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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?    Continue reading “Federal govt finally takes action on Collateral mortgages.”

Banks raise mortgage rates

RBC-BankRBC is raising their rates… As expected, fixed mortgage rates have gone up.  RBC is the first of the BIG SIX to raise their rates.  RBC’s 4 yr rate special will go to 3.09% from 2.99% and their 5 yr rate special will go to 3.29% from 2.99%.

Of course, these are NOT the best rates in the wholesale mortgage market, nor are they the best fixed rate products.  But RBC is the largest mortgage lender in Canada, so we must take note.   This rate increase is no surprise.  As reported on May 13th and May 28th, bond yields had increased over 30bps in May.  A rate increase was imminent.

Wholesale mortgage rates started to go up a few weeks ago.  And as of June 10th, all Lenders will have increased their rates by around 10bps.

Remember, 5 yr fixed rates are still below 3.00%.  I don’t think there is any reason to panic.  We can expect the other BIG SIX banks to follow with their own rate increases.  Fixed rates are closely tied to the Canadian govt bond yields.   And with the stock market in the U.S. hitting unexpected record highs, and the our own Toronto Stock market making significant gains, it was only a matter of time before rates moved.  Economists still believe rates won’t go up quickly.  It will take time for rates to go up significantly.

Your best interest is my only interest.

As always, I welcome your comments, calls and questions.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Poloz in, Carney out as Bank of Canada Governor…3 major changes in less than a year!! Anyone else find this strange??!.

Poloz, Carney, Flaherty Stephen Poloz was announced as Mark Carney’s replacement as the new Bank of Canada Governor.  The announcement was a surprise for many… Most thought the Deputy Governor, Tiff Macklem, would have been a more likely candidate.  But Jim Flaherty, Minister of Finance, chose Poloz…. probably because he shares the same vision as Flaherty…  tighter lending rules, higher rates.. etc..

But this article isn’t about why Poloz is in, and Macklem is out.   I want to bring something else to your attention.   Did you know that we have had 3 major changes in less than 6 months?   Mark Carney is leaving Canada to head the Bank of England.   Then, within 6 months, the head of OSFI, Julie Dickson, announced she will be leaving in 2014.   And now Karen Kinsley, CEO of CMHC, has announced she is stepping down.  I’ll add in a fourth.. Robert P. Kelly has come in as Chairperson of CMHC… You’ll need to read this to understand why this is relevant.

These are major changes folks.  OSFI, CMHC and the Bank of Canada Governor.   3 major players that run and regulate Canada’s Financial and Banking sectors.  Has anyone asked why  they are all leaving now? Continue reading “Poloz in, Carney out as Bank of Canada Governor…3 major changes in less than a year!! Anyone else find this strange??!.”

CMHC CEO Karen Kinsley out, Wall Street banker Robert Kelly in… anybody asking why??

Karen Kinsley Karen Kinsley has been with CMHC (Canada Mortgage and Housing Corporation) for 25 years.  The last 10 as it’s CEO.  CMHC makes buying a home more affordable by insuring the mortgage against default.  End result is a lower down payment requirement and lower interest rates.   CMHC is profitable.  They earned $1.7 billion in 2012 and $17 billion over the last 10 years.

In 2012, the Federal govt and the Minister of Finance decided to move CMHC under OSFI (Office of the Superintendent of Financial Institutions).   OSFI is a regulatory body that provides regulation and supervision to 152 Banks, Trust companies and other Lenders.   They function like auditors.  A move questioned by many and one that contradicts the spirit of what CMHC is supposed to stand for.

Enter Robert P. Kelly.  Mr. Kelly was appointed as Chairperson of the Board of Directors of CMHC this same month.  Coincidence?  Here’s a bit of history on Robert KellyKelly….He worked at TD Bank from 1981 to 2000 leaving as a senior executive that was on the short list to be TD’s CEO.. he didn’t get the job and left for the U.S. to join Wachovia, then later Bank of New York Mellon as CEO and Chairman.  I remember Mr. Kelly from my days working at TD.  He was always a higher profile, more visible executive…  Continue reading “CMHC CEO Karen Kinsley out, Wall Street banker Robert Kelly in… anybody asking why??”

Fixed mortgage rates could move up this week.

graph trend up Guess I shouldn’t have talked about the record low interest rates last week…   Today, 2 small lenders increased their fixed mortgage rates and another Lender warned of a potential increase coming sometime this week.  What’s driving the higher rates?   A jump in the 5 year bond yields.  Fixed mortgage rates are directly affected by the Govt of Canada bond yield.

With bond yields jumping 20 basis points in the past 1o days, it’s only logical to assume mortgage rates will go up.   click here to see bond yields.   But hey, with interest rates at record low levels, it’s no reason to panic.  Rates are still great…. if you want to protect yourself against a possible increase, get a rate hold… it’s free and there’s no obligation.   Most Lenders will hold rates for 120 days..

Need help to get a rate hold?  Call me.   I can help.

Your best interest is my only interest.

As always, I welcome your comments, calls and questions.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

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