Mortgage Rates & Mortgage Broker News in Canada

Off to the CMAs

Off to the Canadian Mortgage Awards we go...The gala event is being held in Toronto this evening so we’ll be offline until Monday. CMT will report back on all the winners then. Have a fantastic weekend everyone!

Variable-rate Discounts Under Pressure

The days of extra-plump variable-rate discounts may be numbered.

A handful of lenders began trimming their variable-rate mortgage (VRM) discounts this week. They've gone from prime minus 0.75% (the average market rate) to prime minus 0.65%, or even prime minus 0.50% in some cases.

To most, these changes have seemingly sprung out of nowhere. Few expected rising VRM rates before the Bank of Canada resumed tightening. Unfortunately, it’s happening now and it’s beginning to smell of a trend. 

So far, four of the top 10 broker lenders have reduced discounts, and others are considering following suit.

Here’s a look at what’s behind it…

FedSpeak & Canadian Mortgage Rates

With Canada so married to the U.S. economy, Canadian rate speculators are perpetually glued to U.S. Fed announcements.

Today we had a unique opportunity to watch U.S. Fed chief, Ben Bernanke, hold a scheduled press conference (Fed chairmen never do that). He said he wanted to “add transparency” to the Fed’s plans for future monetary policy.

Bernanke made several points of note for Canadian rate watchers. He said:

Quantity or Quality (Of Lenders)?

Subconsciously, we’re programmed to think more is often better.

One example of where more is not necessarily better is with the number of lenders a broker advertises.

Brokers often quote relationships with numerous lenders. Just for the sake of illustration, we Googled “...Mortgage Broker” and examined the top five results. Here are snippets from each broker’s website:

Debt Trends From StatsCan

Canadians’ debt levels have made headlines repeatedly over the past few years. People are engrossed with how big our debt burden has grown, and what it means to the economy at large.

On Thursday, Statistics Canada published a new report on how debt is affecting Canadian families. It contains loads of data and below are some of its mortgage-related findings:

Spam Bill C-28 - Lender & Broker Implications

Canada recently enacted a new anti-spam law called Bill C-28. It’s expected to come into force later this year.

Proponents say C-28 will lighten the spam load on all of us.

At the same time, it could turn many businesspeople into spammers themselves!

As a mortgage broker, for example, it’s not uncommon to send out e-mails or newsletters to current or former clients. In some cases, you may not have had contact with a client for years.

If that kind of scenario applies to you, C-28 will change your email habits. For brokers, mortgage specialists and lenders, it pays to know the implications in advance.

Mortgage Careers of the Week

 

 

 

 

Company: TMG The Mortgage Group Alberta Ltd.
Position Title: Sales Director
Years of Experience:  N/A
Required Licenses:  N/A
Location of Position: Alberta
Applicants may contact: careers@mortgagegroup.com

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Company: Valueland Mortgages
Position Title:  Mortgage Agent/Associate/Sub-broker
Years of Experience Required: 2 years preferred
Licenses:  Required
Location of Position: Ontario, B.C. and Alberta
Applicants may contact: careers@valueland.ca

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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.

RBC Apologizes to Brokers

In response to uproar about one of its mortgage specialists discrediting brokers, BrokerNews.ca quotes RBC as saying:

“The RBC brand is defined by our clients and partners and we sincerely apologize for the inaccurate information that was presented in the document.”

That comes from RBC Public Affairs Advisor Nicole Fisher, in a letter to broker associations. We haven’t seen the rest of the letter yet.

RBC Specialist Fires Low Blows & Goes Viral

Banks have extensive policies governing what their representatives can tell the public. The alleged actions of RBC mortgage rep Corinne Schindler demonstrate why.

Schindler has reportedly been circulating this flyer, which grossly mischaracterizes mortgage brokers in relation to bank specialists. It’s a document that demonstrates a stunning lack of knowledge, professionalism and discretion.

The piece, which displays RBC’s logo and web address, has gone viral and caused a PR embarrassment at the nation’s biggest bank. Incensed brokers from across the country have demanded (2nd link) that RBC retract the misstatements on the specialist’s behalf.

Mortgage Term Review

Here's the latest mortgage term review, updated to reflect the market-moving events of recent months.

Shorter terms and variable rates are looking quite delectable given today's pricing and rate expectations. More...

Inside Mortgage Investment Corporations (MICs) – Part II

It’s a pleasure to present part two of CMT’s series on Mortgage Investment Companies (MICs).

Wayne Strandlund, founder and CEO of $250 million Fisgard Capital Corporation, is once again our guide through this unique investment class.

