2 Min Read
* CMHC insurance losses stables, arrears improving Q3
* Volumes down as market cools
* Net income dipped in quarter on lower interest rates
TORONTO, Nov 29 (Reuters) - Canada's government housing agency said on Thursday losses on its insured mortgage portfolio held steady and its arrears rate improved in the third quarter, even as a cooling housing market meant it insured fewer home purchases and refinancings.
In its quarterly financial report, Canadian Mortgage and Housing Corp said the overall arrears rate hovered at 0.34 percent, down from 0.35 percent in the second quarter and 0.42 percent in the third quarter 2011. Losses on claims dropped C$19 million ($19.1 million), or 12 percent, to C$136 million, compared with the same period in 2011. The number of claims received were down about 9 percent.
The federal agency insures the vast majority of Canadian mortgages and guarantees mortgage-backed securities issued by Canadian banks.
Canada's housing market, which roared higher in 2011 and the first half of 2012, has begun to moderate after the government tightened rules on mortgage lending to cool the market and prevent homebuyers from taking on too much debt.
Volumes dropped in the quarter. Insured home purchase volumes fell about 6 percent, while insured refinance volumes were 22 percent lower compared to the same period in 2011, CMHC said.
Earlier in November, CMHC said in its quarterly outlook that it expected new homebuilding to moderate further in the last quarter of 2012 and into 2013, while existing home sales should hold steady and prices climb at or slightly below inflation.
CMHC's net income fell in the third quarter to C$381 million, down 9 percent from C$420 million in the third quarter of 2011, mostly due to lower interest income from its investments. Year-to-date income dipped to C$1.16 billion from C$1.18 billion in the first nine months of 2011.