CMHC cools mortgage market with new cap for banks
A spokesperson with CMHC confirmed media reports Monday that the national housing agency will, effective immediately, limit banks and other mortgage lenders to $350 million worth of new mortgage-backed securities per month.
Following an unanticipated level of demand for mortgage-backed securities, the Canada Mortgage and Housing Coproration (CMHC) has announced that they will limit all banks and other mortgage lenders to $350 million in new guarantees per month.
Earlier this year, the corporation announced a limit of $85 billion for 2013, and increase from the $76 billion limit that was set for 2012. At the end of July, the program has already reached $66 billion.
This is the latest in a string of attempts to slow the Canadian housing market. The regulations set forth previously, including decreasing the maximum amortization on insured mortgages to 25 years and limiting refinances to 80% of the property value, among others have all been targeted at the public. This is the first move that targets the lenders themselves.