Industry professionals have petitioned the Department of Finance for a halt on far-reaching changes to federal mortgage rules until the effects of the recent revisions become apparent.
“We are asking for slight amendments to the portfolio insurance eligibility guidelines, and to wait for the remaining existing changes to make their way through the market before implementing any further changes,” MPC president and CEO Paul Taylor said in front of the Standing Committee on Finance last week, as quoted by CMT
“The recent changes are having a cumulative negative impact on the mortgage market and ultimately on the Canadian consumer,” Taylor added.
In particular, the new rules have led to brokers being burdened by even more tasks on top of their already numerous responsibilities to their clients.
“Canadian consumers have been more and more inclined to use the services of a mortgage broker to provide choice, advocacy and support, and to assist in the technical requirements of mortgage qualification,” Taylor explained. “Placing competitive disadvantages [on] the non‐traditional bank lenders will adversely affect this segment of the Canadian mortgage marketplace.”
“We therefore maintain that in light of decreased competition, increased financing costs, decreased purchasing power, and increased regional prices and access disparity, that the government suspend any further changes to the housing market it is considering.”
Taylor noted that in the interim, federal authorities should consider permitting refinanced mortgages to be included in portfolio insurance to relieve some of the pressure the industry is suffering from at the moment.
“If an 80% loan‐to‐value ratio is unacceptable, please consider reducing the threshold to 75% rather than removing eligibility to these products entirely,” Taylor suggested.
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