CMHC CEO Karen Kinsley out, Wall Street banker Robert Kelly in… anybody asking why??
Karen Kinsley has been with CMHC (Canada Mortgage and Housing Corporation) for 25 years. The last 10 as it’s CEO. CMHC makes buying a home more affordable by insuring the mortgage against default. End result is a lower down payment requirement and lower interest rates. CMHC is profitable. They earned $1.7 billion in 2012 and $17 billion over the last 10 years.
In 2012, the Federal govt and the Minister of Finance decided to move CMHC under OSFI (Office of the Superintendent of Financial Institutions). OSFI is a regulatory body that provides regulation and supervision to 152 Banks, Trust companies and other Lenders. They function like auditors. A move questioned by many and one that contradicts the spirit of what CMHC is supposed to stand for.
Enter Robert P. Kelly. Mr. Kelly was appointed as Chairperson of the Board of Directors of CMHC this same month. Coincidence? Here’s a bit of history on 
Kelly….He worked at TD Bank from 1981 to 2000 leaving as a senior executive that was on the short list to be TD’s CEO.. he didn’t get the job and left for the U.S. to join Wachovia, then later Bank of New York Mellon as CEO and Chairman. I remember Mr. Kelly from my days working at TD. He was always a higher profile, more visible executive…
So I became somewhat puzzled and intrigued. Why would the Federal govt bring this high profile, Wall Street Banker type, as the Chairperson of a govt corp? The Chairperson and the CEO are two different roles..but why is he being asked to come back to Canada? and why did Kinsley leave now? Both events happening in the same month…?.
I did some quick research to what Kelly had been doing the past 13 yrs… I soon found this report from CNN Money dated December 2011 entitled ‘Robert P. Kelly: Inside the Fall of a superstar’. Wow, that got my attention… and it should get yours too. The article talks about Kelly’s accomplishments but also points out the the outrageous compensation and salary he earned… all during a one of the worst recessions in the history of the U.S. According to this article, Kelly earned $18million per year from 2007 to 2010, making him one of the highest paid execs in the U.S.
And when he resigned or was asked to resign by BNY Mellon in 2011, he received a comp package worth $34million. Wow! So why would this high profile Wall Street Banker come to Canada as the Chairperson of CMHC? CMHC.. a boring govt entity… Somethings out of place… Could this be the person to come in and privatize CMHC, as Mr. Flaherty is rumored to want to do…? Will he be the guy to close CMHC or sell it off? Stay tuned… this story will get more interesting in the coming months, I’m sure…
Your best interest is my only interest.
As always, I welcome your comments, calls and questions.
Steve Garganis 416 224 0114 steve@mortgagenow.ca
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As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.
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Let’s not forget the original reason for CMHC was not to make housing more affordable for everyone but for those coming back from the war. I’m fully for privatizing this very profitable entity so that this company can make proper decisions without the influence of a political party that will determine its direction, aren’t you?
That’s true.. CMHC was a temporary stimulus to kick-start the economy. Provide pride of ownership. It’s morphed into something much bigger… but then again, weren’t income taxes brought in temporarily, too?
Current CMHC lending programs have been reduced to buyer’s with less 20% down.. no refinances, no rental properties, no business for self programs (they exist but are far to restrictive or anyone to qualify and are too expensive)..
The current federal govt has an agenda to get rid of cmhc or make them private.. but this is one of the few programs where I see far more benefits of govt involvement..