Canada Mortgage and Housing Corporation has released its 2012 Annual Report.
“This report includes in-depth information on CMHC’s mortgage loan insurance and securitization activities, which have promoted an accessible, competitive and stable mortgage market throughout Canada,” says Karen Kinsley, president and CEO of CMHC.
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She adds, “The quality of the loans in our insured portfolio underscores our ongoing commitment to robust underwriting and risk management practices.”
A significant percentage of CMHC’s high ratio homeowner units are in rural areas and smaller communities. Collectively, these types of loans made up 47.2% of its total rental and high-ratio homeowner business in 2012.
Throughout last year, mortgage loan insurance activities accounted for most of CMHC’s net income of $1.7 billion. Over the past decade, CMHC has contributed $17 billion towards improving Canada’s fiscal position.
The organization’s total insurance in force—which represents the aggregate exposure of the mortgage loan insurance activity—stood at $566 billion as of December 31, 2012. This was virtually unchanged from the beginning of the year, and within CMHC’s $600 billion limit.
The majority of borrowers of homeowner loans had high credit scores in 2012, and the average borrower equity in CMHC’s insurance portfolio is 45%, up slightly over 2011.
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Other key figures show mortgage loan insurance losses on claims decreased by $85 million to $532 million in 2012. In addition, the arrears rate of 0.35% is low and the trend is declining.
In 2012, CMHC says it was tasked with administering the legal framework for Canadian covered bonds. A total of $119.5 billion in securities backed by insured residential mortgages were guaranteed by the organization in 2012, benefitting both large and small lenders.
The Federal government, through CMHC, also provided about $2 billion in support of housing programs in 2012. About $367 million was invested in affordable housing programs throughout the year.