Canada’s dirty sub-prime secret
From this weekends Globe and Mail business section:
“I didn’t really have to show anything to borrow,” Mr. Goodyear said of his two remaining mortgages, both in default and totalling about $340,000. “I didn’t have to show them my tax returns. I just said ‘This is how much I make.’ I think I made 11,000 bucks.”
Mr. Goodyear is not alone. A Globe and Mail investigation into more than 10,000 foreclosure proceedings has uncovered a burgeoning subprime mortgage problem that many, including Prime Minister Stephen Harper, have insisted does not exist in Canada.
Read the full article here, as well as thier article on the related surge in foreclosure proceedings in BC and Alberta.
March 30th, 2009 at 4:36 pm
Oh most Canadians don't understand how much the sub-prime problem exists here, it's that fact that it got so large in the U.S. that they couldn't hide it any longer. But with all the job loses in Canada now pretty soon the spot light will shift and we'll begin to see how many sub-prime problems there are in Canada. This is why S.Harper said at first that the economic action plan will help Canada emerge faster, and stronger from the recession, but then made a comment on how Canada will need the American consumer to start spending again. That's because they need Canadians to be employed again so that that people can take advantage of the action plan and renovate something instead of worrying how they're going to pay a mortgage that's way beyond their means.
March 19th, 2009 at 12:21 am
"If you choose to live on your own and support yourself, fine."
Well, that fills in the remaining details.
"Fun argument though!"
Back at you, Rentah
March 18th, 2009 at 11:38 pm
"jesus raven, have you ever heard the expression “doth protest too much”….?"
Indeed. This forum is one of the worst pity parties I've ever come across.
March 18th, 2009 at 11:01 pm
jesus raven, have you ever heard the expression "doth protest too much"….?
March 18th, 2009 at 10:03 pm
As an avid investor I caution you not to use stock index's as a gauge of the economy. Look at fundamentals, not trader's last bid or ask price.
It's mind boggling how little some people understand about investing.
March 18th, 2009 at 3:36 pm
First, the pundits spouted: "recovery in 2009".
Then "2010"
Recently, so far I have heard 2011,2012,2013.
Today I heard it will be 2014.
I suspect we may hear 2015 or 2016 by late fall or so.
March 18th, 2009 at 2:40 pm
Here is the full story of todays market action after the Fed intervention if your interested
http://www.marketwatch.com/news/story/fed-buy-tre…
March 18th, 2009 at 2:33 pm
Supraboy:
#158 And the the SoupDrooler is an expert on the stock market LOL
March 18th, 2009 at 2:32 pm
Honestly, the only way to live comfortably in Vancouver in a 3-storey 3500 sqft house is bunk in with your family, share the living costs, and have a mortgage helper. PERIOD.
If you choose to live on your own and support yourself, fine. It's hard work getting ahead alone, but it can be done. I choose to live humbly with my family, with 6 working adults no dependents, and take advantage of the scales of economies my family has right now to build wealth. Real estate is an integral part of our portfolio.
If that's not your aspiration, fine. But don't spew hate and judgement just because I chose to do it. Furthermore, my RE investments in Edmonton does not impact you AT ALL.
March 18th, 2009 at 2:29 pm
I wanted to scoop this article off the Province esite before it dissapeared.
http://www.theprovince.com/Business/Subprime+mess…
I think this is another one of those under reported issues. It is the foreclosure stats that are slowly creeping up into the msm. Personally when my bank tried to offer me a big six figure HELOC I turned them down and told them not ot waste the space on my file. I would NEVER borrow that much consumer credit. But that doesn't mean a lot of other people didn't. Having access to hundreds of thousands of easy dollars without having to pick up a phone is just too seductive for many people. Of course the banks know this, but they're not social workers or a nanny are they.
When house prices were rising a LOT of people took huge amounts of money out against "equity" to go on vacations, buy new cars, give money away to a church etc. But now all that money has to be paid back. The Feds have manipulated intrest rates down to mitigate the issue but it won't last forever. Already a lot of foreclosures are showing up as the artice states in spite of the historic low intrest rates. It's called 'Tapped Out". Now that the 'equity' in the house market is disappearing the loan value remains.
Check out what happened when the US FED dumped another trillion into the market this AM. It literally broke the back of the credit market. Long Term Interest Rates WENT UP!!!!! That has to tell you something.
The money is supposed to make it easier to get credit, but the 2 million anticapated foreclosures this year are getting balance out by the 15 million people unemployed. Don't count the millions more who have been relegated to part time and reduced hours ot the numbers get REALLY UGLY.
