It’s that time of the year again.. The Banks have to report their annual profits.. And no surprise, the BIG SIX BANKS are at it again..
RBC reported a $10billion annual profit for 2015. This is the first time a Canadian company reported an annual $10billion profit. Yet, at the same time, they are crying the blues and warning of troubled times ahead. (uh, that’s the same speech they’ve made for the past 10 years.. here’s a 2013 headline). GIVE ME A BREAK!!! Canadians aren’t buying it anymore..
Check out the obscene profits pulled in by the rest of the BIG SIX BANKS..
Continue reading “BIG SIX BANKs report obscene RECORD $34billion in profits for 2015…and still complaining!”
March 29th, 2012 is going to be remembered as the day when the BIG SIX Banks ended their Mortgage War. Well, at least for now. Rates are up around 0.50% at Retail Branches of the BIG SIX Banks. (don’t worry, Mortgage Broker rates haven’t gone up that much and are lower than any of the so-called discounted or special rates advertised by the BIG SIX Banks.)
In what was an unprecedented, public fight for your mortgage, the BIG SIX Banks pulled down their pants and showed how low they can really go with their rates. We saw BMO come out with their 2.99% NO FRILLS mortgage… ( a product we wouldn’t recommend to anyone due to it’s restrictions, limitations and penalty calculations). Unfortunately, too many borrowers don’t look beyond the rate and have signed on for this product.. They will have to deal with the consequences in the years to come.
RBC fired back with a pretty good rate of 2.99% for 4 years… It didn’t have the restrictions or limitations but it still had that unfair penalty calculation. RBC also took some public shots at the BMO product, through the media and their own website. It was great to see some real competition take place among our BIG BANKS. There is always a winner in this war. You the borrower.
TD, Scotiabank, National Bank and CIBC all followed with a similar 4 year fixed rate at 2.99%. But they still had that same penalty calculation formula I absolutely don’t like.
“Canadian lenders appear to be extremely slow to pass on changes in the Bank Rate to their customers.” Anyone remember that quote? That’s a direct quote from the Bank of Canada review entitled ‘Competition in the Canadian Mortgage Market’.
Here’s another one from the same report “borrowers who use a mortgage broker pay less, on average, than borrowers who negotiate with lenders directly”.
The good news about all this rate war stuff is that we saw even better mortgage products being offered through the Mortgage Broker channel. Remember these quotes the next time you are shopping for a mortgage.
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…