FHFA, the US housing agency, is suing 17 banks for selling toxic mortgage backed securities. Another sign that the fallout from the October 2008 mortgage crisis is not completely behind us. The lawsuit is for is for a staggering $196 billion.
Just to give you an idea of what that number compares to…. In Canada, it is estimated that we have around $1 trillion in outstanding mortgages…
The reality of these types of lawsuits is that it will cause some uncertainty in the market… and remember, uncertainty usually means a low-interest rate environment..
Found this article interesting….
Canada is the envy of the world when it comes to our mortgage and banking regulations. This article in the Huffington Post questions why is there a 30 year fixed rate mortgage term and points to Canada’s mortgage and banking system as a better, more viable option.
In case you didn’t know, 30 year fixed rate terms are the norm in the U.S. 5 year Variable rate mortgages are the more common mortgage product around the world, including Canada. 200 U.S. Banks have failed since 2008… NONE in Canada… and in 1985, almost 3,000 U.S. banks failed but only 2 Canadian Banks closed their doors....
Go ahead Canada, feel good about yourselves…!