33 yorkville condos buzzbuzz . House prices in Canada may fall by 18%. Evan Siddall, CEO of the Canadian Mortgage and Housing Corporation, the state-owned mortgage insurance company under the Canadian federal government, has called on commercial banks and mortgage companies to stop providing high-risk home purchase loans to first-time buyers because such high-risk loans endanger the Canadian economy.Please Visit: 33 yorkville condos buzzbuzz to Get Your VVIP Registration Today!
Evan Siddall’s warning letter is addressed to federal officials and heads of commercial banks and credit unions. Evan Siddall, chief executive of the Canadian mortgage and housing company, posted the warning on social media after the warning was reported by the financial news agency BNNBloomberg.
In this letter, Evan Siddall requests Canadian commercial banks and credit unions to continue to support Canadian mortgage and housing companies in their efforts to protect the health and safety of the Canadian mortgage industry.
Although the Canadian Mortgage and Housing Corporation does not provide home purchase loans directly to Canadian home buyers, it provides home purchase loan insurance, so it has a great influence on the Canadian real estate market.
By the end of 2019, the Canadian Mortgage and Housing Corporation had insured mortgage insurance against C $429 billion of real estate assets.
According to Canadian financial regulations, buyers with a down payment of less than 20% of the house price must take out mortgage insurance to be held responsible by the mortgage insurance company if the buyer is unable to make payments on the mortgage. This is a protective measure to prevent the Canadian real estate market from being adversely affected by mortgage default.
However, the rule that buyers with a down payment of less than 20% of the house price have to buy mortgage insurance has also significantly increased their purchase costs.
At the beginning of the summer of 2020, the Canadian Mortgage and Housing Corporation announced that it would tighten the standards for the issuance of mortgage insurance. measures have been taken to increase the credit rating scores required for the issuance of mortgage insurance, set a ceiling on the ratio of debt to income, and prohibit borrowing money to make down payments for home purchases, in order to make it more difficult for home buyers to obtain home loan insurance and reduce the debt risk borne by home buyers.
However, the measures taken by Canadian mortgage and housing companies to tighten mortgage insurance standards have not had the desired effect. The reason is that although CMHC plays a leading role in the field of mortgage insurance in Canada, some other private companies provide mortgage insurance after all; this time, these private mortgage insurers have not taken measures to tighten mortgage insurance standards as in the past.
In other words, these private mortgage insurers have included customers restricted by CMHC’s strict mortgage insurance standards by continuing to maintain relatively loose mortgage insurance standards.
Evan Siddall, chief executive of the Canadian Federal Government’s Home Mortgage and Housing Corporation, warned that excessive debt not only increases the risk of home loans, but also drags down Canada’s economic development. Canadians’ debt has already exceeded 100% of household income, reaching a high of almost 115%.