Pursuits
Canada Watchdog Warns Against Complacency After Home Price Surge
- Lenders should rely less on collateral in mortgage assessments
- Prolonged economic downturn can lead to price correction
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Canada’s financial institution watchdog warned lenders against “complacency” setting in for mortgage lending standards, saying that surging home prices and historically low interest rates can’t be taken for granted.
“Lenders might be led to believe that weak underwriting standards will be mitigated by ever-rising collateral values,” Jeremy Rudin, head of Canada’s Office of the Superintendent of Financial Institutions, said in a speech Monday in Vancouver to mortgage professionals. “Our view is the opposite.”