CMHC to Give Otttawa Special 4 Billion Dollar Dividend

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Hogwild
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CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by Hogwild »

CMHC to Give Ottawa a Special 4 Billion Dollar Dividend after Hiking Mortgage Insurance Premiums
http://business.financialpost.com/real- ... 3669b43245

This comes across to me as propaganda/signalling that "hey, the housing market is healthy(ier than you think).
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by kcowan »

or maybe proof that CMHC is overcharging for its insurance?
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adrian2
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by adrian2 »

kcowan wrote: 29 Jun 2017 14:41 or maybe proof that CMHC is overcharging for its insurance?
Nope, it just proves that so far, the going's been good.
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by kcowan »

adrian2 wrote: 29 Jun 2017 14:43
kcowan wrote: 29 Jun 2017 14:41 or maybe proof that CMHC is overcharging for its insurance?
Nope, it just proves that so far, the going's been good.
Insurance companies are paid to anticipate the future. Maybe this just proves that they are political hacks?
:roll:
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by max88 »

I side with the overcharging argument :twisted: ... that's unfair. Let's ditch CMHC, to make it fair. :thumbsup:
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

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kcowan wrote: 29 Jun 2017 14:41 or maybe proof that CMHC is overcharging for its insurance?
They're not a monopoly, so nothing's stopping other insurers from charging less. There are no purely private insurers willing to enter the market at all (Genworth et. al. are backed 90% by the government), so that tells me CMHC is charging too little, not too much.
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by SQRT »

Kind of ruins the argument that CMHC is in place to support or "bail out" the banks. Don't forget that the banks also pay CDIC premiums which also have totalled in the billions over the years. Also capital taxes.
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by AltaRed »

adrian2 wrote: 29 Jun 2017 14:43
kcowan wrote: 29 Jun 2017 14:41 or maybe proof that CMHC is overcharging for its insurance?
Nope, it just proves that so far, the going's been good.
I agree it likely just demonstrates loan losses have been less than expected. From my perspective, it is important that CMHC (and thus mortgagors) pay for the ultimate taxpayer backstop because when all hell breaks loose, the Feds and thus the taxpayer is likely NOT to let CMHC collapse.
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by kcowan »

AltaRed wrote: 02 Jul 2017 11:23
adrian2 wrote: 29 Jun 2017 14:43
kcowan wrote: 29 Jun 2017 14:41 or maybe proof that CMHC is overcharging for its insurance?
Nope, it just proves that so far, the going's been good.
I agree it likely just demonstrates loan losses have been less than expected. From my perspective, it is important that CMHC (and thus mortgagors) pay for the ultimate taxpayer backstop because when all hell breaks loose, the Feds and thus the taxpayer is likely NOT to let CMHC collapse.
But would it not be prudent for an insurer to hang on to their reserves during this bubble-popping period? After we are through it, then fine. But nobody thinks it has even begun!
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by AltaRed »

Probably, but JT obviously wants his hands on the money to put it on the positive side of the general ledger.
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Re: CMHC to Give Otttawa Special 4 Billion Dollar Dividend

Post by NorthernRaven »

CMHC stress tests from last year are here. They could take some pretty nasty hits and still have double their minimum regulatory guideline capital levels. They had close to $22 billion in equity at last quarter, so this is only peeling off about 15% over the next couple of years. It doesn't do much good sitting on CMHC's books if it isn't going to be used.
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