CMHC addresses their move on the new rule changes

On June 21, 2012 the Government of Canada announced new parameters regarding the application of government backed mortgage insurance. The following clarifications are intended to address common questions that have been raised following the Department of Finance’s announcement and CMHC’s communication to Mortgage Professionals.

These clarifications acknowledge industry realities and accommodate delays that may occur and are often beyond the mortgage professional’s or borrower’s control:

• An insurance application which is received by CMHC between June 22, 2012 and July 8, 2012 inclusive, for a loan where the closing date is documented as and planned to occur on or before December 31, 2012, will be eligible for an exception and will be underwritten in accordance with the pre-July 9th parameters. If closing is later delayed, or the loan is not fully advanced by December 31, 2012 the pre-July 9th parameters will continue to apply.
• A loan application which relates to a bona fide purchase and sale agreement entered into and dated on or before June 21, 2012 may be eligible for an exception and considered in accordance with the pre-July 9th parameters, regardless of the funding date, even if the loan insurance application is received by CMHC after June 22, 2012.

Don’t hesitate to contact me or your local Business Development Representative should you have any questions.

Sincerely,

Sam Carnovale,
Key Account Manager, Brokers
CMHC-SCHL