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Mortgage Broker News | 02 Mar 2016, 08:15 AM Agree 0
One industry veteran is stunned at the number of Canadians who believe the government should get more involved in regulating the real estate market
  • Brad Knight | 02 Mar 2016, 08:39 AM Agree 0
    I wonder if the 66% are the same people that wonder why we need a work letter,pay stub,2 years Noas,proof that no taxes are owed to Cra etc
  • Nick Bachusky | 02 Mar 2016, 09:25 AM Agree 0
    I agree with Joe.

    The fact that we have to work within guidelines and do but then the client can go across the street to a car dealership and the dealer will easily fund a brand new car raising the client's TDS/GDS beyond our guidelines is a real problem.

    I also think that lenders should be requiring the lowering of potential unused credit (LOC's and large unused credit card balances) to fit within our guidelines so that our clients have more difficulty acquiring easy credit after mortgage funded. I used to see this more 5 years ago but not so much anymore.
  • Tomas | 02 Mar 2016, 10:26 AM Agree 0
    You folks know banks make much more on mortgages than credit cards right?
  • Tony Piattelli | 02 Mar 2016, 10:46 AM Agree 0
    Tomas, I worked in the banking world for 20 years and the banks make the spread between what they are charging the borrower versus what they are paying the investor. The average spread on a mortgage is between 1.5% - 2.5%, whereas the spread on most credit cards are between 8.5% and 20% depending on the cc. So the banks actually make a higher return on the ccs. Do you people really believe more regulation is necessary! It's been proven over and over again, the less involved the government the more smoothly the business runs. We need less government involvement especially as most of the politicians don't have a clue about mortgage financing, so let's have them influence the rules around getting a mortgage. Almost like going to a mechanic to get your teeth cleaned.
  • Janice Ashworth | 02 Mar 2016, 12:04 PM Agree 0
    The majority of the public is unaware of the increased scrutiny and many rule changes the federal government has been implementing since 2008.
    Almost all of my clients do not know we now need to use 3% of credit card and other revolving debt balances as a minimum payment and they do not know that there is an "unreasonable (in my opinion) qualifying rate" for terms other than 5 year fixed and up. Many do not know they can not tap 95% of their equity anymore and all clients are overwhelmed by the amount of paperwork now required.
    We need to educate the consumers so they can have an informed answer to the polls mentioned in the article.
    If the people polled - had first been updated on the the government's interventions over the past 7 years - the polls would have reflected more accurately how people feel.
  • John Martin | 02 Mar 2016, 02:38 PM Agree 0
    Here is reality. The banks in this country run the government. Regardless of which party is in power, the banks run them. If you where to sit at one of these nice cozy (we are all friends) get together that all the top guns at these banks do on a regular bases. What you would find out would literally spin your head. Ask Mr Dodig he just gave himself a 72% raise from last year. Of course with the blessing of the usual bunch of cronies on the board. That makes it legal...lol Get one of these job's and you win the lottery every single year. Until you retire. Wow! Got to love that. It is a beautiful thing....
  • Andrea | 02 Mar 2016, 04:28 PM Agree 0
    Tomas, can you tell me where you got the info on the profitability of mortgages over credit cards? I would love to read that and share it.
    Rob McLister can you speak to this? I was under the impression that bank profits are down on mortgages and way up on other products.
  • Jeremy | 02 Mar 2016, 05:15 PM Agree 0
    Tomas,

    How is a bank making more on a mortgage at rates well below even 5% compounded semi annually, vs 19% compounded monthly for consumer credit cards? More return on each dollar, easier to get, more actively borrowed against...
  • RossK | 03 Mar 2016, 12:47 PM Agree 0
    Today in Canada CMHC is approving loans where over 100% of after tax income would be required to cover the obligations contained in any standard mortgage document.

    Clearly someone needs to step in here and help out!
  • Keith | 04 Mar 2016, 05:25 PM Agree 0
    Once again... brokers complain about credit card debt, and some of the biggest complainers are DLC - the ones that SELL credit cards to their customers.

    Pot... meet kettle...
  • Ross Taylor | 08 Mar 2016, 08:08 AM Agree 0
    For what it's worth, mortgage lenders' profit margins are not determined by the coupon rate of the mortgage - it is the spread between their cost to borrow and the rate they lend out at.

    I doubt mortgage lenders' margins would change much at all even if a five year fixed rate mortgage was 19.99%. In fact, it is quite possible the business would be less profitable, since default rates would likely increase.

    And that is one reason why credit card borrowing rates are so high - the default rate is MUCH higher than it is for mortgages.
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