Partner Michael K. Feldman is the author of "Canadian Covered Bonds and Mortgages: A Suggested Compromise," an article for the National Banking Law Review, Volume 34, Number 6. In the article Michael explores the current state of the Canadian residential mortgage market, including his own suggestions on how lenders' dependence on government guarantees (e.g., CMHC) may be decreased. Below is an excerpt of the article.
The nature of a compromise is that no stakeholder gets everything that it wants. If the federal government is to successfully ease the reliance of mortgage lenders on government guarantees, without choking off liquidity in the residential mortgage market (which could precipitate the housing meltdown the government wishes to avoid), the only viable alternative in the near term appears to be covered bonds.
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Originally published December 17, 2015
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