 Sam
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 Posted: Sat Mar 18, 2006 5:08 am Post subject: AIG to offer Mortgage Insurance in Canada |
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The Canada mortgage industry may get a boost up with the U.S financial services giant American International Group Inc. entering the several billion dollars mortgage insurance market. AIG United Guaranty, a subsidiary of the AIG is expected to provide mortgage insurance in Canada. United Guaranty is a leading home insurance provider in the United States and also operates in several other countries.
The mortgage insurance market in Canada is predominated by the Canada Mortgage and Housing Corporation (CMHC). Experts believe, with a new player coming up with its services, there will be a tough competition among others in the industry. Consequently, companies will be offering more and more creative products to lure consumers into the mortgage market. Moreover, AIG's insurance policy will help Canadians buy homes with down payments as less as 5% of the appraised property value.
The impact of the AIG introducing its services in Canada has already been felt as industry stalwarts like CMHC and the Genworth Financial are making innovative changes to their products. In an effort to maintain their positions in the market, both the companies have decided to extend their loan repayment periods to 30 and 35 years respectively. But they will be charging customers an extra premium in exchange of such services.
Canada represents the second largest mortgage insurance market next to United States with $650 billion mortgage market generating $80 billion in insurable mortgages last year. AIG United Guaranty having a market capitalization worth US$ 180-billion hopes to bring about further developments in the industry. The company will be starting off with its services once it gets the regulatory approval.
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