CMHC insurance in force continues to decline after the crown corporation – and Canada’s largest mortgage default insurer – axed a number of its programs earlier this year.
“At the end of the second quarter of 2014, our total insurance-in-force was down $6 billion from December 31, 2013, standing at $551 billion,” CMHC states in its quarterly release. “We expect insurance-in-force to decline to approximately $545 billion by year-end as mortgage repayments continue to offset new insurance written.
“As a result of lower portfolio insurance volumes, our total insured volumes ($) for the first six months of 2014 were approximately 13.3 per cent lower when compared to the same period in 2013.”
Earlier this year the crown corporation announced it would no longer insure the construction of condo developments or homes in excess of $1 million. Additionally, CMHC also announced it would no longer insure second homes and self-employed buyers who do not have third party income validation.
In its quarterly report, released Friday, CMHC also reported $841 million net income for the six month period ending June 30 – a 2.1 per cent increase year-over-year.
“For transactional homeowner loans, the average credit score for loans insured in the six month period ended June 30, 2014, was 745 while the average gross debt service (GDS) ratio for the same period of time was 25.7%,” the release states. “The high average credit score and average GDS ratio demonstrates a strong ability among homebuyers with CMHC-insured mortgages to manage their debts.”