What will the CMHC announce?

Who wants to play ‘guess the future’?

Apparently the CMHC is holding a conference call at 10 am EST on Feb 27th.

Some rumours are saying privatization, though it looks like most everyone agrees that would extreeeeemely unlikely at this point for a few reasons:

Privatization would require the finance department
No one in their right mind would take on the debt

But that doesn’t mean you can’t guess at what is going to be revealed tomorrow!

So what do you think the CMHC will announce? Privatization? Tougher underwriting standards? Branching out into commemorative figurines? A new special expert task force comprised of Brad Lamb, Bob Rennie and Angelo Mozilo?

What’s your best guess at what the CMHC will announce tomorrow?

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Yalie
Guest
Yalie

My guess is they will make it look like they are curbing excessive lending by tinkering with things like income verification and loan approval/documentation rules. But they will leave out anything that will actually have a meaningful effect, such as raising the minimum down payment or substantially increasing insurance premiums.

It will be all optics, no substance, because the CMHC is terrified that their restraining actions might actually work, which could cause a sharp fall in prices and leave a big hole in their balance sheet.

Van Coffee
Guest
Van Coffee

Yalie – Agreed

gokou3
Guest
gokou3

Whatever they announce, it won’t be new policies that would make it more easy to borrow money.

Newcomer
Member
Newcomer

They will announce that they invested all of their reserves in Bitcoins, and have lost them all 🙂

A
Guest
A

CMHC is going to sell various assets. including long term leases for condos on granville island. going to kick the artists and crap out.

Melba
Guest
Melba

My guess is the CMHC will announce a ‘negative billing’ initiative: all Canadians will automatically receive a government backed mortgage unless they specifically opt out in writing. No wait, we already have that. Never mind.

tedeastside
Member
tedeastside

they’re changing their name to Freddie Mac

Many Franks
Member
Active Member

Just in case you were hoping for a double helping of steaming poop… Lamphier: Threats of housing bust and household debt still largely overblown

In which vapid maundering fails to masquerade as coherent thought.

condo_day_ftw
Guest
condo_day_ftw

My guess is they will announce something to knock CMHC down to a level playing field with the so-called “private” insurers. It will be touted as a way to reduce risk to the taxpayer and as a first step towards “privatization” (of the 90%-government-backed variety.)

Whatever the announcement, I am pretty sure tomorrow will be a good day for bears. 🙂

Bo Xilai
Member
Bo Xilai

If CMHC is alerting journalists for a presser, you can be guaranteed Flaherty wants all the journos out there to make a big splash…

david
Guest
david

Well, at last report, CMHC was getting very close to its $600 billion limit, and Flaherty has said it won’t be increased. And we’re just getting into Spring selling season without the slow down that Ottawa hoped for…. So although political spine has never been in large supply in Canada, this announcement might actually surprise people.

Funkeymonkey
Member
Funkeymonkey

Maybe they will be opening up cmhc stores where they will sell swag!
I still have my Lehman brothers lanyard.

condo_day_ftw
Guest
condo_day_ftw

Whatever his faults, Garth Turner is probably more politically connected than anyone else blogging about real estate. In the comments of today’s greaterfool.ca post a few people have asked him about this announcement. Here are the exchanges:

#1

Garth,

Any idea what the CMHC announcement on Friday is going to be about?

I hear it could be a corker. — Garth

#2

Garth – what do your pals in Ottawa tell you about the chmc announcement coming on Friday?

They say, ‘big deal!’. — Garth

I admit I had to look up the idiom “corker”, and the definition I found says “CORKER n. 1. A hard or finishing blow; (hence) (obs.) that which settles an issue.”

paulb
Member
Active Member

New Listings 200
Price Changes 98
Sold Listings 157
TI:14390

http://www.paulboenisch.com

Barb Rennie
Guest
Barb Rennie

My guess is that CMHC may limit eliminate eligibility to foreign investors. Makes sense?

