Effective policy responses have limited the deleterious impacts of the pandemic, Crown corporation says
Improved economic stability has led to less volatility in the Canada Mortgage and Housing Corporation’s operations, according to the Crown corporation.
This stemmed from effective policy responses from CMHC, every level of government, and the mortgage insurance industry, CMHC’s Q3 results indicated. Taken together, these factors “limited the impacts and supported the recovery from the COVID-19 pandemic,” CMHC said.
“We were well-prepared for potential economic impacts brought on by COVID-19, and overall, these have not been as harsh as anticipated,” said Michel Tremblay, chief financial officer and senior vice president of corporate services at CMHC. “However, house prices have continued to climb in 2021 in most regions in Canada, and high levels of uncertainty remain for the market, which can have ripple effect on all types of housing.”
As of July 5, CMHC returned to its pre-July 2020 underwriting practices for homeowner mortgage loan insurance. This reverted the changes implemented last year in response to the economic uncertainty driven by the COVID-19 pandemic, CMHC said.
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Mortgage deferral arrangements formally ceased as of Sept. 30, CMHC said.
“As loans that were in deferral did not materialize into paid claims as originally expected and our arrears rate has remained low, we further reduced our provision for claims in the third quarter,” CMHC said.
CMHC’s overall arrears rate has also decreased on a quarterly basis, from 0.31% to 0.29% as of Sept. 30. The total number of delinquent loans fell from 5,452 as of the end of Q2 to 4,999 by the end of Q3.
“During the three-month period ending on September 30, we insured 57,808 units including 33,628 multi-unit residential units,” CMHC said. “Homeowner transactional and portfolio volumes were at 19,570 and 4,610 units, respectively.”
