One broker takes umbrage with what he feels is the Canadian government limiting the Canada Mortgage and Housing Corporation’s (CMHC) influence in the market following the crown corporation’s most recent restructuring.
“It concerns me that our conservative government seems to be utilizing its moral suasion to limit/control/eliminate CMHC as a major player in our housing industry,” mortgage broker Tom Adamson said in the comments section of MortgageBrokerNews.ca. “A wonderful and exceptional organization (CMHC) that few could argue has not been the backbone to the stability of our Canadian real estate.
“With what we have seen in the North American market place I give the credit of our stability to CMHC.”
Adamson’s comments followed the latest announcement from CMHC that it will no longer provide loan insurance for the financing of multi-unit condo construction and that it will align its low-ratio product with its high-ratio insurance by implementing maximum house prices, amortization periods and debt servicing ratios, effective July 31.
This latest news, of course, came on the heels of a late-April announcement from the crown corporation that it will no longer insure second homes and self-employed individuals who do not have third party income validation.
Several brokers have questioned whether CMHC’s recent program cuts will lead to Canada’s two private insurers, Canada Guaranty and Genworth, to pick up a larger share of market. However, some question their ability to take do so.
“CMHC had given some stability to the real estate market during and after the North America financial crisis in 2008-2011,” Angela Wong-Liao of Invis The Money Lady said on MortgageBrokerNews.ca. “My concern is that even the two private insurers Genworth & Canada Guaranty want to fill the void from CMHC, can they have the strength and sufficient funding to do so?”