Canadian mortgage insurer asked to drop title insurance plans

Federally owned Canadian mortgage insurer Canada Mort-gage and Housing Corp. (CMHC) is the target of recent lobbying efforts from Canadian lawyers who want the Company to cease with its move to include title insurance in its package for people who buy its mortgage insurance.
However, the CMHC’s initiative has garnered strength as Housing Minister Joe Fontana is in support of the idea and, even though the Federation of Law Societies of Canada and the Canadian Bar Association’s lobbying efforts have, to date, kept the CMHC’s plans to require title insurance for its mortgage insurance clients at bay, Fontana continues to push for the proposal to move forward.
Fontana supports the CMHC title insurance plan because he claims that on occasion title is not secure for those property owners.
Despite his support, some backlash to the CMHC initiative has caused Fontana to request that the CMHC provide some scenarios for future possibilities that would support Canada’s homebuyer’s. Currently, the CMHC is preparing another paper of options for the housing minister to ponder.
The CMHC’s initiative will open the Canadian market outside Ontario to title insurance. Title insurance has only recently become more commonly utilized in Qubec and the rest of Canada’s provinces.
Qubec notaries claim that title insurance is being foisted on the Canadian real estate bar so that mortgage portfolios can be sold more easily in the U.S., where title insurance is ubiquitous.
Lawyers are concerned about the CHMC’s plan because their expertise would be rendered inconsequential, however the initiative would provide consumers with more protection.
In opposition of the plan lawyers reiterate the value of their expertise regarding real estate deal closures as they ensure choice and put pressure on title insurance companies to make sure that the products they offer are what the consumer needs. The policy, lawyers anticipate, could have a detrimental effect on the land registry system.
CMHC covers almost 70% of Canada’s mortgage insurance market and in 2004 the Company saw profits of $875 million on mortgage insurance. The agency saw $1.1 billion in premiums and paid out only $51 million in default claims.