“I used to work at CMHC, as senior advisor to the VP Finance. The debt owed by CMHC is additive to the national debt, and the entire CMHC operation is off balance sheet to the Government of Canada. As such, this constitutes financial statement fraud.”

Lending standards in Canada have been far too easy for far too long. Artificial stimulus to any market always, always, comes back to bite. -vreaa

This stunning insider account of the consequences of the CMHC from commenter howstoll 12 Feb 2010 11:18 am, after the Financial Post article ‘Canada Moral Hazard Corp.’ by Peter Foster 11 Feb 2010 -

“I used to work at CMHC, as senior advisor to the VP Finance, and as Asst. Chief Accountant, responsible for producing annual financial statements. The debt owed by CMHC is additive to the national debt, and the entire CMHC operation is off balance sheet to the Government of Canada. As such, this constitutes financial statement fraud. For example, the MIF, which is funded by premiums on long term mortgages, is owned by the Government, administered on its behalf by CMHC, but is not actuarially valued. This too is additive to the liabilities of the Government of Canada. Once upon a time, the NEP resulted in collapse of the Calgary real estate market, and CMHC ended up with something like 10,000 houses. I sat in on a meeting where big Red (Raymond Hession) told the auditor that these should be sold at any price to get rid of them, and of course the resulting costs were borne by the MIF. So much for parliamentary control over spending. CMHC, which appears to be run by the Finance Minister and his minions, should stop backstopping lending institutions, drop the amortization to no more than 25 years, set conservative borrowing standards for MIF-insured mortgages, and wind down its lending portfolio. The bottom line is that the national debt (and deficit) is severely understated, and the question is where does the AG on all this outright misrepresentation? The Liberals were never this bad, and that’s saying something.”

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