Brokers apprehensive about potential B-21

Brokers apprehensive about potential B-21

Brokers apprehensive about potential B-21 Brokers may not buy into Realtor optimism, with two industry players taking to’s comments section to air their fears of the impending B-21 guidelines.

“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 per cent or 15 per cent, affecting mostly first-time buyers, to limitations on bulk insurance which is bound to affect almost everyone else,” Lior Hershkovitz of Mortgage Edge said. “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.”

Expected to be opened to public comment in March, the B21 guidelines will require the three mortgage insurers – Genworth, Canada Guaranty and CMHC -- to more stringently police the mortgage default insurance loans they provide.

And brokers are already speculating about the affect the potential guidelines will have on the industry as a whole.

“One major change may be a requirement to create a pooled database of insured mortgage information and insured mortgage applications to be maintained by all three insurers,” Ron Butler of Verico Butler Mortgage said. “This common database would be intended to allow the insurers to see the all of the application info sent through all lenders applying for an insured mortgage."

According to Butler this database would allow insurers to better track mortgage applications and variations in data “and also allow them to piece together whether there is a consistent pattern of multiple home purchases.”

Brokers may be waiting with baited breath to see if the B-21 guidelines pass but there seems to be a consensus that the industry will feel the impact if they do.

“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,” Butler said.

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  • Stephanie Lopushinsky 2014-01-15 8:42:37 AM
    If the true objective of B21, in the long term, is to slowly remove the insurers completely then they would be more likely to minimize their exposure with more challenging guidelines. I would anticipate that one will have to qualify at the bench and perhaps limit the amount of insured homes that one can have at one time. The changes will be indicative of the true motives of the government. However what I would like to see is provisions that would allow Canadians tax credits for these premiums. Canadians are in a catch 22 with these insurers.
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  • Privatize CMHC 2014-01-15 8:56:24 AM
    Don't need the real estate market bubble to be on the taxpayers back. Let the private companies and the banks insure 5% down mortgages and charge whatever fees they see fit. Too much taxpayer money is covering the butts of idiot Canadians buying with 5% down and no net worth or savings.
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  • Keep CMHC 2014-01-15 12:58:58 PM
    CMHC has double the required reserves and pumps avg 2 Billion/yr into Gov coffers. Not to mention Gov access to the huge database and all that can be derived from it. The old . . backs of taxpayers argument is one I expect from the ill informed gen public, not someone within the industry.
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