Thank you, Mr. Chairman and committee.
Thank you, fellow witnesses.
I've been a practising mortgage broker since 1999 in the Vancouver area. I have a lending background going back to 1988. Our company serves both B.C. and Alberta. We have 130 mortgage brokers on our team, and we did 3,800 mortgages last year for a total of $1.36 billion.
Of the changes enacted on October 3 by the Minister of Finance, the one that impacted Canadians the most severely was bringing consistency to mortgage insurance rules by standardizing eligibility criteria for high- and low-ratio insured mortgages, including a mortgage rate stress test.
Page 36 of the Liberal Party of Canada's platform piece states, “Government should base its policies on facts, not make up facts to suit a preferred policy. Common sense, good policy, and evidence about what works should guide the decisions that government makes.”
The government did nothing to find out from those within the industry the long-term effects of these changes. By making the changes, they've impacted a large number of Canadians, not just first-time buyers but those already in their homes. By rushing these changes through without researching their impact, they've damaged the competitive nature of the industry and skewed it in favour of one group over others. This will result in more expensive lending for all Canadians.
As an example of this, the X family who live in North Vancouver have a mortgage for $250,000 that is now coming up for renewal. Since their home is now assessed at over one million dollars, they are now considered uninsurable and must pay a higher rate on any mortgage term.
Another example is that of Mr. A, who is separated from his wife and has been working out a separation agreement since last spring. He had planned to buy her out of the matrimonial home in the Kootenays but no longer qualifies, and now the home must be sold.
We, of course, have had a number of first-time buyers who have tried to save the down payment needed to enter the market and buy their first home. Many of those reduced their expectations of buying a house and are instead focused on townhouses and condos. With payments forced to be made for over 25 years, their buying power has been further diminished.
Our housing industry in Canada is sound. We survived the meltdown of 2007. We have had a positive impact on the economy. CMHC is a money-maker for the government and is safer than ever. These changes were not needed and will only cause harm to the majority of Canadians.
I recommend the following changes be made to the criteria for insured and non-insured mortgages: allow 30-year amortizations, stop attempting to restrict investment in rental properties, and remove the limit on insurable mortgage size, which is currently one million dollars.
I welcome your questions. Thank you.