Saturday, April 28, 2012

Flaherty says CMHC isn't essential in mortgage insurance role

Given how much of an increase this very man orchestrated in the CMHC cap, and how long he's sat on his hands while Canada's bubble has blown larger and larger. I can't see this as anything more than CYA. So when CMHC's name is mud, he can throw up his hands and say, hey I wanted to get rid of it.

CMHC could be pulled out of mortgage insurance business, Flaherty says
“Over time, I don’t think it’s essential that a government financial institution provide mortgage insurance in Canada. I think what’s key is that mortgage insurance is available at a reasonable cost in Canada. I think there is a role to regulate but whether we, the Canadian people, have to be the owners and shareholders of a financial institution to do this is a question. I don’t think it’s essential in the long run.”
But CMHC has not been insuring just those loans, it has agreed to step in and insure loans — with the premiums paid by financial institutions — for lower-ratio mortgages, or what is called “portfolio” or “bulk insurance.”
“We have quite a bit of information about what the banks do and don’t do. [Superintendent] Julie Dickson had to go to some of them in the last year and say ‘you must ensure that your board policies on residential lending mortgages are carried through,” he said. “She’s quite a strict supervisor which is good for our country.”

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