Following the announcement of CMHC’s new mortgage underwriting rules last week, Canada’s other two mortgage insurers, Genworth Canada and Canada Guaranty, have confirmed that they will not be following CMHC’s lead.
Genworth Canada believes that its risk management framework, its dynamic underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure.
Mary Putnam, VP, Sales and Marketing of Canada Guaranty said that “recent insurer announcements relating to down payment and minimum credit score represent a very small component of Canada Guaranty’s business, and we will continue to be prudent in these areas. Given implementation of the qualifying stress test and historic default patterns, Canada Guaranty does not anticipate borrower debt service ratios at time of origination to be a significant predictor of mortgage defaults.”
Some believe that the announcement from Genworth and Canada Guaranty is a positive one for borrowers who will continue to have some options in the markets should they not be able to meet CMHC’s stricter qualification standards.