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Fitch: brokers facing tighter underwriting on low-ratios

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Mortgage Broker News | 28 Jun 2012, 11:00 AM Agree 0
Another credit rating company is weighing in on Canada’s new rules for insured mortgages, suggesting brokers will soon see lenders move to duplicate those standards for uninsured home loans.
  • Paul Therien, CENTUM | 29 Jun 2012, 03:45 AM Agree 0
    This really should not come as a surprise knowing that most lenders bulk insure much, or all, of their conventional portfolio. It stands to reason that they would have to tighten up the lending to meet the insurers guidelines if they tighten up. Insurance is insurance, conventional or high ratio – either way the insurer is the one taking the risk, not the lender. If they do not tighten the requirements, the insurer will not insure the product, and the lender will not be able to securitize the debt.
  • Hal | 29 Jun 2012, 07:39 AM Agree 0
    At present, the new rules only apply to high ratio deals. Any deal with a LTV of 80% or less can still be approved at a GDS of 44, and with a 30 year amortization. Those files can still be bulk insured through CMHC.
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