* CMHC insurance losses stables, arrears improving Q3
* Volumes down as market cools
* Net income dipped in quarter on lower interest rates
TORONTO, Nov 29 Canada's government housing
agency said on Thursday losses on its insured mortgage portfolio
held steady and its arrears rate improved in the third quarter,
even as a cooling housing market meant it insured fewer home
purchases and refinancings.
In its quarterly financial report, Canadian Mortgage and
Housing Corp said the overall arrears rate hovered at 0.34
percent, down from 0.35 percent in the second quarter and 0.42
percent in the third quarter 2011. Losses on claims dropped C$19
million ($19.1 million), or 12 percent, to C$136 million,
compared with the same period in 2011. The number of claims
received were down about 9 percent.
The federal agency insures the vast majority of Canadian
mortgages and guarantees mortgage-backed securities issued by
Canada's housing market, which roared higher in 2011 and the
first half of 2012, has begun to moderate after the government
tightened rules on mortgage lending to cool the market and
prevent homebuyers from taking on too much debt.
Volumes dropped in the quarter. Insured home purchase volumes
fell about 6 percent, while insured refinance volumes were 22
percent lower compared to the same period in 2011, CMHC said.
Earlier in November, CMHC said in its quarterly outlook that
it expected new homebuilding to moderate further in the last
quarter of 2012 and into 2013, while existing home sales should
hold steady and prices climb at or slightly below inflation.
CMHC's net income fell in the third quarter to C$381
million, down 9 percent from C$420 million in the third quarter
of 2011, mostly due to lower interest income from its
investments. Year-to-date income dipped to C$1.16 billion from
C$1.18 billion in the first nine months of 2011.