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Mortgage Broker News | 03 Mar 2011, 10:00 AM Agree 0
A report by a six-person task force recommends that banks take more responsibility for improving Canadians’ ability to manage and repay debt, while also suggesting the federal government introduce more stringent standards for mortgage qualification.
  • Ann Todd | 04 Mar 2011, 07:20 AM Agree 0
    Regulators need to wake up & see that unsecured debt is the issue. I have clients that barely qualified for their mortgage, but the bank had no problem whatsoever in giving them an unsecured line of credit for $50,000 after their purchase closed.
  • Christopher | 04 Mar 2011, 07:26 AM Agree 0
    I see the trouble origination not from the mortgage side, but from easy credit card and consumer loans for cars and electronics, especially the 'do not pay until...' kind.

    Payday advances are another blight that needs to be addressed before mortgage qualification.

    That said, when I began my lending career, TDS was 38%, and I would support a return to that level.
  • Gale Tracey AMP | 04 Mar 2011, 07:27 AM Agree 0
    There are many responsible borrowers/first time buyers that have no debt when they purchase, but within the first couple of years their unsecured credit increases due to the banks/credit card companies over extending them. Let's not put the cart before the horse and clean up unsecured lending regulations!!!!
  • Dave Trithart | 04 Mar 2011, 07:29 AM Agree 0
    I agree with the writer that qualifying consumers is critical but not with mortgages. There is enough qualification already for mortgages. Institute some qualifications for consumer debt like lines of credit and credit cards. That would go along way to fixing the perceived problem. Oh but the banks may not like that.
  • Paul Meredith, CityCan | 04 Mar 2011, 07:33 AM Agree 0
    Ann,

    I was going to post something very similar but you beat me to it! Banks have no problem whatsoever tacking on credit cards, LOC's, and increasing peoples limits without asking them, just because they have no missed payments. No income qualifying, no look at their other debt. Nothing. I see people all the time with limited incomes and massive credit card debt. Yet mortgages are the problem? Give me a break.
  • Vancouver Broker | 04 Mar 2011, 07:45 AM Agree 0
    These 6 people just wasted 6 months of their time, since the government is already taken action this year.

    The only smart thing they are suggesting is making a qualifying amortisation, but leaving the option of taking a longer amortisation if the client wants. What does not make sense is what the government already did, which is force everyone to pay more for the same amount of mortgage debt.

    And by placing the blame for high debt loads on mortgages, this taskforce is ignoring the real problem. As a mortgage broker, I see clients all the time who can easily afford their mortgage and have consumer debt with extremely high payments. For example, if you have a $20k car loan, your payment is $550 per month. If you have $20k in credit card debt, your monthly interest is $310 per month.

    If you have a 150k mortgage, your payment is $550 per month.

    So paint an accurate picture here. The problem is not the mortgage, its the easy easy easy access to consumer credit that is the problem. I can provide a mortgage to a client, maxing out their ratios, and they can turn around and be approved for 2k or 3k worth of additional debt payments. Thats the problem.

  • Bruce Hale | 04 Mar 2011, 08:18 AM Agree 0
    Action Canada’s Task Force on Household Debt is a joke! I hope we didnt pay this group for this kind of report!
    Derek Dunfield, from MIT’s Sloan School of Management and a member of the task force and if i'm not mistaken this a USA based school. I really dont think we need (USA) Banking advice we have all seen where that has lead them! Regulators need to wake up & see that unsecured debt is the issue. Unsecured debt wether it be credit cards or linse of credit is where the real problem lies people cannot control themselves and obviously neither can the Banks! If you continue to attack the Home ownership dream which defines Canadians and not go after the root problem there will not be a future for young Canadians.Wake up and smell the coffee.
  • Barbara Buote | 04 Mar 2011, 09:03 AM Agree 0
    An issue that never seems to be addressed is the fact
    that the fewer people that are able to get a mortgage
    should the ridiculous recommendations of this group
    be undertaken, more people will have to stay or turn
    to renting. This opens the door to rents rising quickly
    and beyond the monthly payments of a mortgage and taxes.

    The Government is asking Canadians to save money. How can
    you save as a renter, grow older and not have early in life started acquiring equity in a home which in essence,
    is a forced savings plan?

    The major fault in focus groups is that they feel that they absolutely must come up with recommendations to
    justify their existence (and stipends) often with
    negative impacts.

    Why is CAAMP not at the fore in these conversations?
  • Jason Dornstauder AMP | 04 Mar 2011, 09:21 AM Agree 0
    I cannot believe the level of ignorance these "task forces" and government officials hide behind.
    It is amazing that we have FACTUAL and IRREFUTABLE proof that our insured Mortgage Market (the one that is governed to death already) has less than .50% in defaults!
    There is no way the Banks can say that about their Credit Lines or their Credit Cards...and certainly not on their Auto Loans and Personal Loans.
    This is sounding a lot like the Salem Witch Trials...sorry broker buddies - I think they are hunting us!
    Where is CAAMP in all of this? Why aren't they on the Task Force? Good thing they are spending our membership fees on Radio Campaigns to spread awareness about the AMP...perhaps they should be spreading awareness about the TRUE facts about the Canadian Mortgage Market...and STOP this ludicrous Government Nonsense that is unfounded and dangerously incorrect! How in the world can I start a Task Force? I would love to write a report that uses FACTUAL STATISTICAL DATA and not just Helter Skelter boogie man stories.
  • padarzoli | 05 Mar 2011, 06:36 AM Agree 0
    What is the jurisdiction and the mandate for this company? Who are they being funded by and what qualifications they have to conduct sensetive surveys and whom do they report to, besides thois magazin, must say here I will most likely soon opt out of as it brings more bad newes than thi Equirerer. If I want to read bad news ongoing I just subscribe to a daily paper and get it. People with something good to ad to the betterment of the broker community is OK, but allwayd bad news, I am tired of it. Shape up or I will block you out of my computer. My one pany is like this: if you borrow and can not pay it back, you are in trouble, losing home and credit as also if you lend and can not get it back as you have not done your due diligence and have not set responsible qualifying standard, so be it, lose your money. Why do anybody think can tell anybody how much can borroe and how can lend. Communism is dead, long live free market. All the other whiners go hug a frog. Besides we al forgot, the government is for us, not the other way around.
  • Elfie Hayes | 05 Mar 2011, 08:09 AM Agree 0
    You nailed it Jason! I was preparing to comment with my rant, but you did the heavy lifting! Thank you and if you need help with your Task Force sign me up!
    Don't destroy our industry with the nonsense that is published in a useless report such as that above. Who the heck is funding them? Oh yeah! Its' the Canadian Public!
  • Tracy Lucian Price | 09 Mar 2011, 01:55 PM Agree 0
    The writing is on the wall. The government is using 'household debt,' like the Bush Government used 'weapons of mass destruction,'. This is all political pandering for the next election. "Look at us how we handled the recession in Canada but taking control of the mortgage crisis,' The Canadian Banks are so strong in this country they would never let the government dictate regulating the real source of the problem which is unsecured unregulated debt so they bring in more and more regulation of mortgages. Now the banks can make as much money as they want with unsecured debt and put the squeeze on the little guy, by jerking down the amortization. Disgusting!
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