Canadian Mortgages, Insurance, Investment, Tax Planning

CRA Media Room

Revenu Québec - Tax News

XE Forex News

Canadian Mortgage Broker news

Sunday, February 28, 2010

Canadian Mortgage Broker News - Will the Insured Mortgage Purchase Program continue?

Canadian Mortgage Broker News - Will the Insured Mortgage Purchase Program continue?

Will the Insured Mortgage Purchase Program continue?


With reports the federal government will cut a number of its initiatives aimed to help banks through the financial crisis in next week's budget, there is talk about whether the $125-billion Insured Mortgage Purchase Program will continue.

The program, which aims to increase liquidity by allowing the government to purchase insured mortgages from banks, is set to expire in March. A story in the Globe and Mail said while bank interest has dwindled - only $66 billion worth of mortgages have been purchased - some bankers are arguing it should remain as a safeguard

"It eased a lot of funding stress," for the banks, Peter Routledge, an analyst at Moody's told the Globe. "I don't think it hurts the system to have it as a potential outlet if something unforeseen happens."

Boris Bozic, president of Merix Financial, echoed that sentiment in CMP late last year.

"It's really an insurance policy because the reverse option has been undersubscribed for some time now," he said.

The Globe reported banks only sold $1.4 billion out of a potential $4 billion worth of mortgages to the government at the latest IMPP auction held last week. One more auction is set for March 24.