individual consumers about the implications of collateral charge mortgages “before entering into the mortgage loan agreement.”

The DoF says “consumers require sufficient information in order to more clearly understand the costs and consequences of a collateral charge mortgage relative to a conventional mortgage.”

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July 9th, 2014

Lenders’ Worries

Housing bubble conceptNot many lenders go on record forecasting a housing bubble, but what they say in private surveys is another matter.

FICO, a consumer analytics firm, released poll results on Tuesday that show just how concerned lenders are about housing overvaluation. But its data, which was picked up by multiple media outlets, featured responses primarily from U.S. respondents. The opinions of Canadian lenders, alone, haven’t been fully reported.

Today, however, we got our hands on Canadian-specific data, and it revealed some surprising expectations.

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June 16th, 2014

The Public MIC Advantage

Jeffrey D. Sherman, Special to CMT

Public or private. keyboardThe function of Canada’s securities regulation is to protect investors. To help investors make informed decisions, regulated public markets require broad access to information on exchange-listed companies.

In the June 9 article entitled “A Threat to Private Financing,” it was noted that Ontario has restrictions on the sale of securities. These limit many investors to buying only publicly traded Mortgage Investment Corporations (MICs), and not private MICs. This is sound regulatory policy.

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June 13th, 2014

A Few Last Tweaks by CMHC

CMHCLast week CMHC eliminated some more mortgage insurance offerings. Effective July 31, for example, it will no longer insure amortizations over 25-years or $1 million+ properties with low-ratio transactional insurance.  (More details here)

Canada’s largest insurer says this was a business decision. But most business decisions maximize profit and/or significantly reduce risk. These changes don’t necessarily do that, making it appear more like a political decision.

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A Threat to Private Financing

Wayne Strandlund, Special to CMT

Borrower choice and the success of mortgage brokers is tied to the availability of a wide variety of mortgage funds. Apart from conventional insured and uninsured mortgages, there are Alt-A and B, 1st and 2nd mortgages available through the private mortgage market.

For years, Mortgage Investment Corporation (MIC) lenders have provided billions of dollars of this private alternative mortgage financing. But under proposed regulations, this opportunity for borrowers and brokers will be severely curtailed, causing measurable economic harm.

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April 26th, 2014

CMHC Sends Another Message

CMHCSince 2008 the nation’s largest mortgage default insurer has been on a mission to reduce its risk exposure. Yesterday that mission continued with CMHC announcing that it would stop insuring both second homes and self-employed borrowers without traditional proof of income.

Canadians have used these two programs for the last nine and seven years respectively.

But these are not the only adjustments CMHC has in store. It put the market on notice that

April 18th, 2014

B.C.’s New B-20-like Guideline

mortgage-rules-2012In June 2012 Canada’s banking regulator (OSFI) created guideline B-20 to tighten underwriting practices on conventional mortgages.

To date, provincially regulated lenders (like credit unions) haven’t been significantly impacted by B-20 because OSFI only supervises federally regulated lenders.

But now, for the first time (that we know of), a province has put forth its own underwriting standards along the lines of OSFI’s B-20. That province is B.C. and these are its proposed Residential Mortgage Underwriting Guidelines (PDF).

CMT asked Doug McLean, Deputy Superintendent of FICOM, for details on why these rules were needed and what effect they’ll have. Among other things, it looks like we might be saying goodbye to 80% loan-to-value revolving HELOCs in B.C.

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