A competitive advantage is there for the taking for monoline lenders who are willing to work with Canada’s two private mortgage default insurers -- Genworth
and Canada Guaranty, according to two brokers.
“The changes within the market have been frustrating; they have imposed restraints on us,” Craig Spicer of Verico
Premier Mortgage Centre told MortgageBrokerNews.ca “Thankfully the lenders I deal with deal with all three insurers but I know brokers have had an issue with lenders who only work with CMHC.
“The lenders who work with all three insurers have a competitive advantage because brokers are more diversified in what they can offer.”
The crown corporation has amended some of its programs while axing others, leading brokers to wonder just how long it will remain the number one insurer.
Effective July 31, CMHC will nix its loan insurance for the financing of multi-unit condo construction and that it will align its low-ratio product with its high-ratio insurance by implementing maximum house prices, amortization periods and debt servicing ratios.
The move was made to foster more responsible market discipline, according to CMHC.
But these changes have caused brokers to question the crown corproration's influence going forward.
“Some lenders only use CMHC and CMHC isn’t the gold standard anymore and if the lenders can’t use CMHC there are no alternatives,” Clinton Wilkins of Centum Home Lenders Ltd. told MortgageBrokerNews.ca. “Changes in insurer guidelines have been really frustrating; the insurers are already rolling out the B-21 guidelines early.”