Janette Roch

Great news today - we have an Mortgage default insurer who will remain status quo in underwriting guidelines. Whew! Homebuyers rejoice! ** Important Genworth Update ** Genworth MI Canada Inc. Confirms that It Does Not Plan to Change Its Underwriting Policy... Toronto, ON (June 8, 2020) Genworth MI Canada Inc. (the Company) (TSX: MIC) confirms that it has no plans to change its underwriting policy related to debt service ratio limits, minimum credit score and down payment requirements. One of the Company’s competitors announced changes to their internal underwriting guidelines with respect to the aforementioned underwriting criteria on June 4, 2020. Genworth Canada believes that its risk management framework, its dynamic underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure, including its exposure to this segment of borrowers with lower credit scores or higher debt service ratios, said Stuart Levings, President and CEO.

Sorry to report we have very disappointing news from CMHC today. Effective July 1 they will be: --Reducing the shelter ratio we use from 39% to 35% --Reducing the Liabilities ratio we use from 44% to 42% --Disallowing borrowed / non-traditional down payments ... --Increasing Credit Score requirement from 600 to 680 Attn all Home Buyers! Even if you have 20% down, this could affect your existing pre approval - please contact your Broker or Lender to re-run your numbers. Firm Approvals in place prior to July 1 will not be affected. More to follow as we all learn the impact of these new guidelines. Meanwhile, in the wise words of the economist Sherry Cooper: "Suffice it to say that this batters buyer and seller confidence and, all other things equal, has a net negative impact on the near-term housing outlook. Most importantly, in my view, these changes are unnecessary to protect the prudence of Canada's home lending practices. Mortgage delinquency rates are meager, and even the Bank of Canada's forecast is for delinquencies to remain less than 1% of all outstanding mortgages. Moreover, home buyers with jobs who meet former qualifications would undoubtedly have a longer than two-year time horizon when buying their first homes. They were already qualifying at the posted rate that is more than 250 basis points above the contract rate. If anything, the pandemic recession assures that interest rates will remain very low over the next two years." https://mailchi.mp//cmhc-makes-it-harder-to-qualify-for-an

I, like many in the real estate industry, have a hard time believing housing prices are going to drop this substantially, Good news: -We are already past the bottom of the latest economic downturn, with GDP potentially getting back on a positive growth trajectory... -Oil prices have risen sharply, a major boon for Alberta and some high-frequency data have improved. -The stock market is well off its lows - Interest rates have fallen sharply - The qualifying rate for mortgage stress tests has fallen to 4.94% and -Actual mortgage rates are near record lows and are likely to remain low for the foreseeable future. Read full Economic Insight from Dr. Sherry Cooper here: https://mailchi.mp/50325c59e/lockdowns-hit-canadian-q1-gdp

Interest rates are plunging ...so why aren't mortgage rates? https://www.msn.com//interest-rates-are-plung/ar-BB129ELD