Mortgage Bytes

Commentary

  • 9th-inning Morgan Stanley’s CEO, John Mack, says the world’s credit crisis might be “in the final innings.”
  • “A clean credit history is your number one priority,” says Frank Napolitano of MortgageBrokers.com.  “As far as lenders are concerned that’s what matters most. It used to be job history, but no more.” Napolotano also advises clients to hold their banks accountable: “When [banks] tell you ‘this is our best rate’, well it should be that and it shouldn’t depend on what a mortgage broker has offered.”
  • The Times Colonist writes that the “mortgage brokerage business is no longer Plan B. It’s booming as a one-stop shop with super-competitive rates that banks find hard to match.”
  • Ellen Roseman cites an example whereby it takes 16 years before one pays more principle than interest on a 25-year amortized mortgage.  With a 40-year am. it takes 31 years she says. This is based on assumptions that will change, but she makes a point nonetheless.

Mortgage Stats

  • Angus Reid says “27% of Ontarians would love to eliminate mortgage debt forever.” Mortgagors in that other 73% must make the banks quite happy.
  • Here are CMHC’s 2006 market share stats (the most recent available according to the Montreal Gazette):
    • CMHC issued insurance coverage for 631,191 properties
    • Coverage amounted to $291.4 million in premiums
    • CMHC had roughly 70% of the national mortgage insurance market
    • 40% of the mortgage insurance market comes from eastern Canada, including Quebec
    • 24% per cent comes from Ontario
    • 36% comes from Manitoba westward.
  • 64% of Canadian adults own a home.
  • This story has a good comparison of Canadian home price gains, by city.

Mortgage Industry News

  • CHIP is now offering reverse mortgages at prime + 1.5%.  They call it “the lowest reverse mortgage lending rate in the country.” Seniors money, however, is quoted at prime + 1.25%.  Seniors also lends up to 45% of a home’s value versus 40% at CHIP.  To save interest, though, CHIP customers can choose to receive up to $1000 a month instead of getting a lump sum at closing.
  • FSCO has approved IMBA’s Mortgage Agent Course and the IMBA Errors & Omissions Liability Insurance Policy. IMBA also has a nice new website.
  • CitiFinancial’s ex-bankrupt program is reportedly now being offered again.
  • Equitable Trust is expanding to Manitoba.
  • Here’s an overview of Ontario’s new mortgage broker rules.
  • Further to Saturday’s story about lenders pushing broker status, we notice some lenders are now welcoming low volume brokers. It appears to be the same strategy in reverse.
  • Bridgewater now offers 100% financing on rentals.

Mortgage Miscellaneous

  • Investors Group says people who take out a mortgage to invest should be:
    • comfortable with risk
    • in a high income tax bracket
    • a long-term investor
    • in receipt of sustainable monthly cash flows. 

Gordon Pape says some financial advisers push borrowing against your home for investing purposes because of the significant fees and commissions they earn.  TheRecord.com

  • Australia wants to replicate Canada’s mortgage bond program.
  • Detroit, Michigan foreclosures. UglyThe story.
  • Liberal MP David McGuinty suggests subsidizing mortgage rates for Canadians who live near public transportation (to reduce car traffic).
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