Quote:
Originally Posted by ranchlandsselling
You didn't.
You accused a CMHC mortgage of being a taxpayer subsidized item when it's not nor has one ever been.
You then replied to that with a rhetoric question.
I'll move on to other conversations now.
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The risk is underwritten by the taxpayer. Ultimately they will be on the hook if the real estate market declines. What enables a person to buy a home with 20 to 1 leverage in this country is ultimately the assumption of that risk that a crown corporation takes on. It's a risk that the banks by themselves won't make on a large scale (Which should not be easily dismissed).
Take your provided Q2 numbers on CMHC. With 9% of their loan protfolio being 90% or greater LTV then a national decline of 10% (much less than the 25% haircut the Americans took) puts roughly $50 billion of CMHC insured mortgages underwater. Now of course not all of those people are going to default, but the point stands that the CMHC's portfolio certainly has the potential to have to be bailed out.