Residential hypothecary (mortgage) lending constitutes an important activity for many financial institutions and this market plays a key role in the economy. Poor lending practices could cause serious consequences for institutions and give rise to a systemic risk that threatens financial market stability.
In this context the AMF is issuing this guideline to set out its expectations regarding the granting of residential hypothecary loans stemming from the legal requirement to follow sound and prudent management practices. The goal is to control the risks posed by this activity and better protect borrowers and investors.
The AMF expects financial institutions that originate such loans or acquire assets related to such loans to adhere to the principles set out in this guideline. This will facilitate some of their operations, including when deciding to use hypothec insurance for their residential hypothecary loans or to securitize their residential hypothecary loans in order to generate liquidities.
