Registration - In-house Organization

Subject Matters

• Financial Institutions
• Housing
• Privacy and Access to Information

Subject Matter Details

Policies or Program

• AIC is supporting OSFI Residential Mortgage Underwriting and Mortgage Insurance Practices and Procedures encouraging Federally Regulated Financial Institutions to employ sound valuation practices to determine the value of collateral used to secure and insure mortgages. AIC has recommended that these same guidelines extend to non-federally regulated institutions or organizations offering mortgage financing to Canadians.
• AIC members must complete appraisal reports and other valuation assignments in accordance with the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP). Compliance with CUSPAP, in part, requires access to a full range of data on the subject property - including information on sales history. This data has traditionally been in the public domain but access has become limited.
• Canadian consumers require additional education on the full range of fees associated with mortgage financing and refinancing as well as the role of various professionals involved in the transaction. A disclosure of all fees incurred as part of obtaining a loan should be a mandatory requirement for all lending institutions - federally and non-federally regulated – to ensure that Canadians understand the financial commitment involved in what is often the largest investments in their lifetime. This includes the appraisal management fee and the appraisal fee.
• Downward pressure on appraisal fees and increasing demand for quicker turnaround times, combined with the restrictions on accessing good and reliable data, may ultimately drive professional appraisers away from completing mortgage finance work. This places a much higher risk for lenders and for Canadian consumers.
• Over reliance on Automated Valuation Methodologies (AVMs) poses a significant risk for Canadian consumers, lenders and the financial system. The best option to minimize the lending risk for mortgage properties is to have an on-site appraisal conducted by a third-party appraiser to determine the occupancy, the condition of the property, the neighborhood characteristics, and ultimately, the existence of the property.

Communication Techniques

• Written communication
• Oral communication

Government Institutions

• Bank of Canada
• Canada Mortgage and Housing Corporation (CMHC)
• Finance Canada (FIN)
• Financial Consumer Agency of Canada (FCAC)
• House of Commons
• Office of the Superintendent of Financial Institutions Canada (OSFI)
• Privy Council Office (PCO)
• Public Services and Procurement Canada (PSPC)

Address:
200 Catherine Street
Suite 403
Ottawa, ON  K2P 2K9
Canada

Telephone number: 613-234-6533  Ext. 222
Fax number: 613-234-7197