Banks may be forced to carry some CMHC burden

The CMHC is looking at a formula that would force banks to pay a deductible on mortgages insured by the crown corporation before claims are settled.

The idea was briefly mentioned in the International Monetary Fund’s assessment of the Canadian housing market earlier this year and would enable the CMHC to move some of its financial burden on to the private sector; the banks are of course against the idea.

The suggestion is that banks could take on risk of between 5 and 10 per cent of the value of the mortgage.

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