Bad policies grow for CMHC

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CMHC's bottom line is showing the effects of an uncertain economy, with Q2 profit taking a corresponding beating.

Net income for those three months ending June 30 was $335 million, off $48 million from the same period a year ago.

While CMHC is blaming much of the drop on its own impaired equity investments, it suffered an increase in claims, also contributing to a revenue fall of $100 million.

It loss on mortgage insurance claims rose to $168 million for the three months ended in June, which is up from the $144-million recorded for the year-ago period.

"Overall, Canadian housing markets are supported by economic and demographic fundamentals; however, CMHC continues to closely monitor activity," says CMHC in its quarterly report.

Still, there may be further slowdown on the horizon as the effects of a slowing real estate market come home to roost. The Crown corporation has already suffered a slowdown in portfolio insurance for lenders as it approaches the $600-billion cap for its government-backed insurance fund.

  • Guy Lew on 2012-08-30 4:03:26 AM

    A few months ago we were trying to save this one particular family from a Power of Sale, TD Bank wanted to take the house anyways because it was CMHC insured. We tried to tell them we were prepared to pay the full market price to protect the value, put the client in a better position and save CMHC from wasting money on trying to collect on any shortfall. At the end the Bank didn't care, this resulted in CMHC losing while they could have gained all around....I find that very disturbing.

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