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.

Yalie – Agreed

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

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

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.

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. 🙂

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.

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.”

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

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!

> #17 Patriotz

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

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”.

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

#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.