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Mortgage Bytes


  • Timing-Mortgage-Rates “By the time that inflation is on the rise it has already been well ‘priced in’ to the bond markets and thus fixed rates have already been adjusted to reflect inflation. There is not one exception to this rule in the last 75 years of mortgage market history.” – Mortgage Broker, Calum Ross via CMPThe takeaway: It’s easy to be late when timing interest rates.
  • If the TSX rebounds back to 10,000, investors may rotate out of (i.e. sell) bonds. If inflation reappears, investors will sell bonds even quicker. When bonds go down, yields and fixed mortgage rates go up. Some observers feel it’s not a question of if this will happen. It’s a matter of how soon.
  • Mortgage researcher, Dr. Moshe Milevsky, poses this thought about the benefit of long mortgage terms versus short mortgage terms: “If you’re going to renew in a year or two, what if your housing price is lower than the value of the loan, and the banks won’t give you that again? What about locking in as long as possible? If I get the five-year rate, they’re not going to bother me.” (National Post)
  • Extremely low mortgage rates are “now generating a refinancing wave we have not seen in many years.” — CIBC economist, Ben Tal

Mortgage News

  • mortgage-fraud “A recent decision by the (BC) Court of Appeal held that mortgages placed on property by persons who had fraudulently transferred title to themselves were invalid, and the lenders could not collect from the legitimate owners. This means the (BC) Assurance Fund is not liable for the mortgages. Look for more and more lenders to insist on title insurance after this decision.” — Real estate attorney, Tony Spagnuolo.  (More on this ruling from the Vancouver Sun and CBC News)
  • Unemployment and falling home prices have hit some Canadians hard. CMHC and Genworth, Canada’s top two mortgage default insurers, have now launched websites geared to people who have trouble meeting their mortgage obligations:

Rates and the Economy

  • rates CIBC’s Bank of Canada Forecast:  “The Bank of Canada may not announce a change in its overnight target, since that would raise technical issues in the money market without helping the economy materially.”  CIBC expects the BoC’s key interest rate to stay the same for the next 12 months. (CIBC)
  • Unemployment is at a 7-year high of 8%, writes CEP.  CIBC says Canada has shown “three-times the percentage decline in employment than at the equivalent stage of recessions in the early 1980s and early 1990s.” TD expects unemployment will hit 10% by year end.

Mortgage Broker News

  • CMHC CMHC holds a 67% share of Canada’s mortgage default insurance market according to CEO Karen Kinsley. (Reuters) Some feel that number is higher now that many lenders have temporarily pulled back from using competitors Genworth and AIG.
  • Filogix has launched Exchange 2.0, its electronic document transfer and storage system.  Link.  We’ll have more on this story in coming days.
  • FirstLine, one of the most popular broker lenders, has “temporarily” suspended pre-approvals. FirstLine recently integrated new underwriting systems.  In turn, it’s chosen to devote its staff resources to live deals to improve turnaround times. FirstLine is a division of CIBC.
  • Here’s a rather unfair rant against CMHC:  Editorial
    Like most critics of “0-40” mortgages, it’s interesting that the author appears unaware that 100% financing still exists today. If he knew this, he’d be even more ticked off because the current crop of $0-down mortgages are far worse than the old 100% financing programs (thanks in part to much higher interest rate premiums).
  • It’s Canadian Western Bank’s 25th anniversary. (90% of CWB’s loans are commercial.)
  • Mortgage Alliance’s new radio campaign is driving new business. (FP story)
  • CAAMP says 90% of its AMP dues are directed back into promoting the [AMP] designation. But should more be spent on broker education/training and less on advertising? What do you think?


  • job-cuts If you’re in an industry vulnerable to layoffs (autos, lumber, oil, construction, etc.), have over 20% or more equity in your house, and have high interest debt, you may want to look closely at a refinance while the getting’s good. If mortgage rates go up or property values drop further, your benefit from refinancing may decline. There are simple changes you can make to your mortgage now that may save your butt if times get tight. If this applies to your situation, find a good mortgage planner and seek out your options.
  • Big applause to the Toronto Star’s Ellen Roseman on her recent piece about post-claim underwriting. She writes: “Banks can issue (mortgage) insurance and deny coverage years later if they think there was misrepresentation on an application.”  More…
  • Here’s a story about “mortgage helpers” (i.e. basement suites): MetroNews article.

Remember, if a suite is illegal, you can’t use its rental income to qualify for a CMHC-insured mortgage.

  • TD wants folks to know that its mortgage specialists make house calls. Link  They’re not the only ones, however. Other banks have mobile mortgage reps as well. It’s a great way to build relationships with customers. If you’re really pressed for time, an alternative is to find a good mortgage planner that works by phone and email.
  • Canada’s patchwork of foreclosure laws: Globe Story