I have received a number of Panic Calls from clients with regard to Flaherty’s announcement this morning—DO NOT PANIC. There was nothing new in the announcement–most of what he had to say–so called new rules , are rules the mortgage industry as been working with for more than a year.

The only totally new item was in the area of refinances–where its official you cannot take out more than 90% of the equity in your house. Even this is really not new , as is has been very difficult for more than a year to take out more than 90% of the equity, unless you were an extremely strong applicant.

With regard to the purchase of investment and rentals–here again the rule the industry has lived by for the last year or more is 20-25% down.

So theres nothing really new in any of this–simply acknowledging the rules all ready in place.

This morning, Federal Finance Minister Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010. CAAMP and it’s members was actively engaged in the discussions around these changes which are as follows:

1. All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;

2. The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one’s home;

3. Non-owner occupied properties will require a minimum down payment of 20%.

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.

We will continue to monitor developments including transition rules and update you accordingly