The Globe and Mail reports in its Wednesday edition that real estate industry players were happy to see Evan Siddall step down as head of Canada Mortgage and Housing Corp. in April. The Globe's Konrad Yakabuski writes that
Mr. Siddall angered Canadian bankers with the blunt missive he sent out last August criticizing lenders for shunning CMHC in favour of private mortgage insurance providers after the federal agency tightened eligibility criteria to prevent borrowers from taking on too much debt. Mr. Siddall feared rock-bottom interest rates had lulled buyers into piling on debt that would leave them and the entire housing market vulnerable when rates inevitably rose.
Mortgage lenders ignored Mr. Siddall's pleas, shifting their business away from CMHC to private insurers with looser eligibility criteria for borrowers.
Romy Bowers, Mr. Siddall's successor, has scrapped the restrictive eligibility criteria, lowered the minimum credit score and raised the maximum debt ratios borrowers are allowed to maintain in order to qualify for CMHC insurance.
The Globe says Mr. Siddall clearly miscalculated, believing moral suasion by CMHC would be enough to persuade real estate players to curb their enthusiasm.
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