More disclosure.. but still no standardization of Mortgage Penalties.

Olive and harper Last week, we heard some potentially good news for Canadian consumers.  Federal Finance Minister, Joe Oliver, announced Banks would have to provide consumers more disclosure on certain products, including collateral mortgages.  We welcome more disclosure.

However, before we get too excited and give the Federal govt too much credit, let’s wait to see if this latest promise really happens.   If you are wondering why I’m so skeptical, it’s with good reason.  The Federal govt has not honored their commitments before.  And I’m talking about the promise made to Canadians to charge a fair prepayment penalty…  Remember that one? Read the rest of this entry »

Federal govt finally takes action on Collateral mortgages.

handcuffsTD Almost 4 years ago, I reported that TD was about to make one of the biggest changes in mortgage history.   They were about to register all their mortgages as a collateral charge.    Consumer advocates spoke out against the collateral charge as they recognized it would limit a borrower’s future options.

A collateral charge is always used for secured lines of credit products.   The charge does not require an amortization which allows the credit balance to go up and down.   Using a collateral charge for ALL mortgage products gives the Banks more power.   It allows them to attach other unsecured debt to your mortgage…  Unsecured credit products such as loans, credit cards, unsecured lines of credit or other unsecured Bank debt.  I bet most people don’t know that?    Read the rest of this entry »

News stats..Higher debt, but lower defaults

debt aminationSaw this article today about higher consumer debt levels BUT lower defaults.   Equifax Canada is quoted as saying that consumer debt rose by 7.2% in  the second quarter 2014 to $1.45 trillion ,compared with $1.35 trillion from a year ago. This includes credit cards, loans, lines of credits and mortgages.

The average Canadian now has $20,759 in personal debt, excluding mortgages.   That’s a 1.5% increase since last year.   So that means mortgage debt has risen by around 7%.    Here’s a heads up… you will see and hear articles sounding the panic alarm… again.

Well, before we hit that panic button, there was one more stat that we should pay attention to.   DEFAULTS.   Defaults are at their lowest level since 2008.  If higher consumer debt levels and lower defaults sound strange to you, it shouldn’t.    I’ll explain… Read the rest of this entry »

%d bloggers like this: