Focus on refis, not first-timers

Focus on refis, not first-timers

Focus on refis, not first-timers

 

Instead of focusing on first-time buyers, CAAMP should push Ottawa on refinancing restrictions, says one industry vet, reacting to news the association has now tailored its lobby efforts.
 
“From what I hear from other brokers, they haven’t done a refinance in ages,” says Ian McSevney, president of lender Altmore Mortgage Investment Corp. “We as brokers are not just a transactional provider for first-time buyers; we offer financial advice. And right now, people need to refinance their homes to improve their cash flow and save for retirement.”
 
Finance Minister Jim Flaherty appeared to offer a don’t-call-us-we’ll-call-you rebuff following a meeting with CAAMP CEO Jim Murphy where the association head again asked for an easing of restrictions for first-time home buyers. He cited the upcoming spring sales season as needing a helping hand to lift itself out of the doldrums.
 
“I’m not an economist, but they (Ottawa) have done something right,” admits McSevney, a CAAMP member, on the rules concerning first-time buyers. “But CAAMP needs to have Flaherty revisit the refis.”
 
Murphy told Flaherty that last year’s measures have “gone too far” in cooling the market, and urged that a return to 30-year mortgages and an increase of the tax incentive for first-time home buyers be put in place to spur the spring sales season. The current incentive is $750.
 
“The spring months are the most important months for new sales and re-sales,” said Murphy.
 
Flaherty’s office declined to comment following the meeting, but did state it was “unlikely” that there will be any rule changes.
 
Murphy points to the stiffer lending guidelines as having made it too difficult for young people to enter the housing market at a time when prices remain high.
 
“I’m not sure what Murphy is trying to do on the benchmark for first-time buyers,” McSevney told MortgageBrokerNews.ca. “Really, we are only back to where it was in 2005-2006.
 
“What I want is to go back to 85 or 90 per cent on the LTVs," he says. "The 80 per cent benchmark has taken a huge toll on my business.”
7 Comments
  • Shayne 2013-03-13 3:30:55 AM
    “What I want is to go back to 85 or 90 per cent on the LTVs," he says. "The 80 per cent benchmark has taken a huge toll on my business.

    I think a proactive approach on speaking with clients about consumer debt before there is a need to refinance is a better way to go.

    Who are we truly worried about here? A broker's business or home owners using their homes as an ATM?
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  • Christopher 2013-03-13 4:26:49 AM
    A first refinance to improve cash flow for investment purposes is one thing. A second is on the path to bankruptcy, and we as brokers/agents should bear a good portion of the responsibility.
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  • Paolo Di Petta | dipettamortgage.com 2013-03-13 4:37:13 AM
    I disagree, these constant refi's are part of what put us into this mess in the first place. A home is not an ATM and should not be treated as such.

    Either way, it won't matter (at least not in the GTA). Home prices have peaked, and there simply isn't any more room to keep refinancing. We all knew this day would come eventually.
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