"Canada is one of the few countries that backstop mortgages insured by private companies.
Backstopping all of the loans could pose a major political headache for the government. It was Finance Minister Jim Flaherty who opened the door to U.S. private insurers in his inaugural budget in 2006, agreeing to extend the guarantee to new competitors such as AIG. The initiative sparked a flurry of riskier lending that resulted in a proliferation of 40-year, zero-down home loans - so much so that the government barred the loans this summer.
In the first half of 2008, $56-billion of new mortgages, or more than half, had 40-year amortizations. Sources estimate that about 10 per cent of those were zero-down loans.
The most vocal proponent of expanding the guarantee has been Genworth, which for years held an estimated market share of about 30 per cent. The federal lobbyist registry shows that Ron McLaughlin, a former chief of staff to former Ontario premier Mike Harris and a hired consultant for Genworth, held a series of meetings with numerous officials from the Finance Department - starting at the very top. In August, the lobbyist met with Mr. Flaherty and his chief of staff, Derek Vanstone, about the guarantee, the registry shows. Two months later he met with a number of bureaucrats, including Jeremy Rudin, the assistant deputy minister in charge of the government's guarantee. The lobbyist also met with a finance policy adviser in late November." globe and mail jan 09
So convictions in 2005 against AIG and 2006 our government found them credible? Recent history suggested otherwise.