jesse says: They will make some up by increasing premiums, tightening approval criteria, and cutting staff, as well as likely turfing some of their actual housing affordability initiatives. If we also include the principal reductions I think they will probably stay solvent but will be under massive pressure to reconstitute their balance sheet if these losses materialize. Not to mention that they will likely need bridge financing if they can’t liquidate claimed assets quickly.

jesse, you're talking like the cmhc is some sort of private company. the cmhc is a federal entity with direct ties to the bank of canada. none of the above is applicable and only a handful of people are actually privy to it's full accountings and transactions. sure it sounds like something out of the xfiles but it is what it is.

Of course it is different here.

Some listings have been up for over a month and lazy useless REALTORS don't even have a decency to put any pictures on MLS.

WTF for are they getting paid again?

Could someone please explain???

Or perhaps it's just the local thing – as in: chinese will buy everything using remote control, no need for no stinkin' pictures.

@Troll:

So you’ve spent 10 years studying this organization and you haven’t even taken the time to estimate the amount CMHC would be on the hook for in the event of a housing correction?

He didn't spend 10 years of his life analyzing the CMHC. He analyzed 10 years of CMHC data–1999-2009.

@Troll:

"Assume 2.5% Default Rate (same as US)"

That would be the default rate per month. This is what the FT says for a time when most defaults and foreclosures are supposed to be behind us:

"Nearly 20 per cent of non-government-guaranteed mortgages held by the banks are at least 30 days late or in some stage of foreclosure, compared with 7 per cent for loans held by Fannie Mae and Freddie Mac, now controlled by the federal government, according to the data."

More than a quarter of US homeowners have negative equity.

@rp1:

Ha ha ha crash when when……………?

China will surge ahead and become number one despite such retard uttering.

@patriotz:

The correct analogy is that someone damages your car, ICBC pays out the damages to you, and then goes after the person who caused the damage. Or someone damages your house, the insurance company pays out the damages to you, and then goes after the person who caused the damage.

That's not a correct analogy since the person who damaged your house probably didn't pay a 'home damage' insurance premium before they began damaging houses. If they did, they would likely expect some kind of protection, just as someone who pays for 'mortgage insurance'.

@Troll: Uhm is that 2.5% default rate the total default rate or yearly default rate? That makes a huge difference. Also the loss given default various as well since high ratio, high amount mortgages will far more losses than low ratio, low amount mortgages. Without an actual break down of the mortgages CHMC holds by amount, age, equity %, default rates, etc we can't do an actually detailed analysis. You are assuming every mortgage in CHMC has the same outstanding amount which is definitely not true. It could be 70% mortgage that has a LTV value of 80%+ only has an average outstanding amount of $400K while the low ratio mortgage have an average outstanding amount of $700K. That will really skew the loss distribution. Without more detailed data from CHMC on the assets it hold, it is impossible to… Read more »

@VanRant:

Thanks Honky…you may bro' round eyes!