CMHC Working Hard to Ease the Impact of COVID-19 to Canadians!

CMHC to purchase up to $50B of insured mortgage pools

The move is designed to provide stable funding to banks and 

mortgage lenders

Article from CMHC March 13th, 2020 (updated March 17th: see below)

To our clients,

Like many other government organizations, we are monitoring developments around COVID-19. Our primary focus remains the health and safety of our staff and ensuring the continuity of our operations. While the situation continues to evolve, we do not foresee an impact on our operations nor on our role in supporting financial stability through the provision of mortgage funding.

Currently, we consider the risk to our business of the coronavirus outbreak to be low. Nevertheless, we have convened a Crisis Management Committee to monitor events as they develop, to co-ordinate with other government agencies and to take action as required. As of today, CMHC has implemented the following measures:

• Taken action to ensure we have access to sufficient liquidity to support housing activity and financial markets, as required;
• Identified essential functions and isolated separate teams to ensure business continuity;
• Are stress testing a “pandemic” scenario which will allow us to better assess impacts as events unfold;
• Required executive approval for all international travel and forewarned employees of potential isolation requirements following personal travel, including the likelihood that the list of affected countries may grow;
• Reminded our employees of hygienic measures to help limit the spread of disease, including hand washing, maintaining a metre separation from anyone coughing or sneezing and taking extra precautions in large groups; and
• Increased surface cleaning in high traffic areas of our workplace as well as providing hand sanitizers and antiseptic wipes.

The risk to our business is further mitigated because our workforce is mobile and our “Results Only” work philosophy enables our employees to work remotely, a defence against virus transmission. We have encouraged our staff to make use of the technology to reduce the need to work in our offices.

Finally, we want to remind you that CMHC and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. Our default management tools default management tools include: payment deferral, loan re-amoritization, capitalization of outstanding interest arrears and other eligible expenses and special payment arrangements.

CMHC continues its work. We reasserted our commitment by pricing a $6 billion mortgage bond in challenging market conditions on March 11. Employers need to balance public health concerns with business requirements and public agencies like ourselves must promote stability. We recognize that we face a period of uncertainty in the coming weeks. As circumstances change, you will receive follow up communications from us.

Evan Siddall
President and CEO

 Article from CMHC March 17th, 2020

To our clients,

I am writing with an update from my note of Friday, March 13. It was an intense weekend and I promised to keep you informed as circumstances developed. It’s time to tell you more.

Health: Our primary concern is the health of our employees and their families and that we all do our part to “flatten the curve”. Social separation is our best tool to protect seniors and the immuno-compromised. In time, this will pass — it’s up to us to help limit the impact.

Redundancy: As such, we have isolated redundant teams for critical functions. We are following local public health advice, including restricting our Ottawa office to truly essential personnel and asking everyone else to stay home.

Helping Canadians: These events remind us all how crucial it is to have a sanctuary. We believe that we all need a safe and affordable place to live. We have already extended mortgage forbearance for insured mortgages together with Genworth Canada and Canada Guaranty. We are also exploring, with others, potential relief measures for those who cannot make payments on uninsured mortgages and renters.

Market Liquidity: Yesterday, the Government announced that CMHC will initiate a revised Insured Mortgage Purchase Program, a market liquidity tool we used in the Global Financial Crisis. The IMPP is part of a package that includes complementary market support activity from the Bank of Canada. We have scaled the solution to the problem and will have $50 billion available. We are also working with the government on expanding CMHC’s authorities if we need to do more.

Our Ask of You: Just as we do, you have a very important role to play to help preserve our economy. We want to avoid adding undue pressure so you can focus your efforts on managing this crisis. Accordingly, we will suspend quality assurance reviews and other interventions until we return to a more normal state. Importantly, we also expect any housing provider who has received financing or support from CMHC, directly or via provinces and territories, to act compassionately and refrain from evictions.

CMHC exists in part to buffer the effects of these events. This is what we do. Our Crisis Management Committee is meeting daily and we are working around the clock. We are part of a federal team that works well, trusts each other and is earnestly and impressively working together for Canada.

You can count on us to do all that we can for you and for Canadians.

Evan

CMHC also sharing information on :

Dealing with Mortgage Payment Difficulties

When unforeseen financial circumstances impact your ability to make regular mortgage payments, it’s important for you to take quick action. With early intervention, cooperation, and a well executed plan, you can work together with your mortgage professional to find a solution to your financial difficulties.

What can I do to help?

If you find yourself facing financial difficulties, as a result of job loss, family income reduction, or for other reasons, it can be an overwhelming experience leaving you feeling uncomfortable and unsure of what to do. By following these three simple steps, you can make a big difference in resolving your financial difficulties.

1) Talk to your mortgage professional

• To increase the chance of successfully managing your financial situation through early intervention, call your mortgage professional at the first sign of financial difficulty;
• Ask the mortgage professional about information on the options available for managing your financial situation; and
• Keep the mortgage professional informed as circumstances evolve.

2) Clarify the financial picture

In order to help your mortgage professional fully understand your financial situation, before meeting with them, prepare a detailed list of financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets.

3) Stay informed

The more information you have at your disposal on managing your finances, the easier it will be to make the right decisions.
Take Charge of Your Debts is an online tool from the Government of Canada that is designed to help borrowers like you understand debt problems, and includes information on making a budget, budget counselling, collection agencies, credit, and credit repair. To view this tool, log on to www.ic.gc.ca (Industry Canada) and search for “Take Charge of Your Debts”.

How can mortgage professionals and CMHC help?

Your mortgage professional wants to establish and maintain a positive relationship with you over the long term, and is fully trained and equipped with the tools to help you deal with the temporary financial setbacks that you may be facing.

For mortgages insured by Canada Mortgage and Housing Corporation (CMHC), CMHC provides mortgage professionals with tools and the flexibility to make timely decisions when working with you to find a solution to your unique financial situation. These tools include:

• Converting a variable interest rate mortgage to a fixed interest rate mortgage in order to protect you from a sudden interest rate increase, should one occur.
• Offering a temporary short-term payment deferral. Your mortgage professional may be prepared to offer greater payment flexibilities, particularly if previous lump sum prepayments have been made, or if you have previously chosen an accelerated payment schedule.
• Extending the original repayment period (amortization) in order to lower your monthly mortgage payments.
• Adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period.
• Offering a special payment arrangement unique to your particular financial situation.

CMHC is also willing to consider other alternatives proposed by the mortgage professional to resolve or avoid mortgage payment default. In every case, the options available will depend upon your individual financial circumstances.

CMHC is Canada’s national housing agency. For over 60 years CMHC has shared a wealth of knowledge and housing expertise to help create an informed and reassured homeownership experience for Canadians.

For more details on CMHC's programs, contact me or visit CMHC's interactive "Step by Step" Guide. As Canada's authority on housing, CMHC helps Canadians buy a home with a minimum down payment starting at 5%. Ask your mortgage professional about CMHC.

The information is provided by CMHC for general illustrative purposes only, and does not take into account the specific objectives, circumstances and individual needs of the reader. It does not provide advice, and should not be relied upon in that regard. The information is believed to be reliable, but its accuracy, completeness and currency cannot be guaranteed. Neither CMHC and its employees nor any other party identified in this Article (Lender, Broker, etc.) assumes any liability of any kind in connection with the information provided. CMHC stakeholders are permitted to distribute the materials at their expense. The above mentioned stakeholder organization is responsible for the distribution of this document.

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