2.79% 5 yr. NEVER AGAIN
Guest
2.79% 5 yr. NEVER AGAIN

F has surprised many people by taking unpopular stances on issues such as killing income trusts, rolling back the 40 & 30 yr amortizations and eliminating the investor visa. This guy has grudgingly earned my respect. I don’t think he is a Harper robot like many others do. I think he gets it.

I think he does something big with CMHC to offload the risk from the taxpayer.

I think he does something that the real estate cartel is not going to like!

patriotz
Member

@15: “My guess is that CMHC may limit eliminate eligibility to foreign investors. Makes sense?”

CMHC does not insure purchases by offshore buyers, for the simple reason that it has no way to go after them if they default.

@16: “I think he does something big with CMHC to offload the risk from the taxpayer. ”

Cannot be done. A repudiation of a Crown obligation is a sovereign default. It’s the same as telling CSB holders they are not getting their money back.

patriotz
Member

Oh and what do I think the most likely thing to happen is?

What the “private” insurers have been asking for – higher CMHC insurance premiums

Guy Smiley
Member
Guy Smiley

Maybe they will be announcing a new product for sale to savvy investors: securities that are backed by assets owned by the CMHC – mortgages! Mortgages could be packaged up, given generous (but honest) risk ratings and sold. Then the payments on the mortgages (interest and principal) could “pass-through” to the holders of these high quality securities. Could give them fancy names like: mortgage-backed-securities (mbs) or collateralized mortgage obligations (cmo).

Egg Hunt
Guest
Egg Hunt

> #17 Patriotz

Currently, there is no residency requirement for CMHC mortgage.
Offshore buyer can be covered.

Son of Ponzi
Guest
Son of Ponzi

They will announce privatization with the following conditions:
The private consortium will be able to cherry pick, everything with a high Loan to Value ratio (the dogs) will remain with CMHC.
At a specific date, CMHC will not longer insure mortgages.
As with Life and other insurances, the market will dictate who get’s insured at what price.
No more catering to the property virgins.
However, the taxpayer will still be on the hook for the “dogs”.

dogs of war
Guest
dogs of war

so, SOP, the CMHC will announce the privatization of profits and the socialization of losses….

Son of Ponzi
Guest
Son of Ponzi

#19
Remember the mortgages are held
by the Banks and other lenders
So, they are the only ones who can issue MBS, at least at the origin.
CMHC is an insurer, so all they can do is find a cosigner to limit their exposure to mortgage defaults.
That’s what happens when the Government embarks on a policy ” Housing for Everyone”.
Funny enough, in the UK, they are following the same path.
Contagion spread by Carney.

Bo Xilai
Member
Bo Xilai

#16, 2.79% 5 yr. NEVER AGAIN Says

“I think he gets it.”

HUH? IIP ran for 8 out of the 28 years of existence under the Conservatives’ stewardship…
Flaherty LIED about Income Trusts… He said the Conservatives wouldn’t touch them. He only changed his mind after Wunderkind Mark Carney wrote up some BS analysis.
Flaherty is the one who loosened up CMHC’s underwriting standards in the first place. Remember the 0/40 CMHC insured mortgage?

VMD
Member
As CMT noted, “CMHC will be making an announcement Friday at 11:00 A.M. EST. They’ve notified reporters well in advance, which is somewhat unusual.” I agree that it is somewhat alarming that CMHC has summoned the media for this “announcement”. In the past, Flaherty has been the one announcing mortgage rule changes. However, right now Flaherty is in Australia for G20 Summit. This could mean: 1. CMHC will announce low-impact news (eg raise insurance premium, tighten debt serice ratio etc), not important enough to require Flaherty to be the one giving the speech. However, if this is simply a low-impact announcement, why make the unusual move to summon the media well in advance and then delay the announcement from Thursday to Friday? 2. CMHC will announce moderate-impact news, possibly mortgage rule changes. These “mod-impact news” may very well directly impact… Read more »
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