Genworth
follows CMHC Changing Guidelines
Although
there has been confusion over whether the new mortgage rules imposed by
the federal government last week would affect only CMHC-backed
mortgages, Genworth Financial Canada has said the new rules will also
apply to mortgages it insures.
"We were involved
heavily in the consultation process for the new criteria changes," said
Genworth president Peter Vukanovich in an interview with CMP. "We don't
feel there is any housing bubble, but we think it's important to
maintain a safe and stable market and we think we played a role in
ensuring underwriting processes are indicative of a prime-quality loan."
Vukanovich
went on to say that because Genworth Financial Canada is backed by the
government, the company is affected by the new rules.
Both
Genworth Financial Canada and AIG United Guaranty have a 90 per cent
federal government guarantee.
Report says
low inventory, high demand to squeeze spring market
Almost 90 per cent of major Canadian markets saw
home sales
increase in January, a sign that spring activity will be challenged by
a lack of inventory, according to a new Re/Max report.
The
Market Trends Report 2010 found the jump in sales activity in the
usually slow month of January has led to a sharp decline in active
listings. In addition, threats of higher interest rates, HST and
tighter lending rules have prompted buyers to act quickly. Canadian
markets seeing the tightest inventory levels include Toronto,
Kitchener-Waterloo, Ottawa, Victoria, Great Vancouver and
Halifax-Dartmouth.
"There have never been so
many motivating factors in play at once," said Michael Polzler,
executive vice- president, Re/Max Ontario-Atlantic Canada. "We're in
for a heated spring market that will, in all probability, spill over
into the summer months as the window of opportunity draws to a close."
He
added that as pent-up demand builds, frustration levels will also grow.
"For
every successful offer, there are those that will walk away
empty-handed. They're thrust back into the buyer pool and the process
starts all over again," he said, but pointed out most purchasers are
remaining cautious in their bids.
Will the Insured Mortgage Purchase
Program Continue?
With
reports the federal government will cut a number of its initiatives
aimed to help banks through the financial crisis in next week's budget,
there is talk about whether the $125-billion Insured Mortgage Purchase
Program will continue.
The program, which aims
to increase liquidity by allowing the government to purchase insured
mortgages from banks, is set to expire in March. A story in the Globe
and Mail said while bank interest has dwindled - only $66 billion worth
of mortgages have been purchased - some bankers are arguing it should
remain as a safeguard
"It eased a lot of funding
stress," for the banks, Peter Routledge, an analyst at Moody's told the
Globe. "I don't think it hurts the system to have it as a potential
outlet if something unforeseen happens."
Boris
Bozic, president of Merix Financial, echoed that sentiment in CMP late
last year.
"It's really an insurance policy
because the reverse option has been undersubscribed for some time now,"
he said.
The Globe reported banks only sold $1.4
billion out of a potential $4 billion worth of mortgages to the
government at the latest IMPP auction held last week. One more auction
is set for March 24..
