Broker to CAAMP: Give up the mortgage-rule ghost

Broker to CAAMP: Give up the mortgage-rule ghost

Broker to CAAMP: Give up the mortgage-rule ghost

At least one broker is suggesting CAAMP – meeting with officials in Ottawa next week – needs to reconsider its position on tighter mortgage rules and embrace the long-term benefits of the revamp.

“CAAMP really needs to re-evaluate their mission in Ottawa,” Paolo Di Petta, a broker with EQRON Mortgages in Toronto said. “I don’t think they’ll be doing the broker industry justice if they push for a turnaround of the current lending policies.”

This week, CAAMP president Jim Murphy announced that he, the association’s chair and its chief economist would be holding meetings with bureaucrats and politicians in Ottawa Monday to discuss the recent mortgage rule changes and the corresponding hit to housing and mortgage industry.

Earlier this week, Finance Minister Jim Flaherty indicating that he is “happy” with how the rule changes have tempered demand for housing, lowered prices and averted a bust.

Mortgage brokers have largely taken a dissenting view, many are, in fact, pointing to CAAMP’s most recent mortgage market report as proof of their position.

CAAMP intends to bring that document to Ottawa, highlighting the effects the new rules have had on the first-time buyer market as well as the continuing diligence of Canadians, actively paying down mortgage well ahead of their 25- or 30-year amortizations.

Di Petta views it another way.

“I don’t buy that argument,” he said, referencing the first-time buyer falloff. “Those home buyers were shut out of the market due to skyrocketing home value brought about by low interest rates and previously lax mortgage rules.”

Rather than calling for policies that will provide only short-term growth for the mortgage industry, CAAMP and brokers should be more proactive in educating consumers on how to avoid accumulating “irresponsible” debts, Di Petta said, adding that the fourth recent revamp of the country’s mortgage rules was warranted to cool down an overheated housing market.

“We had to rip the Band-Aid off,” he added. “It was something that had to be done whether or not it hurts.”



  • Mortgage Agent 2012-12-07 8:54:44 AM
    Paolo Di Petta needs to study hard and find out the actual reason. Low interest rate was part of the problem, the actual problem was/is the supply and demand. More immigrants, low inventory => Higher prices. Interest rate wasn’t this low late 90’ and beginning 2000’s. The home prices keep climbing since then.
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  • Paolo Di Petta | 2012-12-07 1:55:15 PM
    I admit that wasn't the only reason, but it certainly was a big one.

    Rates started falling in the late 90's and, if you check the TREB stats, you'll see that sales (that were already on an upswing,) accelerated.

    Not to mention, if easy access to cheap borrowed money wasn't a major driver, then the rule changes wouldn't have had this effect.

    Supply and demand IS important, but the fact is if people don't have the money (or access to credit) they simply can't afford it. Housing prices were getting out of control, and this measure will bring them more in line.
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  • Paul Therien - CENTUM 2012-12-08 6:10:45 AM
    I appreciate that CAAMP is making the effort, but I think we need to consider that there are other much stronger lobby groups that support the regulation changes. I can’t see the government doing a flip flop on this, but I do think that CAAMP is doing their job by having the discussion and they should be commended for making the effort.

    Instead of raging against the machine, perhaps the question we should be asking ourselves is this: “How can we, as mortgage professionals, reposition ourselves to take advantage of the greater difficulties the consumer will experience due to the tightened mortgage regulations?”
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