The economy is shedding 700 Thousand jobs a month !!! Last weeks 650 thousand job loss number was revised up today to include an additional 138 thousand who didn't get counted somehow. People with no job will NOT buy a house, pretty simple.
The 'don't worry be happy' crowd is in full damage control mode. Obama will go on Leno Thursday to quell the rising storm after Bernake's panic speech on 60 minutes last week didn't fare to well, DUH.
With the huge amount of gasoline the Fed has been pouring on the fire and the IMF now literally throwing money out of helicopters you can rest assured that gold will be at $2000 before 09 is over and a loaf of bread will cost you an hours wages. Hello inflation bubble.
March 18th, 2009 at 2:27 pm
Anyone see the stock markets lately? It keeps on rallying boys and girls. If that's not an indicator of "we've hit rock bottom", what is? This time next year, you'll see housing prices about 10-20% higher than what it's listed for now.
March 18th, 2009 at 2:16 pm
Raven, I am really concerned for you. You really ought to diversify.
I understand that John is looking to expand his pepperoni business to Alberta. The best part is, he has a whole fleet of SUVs, so you wouldn't have to take public transport anymore. Win-win!!
March 18th, 2009 at 2:08 pm
Whether it's 1) condo 2) townhouse 3) apartment, she still should have stuck to renting.
March 18th, 2009 at 2:04 pm
"” I still live at home with my parents and take public transit!”
What? Your story is quite confusing. I thought you were paying off your own house, not living at home?!
Oh, brother. I’m going back to work!"
To be exact, my parents live with me.
March 18th, 2009 at 2:03 pm
I said: "I feel bad for those that purchased a home to LIVE in and may well lose everything" "Perhaps some single mom working 2 shifts and still finding herself out on the street because she’s behind in the mortgage payements?.”
Raven said "Why in hell would a single mom working 2 shifts by a house? She should have stuck to renting."
A home could be a 1) condo 2) townhouse 3) apartment. And yes, you can get a mortgage on any of the above. I never once said a "house" did I?
Ok, ok ….Raven, you're killing me here! Too funny!
March 18th, 2009 at 2:03 pm
"Raven,
Congratulations for still living off your parents. Always a free ride for you. Perhaps if you had to live on your own, make your own rent payments and generally supported yourself like most adults, you wouldn’t be in this mess.
Again, I hope you get what you deserve."
Ha, then I'd be poor like you, right? I love my parents.
March 18th, 2009 at 2:01 pm
"You’re hoping to be released from the grip of one bubble before you miss the next one.
I believe you came on here with the intention of proving that lending standards are great in Canada. In the process you’ve revealed bits and pieces to provide an interesting bubble vignette.
I think it’s cool that you’ve paid off your main house, though. That’s the part of your story I do admire."
During a recession, who DOESN"T want to reduce their risk? In hindsight, of course I regret buying the condos! But now that the RE popped, I'm hoping Vancouver will become affordable again (that's why I'm a happy RE Vancouver bear) and if it does, I plan to sell off my edmonton properties to fund it.
March 18th, 2009 at 2:00 pm
Ella – Good call! you spotted the rat before I did. (Raven owns a house, but lives in a condo but wait…he/she lives with his/her parents)
I've got some journal entries to post…so I'm going back to work too.
Fun argument though!
March 18th, 2009 at 1:57 pm
Ella, I see your point and yes I agree. A glut of rentals coming on-board is good as long as the speculators don't try to jack up the cost of rent to cover their loses.
As for quality and size – again I agree. I've heard that any project built during a bubble – a condo/house whatever, isn't a good buy now nor in the future. The problems/crappy quality will only increase with repairs in the future. I don't know many families that would want to live in 400 sq ft. either.
March 18th, 2009 at 1:55 pm
"Raven – I resent YOU. A person that has 6 properties, will never live in any of them and probably won’t even step foot in any of them. Why did you buy so many?"
Duh, I live in one of them.
"I hope you get what you deserve. I feel bad for those that purchased a home to LIVE in and may well lose everything. Do you even think about that? Perhaps some single mom working 2 shifts and still finding herself out on the street because she’s behind in the mortgage payements?."
Why in hell would a single mom working 2 shifts by a house? She should have stuck to renting.
"Innicent people will suffer because people like you decided to bulk-buy properties, run the prices up and take affordibility along with it."
People like me who provide properties at rents that are affordable than mortgage?
All this emotional argument–Save it for my property managers.