Canadian Mortgage News & Canada's Mortgage Trends

Reverse Mortgages Not For All

...especially if you can qualify for a home equity loan or might someday need to move.

Here's an overview by The Star Phoenix.

A Walmart Mortgage?

The retail titan is setting it's sights on financial services.  There's speculation (Source:  National Post) Walmart Canada may offer mortgages through a partnership with a Canadian bank.  We'll keep our ears open.

Shocking Revelation. Cheaper Mortgage Payments May Boost Home Prices

As longer amortizations make mortgage payments more affordable people are realizing how this might just drive up home prices.

The latest indication was a scathing letter from our Bank of Canada Governor to the Canadian Mortgage and Housing Corporation, the biggest mortgage insurer in Canada.  The Globe and Mail quotes the Governor, David Dodge as calling CMHC's new mortgage products "very unhelpful" in the Bank of Canada's attempts to keep inflation at 2%.

We agree.  But good or bad, it's tough to fight the insatiable consumer demand for these products.

On a side note, shouldn't Dodge's comments be directed at the Canadian mortgage insurance industry as a whole?  CMHC isn't the only one offering amortizations over 25 years. 

Canada's new crop of private insurers will likely get a lot more aggressive with new mortgage products than trusty ol' CMHC.  CMHC's interest-only mortgage doesn't lower borrower qualification criteria, for example, but AIG, PMI, and other new insurers might not be so conservative.

Full Globe and Mail story

Use Real Live Appraisers

Real Estate Marketing describes how third party appraisers can help prevent mortgage fraud.  REM Story

Pay Down Debt With Equity

Got debt?  This Naniamo News Bulletin Story discusses two common ways out: HELOC's and mortgage "refis".  If you're wondering about the cost or how easy they are to arrange, just call or email me.

GTA Still Has Condo Values

In a city where the average home price is about $350,000, 68% of resale condos in downtown Toronto are offered under $300,000.  10% are available for under $200,000.  National Post Story

U.S. Home Values Nosedive in September

American home prices plunged 9.7% in September versus the previous year, the sharpest annual decline in 35 years.

That's not exciting news for us.  Until the U.S. market bottoms out, there might be little bounce to Canadian home prices.  The exceptions may be certain demand-driven regions in western Canada.

AP Story

U.S. Foreclosures Skyrocket

When variable (or teaser) rates rise and payments go up, it's not a pretty picture for the cash strapped.

That's what's happening south of the border where mortgage analysts predict 1.3 million foreclosures this year.  That's a staggering 53% more than in 2005.

MSNBC Story

Tight Rental Market

Demand for rental housing in Canada is about 45,000-50,000 units a year, but only 10,000 rentals are actually being built annually according to CMHC.  (Source: Times Colonist).  On the bright side, if you can't find a rental, it's never been easier to get a mortgage.

Mortgage Broker Growth

Will mortgage brokers some day be able to deal directly with CMHC?  How long will the big 5 banks remain relevant?  This Edmonton Journal story raises interesting questions:  Story Link 

Our naturally-biased prediction?  Mortgage brokers will control 50% of the mortgage market within 24-36 months...up from 30% today.

(Late breaking retort:  VHB notes that banks fulfill a vital role in risk assessment, something mortgage brokers aren't incentivized to do.)