The Globe and Mail reports in its Wednesday, Aug. 17, edition that Ottawa is monitoring the growth
of unregulated mortgages in Canada
as non-bank lenders see their
market share surge.
The Globe's David Berman writes that a government
briefing note says unregulated mortgage
lenders now control
about 15 per cent of mortgage
originations in Canada.
The document attributed the
growth to low-cost business
models, the rising popularity of
brokers and access to securitization
from Canada Mortgage and
Housing Corp. As well,
new regulations have raised the
qualification thresholds for
insured mortgages from banks,
encouraging some consumers to
look elsewhere for financing to
buy a house.
The government memo estimated
that about 90 per cent of
the business of unregulated lenders
is subject to federal mortgage
rules, which include meeting
the strict underwriting standards
set by CMHC and the Office of the
Superintendent of Financial Institutions.
However, the memo warned
against complacency. "On balance, unregulated lenders
do not appear to pose systemic
concerns at this time and
are enhancing competition in the
mortgage market," states the
Finance Canada memo dated Nov.
20, 2015.
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