By the end of October we should have a clear idea of proposed changes to mortgage lending regulations with updated B-20 rules implemented within two to three months.

Speaking at an event in Toronto, OSFI superintendent Jeremy Rudin said Tuesday that much of what will become the updated regulations will be what the regulator set out in July which includes a stress test for all uninsured mortgages.

He told the Economic Club of Canada audience that the Office of the Superintendent of Financial Institutions is concerned about the high levels of consumer debt and high real estate prices in some markets.

"We are not waiting to see those risks crystallize in rising arrears and defaults before we act," Mr Rudin stated.

The superintendent says that it has never been more important for mortgage lending underwriting criteria to be strong and that the system needs a “certain integrity.”

Mr Rudin said that although there is a risk of more borrowers using unregulated lenders for mortgages that did not preclude OSFI from taking necessary steps within its mandate.

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