More shifts in CMHC management

Things seem to be changing over at the CMHC.

The Financial Post says some upper management have been leaving or plan to leave.

First they brought in Robert P. Kelley as the new chairman, now they’ve confirmed the VP of insurance underwriting has left with no reason given.

Chief Executive Karen Kinsley has also announced plans to leave.

Why are all these changes happening now?

Speculation has been rife that agency could be set for more dramatic changes since it is now under the auspices of the Office of the Superintendent of Financial Institutions. Jim Flaherty, the finance minister, has also discussed privatizing parts of the agency.

Good luck with the privatizing Jim.

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Anonymous
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Anonymous

Horses have already left the barn…

crikey
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crikey
Until recently British Columbia’s longstanding advertising slogan was “The Best Place on Earth”. Indeed there is a list of very good reasons for such pompous conceit, extreme arrogance… Move over ‘Chuck Norris facts’, here come ‘Vancouver facts’! Vancouver fact #40 Contrary to popular belief, Vancouver does not have a thriving population of bonafide homeless, beggars, and drug addicts. They are in fact all very talented and convincing actors paid very well to give the city an exciting ‘edge’. Vancouver fact #41 Vancouver is so overwhelming rich that, all its social and economic problems having long since been solved, recently over half a billion dollars ($563 million) was absentmindedly thrown at buying a new stadium roof with expensive features that few citizens particularly wanted. To give it a familiar Vancouver feel, the newly completed roof included various eaks, as is a… Read more »
patriotz
Member

“Jim Flaherty, the finance minister, has also discussed privatizing parts of the agency.”

What this means of course is shifting profits toward the private sector while leaving the liabilities with the government.

Flaherty knows that a CMHC insolvency and bailout is likely in the cards and he plans to disguise this as a fake privatization.

The private sector cannot and will not take on CMHC’s liabilities, nor is there any chance they will take on future liabilities given that even in the US today the private sector will not take them on. 95% of all new high ratio mortgages in the US are USG insured.

Anonymous
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Anonymous

I love Crikey’s Best Place on Earth series!

Anonymous
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Anonymous

CMHC served the families of a large number of WW II vets well. Post-war, we lived in a (small) CMHC rental house for a decade, and my parents eventually purchased the house from CMHC. Short of that I can’t imagine how our family would have made ends meet.

Fast forward 50 years and CMHC became a shill for the RE industry. The sooner CMHC is dismantled or restructured, the better. Certainly there will be pain for taxpayers. But let’s get it over with.

Democrass
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Democrass

Get the government out of real estate. That means dissolve CHMC. Lets have a free market in real estate.

frank
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frank

What they should have done years ago. Too little too late. The CMHC is going to be a big albatross around our necks for years.

While they are at it, fire the damned board and put some people in who know how to wind up companies.

Another Anonymous Poster
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Another Anonymous Poster
Wartime Housing Limited was Canada’s precursor program to the public housing programs that followed later. WHL was government-supplied rental housing for veterans and war workers. During World War II, the Canadian economy was verymuch focused on supplying the war effort with ships and planes. There was a huge shipbuilding yard in North Vancouver that supplied the war effort. The problem was when they first set up these factories, they couldn’t get the workers because there was a lack of supply of housing and rents were very high. Back then, most Canadians rented because this was before CMHC mortgage insurance so the banks would only give mortgage to wealthy people and they usually wanted the money back after 10 years amortization. They couldn’t get the workers for the factories because there was a lack of housing. The problem was especially bad… Read more »
Another Anonymous Poster
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Another Anonymous Poster

People who are interested in the history of CMHC and the development of Canada’s housing policies in the 1930s and 40s (which was a very important time for the development of housing policy in Canada–the decisions made then paved the way for the development of the Canadian economy and Canadian cities in the postwar decades) should read this book:

Bacher, J.C. (1993). Keeping to the Marketplace: The Evolution of Canadian Housing Policy. Montreal & Kingston: McGill-Queen’s University Press.

chilled
Member
chilled

“First they brought in Robert P. Kelley as the new chairman, now they’ve confirmed the VP of insurance underwriting has left with no reason given.”

++++++++

Greed? When one makes well into the 6 figures and a pension plan that would make Bashar Hafez al-Assad blush, why not?

Also, considering the myriad of corporations that will hire you at double the salary, simply to have your name on their roster, what could you possibly lose?

