Paul Taylor, CEO of Mortgage Professionals of Canada on March 5th:
Quote:
...These premiums have also generated significant profit for the government during our recent historically low arrears and default years, with a recent $4 billion going from CMHC to the Federal Government’s general accounts via a declared special dividend.
Even the NDP – not normally associated with the mortgage industry – supports our recommendation for 30 year amortizations for first time homebuyers, because, absent defined benefit pensions the select few now have, Canada’s economy historically relies on young Canadians who can join the middle class via the growing equity (through repayment – not just continuous appreciation) in homes they own.
Our association has never asked for outright removal of the stress tests; we are reasonably asking for a reduction of them to better counter three Bank of Canada rate hikes in 2018. Without some adjustments, homes will continue to be on sale for the wealthy and unattainable for the young middle class we promised to support.
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Mortgage arrears are around 0.24% in Canada, one of the lowest rates in the world. There is not a week that goes by where at least one client doesn't say something along the lines of "I never used to have to provide this many documents" or "why are there so many documents required?" There is major due-diligence required to determine affordability even before the stress test was implemented.