Over the weekend, one of the most-read articles on this website concerned the federal housing agency's new debt-ratio policy.

The Canada Mortgage and Housing Corporation has imposed a minimum credit score of 680 and declared that nontraditional sources for down payments that boost indebtedness will not be treated as equity to obtain mortgage insurance.

In addition, the Gross/Total Debt Servicing ratio has been set at 35/42—all in response to CMHC's belief that housing prices will fall between nine to 18 percent in Canada over the next year.

This morning, one of the Canada Mortgage and Housing Corporation's private-sector competitors for mortgage insurance, Gemworth MI Canada, said in a news release that it doesn't plan to change its underwriting policy.

That means no adjustment to its debt-service ratio limits, minimum credit score, and down-payment requirements.

"Genworth Canada believes that its risk management framework, its dynamic underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure, including its exposure to this segment of borrowers with lower credit scores or higher debt service ratios," president and CEO Stuart Levings said.

CMHC's president and CEO, Evan Siddall, went on Twitter to express his thoughts.

"Before anyone celebrates, 'no change' may mean in part that @GemworthCanada could have had tighter policies already," he stated. "We don't know. @CMHC_ca welcomes competition but will not compete by encouraging over-borrowing."

https://twitter.com/ewsiddall/status/1270030223980015619

Gemworth says it's the second-largest provider of residential mortgage insurance in Canada, with a 32 percent market share.

CMHC reported in its recent annual report that its "maximum potential total risk exposure of the Mortgage Insurance segment" was $429 billion, as of December 31, 2019. 

Siddall has announced that he will be stepping down later this year as president and CEO of CMHC.

He's previously suggested that it might be prudent if the minimum down payment for a home in Canada were raised from five percent to 10 percent, given high debt levels and his expectation that housing prices will fall.