Is CMHC Seeking To Hide Foreclosure Information?

The following post is in response to the highly misleading article by the Financial Post today: CMHC seeking to hide foreclosure information from home buyers

Many, including myself, have at times been critical of the CMHC and deservedly so.   However, I think this latest piece from the Financial Post attempts to capitalize on the bandwagon vilifying the national housing agency but instead reveals a lack of insight and basic understanding  as to how the real estate purchase process even works.

Case in point:  the Financial Post thinks anything less than 80% down requires mortgage insurance.

80% down, eh?

80% down, eh?

Here’s the memo from the Quebec Federation of Real Estate Boards that was “obtained” by the Financial Post (it was publicly posted on Twitter) which caused this hubbub:


(click to download pdf)

First I’d like to point out that the Quebec Federation would not take a position which would go “against ethical rules stipulating that real estate brokers are obliged to publish information that is truthful and verified.” I was glad to read that and you should too.    So they simply changed the “repossession” field in the Brokerloading system so it was no longer a mandatory field.

Yes, that would make it more difficult for those who are searching specifically for repossessed homes as the database results would be incomplete but would it hide anything?  Would buyers be unaware that they were purchasing or even writing an offer on a repossessed home?  Hardly and for several key reasons.

Let’s use a CMHC repossession that’s currently listed in Calgary.  By the way, how did I find the CMHC listing?  In our database I searched: Sellers Name = CMHC.     I would make quite the detective, wouldn’t I? 😉

Ok, that was too easy.  Let’s pretend that CMHC didn’t want their name disclosed as the seller.  In Calgary, sellers don’t have to disclose their name on the listing itself.  But  – and this is a big but – the owner’s name is always available on Title.  That is public information that can be obtained by anyone.

In a standard purchase contract there’s a section at the top named, “The Seller.”     Your agent would need to find out who that was and the most accurate way would be to simply pull the Title.

Voila.  I  paid for the Title of that CMHC listing so I can prove it to you:


(click to download Title)

Half-way down the first page, clear as day, is the name of the owner.  In this case, CMHC.

Another way that flags a home as a CMHC sale is that it will always include an Addendum or Schedule.  For example, here’s the wording for the one currently for sale in Calgary.

Addendum A & Schedule B (Mould) MUST accompany all offers & all deletions MUST be initialed.”

It usually isn’t listed on the public remarks but it’s highlighted for agents in the private remarks as CMHC won’t accept any offers without the addendum.

Yet another way you’ll know it’s either a CMHC repossession or a foreclosure is that it will include the following wording:  “Sold As Is Where Is – No warranties or representations.”  Again, that can be found either in the public or private comments of the listing.

As you can see, the National Post article was completely a non-story.  For whatever reason CMHC doesn’t want it brokerloaded in the database as a repossession, but that it no way prevents buyers from knowing that it was CMHC that was selling the property.    The buyer would HAVE to know that it was CMHC in order to fill out the purchase contract and Addendum/Schedule  in the first place.

7 responses to “Is CMHC Seeking To Hide Foreclosure Information?

  1. CMHC has responded to the Financial Post article:

    I would like to clarify a number of inaccuracies in Garry Marr’s article of February 27, 2013

    CMHC has national policies around foreclosures which have been in place for decades. Our policies require that real estate agents follow legal requirements with respect to the sale of a property. There is no legal requirement that the seller disclose in a property listing, the reason the property is being sold. CMHC has not directed its agents to breach any legal or ethical standards.

    When CMHC assumes ownership of a property due to borrower default it lists the property using a licensed real estate broker. In an effort to seek the best return, CMHC requests that brokers do not include, on the property listing, that a home is a foreclosure.

    The fact that CMHC is the seller and the reason we are selling is always disclosed to prospective purchasers who are considering an offer on the property.

    The recent situation in Quebec stems from the fact that the electronic listing form used by the Quebec Federation of Real Estate Boards (QFREB) had a mandatory field for “Repossession”.

    The QFREB was advised and subsequently consulted with the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ), the organization responsible for the application and enforcement of the Real Estate Brokerage Act in Québec.

    The OACIQ noted that a property for sale by CMHC, which is a repossession, does not need to appear on a listing. As such, the “Repossession” box on the electronic listing form is no longer mandatory. The real estate broker is however required to disclose this information to all potential buyers in a timely manner.

    Finally, borrowers with a down-payment of less than 20 per cent (not 80 as referenced in the article) are required to obtain mortgage loan insurance.

    Mark McInnis
    Insurance Underwriting, Servicing and Policy

  2. Ben Rabidoux was quoted in the story, but here are his thoughts as posted on VREA:

    Ben Rabidoux | 27 February 2013 at 11:46 am |

    Got to be honest, although I was quoted in the story, I actually told Gary that I thought it was less of an issue than he was making it out to be. My exact words were “non-story”. The timing may be interesting, but that would be it. Mike Fotiou (another good, honest realtor) has written about this and he has some decent thoughts. For the most part, I agree with him:

    Also of interest is that CMHC has put out a press release rebutting the article:

  3. You may have a point, but why make the potential buyers jump through so many hoops to get the CMHC / foreclosure info?

  4. This new policy is absolutely not a nothing. Anyone, for example, researching information on the number of forclosures will be unable to tabulate the data from public sources, accessible to all without the undue cost of pulling a title on each possible listing. This is a huge change designed to obfuscate and decrease the access to information – from an organization we as citizens own, fund and back! Decreasing transperency at this point is very, very indicative of their worry. My guess is that they worry that convenient access to information would percipitate a panic. If they can choke access, they can cotrol the message.
    Mainstream media has been asleep or corrupted for eons (god speed in thier death spiral) and will happily parrot happy, happy messages from CMHC PR department.

  5. If it’s not material it sounds like in the best interest for full transparency on the quick sheet, after all if that’s the case it won’t matter

  6. Len & YVR, I completely agree that transparency is important and that CMHC should divulge all their repossession & bank foreclosure statistics for Canada – accurate and timely figures are impossible to come by. The closest we have are the Mortgages In Arrears stats that the CBA releases, which is a start but not good enough.

    But there’s a huge difference between a) CMHC not wanting it known publicly via the listing details that a particular property is a repossesion, and b) CMHC trying to hide from everyone how many properties they have listed – which I don’t think is the case, at least not at this point in time. I can still easily look up which properties CMHC has for sale in Alberta and see what they’ve sold in previous years.

    The funny thing is that if CMHC didn’t try to recover as much as possible selling the properties they repossessed, others would be saying they are wasting taxpayers (our) money. Darned if they do…

  7. Mike, you are so wrong it hurts. Foreclosures require an extra rigorous inspection and perhaps a lower bid since there may have been occupants who are unhappy, or people unable to pay for ongoing upkeep. This is material information and I am offended that a public agency is hiding it. Moreover we need accurate data on the number of foreclosures out there for many reasons.

    How is it that I’m wrong when we agree? Foreclosures do require extra vigilance as a buyer and I’ve already stated we need accurate data. And for the umpteenth time, CMHC isn’t hiding anything – the fact it’s a foreclosure is disclosed before a buyer can even write an offer and anyone can tell it’s a foreclosure by the simple ways I outlined in the post above.
    -Mike Fotiou

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