MortgageBroker mbabc.ca winter 2014 | 37
governmentguidelines
fi nal version of the Guideline on Mortgage
Underwriting Principles (B-20) on June 21,
2012 that sets out expectations for prudent
residential mortgage underwriting. e
guideline, Residential Mortgage Underwriting
Practices and Procedures (B-20), builds on
OSFI's own domestic supervisory work and
the Financial Stability Board's international
Principles for Sound Residential Mortgage
Underwriting Practices (released in April
2012), but has been adapted to Canadian
circumstances.
e fi nal Guideline is the result
of a thorough consultation process, a sum-
mary of comments received, and the
responses to them.
e Guideline applies to all federally
regulated fi nancial institutions engaged in
residential mortgage underwriting and/or
the acquisition of residential mortgage loan
assets in Canada. It complements relevant
provisions of the Bank Act, Trust and Loan
Companies Act, the Insurance Companies Act,
and the Cooperative Credit Associations Act, as
well as the Government of Canada's mortgage
insurance guarantee framework.
e Guideline outlines fi ve main principles
for prudent mortgage underwriting and/or
acquisition. (see "Residential Mortgage Under-
writing Practices and Procedures", page 35)
With growing household indebtedness, the
potential adverse consequences of erosion in
lending practices are growing. e
OSFI took
action to ensure fi nancial institutions have
a good understanding of
OSFI expectations
when it comes to underwriting mortgages
and Home Equity Line of Credit.
Federally regulated fi nancial institutions
had to fully comply with the guideline no
later than fi scal year-end 2012, with the
relevant public disclosures in Q1 2013.
For further information please go to:
http://www.osfi -bsif.gc.ca■
Institutions Regulated by OSFI
Banks 80
Trust companies 47
Loan companies 19
Cooperative credit associations 6
Cooperative retail associations 1
Life insurance companies 67
Fraternal benefi t societies 14
Property and casualty insurance 172
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