Canadian government changes rules for mortgage insurance
Aug 7th 2008, 5:20 pm
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Canadian government changes rules for mortgage insurance
The Federal Finance Department has announced plans to introduce two new consumer measures involving mortgage insurance. The first measure will require enhanced disclosure to consumers about the characteristics of mortgage insurance. While lenders are already required to itemize the cost of mortgage insurance as part of their disclosure to borrowers, the new measure will set out additional, mandated disclosures to help consumers better understand the mortgage insurance transaction.
The second measure will ensure that Canadian consumers are charged no more for an insured mortgage than the true cost of obtaining that mortgage. This new measure will guard against practices alleged to occur in other jurisdictions whereby insurance premiums charged to borrowers could be artificially inflated.
The government says these measures will increase the amount of money available to Canadians for mortgages and make mortgage insurance more transparent, understandable and affordable.
The Government of Canada is also increasing the volume of funding for mortgages available to Canadian banks and other mortgage lenders. The Canada Mortgage Bond (CMB) program will be expanded to include a CMB with a 10-year maturity to interest new investors who are seeking assets beyond the current five-year term.
The planned CMB program expansion is in addition to the record $12.5 billion CMB issue in June, which funded an estimated 64,000 mortgages and brought the total outstanding amount for the CMB program to roughly $136 billion. (CREA 01/08/08)
The second measure will ensure that Canadian consumers are charged no more for an insured mortgage than the true cost of obtaining that mortgage. This new measure will guard against practices alleged to occur in other jurisdictions whereby insurance premiums charged to borrowers could be artificially inflated.
The government says these measures will increase the amount of money available to Canadians for mortgages and make mortgage insurance more transparent, understandable and affordable.
The Government of Canada is also increasing the volume of funding for mortgages available to Canadian banks and other mortgage lenders. The Canada Mortgage Bond (CMB) program will be expanded to include a CMB with a 10-year maturity to interest new investors who are seeking assets beyond the current five-year term.
The planned CMB program expansion is in addition to the record $12.5 billion CMB issue in June, which funded an estimated 64,000 mortgages and brought the total outstanding amount for the CMB program to roughly $136 billion. (CREA 01/08/08)
