Trending
A red, white, and black flag with a white background.

In opposition of new CMHC guidelines, Genworth not increasing eligibility restrictions

Genworth MI Canada Inc. has announced that it won’t be following in tightening mortgage insurance eligibility.

In a statement earlier this week, Genworth said that it does not see a need for it to change its policies regarding debt-service ratio limits, minimum credit scores, or down-payment requirements

“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, including its exposure to this segment of borrowers with lower credit scores or higher debt-service ratios,” said Stuart Levings, the company’s president and CEO.

An analysis by RateSpy said that the insurer’s underwriting practices “are prudent enough to cherry-pick low-risk borrowers who happen not to meet CMHC’s criteria.”

“Genworth approved less than half the number of borrowers with GDS ratios over 35% than it did in 2011,” RateSpy said. “Not all non-CMHC compliant borrowers will be scooped up by the private insurers. Hence, there will be incrementally fewer borrowers who do not qualify for default-insured mortgages come July 1.”

Market observers have roundly criticized the CMHC’s recent announcement, saying that the policy adjustments would add uncertainty to the already-volatile national economy.

“If the government proceeds with this, the dampening of housing activity will worsen the economic pressures, further impairing the economy,” economist Will Dunning told Bloomberg.

“On the surface, it is remarkably poorly timed,” said Jean-Francois Perrault, chief economist at Bank of Nova Scotia. “Restricting access to credit in a period of economic need is certainly an unconventional policy approach.”

Post a Comment

Related Articles

The Bank of Canada’s latest decision to lower the overnight lending rate by 25 basis points from 3.25% to 3% is giving homeowners and prospective...

Building community resilience to adapt to a changing climate is essential for protecting both housing values and the broader community. In British Columbia, the provincial...

Most Trending News

The Bank of Canada’s latest decision to lower the overnight lending rate by 25 basis points from 3.25% to 3% is giving homeowners and prospective...

Building community resilience to adapt to a changing climate is essential for protecting both housing values and the broader community. In British Columbia, the provincial...

The federal government has decided to delay its planned increase in the capital gains tax inclusion rate, moving the date to January 1, 2026. The...