Submission to Department of Finance
As you may know, the federal government is consulting on a proposed new model for a risk-sharing mechanism for government-backed mortgage insurance in Canada.
Mortgage Professionals Canada has made a submission to the Department of Finance on behalf of our members. Our position is that the proposed risk-sharing for government-backed insured mortgages would be negative and detrimental to the financial stability and security of the Canadian housing market and ultimately the Canadian consumer for the following reasons:
- The current system is “sound, with strong foundations that promote financial stability, including robust regulation, prudential supervision of regulated financial institutions, and high underwriting standards” and without a moral hazard problem.
- The proposed model will increase the costs for insured mortgages and could create significant regional price disparities.
- The proposed model could potentially increase the risk of insolvency for some lenders and fundamentally change our mandatory insured mortgage structure.
- Finally, if the government is concerned about tax-payer risk and consumer indebtedness, continuing to target the insured mortgage space with national policies will further impact first-time home buyers who are not responsible for any distortions within the Canadian housing market.
VIEW OUR FULL SUBMISSION
Please view Paul Taylor's interview with BNN regarding this topic below: