Brokers may not buy into Realtor optimism
, with two industry players taking to MortgageBrokerNews.ca’s comments section to air their fears of the impending B-21 guidelines.
“This time the insurers are said to be the target and this could mean anything from increasing the down payment amount to a minimum of 10 per cent or 15 per cent, affecting mostly first-time buyers, to limitations on bulk insurance which is bound to affect almost everyone else,” Lior Hershkovitz of Mortgage Edge said. “With the banks required to hold a greater portion of the risk on their books, mortgage approvals will become more stringent.
“I can't begin to imagine how this would impact the monolines.”
Expected to be opened to public comment in March, the B21 guidelines will require the three mortgage insurers – Genworth
, Canada Guaranty and CMHC -- to more stringently police the mortgage default insurance loans they provide.
And brokers are already speculating about the affect the potential guidelines will have on the industry as a whole.
“One major change may be a requirement to create a pooled database of insured mortgage information and insured mortgage applications to be maintained by all three insurers,” Ron Butler
Butler Mortgage said. “This common database would be intended to allow the insurers to see the all of the application info sent through all lenders applying for an insured mortgage."
According to Butler this database would allow insurers to better track mortgage applications and variations in data “and also allow them to piece together whether there is a consistent pattern of multiple home purchases.”
Brokers may be waiting with baited breath to see if the B-21 guidelines pass but there seems to be a consensus that the industry will feel the impact if they do.
“Let's face facts, B-20 did not make mortgage lending any easier for mortgage brokers; it's a good bet B-21 will be just as painful,” Butler said.
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