86% of real estate professionals said they worry.

Realtors polled in a recent cross-Canada survey indicated that the country’s real estate market is both highly competitive and provides the necessary safeguards to protect consumers. 

 

Eighty-six percent of real estate professionals said they worry that severe deregulation in the real estate industry would erode standards of customer service for Canadians who are buying or selling a home.

 

According to the online poll of 1,726 realtors by Royal LePage Real Estate Services, the proposed changes to the Multiple Listing Service (MLS) will do little to improve an already competitive industry.

 

Eighty-six percent of agents surveyed said they are “concerned that the push to foster increased competition in the industry will result in lower customer service standards.” When asked about the state of the current marketplace, 76% of respondents said the industry is “highly competitive.” 

 

Click here to read more from the Royal LePage survey.

 

Neither recession, global uncertainty nor growing joblessness appears to have stayed Canadians’ appetite for spending money they don’t have.

 

A new report by the Certified General Accountants Association of Canada shows that household debt in the country kept rising through the recession and peaked in December at $1.41 trillion.

 

That’s $41,740 on average per Canadian, or debt to income ratio of 144%, which is the worst among 20 advanced countries in the Organization for Economic Co-operation and Development.

 

“This report is another indication of Canadians’ readiness to consume today and pay later,” said association President Anthony Ariganello. “The concern is do they understand the full cost of paying later?”

 

The Bank of Canada has also voiced similar concerns, with Governor Mark Carney having repeatedly advised Canadians to ensure they will be able to meet their mortgage commitments once rates increase. Ottawa has put that cautionary principle into effect by stiffening the means test chartered banks must apply when issuing open-ended mortgages.

 

Most Canadians don’t yet share that concern. The accountants’ survey found that almost 60% of Canadians whose debt had increased still felt they could manage it or take on more obligations.

 

Click here to read more from CBC.

Tara Rosen on Agent vs Agent

Southern Ontario Real Estate for First Time Buyers. Watch Tara Rosen vs. Daryl King on Agent vs. Agent Wednesday January 13th at 8:00 p.m. on HGTV Canada.

Anna and Kent are looking for a century home for themselves and their new baby. Sounds simple enough – except they’re looking for a place to call home for the next 20 years. With that kind of timeline, you can bet they’re expecting perfection. Daryl and Tara are eager to hit the ground running, but when they meet their competitor for the first time, they discover a shocking surprise that raises the stakes even higher.

Agent vs. Agent is the ultimate real estate challenge show, where two top notch real estate agents face-off to find desperate home buyers the house of their dreams. Each episode features two successful agents – they may have dramatically different styles but both share one thing in common: an intensely competitive streak. The series follows them as they go head-to-head to find the perfect home, make the sale and earn their commission. At the end of the episode, it all comes down to one thing… Who will be first to close a deal for the client and be crowned the winner?

Win or lose, real estate sales representative Tara Rosen’s steadfast determination and potential to go that extra mile for her clients have propelled her to a great many successes. She is a versatile individual, and although known for her vivacious personality, Tara Rosen is also both meticulous and forthright in her approach. Tara’s quite passionate of what she is doing and she hasn’t looked back, ever, since she embarked on this journey forging an exemplary and sometimes illustrious carrier for herself, spanning now almost 20 years in the industry, and being licensed since 2002.

Learn more about Tara Rosen, Realtor® with Coldwell Banker the Real Estate Centre, Brokerage, and how she can help you as she has helped hundreds of Canadian families before, realize their real estate dreams of home ownership in the Southern Ontario regions of Toronto (the GTA), York Region, and Durham Region.

Visit Tara’s website at http://www.tararosen.com today, and make sure to watch her on Agent vs. Agent Wednesday January 13th at 8:00 p.m. on HGTV Canada. - That is Tonight !!!!

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I have known Tara Rosen for many years, since grade school in fact, and she is one of the best Realtors you will ever meet. I highly recommended her and every client I refer to her only has amazing things to say about her service and skills.

Mortgage Industry in the Media

In recent weeks, there have been numerous articles in the national media on the state of the Canadian mortgage industry. Issues regarding the impact of longer amortizations and a perceived failure to anticipate the effects of various mortgage products have been at the forefront.

Public Should Be Aware Of The Following Important Facts

Arrears and default rates remain low in Canada particularly when compared to the U.S. Canadian mortgage holders have on average over 50% equity in their properties. For all home owners, (those with and those without a mortgage), the equity ratio exceeds 70%;

Longer amortization periods and 100% LTV mortgages do not equate to subprime or alternative mortgages which are based on a borrower's credit worthiness. Relatively few outstanding mortgages in Canada have 40 year amortization periods – only six percent or just over 300,000 mortgage holders out of 5.25 million;

Mortgage products in Canada are transparent. Mortgagors with a variable rate product know their rate and most have the option to convert to a fixed rate product. In the past year, 40% of mortgage holders took out a variable rate mortgage with the expectation that declining rates will continue to drop. This is in stark contrast to the U.S. where the resetting of option ARM mortgages means millions of mortgage holders have been and will continue to face higher rates;

A rise in default rates in Canada is not apparent. It's a fact that the economy is slowing; however if borrowers find themselves with financial difficulties, it will most likely be a result of their employment situation rather than their mortgage product;

Differences between the Canadian and U.S. markets remain. The option ARMs that have and continue to be reset to higher rates are not common in Canada. Those who hold variable and even fixed rate products in Canada are now doing so in a declining interest rate environment. A greater percentage of mortgages in Canada are funded by balance sheet lenders than in the U.S. Subprime or alternative lending products were never as common in Canada;

Canada has a rich history of mortgage insurance. Nearly half of all mortgages obtained in any given year are insured with a second approval process for mortgage applications. Underwriting principles and guidelines in Canada, while not perfect, are more thorough than in the U.S.;

Regulation for Canadian mortgage brokers and agents is more stringent than in the U.S. Several provinces have recently updated or are in the process of updating their origination legislation including Ontario, Quebec, Saskatchewan, Manitoba and Nova Scotia. There are now license requirements and in most provinces education and disclosure requirements. This will ultimately lead to enhanced professionalism in our industry and added security for Canadian borrowers.

