Doug Porter and Benjamin Tal on the possibility of the government enacting new mortgage rules:
- “I don’t think it’s a foregone conclusion that they do anything.” – BMO’s Doug Porter
- “I will not be surprised if they leave mortgages alone and deal with other loans. It’s not just a mortgage story, it’s an overall story. A lot of the debt that you see in non-mortgage loans are basically real-estate-type loans as well, so they’ll attack the whole space if they do anything.” – CIBC’s Ben Tal
Source: CTV
doesn’t really matter now does it? The horses are already out of the barn
Just what did they think the average consumer will be doing when they dropped interest rate to historic low levels in the first place! Now they are worried.
Finally someone from the Big 5 speaking about ‘consumer debt’ as a key component in the equation, not just focused on mortgages as we usually see. Kudos to Ben for speaking out in that manner considering that the CIBC Aerogold CC product (19.99% lending rate) is CIBC’s flagship and most profitable offering. New mortgage regulations will not curtail or slowdown the unsecured lending practices of the Big 5, but in fact may increase it, as they look for ways to substitute larger down payment requirements in mortgage rule changes as an example. Many in the industry have noticed an increase in unsecured PLC’s filling the void in the 20% down payment required in investment property financing, hmmm, 80%LTV mortgage in the mid 3%s, another $30k in PLC at 7%+ is actually more profitable to the Banks, but at a higher cost and larger overall risk to the consumer. Is it a wonder why the Big 5 push for mortgage regulation changes, when in fact they have the ability to still provide unsecured lending facilities to ‘good clients’, something the Monolines do NOT have the ability to do. What a great way to claim back some of the market share they were losing to the often more competitive, mortgage only lenders (especially so in the first time buyer and investment property segment) Hmmm, the Bank Conspiracy lives on….
It’s already too late. When do the banks and the government talk openly about trying to save us from ourselves ahead of time ? They care about themselves and their bottom line on the ledger that saves their own skin. Game over.
It seems to me that there is a whole lot more going on than meets the eye. I agree with Brett’s comment. My own feelings are who the hell is the government at this time saying they are concerned about Canadians spending habits. It seems to me more and more every day that it is more like a dictatorship than a democracy. However many might correct me as I have not been political until now… and believe me the Canadian Economic Action plan benefits someone but it isnt you or I . Rather you may see many brokers leaving the industry and I have to wonder what with has gone with the US, Australia and some recent articles in the MBABC magazine if they would rather be rid of us !!
Food for thought if nothing else
Lorilee