The Real Estate Encyclopedia
Canada Acts, so they don't end up like the US by Steve Simon
Category - Real Estate Information Sources - Real Estate Articles

In an effort to avoid the sort of housing meltdown that has damaged the U. S. economy, the Finance Department today said it was reducing the maximum amortization period for new government-backed mortgages to 35 years from the previously allowed 40 years.

The government states that Canada’s housing and mortgage markets are performing better than the United States and the new ruling which will come in effect October 15th, 2008 will assure the continuation of this.  They state that the historically prudent and cautious approach taken by the Canadian financial institutions to morgage lending, combined with a sound supervisory regime, has allowed Canada to maintain strong and secure housing and mortgage markets.

New regulations will require a consistent credit score for mortgages the government backs along with a minimum level of loan documentation standards to evidence property values and borrowers’ income.  The final change will be a capping at 45% on a borrower’s debt-service ratio.

We should have done this, and enforce what was already on the books! Poor lending practice wasn’t the only problem, but it sure made everything worse!



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