A Statement From The President On Recent Federal Government Announcement
On October 3, 2016 Finance Minister Morneau outlined mortgage insurance and qualification changes effective October 17 and November 30 respectively. Paul Taylor, President and CEO of Mortgage Professionals Canada today released the following statement:
“Our members are concerned about the negative impact the changes to mortgage lending will have on Canadians' ability to afford a mortgage and the negative consequences for the Canadian economy. These changes were announced with no warning to our industry and almost no consultation.
The qualification changes requiring all ‘insured’ (bulk or high ratio) loans to meet 25-year amortizations and be qualified at the Bank of Canada benchmark rate (currently 4.64%) will prevent many Canadians from becoming homeowners. It will also likely raise interest rates which will increase the cost of homeownership in Canada.
Additionally, the changes to mortgage insurance eligibility significantly impact our monoline lenders. They have the potential to severely restrict their access to capital and their ability to compete with the traditional banks. Additionally, the million-dollar purchase price limit effectively excludes many Canadian lenders from the highest property value marketplaces where consumers arguably have the greatest need for funding competition, accessibility, and availability.
As we continue to study the potential impacts, we have been in communication with the Department of Finance and are discussing the unintended consequences to the marketplace these changes will bring.”
Background on Mortgage Professionals Canada
Mortgage Professionals Canada (formerly CAAMP) is Canada’s national mortgage broker industry association. We recognize that Canadians need and deserve more. We believe in competition as it produces better options and demands ever-improving service and products. We believe in choice as it benefits Canadians and delivers an environment of opportunity. We believe in professionalism as it demonstrates commitment, trust, and excellence. The mortgage broker channel is a critical and valuable profession. It creates possibility, fuels the economy and provides Canadians with choice when making the most important financial decisions of their lives.The mortgage broker channel originates approximately 33% of all mortgages in Canada and approximately 50% of mortgages for first-time buyers. The association is an incredibly important segment of the economy and helps maintain a healthy and competitive marketplace.