The Crown Corporation released its Q2 financial report this week, which showed some changing trends for insured mortgages over the past year. This is what brokers need to know.
Revenue and expenses fall
Total revenue, year-to-date at the end of June, was $2.306 billion – down slightly from 2.382 billion in 2015.
Expenses were also down – coming in at $1.450 billion in 2016, compared to $1.472 billion in 2015.
“Total revenues decreased by $21 million (1.9%) from the same quarter last year primarily due to lower parliamentary appropriations for housing programs and net realized gains (losses),” CMHC said in its Q2 financial report.
“Total expenses decreased by $6 million (0.9%) from the same quarter last year primarily due to lower housing program expenses partially offset by higher insurance claims.”
Delinquencies down overall, but up in Alberta
CMHC reported a total of 8,386 delinquent loans year-to-date in Q2, down from 9,027 at the same time last year. The arrears rate also fell from 0.34% in 2015 to 0.32% this year.
However, a bleaker picture is being painted in Alberta.
Oil country had a total of 1,487 mortgages that were behind at least three months of payments, up significantly from Q2 2015’s mark of 978.
Higher volume and more claims
Total insured volume was up in Q2 this year, coming in at $26.87 billion. That was up from Q2 2015’s total of $23.31 billion last year.
Year-to-date (as at June 30), volume was also up, with the Crown Corporation recording $41.2 billion in total insured volume by Q2’s end. That time last year, CMHC had a total of $36.3 billion.
As for claims paid, CMHC paid out $90 million in Q2 2016 – up from $88 million last year.
Claims paid were also up year-over-year at June’s end, with $192 million paid out this year compared to $178 million in 2015.
“Claims paid increased $2 million (2.3%) from the same quarter last year primarily due to the transactional homeowner product,” CMHC said in its report. “There was an increase in payments related to the new claims payment process where claims are paid based on gross dollar values and are occurring earlier when compared to the same quarter last year.”
Premiums and fees up
Premiums and fees received were up year-to-date at June’s end, with a total of $726 million. That’s up from 2015’s YTD total of $613 million.
“Premiums and fees received increased by $85 million (21.6%) from the same quarter last year primarily due to increased fees implemented on 1 June 2015 for the transactional homeowner product and higher insured volumes on multi-unit residential and portfolio (new).