June 2011: 1.46%
(“Between 2009 and mid 2011, spreads gradually tightened as liquidity issues at financial institutions diminished and the competition for mortgages increased,” said the company.)
September 2012: 1.80%
(“With renewed global economic turmoil in 2012, spreads generally have widened again.”)
“…The Company sees the low interest rate environment continuing and healthy mortgage spreads for the remainder of the year.”
“Canada Housing Trust (CMHC) has indicated that it will not unduly increase the size of its (Canada Mortgage Bond) issuances…” (This is a significant constraint for non-bank lenders competing with the majors.)
First National sold 82% of its Q3 mortgage originations to institutional investors, much more than analysts expected.
Genworth MI Canada
Its mortgage application volumes are down approximately 15% since the tightening of mortgage rules, said Genworth.
“Many potential homeowners appear to be sitting
on the sidelines watching interest rates and home prices and adopting a wait-and-see approach before buying.”—Brian Hurley, Genworth MI Canada, Inc. – Chairman & CEO
“…Over 80% of borrowers we qualify for a 30-year term could qualify for a 25-year term,” says Hurley. (CMHC’s findings are likely similar. This counters those who claim that mostly fringe borrowers take extended amortizations.)
Genworth expects the government to raise the cap on insurance-in-force for private mortgage insurers to $300 billion, from $250 billion today. The company hopes that will happen by “early 2013.” RBC Capital markets estimates that private mortgage insurers have, collectively, ~$200 billion in insurance-in-force.
Genworth’s delinquency rate has fallen for six quarters in a row to a long-term low of 0.15%.
Genworth wrote a more “typical” $11 million in bulk insurance in Q3, versus an abnormal $47 million the prior quarter. (That $47 million occurred from pent-up demand after CMHC started rationing bulk insurance.)