In their most recent weekly financial digest, BMO economist Sherry Cooper adamantly states that the financial strength of Canada’s mortgage insurer, CMHC, is solid.
CMHC is fully funded and strong enough to withstand any reasonable (though improbable) stress test. In addition, CMHC is working closely with the Bank of Canada and the Department of Finance to analyze Canadian house prices by city (CMA) looking for warning signs of a potential bubble.
At the moment, there is little evidence to suggest a problematic overvaluation in the Canadian housing market overall, although some centres “warrant close monitoring.”
Read the entire article here
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Other points of view:
Globe & Mail: There could be trouble on CMHC’s Horizon
Macleans: Canada’s mortgage monster
I really liked the detailed numbers that Sherry presents in her appologia. For example, referencing a stress tests that CMHC undertakes – anyone noticed that the details of the stress test are clear as mud?
I think that the message is that we should not worry our pretty heads – they have it,seriously they are the professionals and they know what they are talking about.
I think this header may just go down in history right next to Bernake’s pronouncement that “all is contained”. CMHC is solid! Bottom line, book it!
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Len, I posted some of Bernanke’s quotes in my latest BMO post here