Blog

Canadian banks shouldn’t bear mortgage losses - Do you agree

Homebuyers with less than a 20% down payment are required to get mortgage default insurance, either from CMHC or one of the private mortgage insurers, when borrowing from a bank. That insurance covers the banks in cases where borrowers default on their loans.

Although both CMHC and private mortgage insurers are self-sustainable—claims are covered by the premiums paid by policy holders—all mortgage default insurance is backed by Ottawa. That means that in a dire crisis, such as a major housing market collapse, taxpayers could be left footing part of the bill.

As a result, the Conservative government had been looking at ways to reduce taxpayer exposure to the housing market, and the idea of forcing banks to pay a deductible on mortgage insurance claims was one of the ideas that it had floated.

Read More

Please Login to comment.
Statements and opinions expressed in articles, reviews and other materials herein are those of the authors; the editors and publishers.
While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. FundPage, Inc. will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.
The content of any organizations' websites which you link to from www.FundPage.com are entirely out of the control of FundPage, Inc., and you proceed at your own risk. These links are provided purely for your convenience. They do not imply FundPage, Inc.’s endorsement of, or association with any products, services, content, information or materials offered by or accessible to you at the organization’s site.
All copyright and trademarks accessible via the links from www.FundPage.com are owned by the respective website owners, or their licensors.
FundPage shall also have the right to remove any contents posted at any time without cause as FundPage determines in its sole discretion.

My Community

My Friends