The Canada Mortgage and Housing Corporation says that it will suffer limited impact from the devastating losses in the Fort McMurray area. The agency has given lenders options to help mitigate the special circumstances of those affected; these include deferral of payments for up to 6 months and re-amortization of the loan to result in lower payments. It may consider additional measures if deemed necessary.
CMHC is not directly exposed to losses from the wildfires as mortgage insurance only covers mortgage default and not force majeure, however there is potential loss from claims resulting from the indirect economic consequences of the event such as a decline in property value.
Securitization exposure to mortgages in Fort McMurray is mostly through large diversified financial institutions and no NHA MBS Issuer appears to be overly concentrated in the area or incapable of absorbing potential losses. Consequently, the probability of any securitization-related losses to CMHC is remote.
CMHC is not directly exposed to losses from the wildfires as mortgage insurance only covers mortgage default and not force majeure, however there is potential loss from claims resulting from the indirect economic consequences of the event such as a decline in property value.
Securitization exposure to mortgages in Fort McMurray is mostly through large diversified financial institutions and no NHA MBS Issuer appears to be overly concentrated in the area or incapable of absorbing potential losses. Consequently, the probability of any securitization-related losses to CMHC is remote.
