Two private insurers have announced they won’t be following the Canada Mortgage and Housing Corporation (CMHC) lead to tighten lending standards.

Genworth MI Canada

One of Canada’s largest private mortgage lenders, Genworth Canada confirms it won’t change its underwriting policy related to debt service ratio limits, minimum credit scores, and down payment requirements.

“Genworth Canada believes that its risk management framework, its underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure, said Stuart Levings, President and CEO.

This includes “exposure to borrowers with lower credit scores or higher debt service ratios," Levings said.

Canada Guaranty

Canada Guaranty also confirms that it doesn’t plan to changes its underwriting policy.

Canada Guaranty uses a “dynamic underwriting process where our underwriting policies are consistently updated to reflect evolving economic environments and emerging mortgage default patterns,” according to a company news release.

“This philosophy has resulted in the lowest loss ratio in the industry.”

Recent insurer announcements relating to down payment and minimum credit score represent a very small component of Canada Guaranty’s business, and the company will continue to be prudent in these areas. 

Given implementation of the qualifying stress test and historic default patterns, Canada Guaranty doesn’t anticipate borrower debt service ratios at time of origination to be a significant predictor of mortgage defaults.

See also

CMHC tightens lending standards, making homes less affordable