Phew! Genworth Canada and Canada Guaranty have decided not to follow in CMHC’s footsteps and change their programs for self-employed buyers. But is this only a temporary move?
“Upon review of the current Business for Self Program we will not be making any amendments to current product guidelines,” a Genworth letter to lenders sent Friday reads. “There will be no amendment to the maximum number of Genworth-insured properties per borrower.”
Canada Guaranty has also left its business for self program unchanged, according to the Globe and Mail.
CMHC announced in late April that effective May 30, 2014 the Crown Corporation will no longer insure second homes and self-employed individuals who do not have third party income validation.
For their part, brokers believe this opens up a competitive advantage for the two private insurers of the larger and more prevalent crown corporation.
“If you really look at how many people are self-employed in the country they really are the backbone of the economy,” Zoltan Padar told MortgageBrokerNews.ca. “That’s a good product and it has been proven over time that the two (private) insurers can be very competitive.
“CMHC cutting their business for self program will be a lesson to businesses – some lenders only work with CMHC but if I’m a lender I would start supporting the other two immediately."
Genworth, howevever, is following CMHC’s lead pertaining to vacation and secondary home programs.
“Effective May 30, 2014, the maximum number of units allowable under the Vacation/Secondary Home Program will be reduced from two units to one unit,” Genworth’s letter states.
by Justin da Rosa
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