CategoryMortgage News

Posted July 4, 20132 Comments Interest rates

Banks maximizing mortgage penalties again… but there’s a bright side..

In case you haven’t heard, Fixed rates are up around 0.50% over the last 3 weeks. But the Banks haven’t increased their posted rates… How can that be?? And how does that affect you?

The BIG SIX BANKS have played the rate guessing game for as long as I can remember.. This time, they’ve added another twist to ensure you will be paying those inflated penalties even longer.. By not increasing the posted rates, they ensure themselves any existing BANK customer will pay the same inflated penalties.

Look back to 5 years ago when fixed rate discounts we around 1.10% off Bank posted rates.. Now fast forward to May 2013. Rate discounts reached an all-time high of 2.25%. And whether it was by design or not, this inflated your penalty by the same margin. (I’ll let you decide if this is just good old BANK luck… yeah, right.) Continue reading “Banks maximizing mortgage penalties again… but there’s a bright side..”

Posted June 20, 2013 Interest rates

When the U.S. sneezes, Canada gets a cold… I’m getting the sniffles…mortgage rates are headed up.

Yesterday, the U.S. Fed Chairman, Ben Bernanke, announced he ‘could’ start to ease their stimulation of the economy later this year. That small announcement has had a huge impact on the global stock markets and bond yields. Stock Markets are down around 2.00% around the world as of 2.30pm today.

The U.S. has been buying around $85billion worth of bonds every month in an attempt to keep interest rates low. And with that simple announcement yesterday, the world’s markets have reacted. Bond yields have started to climb…

Our own 5 yr Govt of Cda bond yield is up to 1.75%. That’s up around 10bps from yesterday, and up 60bps from the beginning of May. In fact, we haven’t seen these levels since October 2011 and again in March 2012. We already received warnings from our Lenders that wholesale mortgage rates are likely to go up. Remember, bond yields affect Fixed mortgage rates.. but they will have an indirect affect on Variable rates, too. Continue reading “When the U.S. sneezes, Canada gets a cold… I’m getting the sniffles…mortgage rates are headed up.”

Posted June 4, 2013 Bank News

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

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??!.”

Posted June 3, 20132 Comments Bank News

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

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 Kelly….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??”

Posted May 31, 20135 Comments Mortgage News

Top Banking regulator stepping.. OSFI’s Julie Dickson leaving in 2014

Julie Dickson, the head of OSFI (Office of the Superintendent of Financial Institutions) will not be back when her term expires in July 2014. She’s decided to not to stick around after making more lending rule changes in 2012, than I have ever seen, during my entire 23 year career working in financial services. OSFI is a regulatory body that provides regulation and supervision to 152 Banks, Trust companies and other Lenders. In short, they are auditors. Here’s a link to the major changes made just last year including putting CMHC under OSFI control.. more on that later..

Some say her claim to fame is that she was in charge during the worst banking and mortgage crises in history. And that Canada came out of this global financial collapse way better than any other country. It’s true, we did come out of this very well compared with the rest of the world… But what does Ms. Dickson and OSFI have to do with it? For me, this had more to do with luck, govt intervention and Canadians being our normal conservative selves. We were a little slower to adapt to U.S. style lending policies… Ask any financial expert and they will tell you we were just a few years behind the U.S. with regards to their wild mortgage lending guidelines… Continue reading “Top Banking regulator stepping.. OSFI’s Julie Dickson leaving in 2014”