Watchdog tweaks mortgage rules for insurers, banks – Globe and Mail

There is a new article in the Globe and Mail regarding the newest mortgage regulation changes being implemented by OSFI. From the article:

One of the most notable changes is that the regulator is now spelling out criteria banks must meet to verify the income of borrowers, especially those who are self-employed.

OSFI has waded into the country’s mortgage market in recent years as part of a global effort to prevent another crisis like the one that occurred in the U.S. with subprime lending. Global bodies like the Financial Stability Board, which gets its mandate from the G20, recommended that all countries review their mortgage rules.

The good news is that there is no substantial changes to policies that would restrict borrowers in a way that they weren’t before. The significant difference from before appears to be that mortgage insurers will need to start vetting income confirmation documentation for insured mortgages, where previously they counted on the lender’s word exclusively.

I do not anticipate this change having a significant impact on the market., but may serve to even the playing field between lenders who do follow regulations and those who may not.