• Does disaster loom for Canadian real estate? Merrill Lynch economist David Wolf thinks so. He issued a report today warning that Canadians have a higher debt ratio than the Brits or Americans (at their 2005 debt peak).  Canadian debt is now 6.3% of disposable income on average. Wolf says “it may simply be a matter of time” before Canada’s housing market plummets.  However, PM Stephen Harper countered, “I do not accept this conclusion, not at all.”  Harper said Canada has strong domestic demand and little subprime exposure.
• We’re seeing a lot of applications for 100% financing as the Oct. 14 deadline approaches.  A good number of these borrowers don’t qualify and most are completely unaware of the 680 minimum credit score for most no-down-payment mortgages.
• A laptop with National Bank’s mortgage database was stolen from the company’s headquarters on Friday.  (Canada.com)
• BMO’s Sherry Cooper says banks have been “short sighted” by not providing good enough advice to consumers.  She says mortgage customers, for example, should “not just (be) presented with one mortgage option” by banks. (The Gazette)
• Over 40% of Canadians feel banks complicate their financial decision making, instead of clarifying it. – BMO Poll
• AIG has accepted the U.S. government’s $85 billion loan offer, at 11.5% interest.  (CEP story)  AIG will repay it by selling assets. A list of these assets should be available next week.  Here’s how AIG got in this trouble in the first place.
• Inflation rose 3.5% in July, the fastest rate in 5 years.
• “‘You can’t just blame the banks, you also can blame the people that took out mortgages.” – NY Mayor Mike Bloomberg on the U.S. Banking Crisis (CBC)
• The BC Real Estate Association expects the Bank of Canada to keep rates unchanged through early 2009.
• 70% of Canadians still opt for the security of a fixed rate. (Chronicle Herald)
• Canada’s priciest condo.
• The U.S. credit panic has rubbed off on Canadian banks and made them more stingy with their lending. To get money flowing, the Bank of Canada stepped in on Tuesday and added $2 billion for banks to lend out.
• U.S. President Bush says “America could slip into a financial panic” if congress doesn’t pass the Treasury’s $700 billion bank bailout plan. (Washington Post)  Congress may or may not pass it, but the real questions are, do taxpayers want it, and is it worth the price, and would credit really dry up without it?  At a cost of $2300-$7000 per every American (estimates vary), it’s debatable.
• A cause worth writing about
• Abode Mortgage Corporation is now a CMHC approved lender.  On Oct. 1 they will launch their Preferred Program, with faster approvals, online deal tracking, and full finders fees on renewals.
• Merix Financial should be CMHC approved soon as well. Merix is celebrating its three year anniversary.
• Merix has axed its PrimeBuster ARM and Interest Only ARM due to “lack of interest.”  On the other hand, Merix is seeing tremendous interest in its 100% financing and 40-year amortization products.  It’s one of few lenders who still offer these products.