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Say hello to the decision makers

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This post is all about contacting your representatives in government – getting clarification on where they stand regarding housing economics, and letting them know where you stand as a voter.  Many readers on this site have mentioned the importance of writing to your MP, so I figure it’s high time we do a story thread where we can share ideas and contact information.

First off a list of Vancouver area members of Parliament including email links and mailing addresses. (thanks Drachen for the link)

Now a few questions / opinions I have for my MP.  I should clarify these are just points for discussion and not intended to be copy and pasted into an email.  Writing a letter in your own words will likely be more effective than a form letter.

The Canadian Mortgage and Housing Corporation
I believe that the CMHC is flooding too much cheap credit into the housing market temporarily driving up prices.  Where do you stand on the CMHC and how effective do you feel they are addressing their mandate of making housing affordable to Canadians?  Is ‘affordability’ measured best as temporarily low monthly payments or as total debt load?

OSFI Conversion to International Financial Reporting Standards
The Office of the Superintendent of Financial Institutions Canada (OSFI) has a draft advisory (pdf) that is set to be put into effect at the end of this year.  There has been some opposition to implementing these changes at this time.  Where do you stand on the OSFI advisory, specifically on taxpayer funded securitization of mortgage debt?
* You may wish to contact the Honorable James M. Flaherty on this topic

Bailouts for speculators and negative equity homeowners
As housing prices fell in the US, there were a number of government bailouts and stimulus measures that tried to prop up the market.  These measures have so far failed to keep house prices from falling more than %50 in cities like Las Vegas and Miami.  Where do you stand on bailouts or other measures that attempt to prop up housing markets?  If foreclosure rates rise further in Vancouver, what sort of action would you take if any?  Would you support or oppose bailouts?

So what do you think? What do you want your MP to know and what issues do you want them to clarify their stand on?  Are there other Government entities that you think would be worth contacting?  Post your thoughts, letter excerpts and ideas in the comment section below.

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asp

I recently came across an apparently little known method of getting the governments attention. I don't know if it has a history of being effective. How to Petition Parliament from http://www.inkymark.com/site/node/36 "The petition must contain a request, called a "prayer", for Parliament to take some action (or refrain from taking some action) to remedy a grievance." It needs 25 signatures, and can be sent to any MP, not just your own. However, MP's are not required to present the petition, so one might be best served to find one sympathetic to the cause. "Members of the public who wish to petition the House of Commons on a matter of public interest are advised to first submit a draft petition (without signatures) to a Member of Parliament to see whether it is correctly worded and whether the Member would agree to… Read more »

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Borat

Seems to me like the Feds are attempting to take some heat out of the market without a vote-losing 'pop':

http://ca.news.yahoo.com/s/reuters/091221/busines…

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sluggo

Record profits from record securitization all 100% backed by the CDN taxpayer. Bank's shareholders cash in and all the downside is socialized.

http://www.cmhc-schl.gc.ca/en/hoficlincl/mobase/u…

http://www.cmhc-schl.gc.ca/en/hoficlincl/mobase/u…

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patriotz

@observer:

Typically, the official line from banks is that as long as you can still make payments there should be no problem.

That's true here, because if the mortgage is insured (virtually all bubble purchases AFAIK) the taxpayers are holding the bag and the bank doesn't care if the property is underwater.

The big problem is not going to be willingness of the banks to renew, but the ability (and willingness) of the homedebtor to handle the huge increase in payments once interest rates return to normal, as they inevitably will.

The mortgage securitization and insurance regime during the US bubble was completely different from what we have here, although it looks more like it now due to the federal takeover of Fannie/Freddie and the exit of private capital from the mortgage market.

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D. Bone

@rp:

It's true!

And it's more credible than you think. Somebody on this site just last week (or was it the week before) posted a link to a MLS listing for a $2.5M west side house for sale that was currently rented at $1800/month. There's plenty of west side 'millionaire homes' that are rented for between $1500 and $2000 per month.

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rp

#53 @D. Bone: That's so outrageous I can't believe it. Those numbers aren't credible, whether they're true or not.

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Kevin Simpson

This was a good thing… Well done. I've already gathered my ideas to send an email for him

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D. Bone

@richasian:

"Just keep making up stories to make yourself feel better bear. It’s ok that you’re a loser. Not everyone can be a winner by definition. "

Now that's what I call: 'In Denial'!

My landlord had a $2M mortgage on a $2.5M west side house that I rent for $1500/Month. Do the math.

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observer

There have been numerous occasions when it was asked what happens if your mortgage goes underwater (house value less than loan value). Typically, the official line from banks is that as long as you can still make payments there should be no problem. There is an interesting article calculated risk

http://www.calculatedriskblog.com/2009/12/refinan…

and mish Underwater, Securitized, and Screwed by the "Pass the Trash" Strategy

about the things that happening in the us (where we have a real world example in recent memory as a reference point). It seems securitization causes problems for refinancing underwater mortgages.

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nonymouse

I have to say it's a bit weird reading all of the MSM bubble warnings as of late.

