It may be too early to break out the bubbly, but brokers – and indeed their nervous clients – appear poised to escape the most onerous of OSFI’s proposed changes, said the head of the industry’s largest association, pointing to recent discussions in Ottawa.
“The re-qualifying issue is a top priority for CAAMP,” Jim Murphy told MortgageBrokerNews.ca, reiterating his comments at last week’s CMP Mortgage Summit. "From what we are hearing and based on meetings we have had with federal officials we expect there to be clarification on the requalifying issue -- that the current practice, based primarily on payment history, will continue.”
If true – Murphy, for one, is waiting on a final announcement expected at the end of the month – broker prayers from one end of the country to the next will have been answered.
Moreover, their lobby efforts may also have won that outcome.
Industry reaction to OSFI’s plans to tighten up mortgage underwriting was swift and largely negative this spring. Chief among the concerns was a vague pledge to re-qualify existing mortgagees at renewal.
CAAMP and consumer advocacy groups suggested such a move could actually compromise Canadian homeownership, not bolster it.
“CAAMP strongly recommends that this concept be clarified so that mortgages continue to be renewed at maturity without requalification,” writes the association’s executive in a response to the OSFI proposals. “If not, homeowners who have been in compliance may no longer qualify.
“This would result in a number of properties hitting the market at the same time thereby driving down prices.”
Murphy is now suggesting that aspect of the Residential Mortgage Underwriting Practices and Procedures draft will, indeed, be clarified and the status quo largely maintained.
CAAMP and Murphy, in particular, have actively lobbied OSFI over the last several months in an effort to protect the mortgage industry from unintentional shocks resulting from tighter and, perhaps, unnecessary changes.
“It is important to note the many positive features of the Canadian residential mortgage market,” writes CAAMP in its official response to OSFI’s draft. “This is something that is noticeably absent from the OSFI Draft Guideline B 20 Discussion Paper on mortgage underwriting.”