Brokers are of two minds following Finance Minister Jim Flaherty
’s announcement Tuesday that he is stepping down; some commend his initiatives while others are happy to see him go.
“I’m ecstatic about it … I hope his successor will serve the people of Canada and not the big banks,” Nicholas Hamblin of Ideal Mortgage told MortgageBrokerNews.ca. “Mr. Flaherty has been floating a red herring for several years about the debt levels in Canada and he attacks the most affordable, most commonsensical, best secured instrument in the banking portfolio (mortgages) while he leaves the banks to give unsecured lines of credit and loans and high interest credit cards.”
The Minister resigned Tuesday, stating the decision was made with his family.
Flaherty was unpopular during his tenure among brokers for instituting policies that slowed the market and made it harder for many clients – especially first-time and self-employed buyers – to attain a mortgage.
Meanwhile, some view his restrictions – which include limiting the price of homes eligible for CMHC insurance and shortening the amortization period to 25 years – as necessary measures to reign in a market that could have spiraled out of control.
“Flaherty had tightened the mortgage rules several times and in my opinion (it was) a prudent approach … to ensure that Canada (would) not follow the footstep of the American style financial crisis in 2008,” Angela Wong-Liao
of Invis The Money Lady said. “But obviously the tightened mortgage rules affected my mortgage business directly and indirectly.”
Wong-Liao, however, believes enough has been done and hopes his successor, Joe Oliver, doesn’t take any further action.
Still, not everyone believes his measures were completely necessary.
“I don’t believe there was a risk of (a housing crash similar to the one in the United States),” Hamblin said. “The banks here were highly regulated in the first place and the banking system is completely different; the banks in the US were giving out mortgage for a handshake … that was not happening in Canada.”