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AIC applauds OSFI's new Guideline B-21 to strengthen Canada's mortgage insurance underwriting practices

OTTAWA, ON, Nov. 13, 2014 (GLOBE NEWSWIRE) -- The Appraisal Institute of Canada (AIC) congratulates the Office of the Superintendent of Financial Institutions (OSFI) on the recent release of Guideline B-21 Residential Mortgage Insurance Underwriting Practices and Procedures. The new Guideline complements those governing mortgage lenders (Guideline B-20) by outlining the principles for effective governance and internal risk management within federally-regulated mortgage insurers.



"AIC applauds OSFI for their continuing leadership in advancing financial regulations that continue to enhance the stability of Canada's financial system," says Scott Wilson, president of AIC. "A holistic approach to underwriting mortgage insurance that includes the assessment of the borrower's ability and willingness to repay the mortgage; the use of various methodologies to value collateral; and, a focus on lender processes for acquiring mortgage insurance, is a systematic and effective way to help mitigate risk."

AIC is particularly pleased that the Guideline B-21 calls for mortgage insurers to rely on a combination of methods to determine the value of the properties they insure. Rather than an over-reliance of a single method of property valuation, mortgage insurers must assess the risks they are assuming and then select the most appropriate valuation method to mitigate this risk, ranging from on-site appraisals – carried out by a qualified professional – through to automated valuation models.

Guideline B-21 also acknowledges the requirement for federally-regulated mortgage insurers to engage an independent third-party appraiser that is "designated, licensed or certified to meet qualification standards." Engaging a qualified appraiser ensures compliance to recognized professional appraisal standards and provides added assurance that the appraisal methodology is accurate and rigorous.

"AIC Members complete their work in compliance with the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) which are highly recognized and respected valuation standards on both national and international levels," states Keith Lancastle, CEO of the AIC. "We look forward to working with Canadian federally-regulated mortgage insurers to help them fulfill their requirements as outlined in Guideline B-21 and to continue to collaborate on initiatives that will ensure the stability of Canada's economy and real estate market."

For more information about Guideline B-21, visit http://www.osfi-bsif.gc.ca/eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/b21.aspx.

About AIC

The Appraisal Institute of Canada (AIC) is a leading real property valuation association with over 4,900 members across Canada. Established in 1938, the AIC works collaboratively with its 10 provincial affiliated associations to grant the distinguished Accredited Appraiser Canadian Institute (AACI™) and Canadian Residential Appraiser (CRA™) designations. AIC Designated Members are highly qualified, respected professionals who undertake comprehensive curriculum, experience and examination requirements. Our members provide unbiased appraisal, appraisal review, consulting and reserve fund study services on all types of properties within their areas of competence. For more information, go to AICanada.ca.

CONTACT: Sheila Roy, Director, Marketing & Communications T: (613) 234-6533 x224 M: (613) 863.0127 E: sheilar@aicanada.ca W: AICanada.ca

Source:Appraisal Institute of Canada