Will CMHC Risk Fees Hurt Home Buyers? + MORE Dec 2nd

Last Friday, it was announced the Department of Finance is implementing further measures to minimize taxpayer risk posed by the Canadian Housing and Mortgage Corporation, the Crown entity that provides high ratio home buyers with mortgage default insurance.
As of January 1, 2014, the CMHC must pay the Canadian government 3.25 per cent of their high-ratio mortgage insurance business, and 10 basis points (0.10 per cent) of their low ratio portfolio. Based on their Q3 results and projected future numbers (the CMHC currently ensures $560 billion in default insurance), it is estimated these new CMHC risk fees will cost $50 million annually.
However, the CMHC assures home buyers that a credit crunch isn’t in the cards, as the fees aren’t expected to cut into their bottom line. “We certainly don’t anticipate it to have any impact on the availability of mortgage funding, so we don’t see it as a material event,” said CMHC Chief FInancial Officer Brian Nash in a statement to reporters…

Ontario on Wednesday passed new legislation with the goal of protecting consumers when it comes to door-to-door sales pitches, debt settlement services, real estate transactions, and real estate fees and commissions. The Stronger Protection for Ontario Consumers Act focuses on these four issues:

Door-to-door water heater rentals and sales
Debt settlement service fees
Real estate fees and commissions
Property bidding wars

Door-to-door water heater rentals and sales
Apparently these porch-side sales pitches were among the most prevalent grievances among consumers last year, with the government receiving more than 2,240 complaints and inquiries about companies offering water heater rentals. These companies often present consumers with hard-to-understand contracts, and salespeople may use aggressive, high-pressure sales tactics, according to the government. The act will crack down on these companies by:

Doubling the existing 10-day cooling-off period to 20 days for water heaters, providing consumers with more time to consider their decision
Banning delivery and installation of water heaters during the new 20-day cooling-off period
Allowing rules to require sales to be confirmed by making scripted and recorded verification calls to the customer within the 20-day cooling-off period
Providing new consumer protections when the rules are not followed, such as requiring the supplier to pay all costs and cancellation fees that a consumer incurs when the 20-day cooling-off period is not observed

Debt settlement service fees
Some of the 18 companies and 34 credit counselling providers offering debt settlement services in Ontario charge customers large upfront fees and describe the services they will provide in hard-to-understand contracts…