A top mortgage company official we know believes Canada’s commercial paper market will not return to normal for at least 3-4 months.  (Non-bank lenders use commercial paper to finance a lot of riskier mortgages.)

By that time, people will hopefully be able to better assess the results of the Montreal Accord and buyers of mortgage-related securities might finally return to the market.

If/when that happens, don’t be surprised if Canadian subprime interest rates are noticeably higher.

In recent weeks, some subprime lenders have jacked their rates as much as 2%.