The previous week ended with sad news as many across the country were shocked when it was announced that former Finance Minister Jim Flaherty had died at the young age of 64. Flaherty died just three weeks after resigning from cabinet and was laid to rest this past Wednesday with family, friends, and colleagues paying their final respects at Toronto’s downtown St. James Cathedral. Flaherty will go down in history as one of the best finance ministers in the history of the not only Canada but the world as he lead Canada through the world economic down turn with minimal damage and one of the strongest economies in the world! He will be missed!
The other big mortgage news this week comes from OSFI and the release of the proposed mortgage rule changes. The guidelines are directed at the country’s three mortgage insurers which include Canada Mortgage and Housing Corp (CMHC), Genworth MI Canada, and Canada Guaranty. The proposed rules have been released for public consultation until May 23.
The changes proposed are not significant but will provide clarity about best practices in respect of residential mortgage insurance underwriting, which will contribute to a stable financial system. The most significant change will be eliminating cash-back down payments on insured mortgages which were only being done by select credit unions but borrowed down payments will still be allowed. Overall the main focus will be a higher level of scrutiny on Lenders’ underwriting with heightened focus on the consistency of underwriting decisions.
In conclusion we don’t see any significant impact to mortgage lending but foresee a stronger finance system and more consistent lending guidelines across all lenders.
