Status of Women committee  Recent changes made rental vacancy rates really tight in a lot of areas of the country, too, which has just increased overall costs of living for people. As an individual with children finding a place to live, any sort of assistance that can be created through the insurance mechanism, which really is supposed to be the social portion of the financing world, specifically targeting this group of disenfranchised individuals would be a very welcome addition to that structure, I think.

Status of Women committee  I suspect that the reason we were invited is we are somewhat peripherally related to this for the folks who are transitioning out of those shelters and trying to create new homes for their families, as victims of this abuse. Jacquie would know this directly, but it's not uncommon for anybody who has been through any type of separation or dissolution of a relationship for there to be bruised credit on either side of that.

Status of Women committee  Right. To respond directly to the question, it might be smart for some group such as CMHC, which provides mortgage insurance to folks who have the smaller down payments, to potentially provide products that are specifically tailored to individuals who can show that they've been victims of this type of abuse, violence, and in addition to some of the traditional underwriting criteria regarding credit scoring or just down payment, to make particular allowances or buffer their credit specifically for those folks to help them transition into something that would provide a family unit for them to transition out of those shelters.

Status of Women committee  Good afternoon, everybody. Thank you for inviting Mortgage Professionals Canada to speak to you today. My name is Paul Taylor, and I'm President and CEO of the national association. I'm joined today by mortgage expert and Mortgage Professionals Canada member Jacquie Bushell of Ottawa.

Finance committee  Thank you very much indeed for the question. The recommendation we're making regarding providing interest-free loans to municipalities actually ties into this, to a degree. I think a lot of measures have been implemented that are essentially trying to tamp down demand when the answer to the problem, in terms of Vancouver, is probably adding supply.

Finance committee  Do you want to take that one?

Finance committee  I think that anybody who has been paying attention to real estate transactions will see that there's been a pretty significant fall-off in that since the beginning of the year when the uninsured stress test was introduced. We're quite concerned that it really does disproportionately affect first-time buyers and younger Canadians.

Finance committee  Thanks very much indeed for the question. The stress test is currently at a rate of 2% above posted. I'm oversimplifying it, but essentially if a contract is issued today for a five-year term at around a 3.5% rate, people have to qualify at a 5.5% rate. The logic is that you can ensure you can manage the payments if interest rates rise over time in the future.

Finance committee  In our recommendation four, we would recommend implementing an indexation to inflation for the mortgage insurance cap, and also to consider setting regional limits to better reflect localized housing market conditions rather than setting a national standard. Adjusting the valuation eligibility cap for mortgage insurance would actually help mitigate against the shifting portfolios of mortgage insurers.

Finance committee  The first point I'd like to make is that these changes are a little overreaching in how conservative they are in the amount of capital that needs to be reserved to ensure that the financial system doesn't fall apart, as you have alluded to. Our arrears rates for mortgages are currently 0.28%.

Finance committee  Thank you very much for the question. This may take a moment, so I apologize if I get long-winded. We're an association of mortgage lenders, mortgage insurers, and mortgage brokers. The lenders within our community actually include TD and Scotiabank. We also have First National, Street Capital, MERIX Financial, and a whole raft of others.

Finance committee  I think I can get to the root of this. There are some lenders who will specifically focus on or target borrowers that have less appealing credit histories. They might work in a marketplace where they will offer a higher standard mortgage interest rate because the risk of default for those clients is different.

Finance committee  In fact, there's a very key distinction between the current and the previous. The stress test only applied to people who were getting less than a five-year term. Because the logic was that on a five-year fixed mortgage, you have five years to accrue equity before you're actually exposed to the current interest rate again.

Finance committee  It is not too early to tell. Our association has a very large number of mortgage lenders and insurers, actually, as part of our constituents. They will tell us specifically that they have seen reductions in the number of applications for loans they have funded and the number of insurance applications that they have provided cover for.

Finance committee  Could I comment very briefly?