Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Notify me of new replies via email
Mortgage Broker News | 21 May 2015, 09:15 AM Agree 0
It’s an opinion brokers may not necessarily agree with, but one influential public policy think-tank believes concerns about household debt are overblown.
  • LanceH | 21 May 2015, 10:41 AM Agree 0
    I suspect the cc co. that called Ad Lakhanpal had already done a soft check while talking to him and already knew what cards he had, limits, amount owing, and that he was responsible with his use of credit. So no, they don't need to know his income - he's already proven himself. Just a possibility, as I know lots of folks with poor credit that would never get offered that. They made the offer for good reason....
  • lwright | 21 May 2015, 10:51 AM Agree 0
    I think that much of the Canadian population is made up of baby-boomers in their twilight years who are earning less income by choice during their retirement. however, many may have the ability to take on debt due to assets they have accumulated be it property or investments. Thus, it is important to look at the complete picture not just income to debt spending vis a vis income.
  • FA | 21 May 2015, 03:21 PM Agree 0
    Assets? I suspect these are mostly house/real estate values? LOL - this is the kind of rationale that caused the RE market in the USA to crash and the subsequent credit crunch. These assets only go up in value as long as someone can pay for them... Also remember the early 1990s in Canada? As soon as folks started to bankrupt en mass and walkaway from mortgages all these "asset valuations" just tanked.
  • LanceH | 21 May 2015, 03:38 PM Agree 0
    @FA. Except we don't get to simply "walk away" in Canada, as our mortgages are full recourse, unlike the US. I think there was a lot more than that that caused the crisis no? As I recall, there's also been a slight of hand on those stats too. The US 150% of debt-to-income ratio did NOT include their homes!! Just sayin. . .
  • Carsten | 26 May 2015, 12:44 PM Agree 0
    The US debt to income ratio is after paying income taxes and before they pay their medical insurance.
    The debt to income ratio in Canada is
    calculated after we paid our taxes that include
    most of our medical insurance costs.
    This calculation was changed several years back (5 - 7 years???) and the Canadian debt to income ratio suddenly jump by about 20% if I remember right. At the time somebody quoted that an average American family of 4 that has to buy their own medical insurance had to pay about $ 1,100 / month. I don't know what the costs are today after Obama Care. Don't get me wrong. Less debt is better but don't we create a crisis here by fudging numbers?
Post a reply