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Mortgage Broker News | 21 Jul 2017, 08:15 AM Agree 0
Crown corporation addresses the concerns of the Quarry, Chadwick Towers, and Spruce Courts co-ops
  • Nick Sidor | 25 Jul 2017, 03:33 PM Agree 0
    CMHC is mixing apples and oranges. The money from the government's prepayment fund, established in 2015, goes directly to CMHC to keep CMHC whole on its 50-year mortgages at 8% or more. Not a nickel of that money goes to the co-operative; not a nickel can be used to help the low-income households pay their rents (which don't change as a result of refinancing). These co-ops simply want to pay off the CMHC mortgage and borrow additional funds privately to repair and modernize their buildings. That is unaffordable if millions of dollars to repay ridiculous fixed-term interest rates are required.

    At the end of the refinancing, the co-ops will have a new mortgage and need to service it. CMHC's clawing back money used to bridge the gap between what a household can pay, and the co-op's need for breakeven rents is unconscionable. But then again, so is letting mortgages at 8% or more endure all these years....
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