Canada Guaranty Mortgage Insurance Benefits

Archive for August, 2015

Introduction from Andy Charles


Andy Charles

Since our last issue, we were pleased to welcome two new lenders to our growing list of national partners and continue to deepen existing relationships by providing dedicated support to our customers. With each season comes change and, in recent weeks, our industry has continued to evolve with a variety of prudent mortgage underwriting protocols that reflect OSFI’s Guideline B-21.

Our organization adopts a balanced approach to supporting the Canadian housing market by promoting policies that encourage responsible homeownership and sustained strength in the housing industry, some of which include:

  • The direction of cash backs as a source of down payment
  • The implementation of maximum loan amounts under the Rental Advantage™ program
  • Enhanced requirements for information used to verify the reasonability of self-employed income
  • New mortgage loan documentation and retention requirements

Whether a lender, mortgage originator or insurer, we all share a vested interest in ensuring a sound and stable industry.

Regardless of the time of year, we are committed to delivering on our promise of responding to 90% of all applications within 90 minutes (and we’re proud to say we’ve been fulfilling this promise!). We’re open later during the week, available on Saturdays and our adjudication system continues to accept applications 22 hours a day. An experienced decision-maker is the first and last person you’ll speak with when calling our National Underwriting Centre, and across Canada our regional Sales and Underwriting teams work together to enhance your experience by providing personalized service, effective solutions and timely responses to your questions.


On behalf of the Canada Guaranty team, thank you for your continued support and the opportunity to earn your business every day. We wish you success and hope you enjoy some summer vacation. When you return, we’ll be standing by to support your business.

Andy Charles
President and CEO
Canada Guaranty Mortgage Insurance Company

The Homeownership Solutions Program


Helping More Borrowers Stay Homeowners
The Homeownership Solutions Program

“Life can be unpredictable and when short-term financial hardship occurs as a result of an unanticipated life event, early intervention can make all the difference in reaching a successful resolution. For borrowers who are highly motivated to maintain their homeownership and are receptive to working with their lender when experiencing financial difficulty, Canada Guaranty offers effective solutions to support the mortgagors in reaching a positive outcome.”

- Donna Parissi | Director of Loss Management, Canada Guaranty


Designed to help borrowers who are experiencing unforeseen short-term financial difficulty, the Canada Guaranty Homeownership Solutions Program provides lenders with greater flexibility to offer their borrowers assistance while satisfying the lending institution’s requirements and the borrower’s temporary challenges. The following scenarios represent real life examples of borrowers who received support and benefited as a result of the collaborative efforts between their lenders and Canada Guaranty.

Reason for Assistance (Borrower Circumstance) Lender’s and/or Borrower’s Request Implemented Workout Solution

Reduced Income

Mortgagor had an accident at work and had to go on short-term disability

Looking for assistance with mortgage payments during recovery
  • Canada Guaranty’s discussions with the lender and borrower ascertained that the mortgagor would be on short-term disability for a limited period of time to recover from the injury. Once recovered, the mortgagor would be able to return to full-time employment and resume their full income.
  • Based on input from the lender, a capitalization for two months of mortgage payments was applied, thereby removing all stress so that the mortgagor could focus on their recovery.

Severe property damage and mortgagor evacuated for required repairs

Following a fire, the mortgagor had to find temporary accommodations while the home was being repaired

Looking for assistance with mortgage payments during repair period; unable to manage both the mortgage and cost of temporary accommodations
  • Working with the lender, Canada Guaranty determined that an extended capitalization would be required to provide support to the mortgagor in these unfortunate circumstances.
  • This provided relief to the borrower on both a financial and personal level, removing the added stress of trying to manage both their mortgage and the temporary rent.









The lender’s internal guidelines always supersede those offered by Canada Guaranty; however, in all cases, our Loss Management team is available to offer ongoing support, consultation and customized solutions to facilitate the successful implementation of a workout.

CANADA GUARANTY CAN HELP
If your client or borrower is experiencing temporary financial hardship, please feel free to contact a member of our Loss Management team with any questions or to learn more about the Homeownership Solutions Program and the options available.

Contact the Loss Management Team:

Products + Solutions


SELF-EMPLOYED PROGRAM
Low Doc Advantage™

Further to OSFI’s Guideline B-21, new requirements for information used to verify the reasonability of income for self-employed borrowers became effective as of August 1, 2015. To ensure you are prepared for these changes, please take a moment to review the following important guidelines, which outline critical information to include with your client’s next application.

UPDATED GUIDELINES | Effective August 1, 2015

The Low Doc Advantage continues to be a program designed for borrowers with an established history of self-employment and a strong credit profile. In addition to satisfying existing Low Doc requirements and ensuring the borrower’s income is reasonable for the nature and tenure of the business:

  • Lenders are required to obtain the Notice of Assessment (NOA) from the most recent tax year, at the time of application, to confirm the income from line 150 and that there are no income tax arrears.
  • The following information must be included in the submission notes of the application, for each self-employed borrower:
  1. Income amount confirmed by line 150 on the most recent NOA.
  2. Gross revenue of the borrower’s business.
  3. Type of business being owned and operated (e.g. landscaping, bookkeeping, etc.).
  4. Ownership structure (e.g. sole proprietor) and the percentage of ownership.

To review all requirements and qualifying guidelines, please visit the Canada Guaranty website to download the Low Doc Advantage product sheet. Should you have any questions or wish to discuss your client’s unique circumstances, please do not hesitate to contact your dedicated Account Executive or speak directly with a member of our National Underwriting Team at 1.877.244.8422.

NOTE: The Lender’s internal guidelines always take precedence and must be adhered to prior to review by Canada Guaranty.

Housing Market Trends



To view additional monthly aggregate house price data for 13 of Canada’s major cities, please visit the Brookfield RPS House Price Index site.

Source: CREA (The Canadian Real Estate Association)

HOUSING MARKET SUMMARY

  • Throughout the spring market, home price appreciation continued to be strong in Vancouver, Toronto and Hamilton, while other major markets in Canada experienced relatively flat home prices. On a national level, house prices have risen 5% over last year.
  • Much of Canada continues to exhibit balanced housing markets; however, some key markets are in seller’s territory, including Greater Toronto, Hamilton, Vancouver and Calgary.
  • In recent months, Alberta’s sales-to-new listings ratio has stabilized after experiencing a significant rebalancing earlier this year.

NOTE: Traditionally, a buyer’s, balanced or seller’s market is defined by the following ranges of sales-to-listings percentages:

< 35% Buyer’s Market (More homes are for sale than there are buyers)
= 36-54% Balanced Market
> 55% Seller’s Market (More buyers available than there are homes for sale)

NOTE: Click on the image of the map to download/print in PDF format.

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