CAAMP Heads to Ottawa to Make Case for Revisiting Mortgage Rules
It was just a couple of weeks ago when we spoke of how CAAMP was unhappy with the mortgage rules that were put into place this past summer, and that they believed they were having an extremely detrimental effect on the economy. Now, no longer happy to settle for just a report stating the harm the mortgage rules are having on the housing market and related industries, they’re taking their fight straight to Ottawa.
In a report published in late November, CAAMP’s Will Dunning stated, “The opinions being expressed by this author are his own, and are strongly felt. The changes to mortgage insurance criteria are unnecessarily jeopardizing the health of Canada’s housing markets and the broader economy.”
Now, they’ll be in Ottawa as soon as next week to voice their concerns in person, and to hopefully change the government’s mind on the restricting rules.
“Our Chair, I and our chief economist will have a series of meetings in Ottawa on Wednesday with both public servants and politicians to discuss the findings of our most recent research,” said CAAMP’s president and CEO Jim Murphy in a statement. “We will obviously discuss the government’s recent changes along with the need to maintain a healthy housing and mortgage industry in Canada.”
The problem, says CAAMP, is that the mortgage rules came at a time when the housing market was already showing signs of cooling. That might be hard to argue though, given that prices were still climbing even in September, two months after the rules had come into effect.
And while many analysts have said that the rules will have the biggest impact on first-time buyers, CAAMP believes that it’s going to have an impact on the higher end market as well.
In addition to the fact that million dollar homes will no longer be eligible for mortgage insurance, CAAMP argues that the effect on first-time buyers will have a trickle down effect, making it more difficult for homeowners who want to move up to sell their home. When they can’t, those higher-end homes they were going to move into will instead sit empty. Of course, the fact that first-time buyers are finding many issues when trying to get a mortgage is also of concern to the mortgage broker organization.
“Our concern today is the number of growing first-time buyers who are now unable to get a mortgage,” continues CAAMP in their statement. “We worry that this is having a dampening effect on what was already a cooling market, we hope policymakers will give some thought to addressing the needs of this key sector.”
The question is, will the government listen? After listening, will they move to make revise the rules?
CAAMP certainly seems to think so. “The federal government is always interested in CAAMP’s research,” Murphy stated. “It provides critical and credible information on the overall mortgage market and trends.”
But it could be an uphill battle for Murphy, and the other officials at CAAMP. While CAAMP is a respected voice in the industry, Finance Minister has acknowledged that the mortgage rules have had an effect. And just this week he’s stated that he’s “very happy” about the softening effect they’ve had on an extremely overheated market.