CMHC Warns Banks Of Coming Mortgage Defaults

A significant number of homebuyers think housing risk disappeared, because defaults haven’t jumped. Defaults can’t rise right now, because lenders stopped collecting payments from almost a fifth of mortgages. The CMHC reminded lenders they “always anticipated a delayed impact: weakening in late 2020 and 2021 once government income supports unwind, bankruptcies increase and unemployment starts to bite.”

“borrowing creates a very significant economic drag on our outlook.” Since debt is future income used today, expansion of household debt will slow future economic activity