Shadow lenders targetted as ‘riskier’ mortgages grow popular
Canada’s housing agency is seeking more data on home loans from shadow lenders, amid concern rising levels of debt aren’t being adequately tracked and may increase the risk of financial instability.
Canada Mortgage & Housing Corp. will seek data from participants in the securitization program on their uninsured conventional mortgage lending, said Evan Siddall, chief executive at the agency.
CMHC needs to “know what risk we are exposed to,” so will use the reported information to decide if changes are needed to their rules, he said.
Various levels of government recently introduced restrictions on mortgage lending to get a handle on what seemed like out of control increases in home prices.
That’s pushing buyers who no longer qualify for insured home loans to take out mortgages with institutions that aren’t tracked by federal regulators.
CMHC is raising the alarm after Home Capital Group Inc.’s nearcollapse this year called into question the stability of the country’s housing market.