Sunday, 26 January 2014

OSFI's potential B-21 changes worries mortgage brokers

Brokers apprehensive about potential B-21
15 Jan 2014
"Brokers may not buy into Realtor optimism, with two industry players taking to’s comments section to air their fears of the impending B-21 guidelines.

“This time the insurers are said to be the target and this could mean anything from increasing the down payment amount to a minimum of 10 per cent or 15 per cent, affecting mostly first-time buyers, to limitations on bulk insurance which is bound to affect almost everyone else,” Lior Hershkovitz of Mortgage Edge said. “With the banks required to hold a greater portion of the risk on their books, mortgage approvals will become more stringent."

"Expected to be opened to public comment in March, the B21 guidelines will require the three mortgage insurers – Genworth, Canada Guaranty and CMHC -- to more stringently police the mortgage default insurance loans they provide.

And brokers are already speculating about the affect the potential guidelines will have on the industry as a whole."

"“Let's face facts, B-20 did not make mortgage lending any easier for mortgage brokers; it's a good bet B-21 will be just as painful,” Butler said."

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