CMHC's loss is Sagen's gain, as private-sector mortgage insurer sees market share grow

CMHC CEO’s letter ruffles feathers as bankers say stricter mortgage rules could dash first-time homebuyers’ hopes

The changes meant up to 30 per cent of future applicants might not meet CMHC’s guidelines, a report from credit-rating agency DBRS Morningstar estimated. Furthermore, CMHC’s private-sector competitors, Sagen and Canada Guaranty Mortgage Insurance Co. , did not follow suit.to lenders in August warning that the Crown corporation’s market share had taken a hit, and that it was approaching the minimum level at which it would be able to protect the mortgage market in a crisis situation.

The coronavirus pandemic also stoked concerns about a rise in mortgage defaults, prompting lenders to allow borrowers to defer their loan payments — with the blessing of mortgage insurers. The pandemic has stoked concerns about a rise in mortgage defaults, prompting lenders to allow borrowers to defer their loan payments — with the blessing of mortgage insurers.Sagen also said the proportion of new insurance written in the third quarter that had gross or total debt-service ratios above 35 per cent and 42 per cent, respectively — which are CMHC’s limits — was around 41 per cent.

Because CMHC's mandate is quasi market but more so a fattened Govt agency with research and social programs. Time to split CMHC into a Govt dept and a true mortgage insurer.

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