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April 30th, 2008

BoC governor Carney warns about loosening mortgage standards in Canada

“The costs for the banks have increased and yet there still remains an operating band (for other loans), except for five-year mortgages”

– Bank of Canada governor Mark Carney is concerned about the loosening standards in the Canadian mortgage system, particularly the growing popularity of mortgages amortized over a 40-year period.

Carney told a Commons committee Wednesday that the central bank is watching developments in the mortgage lending sector closely to ensure that the abuses seen in the U.S. subprime market do not occur in Canada.

“We have concerns with the increased prevalence of very long amortization and higher value mortgage products,” he said. Read more



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