CMHC reveals confidential memo to finance ministry

CMHC reveals confidential memo to finance ministry

CMHC reveals confidential memo to finance ministry The Canada Mortgage and Housing Corp (CMHC) has admitted that it told the finance ministry in 2014 its concerns about increasing high household debt levels and rising prices in a number of urban property markets.
 
CMHC’s comments were initially confidential, sent in May 2014 through a memorandum.
 
"We are, however, concerned about reduced household flexibility resulting from elevated debt levels as well as diversion of capital into residential housing investments," the memo last year stated. "Likewise, elevated prices in some urban markets further compound affordability concerns."
 
This week, CMHC furnished Reuters a copy after the Blacklock's Reporter online website first reported it.
 
The memo also stated CMHC would “look at options for loan-level risk sharing with lenders to reduce risk, increase market discipline and further optimize taxpayer exposure.”
 
However, details of its proposals were censored.
 
From 2008 to 2012, Canada exerted efforts to tighten the rules around government-backed mortgages four times in a bid to cool the property market.
 
13 Comments
  • David Skinner 2015-03-05 2:32:15 PM
    If the government & CMHC are so very concerned about debt load of Canadians, can anyone answer why they've put so many restrictions on mortgage lending(cheap borrowing costs) and no costs on unsecured lending. Dollar for dollar, the Banks earn far more on credit cards, loans, & PLC's than they earn on mortgages.
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  • Joel Sida Mortgage Broker 2015-03-05 2:38:08 PM
    Good point David, when mortgage rates dropped, unsecured debt rates went up and the consumer has no saying at all.
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  • Mike 2015-03-05 2:38:09 PM
    Ironic, government is concerned with consumer debt load. As a taxpayer I am very concerned with government debt loads. Time to put some restrictions on government spending, especially bankrupt Ontario. If you do the math I pay more in interest on the government debt than I do on my own debt.
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