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Mortgage Broker News | 16 Mar 2016, 08:15 AM Agree 0
Brokers may not be sold on CMHC forcing banks to take on more risk
  • Rob Chandler | 16 Mar 2016, 09:12 AM Agree 0
    The real issue here is the consequence on Canadian borrowers not living in major urban centres. Banks and other lenders will likely deal with the additional risk by foregoing lending in rural areas and lower income areas of the country - the places where mortgage defaults are highest and mostly costly to the insurance providers (CMHC). So what CMHC would achieve with such a policy would be to bias the affordability of home ownership to those living in major urban areas at the expense of other Canadians that do not. I don't think the federal government wants to take on a policy that would bifurcate the Canadian population in such a manner.
  • Guy | 16 Mar 2016, 09:33 AM Agree 0
    If this applies to bank deals, it might be a good thing for mortgage brokers. I get so tired of hearing Banks bending the rules on credit score and TDS to push files through when we brokers can't get them done with the very same institution making us look incompetent. This will make them think twice about filing quotas to make their balance sheet look good and bury all the defaults in their huge mortgage portfolio.
  • Trudy | 16 Mar 2016, 10:22 AM Agree 0
    Interesting, isn't this why clients pay insurance premiums to CMHC?
  • IMHO | 17 Mar 2016, 07:30 AM Agree 0
    This would end up affecting the monolines more than the banks as in many cases the banks have bent the rules to approve outside of the CMHC box anyway, so don't make a claim on a lot of defaults.
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