Consumer insolvencies in Canada have risen to their highest level in three years.
In March, 11,768 people filed insolvency paperwork, the highest monthly figure since 2019, according to data from the Office of the Superintendent of Bankruptcies. That’s up from 9,222 in February.
The figures include both bankruptcies and proposals to creditors, which is an agreement negotiated with the borrower’s creditors through a Licensed Insolvency Trustee.
For the full-year period ending March 31, 2023, consumer insolvencies were up nearly 20%. The increase was driven by a 29.3% increase in consumer proposals, while consumer bankruptcies were down 4.7%.
Mortgage delinquencies, meanwhile, remain just off their all-time low at 0.15% as of February.
Reverse mortgage provider Bloom closes $7M financing round
Bloom Finance Company has announced the closing of a $7-million Series-A financing round led by SixThirty Ventures.
Bloom, a fintech company that launched its reverse mortgage product in 2021, said it will use the new funding to accelerate its investments in product and process innovation, and continue its geographic expansion.
The company currently offers its home equity release solutions in Ontario and British Columbia, but has plans to expand to other provinces. Since launching in 2021, Bloom has completed nearly $100 million in reverse mortgage volume.
“For an ageing demographic that has generally under-saved, home equity release represents a powerful, supplemental income solution,” Atul Kamra, SixThirty’s Managing Partner & Bloom board director, said in a release. “Bloom’s funding partnerships and rapid growth are proof positive of the market demand.”
Bloom says it has been gaining market share in the traditionally bank-dominated reverse mortgage industry. It credits its “intense focus on leveraging technology” to offer the “simplest and most transparent equity access solutions” to clients and their mortgage professionals.
Rhys Mendes appointed Deputy Governor of the BoC
The Bank of Canada has named its newest Deputy Governor, Rhys Mendes. Mendes will begin serving in the new role effective July 17, 2023.
In a release, the Bank said Mendes will oversee the Bank’s economic and financial research, its analysis of international economic developments, and he will serve as the Bank’s G7 and G20 Deputy.
“I am delighted to welcome Rhys Mendes back to the Bank and onto Governing Council,” said Governor Tiff Macklem. “We will benefit greatly from his experience and expertise in economic modelling, monetary policy framework design, and international policy issues. In addition to his economic insights, Rhys brings seasoned leadership.”
Since 2021, Mendes has been on secondment to the Department of Finance as Assistant Deputy Minster. He joined the Bank of Canada in 2004 and has held a variety of increasingly senior positions throughout his term.
CMHC CEO rejects idea of amortization extensions
The Canada Mortgage and Housing Corporation (CMHC) is against the idea of extending amortization periods for new mortgages.
CMHC’s CEO Romy Bowers made the comments in an interview with the Globe and Mail, saying that while such measures would help reduce monthly mortgage payments, they would also stoke housing demand and put upwards pressure on prices.
CMHC-insured mortgages currently have a maximum 25-year amortization period.
“It’s better to focus on increasing the supply versus making it easier for people to borrow more money,” Bowers told The Globe and Mail. “We feel, from a policy perspective, it’s probably not the best move in a supply constrained environment.”