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Mortgage Broker News | 13 Jan 2014, 07:13 AM Agree 0
It depends how much stock you put in Realtor forecasts, but a new market survey suggests brokers have little to fear from the federal government this year, despite continuing rumour to the contrary.
  • Lior | 13 Jan 2014, 09:15 AM Agree 0
    I just want to see Realtors getting their deals done when the B-21 kicks in. If they think they are getting white hair now, just wait and see what's coming. This time the insurers are said to be the target and this could mean anything from increasing the down payment amount to a minimum of 10% or 15%, affecting mostly first-time buyers, to limitations on bulk insurance which is bound to affect almost everyone else.

    With the banks required to hold a greater portion of the risk on their books, mortgage approvals will become more stringent. I can't begin to imagine how this would impact the monolines.

    Regulators are coming to grips with the fact that five years after the credit crisis started, low interest rates are here to stay, at least for the foreseeable future, hence the need for additional intervention seems justified. The only thing I see derailing this intervention is rising market rates once the U.S. economy comes back to life. Higher interest rates converging with high home prices will put home ownership out of the ballpark for a lot of people and this is what will drive the housing market into a correction, especially markets where affordability is already under pressure.
  • Ron Butler | 13 Jan 2014, 11:01 AM Agree 0
    There have already been some preliminary B-21 discussions and an increase in minimum down payments is a MOF decision not an OSFI policy move.

    There are several tweaks being considered like how incomes are defined on the existing insured Alt-A plans and improved audit of files.

    One major change may be a requirement to create a pooled data base of insured mortgage information and insured mortgage applications to be maintained by all three insurers. This common data base would be intended to allow the insurers to see the all of the application info sent through all lenders applying for an insured mortgage. This is different than the credit bureau that shows existing mortgages, this data base would show mortgage applications and allow insurers to track any variation in data and also allow them to piece together whether there is a consistent pattern of multiple home purchases.

    Let's face facts, B-20 did not make mortgage lending any easier for mortgage brokers; it's a good bet B-21 will be just as painful.
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