New B-21 mortgage regulations announced
Many had their breath held as OSFI (Office of the Superintendent of Financial Institutions) released their draft for their latest round of mortgage regulations Monday April 15th. This time, for the first time in a long time, the proposed changes were quite… tame. Intentions of drastically changing mortgage lending criteria once again to put a damper on the Canadian housing market seems unlikely. The new items in B-21 are:
Cashback down payments not allowed on insured mortgages. No surprises yet, as these mortgages are considered high risk. Interestingly, borrowed down payment (assuming the borrower can qualify to carry the payments) is ok.
Lenders will be audited more frequently. OSFI is really looking for underwriters to be granting less exceptions and sticking with their lending guidelines more frequently. Unfortunately, this means that common sense lending will be heavily restricted – not good for many borrowers. Lenders with higher defaults will be audited more heavily.
Data Disclosure to increase. Insurers will be required to publicly disclose more stats every quarter related to the risks of the portfolio.
All in all, no big waves will crash through the markets but heavier pressures from OSFI to minimize exceptions will have an effect on borrowers that are “out of the box”. Unfortunately, the box seems to shrink all the time.
For more information contact our Vancouver Mortgage Expert – Kyle Green at www.kylegreen.ca