CMHC ends 30-year monopoly of the custody of mortgage records in Canada

December 19, 2016 9:23 pm


Canada Mortgage and Housing Corp. has effectively broken up a 30-year monopoly related to the custody of mortgage records in the country, a move the new entrant into the market says could open up the multi-billion dollar securitization business to others.

CST Trust Company, a Canadian-based entity which provides financial and administration support for the financial industry, said last week it had received certification to act as a third-party to store documents related to the mortgages of millions of Canadians.

For three decades, that custody was handled by one provider which was using a manual process to record some of the data used in connection with Canadian mortgages. Banks do hold onto the loan records but CMHC, which runs the multi billion dollar program that securitizes government backed consumer mortgages, requires a third party to hold onto documentation for risk reasons.

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