Mortgage Experts Scrutinize Report Questioning Accuracy of CMHC’s Data

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Expert Canada mortgage broker, Marcus Arkan, puts ‘Globe and Mails’ report under unbiased analysis.

Marcus Arkan, CEO of Syndicate Mortgages and Canada housing expert, has recently shared his analysis of one of the most controversial article published this October. According to the said article, Emili, the Automated Value Model database CMHC since 1996 is using to determine the amount of money that can be lent against a residential property, has a potential margin of error that can make a significant difference to the overall data.

The article, published on 10th October, was produced by two experts, Grant Robertson and Tara Perkins, who claim to have obtained confidential documents that prove that there is a rising worry regarding flawed data as it is leading to higher home prices and serious inflation in the industry.

Sharing some of the major concerns raised by the Globe and Mail’s article, Mr. Arkan said, “If Robertson and Perkins are right than EMILI’s flawed data might really be putting lenders and borrowers at risk. On one hand it can make lenders overpay or over-borrow, while on the other hand, it can lead banks to determine wrong value of collateral against a mortgage.”

CMHC, Canada Mortgage and Housing Corporation, which is currently the largest mortgage insurer in Canada, may possibly be overlooking the market value of a property as it uses generalities to determine the risk level of a mortgage, reports Globe and Mail.

The article also points out that inaccurate data and home valuation has also made consumers pay a higher CMHC premium on insured mortgages. Mr. Arkan also agreed on the consequences of the possibly flawed data generated by Emili. He warned that the flaws might prove more impactful in the current cool market where sales are going down and prices are going up in most of the regions.

However, Mr. Arkan strictly stressed the fact that the Globe and Mail’s article has failed to provide with any substantial data that can prove a significant flaw in the data generated by Emili. According to him, the report has only provided with weak links and empty allegations. “It’s a huge allegation on one of the major federal institution. Yet, the report has failed to mention the number of times the system has been used since 1996. Also, the estimated amount of monetary loss due to Emili’s incorrect evaluation is also missing,” Mr. Arkan added.

While the Robert and Perkins controversial revelation by has sent shocks down the mortgage industry, Mr. Arkan suggest lenders and borrowers to wait for solid facts and figures before making any decision based on these revelations. He pointed out that the market position is currently not as bad as the depicted. Interest rates are still at their historic low and despite lower sales, inflation is not a major issue right now.

About Syndicate Mortgages Inc.
Syndicate Mortgages Inc. is one of the leading Canadian mortgage brokerage firms. Founded in 2008 in Ontario, the company specializes in residential, commercial and construction financing across Canada. With years of experience and expertise in the mortgage industry, and access to an array of lending institutions across Canada, Syndicate is known for finding the best mortgage rates for their customers. Syndicate has branch locations across Canada. For contact, please use the following details.

Contact Details
Syndicate Mortgages Inc.
Toll Free: (888) 646-1062
Email: info(at)smibroker(dot)com

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