Measures to tighten mortgage lending could be in place by January
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The high levels of consumer debt and high real estate prices are a concern which cannot be ignored.
That was a key message in a speech Tuesday by banking regulator Jeremy Rudin, superintendent of financial institutions.
"We are not waiting to see those risks crystallize in rising arrears and defaults before we act," Mr Rudin stated.
Mr Rudin was speaking to an audience of the Economic Club of Canada in Toronto and said that OSFI will set out the measures it intends to take by the end of October.
Implementation of the mortgage lending regulations, known as B-20, will then take place within two to three months, which means tighter lending rules could be in place by January.
Central to the changes are the requirement for stress tests for all mortgages, whether they are insured or not.
The measures were set out in July but are expected to include some modifications when announced later this month.
However, there are concerns in the real estate and banking industries that the tighter underwriting requirements will be more harmful than helpful and could have a negative impact on housing affordability.
There is also a risk that some borrowers will opt for loans from unregulated lenders however Mr Rudin said that this does not preclude OSFI from taking action within its remit.
That was a key message in a speech Tuesday by banking regulator Jeremy Rudin, superintendent of financial institutions.
"We are not waiting to see those risks crystallize in rising arrears and defaults before we act," Mr Rudin stated.
Mr Rudin was speaking to an audience of the Economic Club of Canada in Toronto and said that OSFI will set out the measures it intends to take by the end of October.
Implementation of the mortgage lending regulations, known as B-20, will then take place within two to three months, which means tighter lending rules could be in place by January.
Central to the changes are the requirement for stress tests for all mortgages, whether they are insured or not.
The measures were set out in July but are expected to include some modifications when announced later this month.
However, there are concerns in the real estate and banking industries that the tighter underwriting requirements will be more harmful than helpful and could have a negative impact on housing affordability.
There is also a risk that some borrowers will opt for loans from unregulated lenders however Mr Rudin said that this does not preclude OSFI from taking action within its remit.
