Calls for more openness from CMHC denied

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Calls to CMHC from one leading economics professor to disclose details about the risks in its portfolio have been denied under the guise that the information is commercially sensitive.

“They used this as an excuse to cloak what they were doing,” Dr. Ian Lee, director of the MBA program at Carleton University’s Sprott School of Business told the Huffington Post.

Lee called for the disclosure because he believes Canadian taxpayer have a right to know just what kind of risk the insured mortgage game presents, according to the Huffington Post.

Addressing potential risks has been a priority for the Crown Corporation for some time now, with potential risk sharing being one of the measures mentioned.

“In our role as an adviser to government, we are evaluating a range of ideas on future improvements to our housing finance system, including risk-sharing with lenders to further confront moral hazard, future sandbox changes if housing markets are to become less stable, and increased capital requirements,” CMHC President and Chief Executive Officer Evan Siddall told the Saint James Club in late September.

“Lots of work has been done on how corporations can better manage commercial risks, but in my view, too little attention has been paid to government’s management of tail risk.

Insured mortgages currently accounted for $539.8 billion in residential mortgages in Q2 2014 -- 58 per cent of all mortgages originated in that time.
  • Janice Ashworth on 2014-10-09 12:41:56 PM

    I have been trying to find out what the default percentage was on the Business for Stated, 0 down and 2nd home program from inception through to cancellation. Very curious to see if the cancellation of these programs was due to high default rates. I've would like the information on total defaults as well. Is this information really not available? It should be public information and easily accessible.

  • Vejai Etwaroo on 2014-10-09 1:39:21 PM

    I do believe that just as the Financial Services Commission require that Mortgage Brokers give full disclosures to all involved in a transaction then the Insurers and lenders should do the same and give full disclosures on the default insurance that is paid by the Borrower upfront to the insurers. What % is default? How many defaults? Should be Public Information

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