OSFI Comment Deadline Tomorrow

OSFIIf you want to be heard on OSFI’s new lending restrictions, tomorrow is your last chance to submit feedback.

This could very well be the most commented-on OSFI proposal in years.

Here’s what you need to know:

What changes?

See:  OSFI Draft Underwriting Guidelines

Where can I comment?

Click: here

How might OSFI’s changes impact me?

See:  “More Stringent Mortgage Qualifications” (our take)

What are others recommending?

See:  CAAMP’s Response.

Below is a quick summary of recommendations from the Canadian Association of Accredited Mortgage Professionals (read the above link for context):

  • “CAAMP strongly recommends that…mortgages continue to be renewed at maturity without requalification” where the borrower has paid as agreed. If not, it “would result in a number of properties hitting the market at the same time thereby driving down prices.”
  • “CAAMP supports the elimination of “cash back” products in lieu of the five percent down payment. Borrowers should have ‘skin in the game’.”
  • “CAAMP recommends non-conforming or alternative lenders be permitted to (continue lending) up to 80% LTV” to properly qualified borrowers.
  • “CAAMP recommends that flexibility be allowed for those individuals with sound credit and verified income, to go beyond the proposed 65% LTV threshold for HELOCs…“This would support options for both retirement planning and small business investment. If the funds are used for the purpose of purchasing a home then CAAMP recommends they should be structured like mortgages and be amortized…If the funds are being used for business purposes, CAAMP recommends that there not be an amortization requirement.”
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