In November, MLI published Mortgage Insurance in Canada by University of Guelph Associate Professor Jane Londerville. Almost three months later, even as other think tanks enter the debate, the paper continues to make waves across Canada’s mortgage insurance sector.
In today’s Globe and Mail, Tara Perkins writes,
A paper by Jane Londerville, an associate professor at the University of Guelph, released by the Macdonald-Laurier Institute for Public Policy in November, noted that in 1997, CMHC lacked sufficient reserves to cover the claims being made, and Ottawa had to step in to ensure the agency had enough capital. Since then, CMHC has charged higher rates.
Ms. Londerville argued that CMHC’s “unfair” advantage over private sector competitors is hurting consumers who buy mortgage insurance. A person buying a $300,000 house with a 5-per-cent down payment, for example, would pay about $8,000 for mortgage insurance – more if he were deemed a risky borrower.
The article has already been picked up by financial sector players like Canadiana Financial Corp as the message of the MLI paper spreads across the land.