Mortgage Rates & Mortgage Broker News in Canada

Mortgage Rules Help Fuel Rent Hikes

Young adults have to live somewhere. And when they outgrow their parents' house and join the workforce, the choices are typically to rent or buy.

But for many first-time buyers, the choices narrowed last July. That’s when Ottawa reduced the maximum allowable amortization and gross debt service ratio on insured mortgages. This immediately made it harder for younger buyers to qualify.

Because 80% of first-timers need mortgage insurance (and therefore have to play by insurer’s rules), that put many home ownership dreams on the back burner. In fact, the Canadian Association of Mortgage Professionals (CAAMP) estimated last fall that almost 17% of high-ratio borrowers would no longer qualify due to the last few rounds of rule changes.

As a result, tens of thousands of would-be purchasers have been (or will be) forced to rent, or stay renting. And with that jump in rental demand has come an expected byproduct: higher rents.

Buyer Protection Plan - Revisited

Home sellers can get pretty anxious when they list their property and weeks go by with no bites. Some become willing to try almost anything, within reason, to generate buyer interest.

That's where the Buyer Protection Plan (BPP) comes in. When all else fails and price drops are unpalatable to the seller, the BPP provides another option.

Default Criteria & Amortizations

Fitch Ratings, one of the big three North American credit rating agencies, published its mortgage loss model today. It’s basically a bunch of formulas and assumptions that can be used for estimating losses on prime mortgages.

Fitch researched hundreds of thousands of mortgages and settled on six primary factors that drive defaults. They are (in order of significance):

Mortgage Career of the Week

 

 

 

Company: Canada Guaranty
Position Title: Loss Management Associate
Previous Experience Required: Minimum 2 years in the financial or high-ratio mortgage insurance areas
Licences or Registrations Required: No
Location of Positions: Toronto, Ontario
Applicants may contact: Please submit resumes to careers@canadaguaranty.ca Subject line: Loss Management Associate

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Click on the position title above for more information. Advertise your mortgage job opening today! Click here to post. Or browse CMT's Mortgage Jobs Database

OSFI Considering Mortgage Amortization Changes

Federal policy-makers are exploring additional mortgage rule tightening, CMT has confirmed.

A spokesperson from Canada’s banking regulator, The Office of the Superintendent of Financial Institutions Canada (OSFI), verified that it is looking at the issue of limiting amortizations to 25 years on conventional mortgages (those with 20%+ equity). Currently, those “low-ratio” mortgages can have amortizations up to 35 years.

Congratulations CMA Recipients!

Yesterday was the 8^th annual Canadian Mortgage Awards (CMAs), a top-notch gala event by all accounts. In all, 21 winners received CMA honours.

Given how deep the talent pool is in our industry, each recipient deserves all the acknowledgement they receive. In fact, making it to the judging round is an accomplishment in itself so every finalist should also feel honoured.

Headline awards of the night included:

Death Sentence for Extended Amortizations?

Housing commentator Garth Turner cites insider info that long-term amortizations are about to go extinct, at least where the federal government has jurisdiction.

In a blog post today, he writes:

The Market Pulse from Genworth

Last year’s mortgage regulations shrank the overall high-ratio mortgage insurance market by about 15%, according to recent estimates from Genworth Canada.

Those rule changes also eliminated high-ratio refinances and contributed to a 15% drop in housing sales last quarter versus Q1 2012.

Genworth CEO Brian Hurley spoke today on BNN about the pulse of the market. Here are some of his insights of note (our comments in italics): 

Mortgage Careers of the Week

 

Company: SafeBridge Financial Group
Position Title: Marketing Coordinator
Previous Experience Required: 1 to 2 years
Licences or Registrations Required: No
Location of Positions: Toronto, Ontario
Applicants may contact: paula@safebridgefinancial.com

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Company: CML Canadian Mortgage Lender
Position Title: Mortgage Associates
Previous Experience Required: No
Licences or Registrations Required: Licensed mortgage associate
Location of Positions: Across Alberta
Applicants may contact: frank.petrin@cmlmortgages.com

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Click on the position title above for more information. Advertise your mortgage job opening today! Click here to post. Or browse CMT's Mortgage Jobs Database

An Avoidable Potential Conflict

Last week the Toronto Star ran this story. It was a mostly pro-mortgage broker article.

It featured Christina Cleveland, a first-time home buyer portrayed as someone learning the benefits of brokers, and Raj Babber, a broker and a director of the Independent Mortgage Brokers Association of Ontario.

The story landed immediately in the crosshairs of real estate critic Garth Turner.