Winds of Change - Should OSFI's stress tests be expanded to uninsured mortgages?

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Categories: calgary real estate , Commercial Mortgage , Debt Consolidation , First Time Home Buyer Mortgage , Home Construction Loans , Jencor News , Mortgage Broker , Mortgage Companies , Mortgage Refinancing , Mortgage Renewal

The Office of the Superintendent of Financial Services (OFSI) announced earlier this month it will be increasing its supervisory efforts for residential mortgage underwriting - specifically focusing on Guideline B-20, which it also announced potential changes to.

Changes include:

uninsured mortgages requiring a qualifying stress test

LTV, loan to value measurements remain strong and adjust for local market conditions where they are used as a risk control, such as for qualifying borrowers

prohibiting co-lending arrangements that re designed or appear to be designed to circumvent regulatory requirements

Many brokers would argue that not enough time has been given to see how the impact of those changes from last summer have been.

Hard to say the impact of these changes if and when they come to pass, but keep an eye out....