Reinforcing Prudent Residential Mortgage Risk Management

OSFI is publishing a letter to advise federally regulated financial institutions (FRFIs) that it is tightening its supervisory expectations for mortgage underwriting in light of the evolving housing market. The letter identifies a number of areas that warrant close attention by mortgage lenders and insurers.  

OSFI’s supervisory scrutiny for residential mortgage underwriting will place an even greater emphasis on confirming that the internal controls and risk management practices of mortgage lenders and insurers are sound and take into account market developments.

The letter also provides an update to industry on initiatives announced by OSFI in a December 2015 letter aimed at strengthening the measurement of capital held by the major banks and mortgage insurers.