Quote:
Originally Posted by GGG
Does CMHC hoard tonnes of cash from years of ever increasing real estate prices or did insurance rates lower to limit profit kind of like EI does? Would CMHC need bailing out with a large housing crash?
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They used to, but in recent years they've operated similarly to a bank or insurer. They have their capital requirements where they have to keep whatever % of their insured/loaned liabilities on hand as cash, and then they pay most of the rest out to shareholders (the federal government in this case) in the form of dividends.
It's sort of a distinction without a big difference though, as CMHC income/expenses were already incorporated into government finances (so this isn't new money). And similarly, should CMHC have solvency issues, then the government will be bankrolling it.