Banking regulator warns lenders not to become complacent about mortgages
VANCOUVER — Canada’s banking regulator warned lenders Monday not to become complacent about the way they underwrite mortgages, reminding them that low interest rates and rising property values aren’t guaranteed.
Jeremy Rudin of the Office of the Superintendent of Financial Institutions said prudent lending practices have never been more important because of the current economic environment.
“When house prices have been rising for several years and interest rates have remained at all-time lows, complacency can set in,” the superintendent said in the text of a prepared speech for a meeting of mortgage professionals in Vancouver.
“Lenders might be led to believe that weak underwriting standards will be mitigated by ever-rising collateral values.”