Here’s a great report that was put out by Deloitte. The report shows that Canadians rely on Mortgage Brokers more than ever… but not as a last resort.
Unlike the U.S., where mortgage brokers used to account for 65% of all mortgages arranged prior to the October 2008 mortgage crisis, U.S. broker now account for less than 20% of mortgage business.
Here in Canada, 38% of all mortgage originations went through a mortgage broker…. including 44% of First Time home buyers.
With national and provincial organizations like CAAMP (Canadian Association of Accredited Mortgage Professionals) and IMBA (Independent Mortgage Brokers Association), Mortgage Brokers play a vital role in informing and educating borrowers. Mortgage Brokers aren’t just a last resort, they are now viewed as a first choice for getting unbiased and professional advice.
Dare we say it, a mortgage broker helps to create competition….and isn’t competition good for the consumer?
A deal was struck earlier this week that will make it easier for seller’s to list their homes on MLS… The Competition Bureau hopes we will see some changes in real estate commissions….click here for the CBC article.
Currently, a seller pays 5% or 6% to sell their home… and that’s been the standard for many years… But with new technology and the internet, we have seen For Sale By Owner companies popping up everywhere. These companies have not been able to access MLS without employing a realtor.
We all want to save money and pay less… but there is a saying…’you get what you pay for’.. For some, paying a reduced flat fee, and handling viewings, the negotiations, etc, could be worth savings…. but others may not have the expertise, the knowledge or the time to deal with this….
In the end, I think choice is good. It remains to be seen how many people will move away from the traditional real estate agent and handle things on their own… Just beware of something that sounds too good to be true…
A few weeks ago, we heard from a source that TD Canada Trust was making a major change in their Mortgage Lending policy. ALL new mortgages would be registered as a collateral mortgage instead of as a conventional mortgage…. previously, only secured lines of credit were registered as collateral mortgages.
By the way, here is a great article from Gail Vax-Oxlade, a well known personal money manager…..she would never take one of these new mortgages with TD… I think she is right on the money with her comments and analysis. Continue reading “Update on TD Collateral mortgage rules”
Bank of Canada governor, Mark Carney, held the Target Rate steady today…as expected… Concerns about the U.S. economic recovery stalling, the Global economy and our own domestic economy were mentioned in the Press Release.
In the press release, the Bank said inflation was not a concern as it is under the 2% target. Take all this data and it spells UNCERTAINTY.
What’s also interesting is that the Bank has adjusted it’s forecast for growth downward for the next 2 years…Great news for those in a Variable rate… Variable rates are hovering around 2.30% these days.
This makes the Variable Rate product that much more attractive…even with 5 year fixed rates in the 3.59% range.
Experts believe the rate will remain steady throughout next Spring and possibly into Fall depending on inflation and Global and domestic economic data….
Click here for the Press Release.
Here is a good article from McLean’s Magazine that talks about more Mortgage Fraud taking place in Mississauga and other parts of Canada.
But before you read any further, just make sure you understand something… during an economic downturn, we will hear and see more crime related reports…. I’m not sure fraud has increased more or if the fraud can no longer hide behind rising house prices and stable employment…
One of the big mysteries is that we don’t know how much mortgage fraud really takes place in Canada. That’s because no statistics are available…or at least are not made public.
The McLean’s article said the Canadian Bankers Association says they have no stats on mortgage fraud… and CMHC said that ‘it wasn’t able to provide that data prior to the article being published’….. Come on… no one has these statistics??? Then how do we know fraud is a problem?? Clearly, the Bank’s obligation is to it’s shareholders… and reporting any type of fraud could affect the value of the shares….discretion is always exercised when talking about taboo subjects like fraud. Some have suggested it’s an acceptable cost of the mortgage business… after all, there are over $940 billion in outstanding mortgages in Canada.
Earlier this year, we saw a high profile case with BMO filing charges of mortgage fraud naming hundreds of people… the fraud was for $140 million and could cost the bank $30 million in losses.
Then in June, a report came out from the BC govt that slammed RBC and BMO for loose lending practices…. what made this report somewhat funny is that during this same week, RBC received an award for Creditor of the Year… one of the reasons for winning the aware was that RBC was ‘thinking outside the box’.…. yeah, I guess they were..!
I don’t know if there is any correlation but the Big Six Banks (TD, BMO, CIBC, Scotia, RBC, National Bank) have been on a massive hiring blitz… hiring record number of so-called Mobile Mortgage ‘Specialists’ …. These banks have doubled and tripled their commissioned sales force in the past few years…. That’s right, COMMISSIONED sales force… Makes you wonder…..
By the way, Bank employed ‘Mortgage Specialists’ are not registered with the Ministry of Finance like Mortgage Brokers are…no license to lose…