Your Taxe Dollars are used to Pay Banks when Borrowers Default

Banks in Canada have, lately, been very strict about qualifying and approving potential home buyers for Mortgage.
On 29 of August, "The Globe and Mail" published an article saying that "Canada Mortgage and Housing Corp. saw profits at its mortgage insurance business fall sharply in the second quarter largely due to a jump in losses from claims.
The rise in claims losses suggests that an increasing number of borrowers whose mortgages were insured by CMHC have been unable to make their payments and have lost their homes. Mortgage insurance pays the bank back when a borrower defaults.
Amid growing concern about taxpayers’ exposure to mortgage defaults, Ottawa has been taking steps to curb CMHC’s growth and has placed the housing agency under the watch of the country’s banking and insurance regulator.
The amount of insurance that CMHC has in force crept up to $576-billion at the end of June, closing in on the $600-billion limit that Ottawa is now enforcing on the Crown corporation. To keep the amount in check, CMHC has dramatically cut the amount of portfolio insurance that it is offering to banks.
And it said that its future sales of mortgage insurance will continue to be offset as each year Canadians pay off about $60-billion of mortgages that it has already insured.
CMHC said that it has been spending more money on so-called “work-outs,” in which the mortgage insurer and banks work with struggling borrowers to find a solution – such as deferred payments – to keep them in their home".
To read more go to:
Jump in Claims pinches CMHC's Insurance Business

First Time Buyers and Retirees Will Continue to Prop Up Demand for Condos

According to an article published today in the "Financial Post", A new condo report suggests first-time buyers, retirees and population growth will continue to fuel demand and price growth for the compact living spaces over the next few years.
The study by Genworth Canada found that average condo resale prices are expected to rise next year in seven of the eight metropolitan centres studied.
Prices in Toronto are projected to jump 2.5% to $312,352.
For those seeking to own a home affordably in urban centres, condos remain a good option.
The highest increase however, is expected to be in Edmonton where prices could rise 3.2%.
Vancouver is the only city where condo prices are expected to drop, by 2% to $348,152.
The report stands in contrast to warnings from economists and officials that the condo market in some hot markets is reaching bubble territory that could soon burst.
The central bank noted certain segments of the housing market that have a persistent oversupply — such as condos in Toronto — face a higher risk of a price correction.
Genworth — which earns revenue from selling mortgage insurance — notes that rising prices for single-detached homes are driving first-time buyers to condos, but retirees also continue to prop up demand.
It suggests that the population is expected to grow in all eight cities studied over the next few years, while employment growth and low interest rates should also support the market.