Canadian Mortgage Delinquencies Expected To Rise 200% -

TransUnion Warns A “Severe” Scenario Likely In Canada, Mortgage Defaults To Jump

One of the “Big Three” credit agencies warned they expect a big jump for insolvencies. TransUnion gave the industry a look at recent macroeconomic and consumer credit activity this week. During the presentation, the firm’s analysts highlighted various deteriorating macro events. They warned lenders to expect a rising wave of defaults, as a “severe” risk scenario plays out. ...

In the severe scenario, they expect the mortgage market will be hit fairly hard. By Q3 2020, they expect mortgage originations to drop by 43%. Average balances rise by 20%, as people stop aggressively paying off balances. Most interesting – the delinquency rate could rise 200%. The end of the third quarter would be around when the surge in mortgage deferrals begin to expire. ...

Overall, the firm’s outlook seems to be in-line with what other credit risk firms have been saying. Insolvencies were rising and credit growth was slow last year. Now with a recession approaching, they expect the trend to accelerate. Over the long-term, the firm  also warned, “entire sectors of the economy will have long-lasting impacts and some may not recover (travel, small business, ride-sharing, Commercial real estate).”

And for Analysis of this article, lets lean on the ever insightful Comment section for proof that Canada is a sinking ship steered by incompetence, And Alberta ... when this housing bubble pops ... you will be the one paying for the clean up for the entire friggin country:

cmhc better not be tapping taxpayers for a bailout.
what are these guys paid for other than to transfer risk from banks to taxpayers.

  • DownToFinance2 MONTHS AGO
    They are a Crown Corporation. How else are they going to pay for a bailout? When a disaster takes place and an insurance company has to payout it’s the share holders that suffer the loss. That’s the whole point of the CMHC. Let the taxpayers take the fall and backstop the entire residential real estate market.

    • Zalzon2 MONTHS AGO
      It would be one thing if the premium on the risk was fairly priced.
      Quite another when private insurance companies are excluded from setting the premium on hundreds of billions of sub-prime mortgage junk CMHC has gleefully insured.
      In the end, there is nobody to represent the interest of the taxpayer. Despite being a crown corporation that should be putting its owner’s (i.e. taxpayer) interests first, the CMHC seems to have been doing the bidding of private banks. Insuring high risk garbage mortgages for peanuts puts taxpayers in the firing line when tons of default start rolling in – as it is right now. The premiums collected do not even begin to make up for the impending losses taxpayers are about to suffer.
      The whole scam is designed to guarantee profits to banks that profited from creating that junk in the first place. Moral hazard up the wazoo in other words.
      Whoever’s interest CMHC is representing, it certainly isn’t the taxpayers’.

      Read Stephen Punwasi's (Co-Founder at Better Dwelling. Named a top influencer in finance and risk by Thomson-Reuters) entire article HERE.


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