Feb 28 0 2013 - Canada Mortgage and Housing Corp. is making no apologies over its tactic of not disclosing a house has been repossessed when it puts the home back on the market.
The Crown corporation says it is acting like any other seller — just trying to get the best offer it can. Critics charge CMHC should disclose more information, given its role as Canada’s national housing agency.
“We don’t want to attract low-ball offers,” said Mark McInnis, vice-president insurance underwriting, servicing and policy with CMHC.
Mr. McInnis agreed to discuss CMHC’s policy on repossession in the wake of a Financial Post story on that said Quebec realtors were balking at a demand to not disclose the fact properties the Crown corporation was selling were previously repossessed.
The agency said listing a property as foreclosed just muddies the waters and brings in offers that are less than genuine.
In Canada, anyone buying a home with less than 20% down and borrowing money from a financial institution covered by the Bank Act must have mortgage default insurance. CMHC, which controls about 75% of the insurance market, is ultimately backed 100% by the federal government.
At this point the question of whether to disclose the fact properties are part of a repossession is mostly philosophical given that only 0.32% of Canadian mortgages are in arrears, according to the Canadian Bankers Association.