Mortgage lender woes may cool Canada housing market

Toronto

THE funding crisis at mortgage lender Home Capital may spark a welcome cooling in Canada's housing market and take pressure off policymakers confounded by the hot market - as long as the crisis does not turn into contagion, analysts said on Tuesday.

The troubles at Home Capital Group Inc are about liquidity rather than mortgage quality - it is not a US-style subprime mortgage crisis - but the shift in sentiment just a week after Ontario unveiled more measures to cool housing has investors in the mood to sell.