OTTAWA – Canada Mortgage and Housing Corp. president and CEO Karen Kinsley is stepping down after a quarter century with the provider of mortgage loan insurance.
Kinsley announced the move in what she described as her 10th and final message for CMHC’s annual report and at a time that Ottawa has been moving to reduce taxpayer exposure to housing market debt.
“CMHC has been my home away from home for 25 years and I cannot adequately express how proud I am of our achievements,” Kinsley wrote.
“We have met and often exceeded expectations — whenever called upon, in whatever situation — through the passion and professionalism of current and former CMHC employees.”
She noted that of its “many accomplishments” CMHC could be particularly proud of its pioneering role in mortgage loan insurance and securitization guarantee programs that have promoted an accessible and competitive mortgage market throughout Canada.
“Many have credited the long-standing presence of CMHC for helping Canada’s housing finance system withstand the liquidity crisis of 2008 and avoid many of the practices that led to issues in other housing markets around the world,” she added.
In 2012, CMHC insured $66 billion in loans for 386,222 units, below its plan of $94.5 billion and 550,335 units.
“This variance was largely due to lower portfolio insurance volumes but also due to general economic and housing market conditions. Successive changes to the rules governing insured mortgages have also reduced the size of the high-ratio homeowner market,” she said.
The federal government has been moving to crack down on what many feel has been an overheated housing market, with Finance Minister moving four times in as many years to tighten lending rules.
Last month, Finance Minister Jim Flaherty tabled changes to place CMHC under control of the Office of the Superintendent of Financial Institutions.
Flaherty said the move was necessary because CMHC — which insures mortgages when homebuyers make a down payment of less than 20 per cent — had become a significant financial sector player in Canada and it was appropriate that it meet the high standards of soundness demanded by OSFI.
The CMHC guarantee, which essentially removes bank exposure to riskier mortgages, helped stabilize Canada’s housing market during the 2008-09 credit squeeze by encouraging banks to keep lending. But many believe it is now contributing to what have become overheated housing market conditions, sky-high home prices and record high household debt.