Both GMAC Residential Funding of Canada and MCAP Financial announced that they would be suspending subprime lending due to secondary market woes in the United States.
MCAP Financial, which originates subprime loans through its Eclipse Division, said it has temporarily stopped funding subprime loans, but that loans already in the system would be continue to be honored.
The Canucks were quick to point out that the halt in production had nothing to do with their celebrated economy.
The memo made it quite clear who was at fault for the ensuing credit crunch.
It said Canadian real estate and mortgage markets continue to perform much better than those in the United States, and also took a swipe at the States for causing the credit crunch.
GMAC Residential Funding also announced that it would no longer originate subprime mortgages amid recent credit worries.
In a written statement, John Schipper, senior vice president of mortgage lending and sales said GMAC ResCap will continue to reduce nonprime lending and restrict the origination of mortgage products with poor market liquidity.
It is expected that many other Canadian lenders will come forward in the coming weeks to make similar announcements as the secondary market continues to dry up.