It was a couple of weeks ago that Canada Mortgage Trends reported that the Office of Superintendent of Financial Institutions (OSFI) was considering changing mortgage rules once again by capping all mortgages in Canada, provided by a lender under their supervision, at 25-year amortizations.
This caused a huge outcry, from both consumers and those in the industry.Now, CAAMP has been the latest to come out against the OSFI saying that there are other areas they could be focusing on that would help those buying a home, instead of hurting them.
CAAMP’s president, Jim Murphy, started off by saying that he understands what the government is trying to do in curbing household debt and getting the housing market under better control. He then goes on to say that this is not the way to do it.
“As an association we always take a balanced approach,” Murphy says. “We’re always concerned about household debt, and rates and we understand the government’s concern with taxpayer exposure contributor that has taken some knocks already.”
He believes that limiting every Canadian who acquires a mortgage through a major bank or lender will only hurt consumers. He also believes that the OSFI should be focusing on ways to help specific home buyers that have already been hurt by the tighter mortgage rules. And he believes that one group who needs help the most is first-time home buyers.
“Instead of further restrictions on uninsured mortgage products, the government should examine measure to support first time buyers who have been impacted the most by recent regulatory changes,” Murphy goes on to say.
So what changes does Murphy suggest? He believes that expanding the Home Buyer’s Plan RRSP would be very helpful, and that an additional new home buyer tax credit could also be introduced that would help alleviate some of the cost and stress for first-time home buyers. He also believes that the government should look at first requiring these buyers to qualify under today’s strict rules, but then have those restrictions ease up once the buyer has qualified. This would ensure that only qualified buyers were purchasing homes, but that their budget wasn’t stretched to the limit because of it.
What do you think of the proposed changes that the OSFI is currently shopping around to different lenders? What do you think of Murphy’s proposed changes that could be made instead of the ones the OSFI would like to see?
