Cheers

It really is a shame that CMHC is looked at so poorly these days – and its even worse because the public and the media don’t understand what CMHC does…perhaps even worse – the Politicians may not even fully understand!

Today the politicians and the public view CMHC as a scapegoat to lay blame…its been propagated very well by the media. What irks me the most is that there are industry participants that fuel that fire by “throwing CMHC under the bus” . Usually because they are mad because CMHC wouldn’t approve their mortgage file!

It’s strange…a few years ago when the market was teetering on collapse – CMHC came to the rescue and bought up business from the lenders in order to keep them above water and perhaps even “solvent” to some degree – at that time CMHC was looked upon as SAVIOURS of the mortgage market in Canada! They prevented a very large crisis. They were the ones that took it on the chin so that the lenders could open up their lending pools more. Because of that the Banks were able to have Record Profits. I heard recently that something like 80% of TD’s conventional Mortgage product was Bulk Insured (that figure may not be precise…but close). Mortgages that didn’t have to be insured – but were insured in order to allow them to lend more! Imagine how much the other banks sold off!!

Now that the lenders have pushed CMHC close to its limits – they are in a tiff because they now have to inherit risk again – a practice that was only temporarily removed from them during the economic down turn until recently.

Its embarrassing really – the Banks are acting like petulant children and can’t, or perhaps the better word is WON’T, take responsibility for their own actions.

It’s no secret that Consumer Debt is at an all time high – Credit Cards, Lines of Credit, Auto Loans, Consolidation Loans, Demand Loans, Student Loans, Over Drafts, etc…but those credit items are all “hush hush”. – instead the focus is on the one credit item that has less than a .45% delinquency rate! LESS THAN 1/2 OF 1%!!

In Canada – it’s less likely for someone to go in to Bankruptcy because they can’t afford their mortgage – it’s considerably more likely that people over extend on their other consumer debts – the Car Loans, the Boat Loans, the High Interest Credit Cards and Loans, the Interest Only Line’s of Credit…but no one seems to want to talk about that stuff. It’s like some dirty little secret that we are all ashamed about.

Perhaps ignorance is bliss – and maybe it’s best we not talk about the real issues that are causing Canadian’s financial stress. Let’s just keep the Banks and other Financial Institutions wealthy…we all know they will be there for us when we fall on hard times…oh, wait – No they won’t. Why not? Because you are too high risk!