In our second chat with Wayne, he shares his thoughts on how MICs work, their investment potential and management fees, and how to improve the MIC structure going forward.

Here is the conclusion of that interview…

Gord Dahlen Joins DLC

Prominent industry executive, Gord Dahlen, has joined Dominion Lending Centres (DLC) as Executive Vice President, effective immediately.

Dahlen is widely known throughout the industry, having cultivated strong relationships with lenders, brokers and insurers from his 21 years in the business.

He was previously President and CEO of Invis and Mortgage Intelligence, departing last fall. Before that, Dahlen was with the lender MCAP for several years.

Lower Qualification Rates on Conventional Mortgages. A Trend?

One year after most banks started using posted rates to qualify conventional mortgages, we’re starting to see some loosening of those policies.

Three weeks ago, Scotiabank lowered its conventional qualifying interest rates, and last week FirstLine (a division of CIBC) did the same.

Lower qualification rates impact debt ratio calculations and make it easier for borrowers to qualify for variable and 1- to 4-year fixed mortgages.

Bank of Canada Leaves Rates Untouched

The Bank of Canada surprised few today by keeping its key lending rate at 1.00% for the fifth consecutive meeting.

With the prime rate holding at 3.00%, today's news is yet another positive for variable-rate mortgage holders.

The BoC’s statement did have some mixed signals, but few analysts are decoding that to mean a May rate increase. Here is some of what the Bank had to say:

Pacific Mortgage Group Makes Offer For Invis

Pacific Mortgage Group Inc. (Pacific) has announced a $9 million cash + stock offer for Invis, a national mortgage brokerage, and its subsidiary Mortgage Intelligence.

Pacific says the combined entity could post “$15 billion in annual mortgage origination volume” and realize “substantive revenue growth and economies of scale, materially improving bottom line profitability for its owners.”

10% Down Payments & Other Policy Debates

Housing accounts for an immense 1/5th of Canada’s GDP. That makes mortgage debt and housing policy enormously important topics from an economic standpoint.

With the stakes so high, it’s painful to watch critics exhort blanket changes to mortgage rules, based primarily on their opinions in lieu of credible data.

Case in point is this editorial on down payment size.  The author, Ted Rechtshaffen, advocates a move to 10% minimum down payments because 5% downpayments are riskier. Interestingly, Rechtshaffen sprinkles the word “risk” 10 times throughout his article, without ever attempting to quantify that risk.

Vancity Saver’s Mortgage

Vancity has taken the B.C. rate crown for now with its new Saver’s Mortgage.

The Saver’s Mortgage is a 5-year fixed with an ultra-low rate (3.64% currently) and a twist. You need to:

• Save a minimum of $50 a month in a non-registered Vancity savings account
• Get two other eligible products from Vancity (Cross-selling lets Vancity offer what is the lowest advertised rate in Canada—that we know of anyway.)

“Eligible products” include non-registered investment accounts, term deposits, payroll deposits, Vancity's VISA, credit lines, loans and mortgage insurance.

Yields Make 11-Month High

Bond traders have put the Japan disaster in the rear-view mirror…for now anyway.

That, coupled with falling U.S. treasuries and a positive purchasing manager survey, pushed 5-year yields to an 11-month high today.

Mortgage Investment Companies & Individual Investors

With investors tiring of 2-4% fixed income returns, Mortgage Investment Companies (MICs) have been attracting more assets.

People are finding that certain reputable MICs have a long history of strong inflation-adjusted returns. (See: Inside Mortgage Investment Corporations.)

Yet, not everyone can invest in a MIC. And, those who can sometimes run into regulatory limits.

For insight into the rules surrounding MIC investing, we spoke with Jeremy Farr, a partner at Borden Ladner Gervais, a MIC specialist and corporate lawyer of 27 years.

2011 Canadian Mortgage Awards Finalists

There are folks in the mortgage industry who deliver service levels far above and beyond the norm. The Canadian Mortgage Awards is one of few places where they can be duly honoured.

The finalists for this year’s fifth annual CMAs have all been announced and appear below. The winners will be revealed Friday April 29 in Toronto.

A popular vote is now underway for the following categories:

• Best Internet Presence
• Best Advertising
• Best Branding
• Best Lender BDM
• Best Newcomer Lender BDM
• Best Lender Underwriter
• Best Newcomer Lender Underwriter
• Best Industry Service Provider
• Best Community Service

Click here to cast your ballot. There have been some tight races in the past so each vote matters.

Good luck to all the finalists!