One industry professional is arguing the crown corporation should be a non-profit organization that should focus on helping a certain segment break into the housing market.
“CMHC should operate on a break-even basis,” Bob Cameron, a broker with Cameron Financial Services, told MortgageBrokerNews.ca. “Their purpose [should be] to help first-time homebuyers purchase, but they are making big money and they shouldn’t be increasing fees.”
Earlier this year, CMHC increased premiums by 45 basis points for buyers who put less than 10% down on a home. It reported net income of $690 for the first six months of the year in its latest quarterly report, released in the summer.
The crown corporation was originally established to give a helping hand to Canadians who otherwise would not be able to afford a home. However, many of whom believe the Crown corporation has outgrown its initial intention.
“CMHC was not established as a profit centre with a billion a year. It was created to help with home ownership. Originally if one was fortunate to have a CMHC insured loan your mortgage rate was discounted off the market rate,” one anonymous commenter wrote on MortgageBrokerNews.ca last year. “The crown corporation morphed into an insurance business with little regard paid to risk and its consequences.”
And it’s an opinion that was shared by the late Jim Flaherty
“Regrettably, CMHC became something rather more grand, I think, than it was intended to be,” Flaherty once told reporters. “We’ll see over time what that role should be.”