On Friday, September 19, 2008 the Department of Finance issued its final mortgage insurance guarantee parameters and accompanying explanatory notes. The final guidelines follow the initial announcement on the financial guarantee for mortgage insurance providers issued July 9, 2008 by the Department of Finance.
There are two noteworthy changes from the draft parameters:
1. Elimination of reference to a Total Debt Servicing (TDS) number, replaced by a principles based approach;
2. Reduction in minimum credit score to 600 from 620. Three percent “basket” for flexibility remains;
These modifications follow discussions with stakeholders, including CAAMP. CAAMP through its submission focused its comments on the minimum credit score and welcomes the decision by the Department of Finance to adjust the credit score.
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