Analysts are worried those tighter mortgage rules have come too late to pull Canadians back from the brink of debt. So mortgagebrokernews.ca is checking in with industry leaders, asking for their take on what the federal government is likely to do next in order to slow the housing market.
Here's a sampling of that opinion, with mortgage professionals offering well-reasoned guesses on what's likely to be in the next round of tightening -- if, in fact, that tightening occurs.
“The next step could be increasing the minimum down payment from five per cent to seven or eight per cent or even 10 per cent. Another step could be to reduce the GDS/TDS ratios further and go back to 32/40. Either one of these moves will have a major impact on the market.”
-- Ad Lakhanpal, mortgage broker, Mortgage Alliance
“The opinions from all industry associations have been well documented, OSFI and the federal government have extended too far with their mortgage rule changes. It is counter-intuitive to be tinkering with the strongest part of the Canadian economy which if/when housing slows down will certainly effect every other sector. If these numerous changes do not have the desired effect the Feds are looking for they may resort to raising the cost of borrowing by increasing interest rates.”
-- Albert Collu, broker and president, IMBA and Argentum Mortgage Finance Corp
“More than likely (the government will) increase the down payment form five per cent to 10 per cent and or lower the GDS/TDS ratios.”
-- Kelvin Seepersad, agent, Mortgage Intelligence
“This one may have the desired effect the Feds want, and as far as I am concerned these changes will have a tremendous cooling effect on the housing and mortgage market. The Feds should be focusing their attention on the unsecured debt of Canadians and get the lenders to revert to more instalment type of borrowing instead of revolving debt and keeping Canadians in a constant state of debt.”
-- Kevin J. Power, president, Power Mortgages
“The next move will make purchases only to 90 per cent and qualify all deals on five year posted rates, regardless of the term chosen.”
-- Allan Kates, broker and VP sales, Verico Northwood Mortgage
“The good news from the recent announcement that caught many of us off guard is that the minimum five per cent down payment option is still available to buyers as long as they purchase properties under $1 million. This is good news for first time buyers since many of them take advantage of this program especially in more expensive markets like Vancouver.
"I'm not sure the government needs to make any further changes at this time but should these changes not result in the desired effect we might see having to use the benchmark qualifying rate to qualify high-ratio borrowers on five plus year terms as well.”
-- Scott Dawson, mortgage broker, Verico Paragon Pacific Mortgages
"It’s a tough call as the government may not be in position to make any more changes if the economy slows down and it’s going to be out of money?"
-- Stephane Prevost, mortgage agent, Dominion Lending Centres Alliance
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