Lenders may have to share mortgage risk

The Department of Finance may soon require banks to share risk with mortgage insurers, reports the Globe and Mail.

“In a briefing note to Finance Minister Bill Morneau and released under Access to Information, department officials say they are studying an option to introduce ‘risk-sharing’ for lenders, a move that would likely mean a deductible payable by the banks on the mortgage insurance provided by Canada Mortgage and Housing Corp. (CMHC) and its private-sector competitors,” says the Globe.

A Finance Canada spokesperson cited OECD and IMF recommendations when explaining why the government was analyzing “housing-related vulnerabilities.” Read the full story here.

Overheated housing markets have led to much hand-wringing. The briefing note’s release comes on the heels of Vancouver imposing a 15% tax on foreign property buyers.

Here’s more analysis of the Canadian market:

Would more rental units make the GTA more affordable?

Canadian home sales drop for third straight month

Will Ontario follow B.C. by implementing real estate tax?

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.