[Statistics Source: CAAMP's Annual State of the Residential Mortgage Market in Canada, by CAAMP Chief Economist Will Dunning]

The following article appeared in the Toronto Star yesterday with some good points and interesting idea to help out with our economic recovery.



By: Angelo Persichilli - Toronto Star

Excerpt from Article
"Banks asked for help and got it from governments all over the world, including Canada. Unfortunately, instead of passing that help on to the people, they used the money to replenish revenues depleted by their irresponsible policies. Ottawa pumped in billions of dollars by uploading mortgages through CMHC and the Bank of Canada, and it has dramatically cut interest rates to encourage people to borrow money. Banks have kept part of the cuts for themselves and now they want more – a corporate tax cut. We need tax relief not for the banks, but for the tens of thousands of small companies that risk losing their business because of the credit crunch the banks created."
Read Full Article Here

Flaherty Says He’ll Pressure Canada Banks on Lending

By Theophilos Argitis
Dec. 18 (Bloomberg) -- Canadian Finance Minister Jim Flaherty said he’ll pressure the country’s banks to increase lending to consumers and businesses, in a bid to help reverse the country’s worst downturn in 18 years. Flaherty said today he’ll meet bank executives early next month with Bank of Canada Governor Mark Carney to convey the need for financial institutions to offer credit.

“I expect them to make it evident to us that they are taking steps to make credit more available in Canada,” Flaherty told reporters today in Saskatoon, Saskatchewan.

The government is providing guarantees on more than C$200 billion ($167 billion) of bank debt and has pledged to buy as much as C$75 billion in mortgages from banks to free up cash for loans to consumers and businesses. Bank of Canada policy makers also have put more than C$36 billion into the banking system this year to restore normal terms for loans of up to three months and expanded the types of collateral they accept.

The government “has been assisting banks by ensuring adequate cash,” Flaherty said. “We expect the banks to reciprocate. We expect the banks to provide adequate credit.”

Read Full Article Here

Response to Globe's"High Risk" mortgage article

There has a been a great deal of resonse to The Globe & Mails December 14th Article: Special investigation: How high-risk mortgages crept north . There is already close to 1000 comments on their website.

Brain Hurley, from Genworth Financial replied with this statement published in the Globe and Mail on December 16th:

"It was the easing of traditional underwriting standards in the U.S. - not extended amortizations - that put so many subprime borrowers in loans they could not afford. Here in Canada, the overwhelming majority of 40-year mortgages are prime loans held by customers with solid credit - and who would have qualified for mortgages with 25-year amortizations. Arrears here are near all-time lows.

Genworth supported Ottawa's decision to limit its government guarantee to mortgages with a maximum 35-year amortization. Healthy competition between CMHC and Genworth has provided an important second set of eyes that act as a check against unwise lending."

And from Mike Storeshaw, director of communications to Finance Minister Jim Flaherty published in the Globe and Mail on December 17th:

"Your article implies the government exposed the Canadian housing market to undue risk (How High-Risk Mortgages Crept North - front, Dec. 13). The fact is our housing market has not witnessed a proliferation of products and marketing practices that led to problems in the U.S.

This is made clear in the recent Financial System Review report from the Bank of Canada. The bank's report states, "The housing and mortgage market excesses seen in the United States and in several European countries do not have a counterpart in Canada."

It adds: "Lending practices in Canada have been much more conservative than in the United States and some European countries, and the resulting imbalances far less acute. The subprime mortgage market in Canada accounts for less than 5 per cent of the residential mortgage market, compared with 14 per cent in the United States, and it is characterized by more stringent lending standards than those that have been applied in the United States."

Canada continues to have one of the lowest rates of mortgage delinquency in the world."

Banks only reduce prime rate by 1/2

After the Bank of Canada cut its key rate by three-quarters of a percentage point yesterday, Canada's six largest banks only passed on 50 basis point reduction to their clients lowering prime to 3.5%.

Several other non-bank lenders have also already reduced their prime rate to 3.5% and certainly all will follow.

This is good news for customers who have variable rate products, although we can all agree that receiving the full 3/4 would be even better news.

Banks argue that given the current economic turmoil and higher costs of borrowing funds, makes it harder for them to pass on the full rate cut.

With home prices reduced and low interest rates this is certainly a great time to buy real estate in most markets in Ontario. First Time Home Buyers who have been waiting to see what happens should seriously start looking and be ready to make a decent offer on a new home before the prices start to go rise again.

If you have not been pre-approved yet, please contact me to discuss your options.
gbarrow@dominionlending.ca

Have a great Day!

Canada's mortgage consumers 'remarkably positive'

[Source - Eric Beauchesne, Canwest News Service]

Canadians are still in a mood to mortgage.

Nearly four in 10 still think that now is a good time to buy a house, even though the proportion who expect home prices to fall has soared and the proportion expecting higher housing prices has plunged, according to survey results published yesterday.

"Residential mortgage consumers remain remarkably positive as they weather the financial storm," the Canadian Association of Accredited Mortgage Professionals said in releasing the results of a mid-October survey.

Attitudes toward area conditions have shifted only slightly, with 38 per cent of Canadians believing now is a good time to purchase a house, compared to 32 per cent who believe it is a bad time.

Read Full Article: http://www.househunting.ca/buying-homes/story.html?id=a282684c-a28f-48ec-9a0a-747882181c2c