CMHC Mortgage Loan Insurance at Glance by liaoqinmei


									                                                                                                         CMHC Mortgage Loan Insurance at a Glance
                  CMHC Mortgage Loan                                               did you know?
                  Insurance at a Glance                                            Distribution of Homeowner
                                                                                   insurance-in-force (HigH anD
                                                                                   low ratio, unless otHerwise stateD)

                                                                                   Average amortization period at origination                               25 years
Since 1954, CMHC’s role in providing mortgage
an insurance has helped shape Canada’s housing                                     Average credit score at origination
finance system and has been instrumental in                                        (high ratio only)

underpinning its strength in both good and bad                                     Percentage of borrowers who are ahead
economic times. Since the mid-1990s, CMHC                                          of their payment schedule by any amount                                  64%
                                                                                   (high ratio only)
has operated its mortgage loan insurance and its
securitization guarantee programs on a commercial                                  Average loan-to-value based
basis. This minimizes risks to taxpayers while also                                on updated property value1
generating reasonable returns for the Government
                                                                                   Average equity based on updated property value                           45%
of Canada helping improve Canada’s fiscal position.
Below, you will find information about various                                     Average outstanding loan amount
                                                                                   (high ratio only)
characteristics of CMHC’s mortgage loan insurance
business, as reported in CMHC’s most recent
Quarterly Financial Report (as at 30 June 2012).                                   1
                                                                                       LTV based on the updated value of the property when using changes in local
                                                                                       resale prices.

                                                                                  Prudent underwriting Practices
Helping Canadians from Coast-to-Coast                                             Help to keep Arrears Rates Low
    distribution of Approved units for Multi-unit
                                                                                                                  Arrears Rates (%)
  Residential and High Ratio Homeowner Properties
  100                                                                                    0.4
   50                                                                                    0.2
    0                                                                                    0.0
         Canada    Atlantic     Quebec       Ontario     Prairies and  British                 Q2 2011         Q3 2011         Q4 2011         Q1 2012   Q2 2012*
                                                          Territories Columbia
                                                                                                                   CMHC                            CBA
    Homeowner properties      Multi-unit residential properties   Homeowner                 * Latest available CBA arrears rate is for May 2012.
    in rural areas and        of > 4 units (includes nursing      properties in
    smaller communities       and retirement homes)               urban areas

CMHC continues to be the only mortgage loan insurer for large                     The strength of CMHC’s mortgage loan insurance portfolio
multi-unit residential properties including nursing and retirement                is further demonstrated in its mortgage arrears rate
homes. The Corporation’s support for these forms of housing is                    (borrowers who have missed three or more consecutive
important to the supply and maintenance of a range of housing                     payments). The overall CMHC Arrears rates for June 2012
options in Canada.                                                                was 0.35%, improving on both the 0.38% level reported in
CMHC is also the primary insurer for housing in rural areas and                   Q1 2012 and the 0.40% rate as at the beginning of the year.
smaller Canadian markets. Close to 44% of CMHC’s total rental and                 Improving YTD trends have been noted in both the CMHC
high ratio homeowner business in the first six months of 2012 was in              Homeowner arrears rates and the Portfolio component.
markets or for housing options that are less well served or not served
at all by the private sector.

date modified: August 21, 2012                                                                         Canada Mortgage and Housing Corporation                      1
                                                                                         CMHC Mortgage Loan Insurance at a Glance

Prudent Risk Management
The profile of CMHC’s insurance-in-force demonstrates the nature and level of risk associated with
CMHC’s mortgage loan insurance business. CMHC’s total insurance-in-force increased to $576 billion
at the end of the second quarter of 2012, nearly 2% higher than total insurance-in-force at year end
2011 and 1% higher than in the first quarter of 2012. Risk exposure is mitigated in a variety of ways.

     distribution of High Ratio Homeowner
     insurance-in-force by Credit Score at                                        ≥ 660 < 700
                                                                                      15%                             ≥ 700
     origination (%)                                                                                                   74%
                                                                       ≥ 600 < 660
     CMHC has been able to maintain its strong market                      9%
     position and manage its risks while applying prudent
     underwriting practices. This is demonstrated by an
     average credit score of 725 for CMHC’s high-ratio                  = 0 < 600
     homeowner insurance-in-force at 30 June 2012. The
     high average credit score also demonstrates a strong
                                                                         No score
     ability among homebuyers with CMHC-insured
     mortgages to manage their debts.

     distribution of High-Ratio Homeowner
     insurance-in-Force by Province (%)
     Consistent with its mandate, CMHC provides
     mortgage loan insurance in all Canadian
     markets, spreading its insurance-in-force risk
     nationwide across all provinces and territories                  0.5%

     each with a distinct economic outlook.

                                                            12.5%                                          20.4%          0.3%
                                                                      16.8%             3.0%
                                                                                                                     2.2%        2.7%

                                                        Territories           Saskatchewan     Quebec           New Brunswick
                                                        British Columbia      Manitoba         Newfoundland     Nova Scotia
                                                                                               and Labrador
                                                        Alberta               Ontario                           Prince Edward Island

                                                                                        Canada Mortgage and Housing Corporation         2
                                                                                                         CMHC Mortgage Loan Insurance at a Glance

          Prudent Risk Management

                     distribution of Homeowner                                          distribution of High Ratio Homeowner
              insurance-in-Force by Loan-to-Value (LTV)                                 insurance-in-Force by Loan Amount ($)
             Ratio Based on updated Property Values1 (%)                       %

              %                                                               40
             70                                           Average LTV         30
             40                                                               20
                   ≤ 80%    > 80.01   > 90.01   > 95%                          0
                            ≤ 90%     ≤ 95%                                         Under         Over         Over        Over        Over         Over
                                                                                    $60,000     $60,000 to   $100,000 to $250,000 to $400,000 to   $550,000
                                                                                                 $100,000     $250,000    $400,000    $550,000

            The majority of CMHC-insured mortgages currently                 As at 30 June 2012, the average outstanding loan amount
            have loan-to-value (LTV) ratios of 80% or less based             for homeowners who took out high ratio loans above 80%
            on updated property values.1                                     loan-to-value at origination was $175,061. The figure includes the
                                                                             regular amortization of loan balances as well as accelerated
                                                                             payments by borrowers.

    LTV based on the updated value of the property when using changes in local resale prices.

                                                                                                        Canada Mortgage and Housing Corporation               3

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