Mortgage News

June 4th, 2013

I’ve been watching various blog posts and emails go by commenting on what people are trying to predict in the residential home mortgage space.

I’ve seen everything from Flaherty wont touch the mortgage rules… as far as being in control of CMHC is concerned, but no where did it state explicitly that he wont put pressure on lenders for non-insured deals. Lenders need to “beef up” their book (or on balance sheet) of lending, i.e. non-CMHC insured mortgages.

If you believe the media reports, the sky is falling and we’re in the biggest housing bubble since the beginning of time. They keep talking about national averages being down. Who lives in a national average town? Ottawa for example, showed a slight increase in price year over year in April. Yet I wouldn’t want to be trying to sell a home in Vancouver any time soon. Boom & bust what seems like quarterly in that city.

Then I hear talk of a “softening” market. I’ll assume this is the PC way of saying that listings are up (way up), but no one is buying. I think everyone is STILL trying to figure out the rule changes from last year. “do I qualify or not?”

Even heard from a few major developers that condo sales in Toronto aren’t as brisk as they had anticipated. They are focusing now on developing anything BUT condos in the GTA. The condo frenzy appears to be over for the time being.

Mr. Flaherty said he was “happy” with the slow down in real estate… i.e. in Toronto and Vancouver. Unfortunately for the rest of the country, we all have to suffer the slow down even more so, because that’s what the media is reporting. The mind set wont change until the local media starts to report that, “hey look at us, we’re beating the national average. OUR market is HOT.”

The latest rumblings in my world are concerning folks who are self-employed. They are usually the first ones to be picked on (right in there with rental owners) whenever there is any talk of “reducing risk” in the market.

To that end, there have been at least 3 lenders that have announced that due to, from what I can figure, increased scrutiny from CMHC, the lenders have decided that this segment of the market is “too risky” and have pulled back.

If you are, like me, self-employed, then this means you can forget about using any “stated income” product out there until someone deems the backbone that drives the Canadian economy is no longer considered high risk.

In God we trust, but all you non-salaried, self-employed people, please pay cash for your houses.

Enjoy.

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