|Ottawa to toughen CMHC oversight|
March 30, 2012
After earlier voicing concern over the activities of the country’s dominant mortgage insurer the federal government is toughening its oversight of the massive and economically vital organization.
The federal budget took aim at Canada Mortgage and Housing Corp., the Crown corporation that controls about 75% of the mortgage default insurance market. CMHC is backstopped by the federal government but is coming close to breaching its mandated limit of $600-billion because of the red-hot housing market and so-called portfolio insurance for the banks.
“The government will introduce enhancements to the governance and oversight framework of Canada Mortgage and Housing Corp.,” according to the budget.
The document provided few details about what action would take place, but suggested the government was principally concerned about the Crown corp.’s dealings with the banks and how it could impact the broader economy.
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