Final Mortgage Insurance Guarantee Parameters.
On Friday, September 19, 2008 the Department of Finance issued its final mortgage insurance guarantee parameters and accompanying explanatory notes. The final guidelines follow the initial announcement on the financial guarantee for mortgage insurance providers issued July 9, 2008 by the Department of Finance.
There are two noteworthy changes from the draft parameters:
1. Elimination of reference to a Total Debt Servicing (TDS) number, replaced by a principles based approach;
2. Reduction in minimum credit score to 600 from 620. Three percent “basket” for flexibility remains;
These modifications follow discussions with stakeholders, including CAAMP. CAAMP through its submission focused its comments on the minimum credit score and welcomes the decision by the Department of Finance to adjust the credit score.
Many Canadians oppose tougher mortgage rules!
The great National Post had an article today that said about 25% of Canadian’s polled do not agree with the federal goverment steping in and changing the mortgage rules. In case you have forgotten click here to see an earlier post.
I have to mention that the poll was conducted by Angus Reid for ResMor Trust Company. Surprisingly 45% agree with the new rules, and when you factor in current renters, the support falls to 25%. This is the group that is affected the most by the new changes. As it takes away a lot of options for them when it comes time for them to look at get out of renting and buy a home.
Our fantastic government apparently thinks that we were too close to acting like our neighbors to the south. It is true we had a lot of sub prime players in our market the past few years. However we did not have the no doc, qualify on teaser rate no down payment mortgages some of our southern neighbors had available.
I am sure you have an opinion. You should voice it too. Send your comments to Finance Minister Jim Flaherty by clicking on this link.
Cheers,
Pat
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