CMHC takes responsibility for all mortgages?

Apparently it’s not just the typical less than 20% down mortgage that the CMHC insures. They’re currently almost at their government mandated limit of $600 billion in default insurance because banks are buying up insurance to cover even low ratio loans (ie greater than 20% equity). This removes all risk from the lender, so why wouldn’t they do it? I didn’t even know this was permitted.

Normally, every 3-5 years as the mortgage market grows, CMHC has asked for, and received, approval from parliament to raise this limit. It was last raised by $150 billion in 2008.

Now media frenzy has politicians scurrying to offload mortgage risk from the government back to the private sector. (The government guarantees CMHC’s liabilities, so public concern is certainly understandable.)

As a result, many question whether CMHC will get its $600 billion limit raised anytime soon.

Here’s some reaction on that:

TD Bank economist Sonya Gulati tells CBC that not increasing the limit “may serve to tighten the housing market.”
RBC economist Robert Hogue told Global News that increasing the limit “…would be, policywise, a very delicate balance to strike.”
The Post quoted an unnamed industry source as saying: “…What will the government do, not increase (CMHC’s) limit? This could kill the entire housing market.”

Read the full article here.

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Brainburst
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Brainburst

Reassessing the Canadian Banks

all is well but…

http://www.morningstar.co.uk/uk/13/articles/10396

TPFKAA
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TPFKAA

OFF TOPIC:

I predict at least 21,000 inventory by July 1st.

Anonymouse
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Anonymouse

@TPFKAA:

I think the peak for the year will be around 19000-19500.

Guy Smiley
Member
Guy Smiley

The Post quoted an unnamed industry source as saying: “…What will the government do, not increase (CMHC’s) limit? This could kill the entire housing market.”

Well-said, unnamed industry source! Give that junkie some more heroine – who knows what could happen if we let him come down.

yvr2zrh
Member
My models are showing about 20,000 immediately before the June 30 Expirations. With some small fluctuation during the summer and the same level at the September 30 expirations. Unless we have a complete collapse of buyers (like 2008) we will not see that same 2008 peak inventory level. However – -you just never know. On the MOI side – We are at about 8 right now. During peak spring season, I am forecasting approx 4.4 months as the low (which is quite bad given it is typically 2-3) and an increase up to 8.6 months by Mid-September. I'm forecasting year-end inventory to be higher than last year by 17% which will not get us to the same as end of 2008 but be quite high. (I think I want to save this one to see how close it is).
Slippery Pete
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Slippery Pete

And there you have it folks – the political dilemma spelled out for you! This market will continue to remain solid because the politicians need the market to keep rising! hahah bears – foiled again!

Anonymous
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Anonymous

you will be taking a job with double your current salary by then, no?

buffates
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buffates

One of my friends is good buddies with one of the top foreclosure guys in the city and apparently he is cranking out foreclosures like crazy. How crazy? He has 12 count them 12 paralegals working for him. Apparently, the sunshine coast and the okanagan are getting crushed and it's starting to show up in surrey and delta. Rotting from the outside in.

Anonymous
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Anonymous

One of my friends is good buddies with one of the top foreclosure guys, said his office has nothing to do in BC. all the guys are sitting there counting their fingers.

Slippery Pete
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Slippery Pete

One of my friends is good buddies with one of the top foreclosure guys in the city and apparently he is cranking out foreclosures like crazy. How crazy? He has 12 count them 12 paralegals working for him. Apparently, the sunshine coast and the okanagan are getting crushed and it’s starting to show up in surrey and delta. Rotting from the outside in.

_____

This "story" gets brought up every year..

