Shadow lenders targetted as ‘riskier’ mort­gages grow pop­u­lar

Vancouver Sun - - FINANCIAL POST -

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.

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