AMBA cautions government

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Alberta’s association of mortgage brokers is sounding the same alarm as CAAMP, urging Ottawa to abandon any plans in the works to introduce yet more mortgage rule changes because of the CMHC’s much-talked about insurance fund.

AMBA fully supports the initiatives by the national association the Canadian Accredited Association of Mortgage Professionals (CAAMP) in their efforts to advocate on the mortgage brokers industry’s behalf,” reads a statement for the provincial association, released Wednesday. “Government should consider the risk of limiting consumer choice when it comes to large financial transactions.  AMBA believes that consumer choice is important to families who are managing their debt and with less choice comes higher costs.”

The letter comes on the heels of CAAMP announcement it is actively lobbying the government against making such a move.

“During the past week, there has been extensive media coverage and announcements affecting the mortgage industry,” writes CAAMP in a message to its members last week, outlining its lobby efforts. “The issue of lenders and the mortgage insurance ceiling has nothing to do with lending practices, but rather liquidity and capital requirements.”

Many brokers have offered the same analysis since CMHC warned lenders that their access to that insurance fund for the purposes of bulk insuring would rationed as it comes within 10 per cent of its $600 billion cap.

CAAMP is now speaking with lenders, insurers and brokers to evaluate the “facts and their implications” of that move.

AMBA suggests that the government previous rounds of mortgage rule changes have been sufficient to slow down household debt. It’s worried any further changes would see consumers lose access to much needed mortgage credit options and be left with more costly options.

“Action taken in adjusting rules or policies has the potential of reducing liquidity in the marketplace and may cause a crisis where none existed previously,” writes AMBA. “In considering mortgage rule changes, we urge the government to consider the risk of forcing consumers to higher interest-bearing credit such as personal lines of credit or credit cards as a result of less mortgage product options.”

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