Yawn…same old stories give the bears hope I guess…

See you in Spring bears when you are crying with rising prices or sideways prices…

VMD
Member
Time flies, it’s suddenly Feb 1st. "2012 VCI Price Prediction Contest" entry ends Today @ 23:59 PST So far 5 contestants. For HPI category: compared to Dec 2012 Me: -2.5% by end of Jun, -10% by year end The Ant: -0.45% by end of Jun, -2.8% by year end Jesse: +3% by end of Jun, -3.5% by year end 604x: -5% by end of Jun, -8.4% by year end Absinthe: -1.5% by end of Jun, -11.5% by year end There are a total of 10 categories. Winner nets 1. Bragging rights 2. Bestowed the title “The Prophet” 3. The prestigious VCI Golden Bear Award For the not-so-hardcore VCI members, feel free to drop your predictions for JUST the HPI category (mid year & year end) either here or in the forum. I’ll add your predictions into the spreadsheet.. but the… Read more »
Yaya
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Yaya

@Slippery Pete: Sure.. can you tell us how the property prices in the Okanagon and the Sunshine Coast are doing?

MM
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MM

Is the mandate of this crown corporation really to take care of private sector banks? Why doesn't someone from NDP make more noise about this?

VMD
Member
the axes are falling… [Canpages lays off hundreds of employees] There are widespread layoffs at Canpages, the Burnaby-based phonebook and internet advertising company that was bought by Yellow Media just two years ago for $225 million dollars. Staff at Yellow Media in Montreal said fewer than 700 people would be let go across the country as the company moves to consolidate its two operations by eliminating duplication. Staff at the Canpages headquarters in Burnaby, just east of Vancouver, were still picking up the phone Wednesday morning but no one at the company was willing to talk publicly. Nobody was answering the phone at the Victoria office, which is closed. One former employee from Ontario told CBC News he and hundreds of others were called to meetings Tuesday and let go. He estimated hundreds of employees were terminated, mostly in the… Read more »
Anonymous
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Anonymous

According to this article by Susan Pigg at moneyville.ca banks are tightening on their own. Capping the amount it will lend? Unheard of!

"CIBC’s wholesale mortgage arm, FirstLine, quietly announced Tuesday that it will no longer accept new applications from “stated income” homebuyers who can’t prove they have the annual net income to qualify for home loans.

FirstLine also set a $1 million cap on what it will lend for a home purchase."

BC reader
Guest
BC reader

-7% by end of June

Guy Smiley
Member
Guy Smiley

2012 VCI Price Prediction Contest …

-3.2%, -14.6%; Romney takes gop leadership race; QE3 announced in may; winnepeg takes the stanley cup; the four horseman arrive shortly before christmas which will be very bad for home prices going into 2013 (which may or may not arrive 50%).

Sorry VMD, I tried to register into VCI for the full contest but gave up when my 8 figure alpha-numeric was not sufficient security for a password.

TPFKAA
Guest
TPFKAA

@ZRH2YVR: Actually June 30 is the date I meant – I didn't account for the expirations (Do they go by calendar month end date then?)

So your model says 20,000; I say 21,000; Default (e) says 19000-19,500

Anyone else?

TPFKAA
Guest
TPFKAA

@TPFKAA: I mean, I say > 21,000.

VMD mobile
Guest
VMD mobile

@Guy Smiley:
I know.. same thing happened to me at vci forum . tried for half a year and it kept saying password security too low… But one day it worked for some reason…

Anonymous
Guest
Anonymous

@DEFAULT NAME: Across the border the Fannie/Freddie loan limit is $625,500 for high cost areas in the continental US. In Hawaii it is $720K. Could CMHC be considering loan limits in Canada? Imagine what would happen to the Vancouver market if the maximum insurable loan you could get was $625,500!

Anonymouse
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Anonymouse

@VMD:

Does anybody still use a phonebook?

Makaya
Member
Makaya

@VMD:

Here's my take:

End of June: -3%

End of December: -12%

Extremely rich Van h
Guest

@Slippery Pete:

Agree,hit them right on the balls again and again.They are very persistent but every year,the outcome goes against them since 2000.

Extremely rich Van h
Guest

@buffates:

Your friend? who the local guy who only mean of living is stretching he/she hands for quarters.Pls,provide further detail,if it isn't a story from the moon.

wpDiscuz