From The Globe and Mail 6 Feb 2010 12:00 am –
Canada’s top bankers are pushing the government to clamp down on the mortgage market to cool off the rise in home prices. … The heads of the country’s six largest banks have privately told policy makers that they fear the wide-ranging economic fallout of a U.S. style binge-and-collapse in housing. … The chief executives of the Big Six made their point last November, when they met with Bank of Canada Governor Mark Carney. The country’s top commercial bankers, who between them control more than three-quarters of the country’s $940-billion mortgage market, said then that they wanted the government to look at far-reaching options, such as raising the minimum down payment to as much as 10 per cent and shortening the maximum amortization period to 30 years. … Mr. Carney didn’t disagree, according to people familiar with the November talks. … However, the real key is convincing Finance Minister Jim Flaherty.
Much of the population’s net worth is tied up in their houses, and the concern is that if tighter rules caused home prices to fall, consumers would rein in their spending.
“Some people talk about 10 per cent down payments, and we would have serious concerns with that,” said Jim Murphy, head of the Canadian Association of Accredited Mortgage Professionals.