Lifetime Renter
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Lifetime Renter
From the article: “CMHC has already announced that veteran Wall Street banker Robert P. Kelly has been brought in as chairman.” Take note – once the debt driven housing market collapses, anyone who thinks that the CMHC or the government will hold the feet of the chief enablers, the bankers, to the fire should shed their illusions. Not a chance that a Wall Street banker will do anything other than rescue banks from the consequences of their own greed and profligacy. Otherwise our Mr. Kelly would have to deal with embarrassment and ostracism from his social set and we couldn’t have that. The lesson Wall Street learned from rescuing the bankers in the U.S. is that they got away with it. Not one of the chief players in the fraudulent lending practices, the fraudulent bundling of toxic housing loans, etc.… Read more »
Guy Smiley
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Guy Smiley

Fact #42:

Vancouver has no traffic problems. Motorists in Vancouver choose to sit in their cars for hours each week contemplating the wondrous road networks they have built and gazing at the beauty of their city.

Skook
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Skook
Burnabonian
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Burnabonian

“now they’ve confirmed the VP of insurance underwriting has left with no reason given”

Maybe he needs the free time pending his upcoming Senate appointment.

A CMHC gremlin seems like an idea candidate, given what’s expected of Senators these days.

Turkey
Guest
Turkey

@patriotz,

Flaherty knows that a CMHC insolvency and bailout is likely in the cards and he plans to disguise this as a fake privatization.

There’s a silver lining here: if a CMHC bailout is inevitable, what happens afterwards is still of interest. Is the “privatized” CMHC suddenly exposed to risk, and forced to show more prudence, or will it be business-as-usual?

Burnabonian
Guest
Burnabonian
“veteran Wall Street banker Robert P. Kelly has been brought in as chairman” Woah. No coffee this morning. Holy crap this is huge. CMHC is moved under the authority of the OSFI, and the first thing they do is start firing cronies and hiring American bankers to run it. All as quietly as possible. There is a plan afoot, friends. Wild guess: 1) Wall Street types come in and express shock! and horror! at the CMHC’s half-trillion-dollar portfolio of unverifiable, declining-value liabilities, incurred under old management. 2) The public are now brought into the loop, while the mess is carefully blamed on the Liberals’ policies and lack of management. 3) Much hand-wringing leads to the inevitable conclusion: no matter who is at fault, the taxpayers are going to have to eat this one. (“Don’t worry, we will make sure that… Read more »
emmi
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emmi

CMHC would do well private, for a while, anyway, they wouldn’t have to write checks to the Canadian treasury anymore.

jesse
Member
“Wall Street types come in and express shock! and horror! at the CMHC’s half-trillion-dollar portfolio of unverifiable, declining-value liabilities, incurred under old management” The Conservatives have had seven years to look over the books. If there’s any mismanagement publicly aired, it falls right back onto what the Act says: CMHC is under the purview of the minister of finance. If there are going to be changes to CMHC — which I think are likely — the fiscal fallout will most likely be obfuscated. Total liability that will need to be wound down on government books is likely on the order of several tens of billions of dollars. The rest can be shovelled off to private hands without too much bother. That is, not all loans were poorly-underwritten. Also of note, highlighted many times by one Karen Kingsley, CMHC has returned… Read more »
good-format
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good-format

RossKay.com issues warning on home sales numbers to be reported in Canada, giving you a 60 to 90 Day lead time using Canadian consumer engagement index

http://www.rosskay.com/index.html

I had been to many open houses since March. The open houses were quite busy in March and April. But the open houses are very quiet now (rarely meet other people).

Priced out Renter
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Priced out Renter

Jesse,
“CMHC has returned some decent revenues to the government over the years. That, hopefully, will ease the mental burden of taxpayers knowing that homeowners have already partially financed the coming bailout”
I believe these “decent revenues” went straight to general revenues, and have long been spent.
Therefore, the taxpayer will still be liable to finance the coming bailout.

Anonymous
Guest
Anonymous

Why is it that the Consumer protection branch of the federal government will ensure there really are two scoops of raisins in a package of raisin bran but they’re nowhere to be found when consumers make the largest purchase of their lives?

Priced out Renter
Guest
Priced out Renter

Good format.
Agree with your observations re: Open Houses.
It’s dead.

jesse
Member

“Therefore, the taxpayer will still be liable to finance the coming bailout”

Yes. They just can’t scream as loudly about it. 🙂

Not much of a name...
Member
Not much of a name...

@jesse 18

The Conservatives have had seven years to look over the books. If there’s any mismanagement publicly aired, it falls right back onto what the Act says: CMHC is under the purview of the minister of finance.

Through their policies, the Conservatives have had seven years to increase the liability of the CMHC too. I guess the CMHC will be one giant hot potato.

Real Estate Pimp
Guest
Real Estate Pimp

This must be signalling the imminent collapse of real estate prices.

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