Another great month of Data for the Calgary Real Estate board.  This month i gp into more detail and ook at some graphs so we can see the trend line over time.  Let me know your thoughts.

March 09 CREB Analysis from Greg Williamson on Vimeo.

Genworth Financial announced that they are making sweeping changes to tighten up their credit requirements for insured motgages.

1. Bringing in a new credit beacon score requirement for people buying a high rise apartment condo (over 4 floors).

• 660 for Loan to Values of 85% to 90%
• 700 for Loan to Value of 90%.01 to 95%

2.   Increasing Credit Beacon score requirements for it’s business for self Alt. A program

• increasing from 650 to 700 (that is really a big jump, believe me) for 85.01% to 90% LTV
• increasing from 650 to 680 for LTV of 80.01% to 85%
• eliminating business for self applications with LTV over 90%.  Previously they allowed up to 95%

3.  Increasing Credit Beacon Score Requirements for it’s Cash-Out Refinance Program

• increasing from 650 to 700 for LTV 90.01% to 95%
• increasing from 600 to 660 for LTV 85.01% to 90%

4.  Lowering it’s maximum allowed Total Debt Service ratio for all applications from 44% to 42%

5.  Elimination of both the Credit Assist program and their high ratio Rental program

The only thing Genworth is saying is that of course they are blaming the economy for the decision to tighten their guidelines, which on the surface makes sense.  Except that they are fightng the fight of their lives to stay relevant and get ANY market share let alone their fair share due to the unfair competition that is happening in the insurance sector.

This unfair competition results from the fact that CMHC has a 100% gurantee from the government and Genworth has a 90% government guarantee.  Therefore Investors who accept a Genworth insurance product will have to keep 10% on the books to cover any loss, in these tough capital times that is to much for many mortgage companies to do when they can just easily go to CMHC which they do.

Back to Genworth, so given this uphill battle why make it even more difficult to get business by tightening yout guidlelines against CMHC?

The answer?  Only if they know from other sources that CMHC is about to tighten up as well, OR they are trying to appease the government in order to get the 100% guarantee that they have been voraciously lobbying for?

Time will tell…

What do you think of these changes, and how will it affect our market?  Do you think CMHC will follow suit?