After the U.S. subprime crisis takes its toll, Finance Minister Jim Flaherty starts tightening the rules. On July 9, he announces that effective Oct. 15: • the maximum length of insured mortgages is cut to 35 years • the minimum downpayment on insured mortgages is raised to five per cent
But the collapse of Lehman Brothers in September threatens to hammer bank lending and the economy. To keep it going, Flaherty announces the Insured Mortgage Purchase Program on Oct. 10. The program sees the government, via CMHC, buy nearly $70-billion worth of mortgage pools from the banks through 2009 and early 2010, so that they can lend more.