Yet it seems that the lazy reporters just handing in press releases haven't

got the message yet.

http://www.vancouversun.com/business/Home+resale+…

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patriotz

@Anonymous: Great link, anon, you beat me to it. But look at the typical response from the bubble denier: Arguing for the armour case in a new report for the Federal Reserve Bank of Cleveland, University of Western Ontario economist James MacGee says the main reason Canada's housing market hasn't gone bust is because of much sounder lending practices. An explosion of subprime and high-risk mortgages, rather than merely low interest rates, was the primary reason that U.S. prices boomed and then collapsed, according to Prof. MacGee. WRONG. All housing busts, everywhere, have the same root cause – prices out of proportion with rents and incomes. There may be different reasons for this in different places, but how prices got to be too high is irrelevant. What matters is that they are too high. And lending for more than the… Read more »

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patriotz

@other ted: Patriotz good post but Krugman didn’t just call the bubble he was an advocate of it. Does that sentence make any logical sense at all? Doesn't it follow both from reason and from evidence that those who wanted a housing bubble and had the power to enable one (Bush, Greenspan, Bernanke, et al) would deny that one existed, and attack those who claimed there was one? Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve. Bernanke: There's No Housing Bubble to Go Bust (2005) How come nobody was claiming in 2005 that Krugman had previously advocated the bubble? Think that one over. Could you do… Read more »

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realpaul

The smoke and mirrors campaign by the government to misdirect the populations attention away from price inflation to real estate appreciation is obviously working.

What do people react to first, the good news on the latest rise in values or the fact that the cost of everything else is also going up so fast that the increase is meaningless?

http://www.bloomberg.com/apps/news?pid=20601103&a…

Why do you accept that food costs are doubling every year but feel snug as a bug when real estate values are going up 10 to 15%?

I can't help but conclude that the CDN population has been adversley affected by a 'stupid drug' put into the water supply. Otherwise none of this makes any sense.

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Absinthe

As someone who has done letter writing in the past, I thought I'd mention that indeed, personal and mailed letters are better, but that you can expect a response to be anything from a month to an entire year later. Longer for cabinet ministers. (And sadly, the response will have zip to do with what you wrote, usually being sort of canned party level adverts in that vein.)

However, letters DO matter, even more than opinion polls.

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DoDo1975

The following is a letter I originally sent to Bill Siksay in July. I never received a response as Bill forwarded it onto Peter Julian, so I have resent this to Peter. Peter Julian MP, I have some concerns over the governments willingness and in some cases its outright encouragement to put its citizens further into a hole many will never dig their way out of. After several years of unprecedented "appreciation" in real estate, housing is unaffordable to to the vast majority of the population in much of Canada. In the major centers of British Columbia, only the very upper level income earning families can afford to own a home and have a decent quality of life as well. For some reason, a large swath of the population, including most in government, see this as a badge of honor… Read more »

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observer

@GR: Interesting discussion. The way I see it, there is difference between being right and being listened to. The two things are completely uncorrelated, except that those organizations/countries who listen to those who are right will win out in the long run from those that don't. In the short time scale, you can ignore people who are right, but you can't continue to do so forever because eventually the SHTF.

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observer

@patriotz: You are right, you can't rescind this on past CMHC bonds and doing this on future bonds would require introducing a new type of bond, call it CMHC B bonds if you will. But all of this is very unlikely I agree. I think CMHC could still operate as insurance company but it would need to be broken up into smaller pieces (so not too big to fail) and operate on the understanding that it could fail. That would force banks and bond holders to price in the risk and be more prudent in lending. The government would should also regulate these mortgage insurance companies so they are well capitalized and supervised closely. More complicated yes, but that is the price of allowing people to buy with little down payment and longer amortizations. Your predicted outcome is simpler and… Read more »

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oneangryslav2

@other ted: I wasn't mentioning Krugman's credentials as an attempt at argumentum ad verecundiam, but merely establish clarity about the identity of the individual to whom you were referring. I found that necessary because, as I mentioned in an earlier message, nothing that I have read by Krugman is would support your contention that he was an advocat of the housing bubble as sound economic policy. I then assumed that you may be talking about a different Paul Krugman.

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trackback

[…] December 2009 · Leave a Comment This from Let’sGetOurFactsStraight at vancouvercondo.info 14 Dec 2009 at 2:12 pm […]

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ReadyToPop

It's a problem the Bank of Canada warned about last week when it called rising consumer debt from Canadians buying into the hot housing market the top risk to the country's financial system.

Higher interest rates, more household debt raises fears for households

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rp

"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

That's a pretty weak indictment. Also note that that column was written in August 2002, with the rate at 1.75%. Three months later they dropped it to 1.25%, then in June 2003 it went to 1% and stayed there for a year. This part of the policy was clearly insane, and seemed to be a play by Greenspan to get Bush reelected.

http://www.newyorkfed.org/markets/statistics/dlyr…

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other ted

And OAS so what if Paul Krugman is a nobel prize winner, so are Obama, Gore, Moniz just to name a few disgraceful winners.

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richasian

@D. Bone:

Just keep making up stories to make yourself feel better bear. It's ok that you're a loser. Not everyone can be a winner by definition.

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other ted

last one was me. No idea why nonymouse popped in as my name

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