Flaherty: No more room for rule changes

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Brokers have heard it before, but the Finance minister is saying it again – this time with more conviction – arguing the government simply has no more room to play with the mortgage rules in order to curb household debt.

“We’ve done enough,” Flaherty said during a weekend interview. “I do not intend to do anymore.”

If true, that's good news, say most mortgage brokers.

Many of them complained that the guidelines and rule changes introduced by the Conservative government this summer in order to slam the brakes on an overheated housing market were too harsh. Flaherty himself had earlier conceded that the economy could take a beating with the changes, but called the tighter mortgage rules around amortization and LTV for refinances necessary to prevent a housing bubble.

During Saturday’s interview, the minister said he was pleased by signs of a slowdown in vital segments such as condo markets in white-hot centres Toronto and Vancouver.

One broker, who operates in one of the regions where the rule changes has paved the way for a broker cull, said the revamp has effectively slowed down the market.

While he welcomed Flaherty’s remarks, Michael Marini, Toronto-based broker for Dominion Lending Centres Funds, said it could also be that the newly introduced rules are here to stay.

“I take it to mean that he (Flaherty) is satisfied with what the rule changes have accomplished,” he said. “We may not see any more tightening, but it’s also unlikely that the rules will be reversed.”

  • George Janho on 2012-10-23 10:41:42 AM

    there is no room for more changes because there are no mortgages being done period. Ina slowdown economy the Government has elected to kill the market in order to protect the big banks instead of losening conditions thus allowing the economy to recover faster. Now homeowners cannot use the equity on their homes to alleviate debts but have to pay high interests on their credit cards,reduce their living standards and making the big banks wealthier. Good job Mr. Flaherty

  • Derek Rowley, RMA on 2012-10-23 2:24:17 PM

    Well said George and I totally agree.


  • Frank Colavecchia on 2012-10-24 5:33:17 AM

    Mr. Flaherty is barking up the wrong tree with all the mortgage changes. Instead of tightening up the mortgage rules and is really concerned about household debts he should tell the banks and credit cards to stop issuing credit cards like bon bons at Christmas. Why do conusmers have 3-4- 9 credit cards ? Why are credit card limits automatically increased ?Why aren't banks or credit cards following the same rules of affordability ? Why, because they are making billions of dollars in interest knowing credit cars holders can't pay out balances in full.
    Mr. Flaherty should sit down and ask mortgage agents/brokers who refinance these clients what the real problems are.

    Credit cards are the real problems...

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