Which Canadian mortgage default insurer is a federal Crown corporation?
Correct Answer
C) CMHC
CMHC (Canada Mortgage and Housing Corporation) is a federal Crown corporation; the CMHC Act makes it an agent of the Crown for all purposes. Sagen (formerly Genworth's Canadian business) and Canada Guaranty are privately owned insurers, although their policies also carry a federal guarantee under the Protection of Residential Mortgage or Hypothecary Insurance Act.
Why This Is the Correct Answer
CMHC is correct because it is the only one of the listed insurers that is owned by the federal government. Section 5(1) of the CMHC Act makes the corporation an agent of the Crown for all purposes, so its insurance obligations are obligations of the Crown itself. The other insurers are private companies whose policies are protected by a separate, partial federal guarantee.
Why the Other Options Are Wrong
Deep Analysis of This Mortgage & Real Estate Finance Question
Background Knowledge for Mortgage & Real Estate Finance
Memory Technique
Exam Tip for Mortgage & Real Estate Finance
Real World Application in Mortgage & Real Estate Finance
Common Mistakes to Avoid on Mortgage & Real Estate Finance Questions
Key Terms
More Mortgage & Real Estate Finance Questions
An Alberta first-time buyer makes their first Home Buyers' Plan (HBP) withdrawal from their RRSP in 2026. What is the maximum withdrawal, and when must repayment begin?
What happens to monthly payments in a variable rate mortgage when interest rates increase, assuming the mortgage has a fixed payment structure?
What is the primary purpose of the B-20 stress test for uninsured mortgages?
An Alberta buyer wants to purchase a property for $600,000 with a down payment of $50,000. How is the minimum down payment calculated for this price?
A borrower has a $400,000 mortgage at 5% annual interest, amortized over 25 years. If they make an additional principal payment of $10,000, what is the primary benefit?
- → A client is purchasing a $750,000 home. What is the minimum down payment required?
- → A borrower's variable rate mortgage has reached the trigger point. The outstanding balance is now higher than the original mortgage amount despite making regular payments. What is the most likely explanation and immediate consequence?
- → A self-employed borrower with irregular income is applying for a mortgage. Which documentation requirement is most likely to be emphasized by the lender?
- → In Ontario, under what circumstances can a mortgage lender place a property under Power of Sale proceedings?
- → Under what circumstances might a conventional mortgage (with 20% or more down payment) still be covered by mortgage default insurance?
- → Which scenario would require mortgage default insurance?
- → Which organization is the primary provider of mortgage default insurance for high-ratio mortgages in Canada?
- → Under CMHC's current requirements for homeowner mortgage loan insurance, what is the maximum Total Debt Service (TDS) ratio?
- → A client has a gross annual income of $80,000 and monthly debt payments of $500. Using a 32% gross debt service ratio, what is their maximum allowable monthly housing payment?
- → What happens to mortgage payments when interest rates decrease on a variable rate mortgage with fixed payments?
People Also Study
Real Property Law
60 questions
Contracts & Agreements
60 questions
Agency & Professional Ethics
60 questions
Land Use & Planning
50 questions