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The country’s financial industry has been focused recently on the woes of Home Capital, the Toronto-based alternative-mortgage lender whose share price plummeted after it was accused by regulators of misleading investors on an internal probe into falsified mortgage applications. McKay told analysts Thursday that he didn’t see Home Capital as posing a broader risk to the country’s mortgage market.

“I don’t view it as a positive development nor do I view it as systemic,” McKay said.

Bank of Montreal’s domestic mortgage book shrunk for the first time in two years, with average balances in the quarter slipping about 0.1 per cent to $98.3 billion from three months earlier, the Toronto-based firm said Wednesday. Bank of Montreal, which has the smallest share of the domestic market among Canada’s five largest lenders, said home loan balances rose 5.2 per cent from a year earlier, the slowest annual growth in three quarters.

“There is a little bit of seasonality in the second quarter,” CFO Thomas Flynn said in a phone interview. “It’s not as active of a mortgage season for us, and it’s also a slightly shorter quarter.”

Canadian Imperial Bank of Commerce appeared to be an outlier among Canadian lenders, with mortgage balances jumping 12 per cent from a year earlier. Still, growth from the prior quarter eased to 2.3 per cent — the slowest sequential gain in a year.

Regional Differences

Increases in Toronto home prices slowed in the first two weeks of May, according to the city’s real estate board, after climbing 25 per cent in April from a year earlier and 33 per cent in March. Last month, Ontario’s government announced plans for a 15 per cent tax on foreign buyers, following similar measures enacted in British Columbia in August.