TagCMHC

Posted March 6, 2014 Mortgage News

CMHC mortgage insurance rates increasing but still cheaper than 10 yrs ago.

Canada Mortgage and Housing Corporation (CMHC) announced they will be increasing the cost of insurance premiums effective May 1st. The premium increase is minimal and isn’t expected to slow the mortgage volumes (see below for cost changes). The move isn’t that puzzling given that CMHC’s most recent financial statements from 2013 show their volumes are down due to the Federal govt mortgage rule changes… but interestingly, profits were up 11% for the first nine months of 2013.

CMHC made $1.27billion as of September 30th 2013. Not bad for a crown corporation that was created to encourage home ownership in Canada. CMHC puts a lot of money in the government coffers. Arrears are lower at 0.33%.. that’s considered extremely low. Some would say this is just a cash grab. But I think it’s just being proactive as taking action before the expected volumes decrease.

CMHC PREMIUMS ARE STILL CHEAPER THAN THEY WERE 10 YEAR AGO

But here’s the bright side. Continue reading “CMHC mortgage insurance rates increasing but still cheaper than 10 yrs ago.”

Posted June 4, 2013 Bank News

Poloz in, Carney out as Bank of Canada Governor…3 major changes in less than a year!! Anyone else find this strange??!.

Stephen Poloz was announced as Mark Carney’s replacement as the new Bank of Canada Governor. The announcement was a surprise for many… Most thought the Deputy Governor, Tiff Macklem, would have been a more likely candidate. But Jim Flaherty, Minister of Finance, chose Poloz…. probably because he shares the same vision as Flaherty… tighter lending rules, higher rates.. etc..

But this article isn’t about why Poloz is in, and Macklem is out. I want to bring something else to your attention. Did you know that we have had 3 major changes in less than 6 months? Mark Carney is leaving Canada to head the Bank of England. Then, within 6 months, the head of OSFI, Julie Dickson, announced she will be leaving in 2014. And now Karen Kinsley, CEO of CMHC, has announced she is stepping down. I’ll add in a fourth.. Robert P. Kelly has come in as Chairperson of CMHC… You’ll need to read this to understand why this is relevant.

These are major changes folks. OSFI, CMHC and the Bank of Canada Governor. 3 major players that run and regulate Canada’s Financial and Banking sectors. Has anyone asked why they are all leaving now? Continue reading “Poloz in, Carney out as Bank of Canada Governor…3 major changes in less than a year!! Anyone else find this strange??!.”

Posted June 3, 20132 Comments Bank News

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… Continue reading “CMHC CEO Karen Kinsley out, Wall Street banker Robert Kelly in… anybody asking why??”

Posted May 31, 20135 Comments Mortgage News

Top Banking regulator stepping.. OSFI’s Julie Dickson leaving in 2014

Julie Dickson, the head of OSFI (Office of the Superintendent of Financial Institutions) will not be back when her term expires in July 2014. She’s decided to not to stick around after making more lending rule changes in 2012, than I have ever seen, during my entire 23 year career working in financial services. OSFI is a regulatory body that provides regulation and supervision to 152 Banks, Trust companies and other Lenders. In short, they are auditors. Here’s a link to the major changes made just last year including putting CMHC under OSFI control.. more on that later..

Some say her claim to fame is that she was in charge during the worst banking and mortgage crises in history. And that Canada came out of this global financial collapse way better than any other country. It’s true, we did come out of this very well compared with the rest of the world… But what does Ms. Dickson and OSFI have to do with it? For me, this had more to do with luck, govt intervention and Canadians being our normal conservative selves. We were a little slower to adapt to U.S. style lending policies… Ask any financial expert and they will tell you we were just a few years behind the U.S. with regards to their wild mortgage lending guidelines… Continue reading “Top Banking regulator stepping.. OSFI’s Julie Dickson leaving in 2014”

Posted February 4, 20131 Comment Consumer Debt

Personal Debt level concerns are overblown according to Equifax stats.

So here we go again.. More stats that show our personal debt levels aren’t out of control… That’s right, I said ‘aren’t’ out of control. Equifax Canada says our defaults are at record low levels and we are paying off our debts faster. This doesn’t come as any surprise to me. Anyone that’s followed my posts knows that I have questioned all the popular articles telling us we are not managing our debts responsibly.

You’ve seen the reports… ‘Personal debts at record high levels’…..’Personal Debt crisis’. We’ve been hammered with the same headlines for the past few years. I just wasn’t seeing this with my readers or my clients… I kept seeing consumers wanting to take advantage of these record low interest rates to invest or improve their homes (why is that a bad thing?). That’s not bad debt in my opinion… that’s good debt.. And now we have some stats to back up what I have experienced. Continue reading “Personal Debt level concerns are overblown according to Equifax stats.”