Scotiabank ends 2.99 mortgage deal early, more tightening on the way?

Wow, it seems like it was just a few days ago we were talking about newly introduced teaser-level mortgage rates offered by Canadian banks.

… oh, it was just a few days ago.

BMO kicked off the competition and TD, Scotia and CIBC jumped in with competing lowball offers.

Well it looks like Scotiabank blinked first.  Their special offer didn’t even last a week.  Canadian Mortgage Trends is reporting that Scotiabank has pulled their special offer for a 2.99% rate.  Guess we’ll have to wait to see if the other banks will follow.

And speaking of mortgages, Canadian Mortgage Trends also has some interesting analysis of the OSFI recommendations for underwriting practices and how it’s about to lead to mortgages that are a bit tougher to get.

After reading through 18 pages of changes in detail, our immediate reaction was frankly, concern.

That’s not because the guidelines are greatly imprudent. Some are unnecessarily rigid, but most are sound policy.

It’s because OSFI risks tightening too much, too fast.

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rp1
Guest
rp1

#42 @patriotz: “CHMC insurance is issued at sale time and never has to be renewed over the life of the mortgage.”

So if prices were to fall, some buyers who did not originally have CMHC insurance might be forced to get it, and thereby help prop up the CMHC? Interesting.

patriotz
Member

@pricedoutfornow:
Will not happen for insured mortgages. CHMC insurance is issued at sale time and never has to be renewed over the life of the mortgage. With this guarantee of repayment banks have no need of or requirement for equity to renew.

Anonymous
Guest
Anonymous

@Troll: “Have a heart for the people that might get caught in that situation. I know that most here are keen to see prices crash, and understandably so. That said, many families will suffer, perhaps never fully recover. Call them fools if you wish, but please try not to gloat over the misfortune of the ignorant. It’s not nice.”

Fuck em!

rp1
Guest
rp1

#27 @pricedoutfornow: “I reviewed one situation where the mortgage value is $275k and the value of the property is only $165k. Imagine what would happen if the bank would only renew the mortgage for $165k. There would be blood on the streets!”

If the owner has no other assets, it could be in their best interest to declare bankruptcy…

Bullocks
Guest
Bullocks

So Marine Gateway was a sell out on presales. But does that mean that the construction will go ahead? Don’t all those assignments need to cough up more money before the final decision is made?

VMD mobile
Guest
VMD mobile

HSBC quits consumer finance, lays off 500
– there seems to be an increase in banking sector layoffs and banks exiting higher risk mortgage businesses over the last few months. Do they sense the end is nigh?

http://ca.finance.yahoo.com/news/hsbc-canada-exits-consumer-finance-204645545.html

jesse
Member

@Troll: ” try not to gloat over the misfortune of the ignorant”

Sympathy seems to be a unidirectional emotion, only called upon when personal situations are dire. Maybe I’m alone on this one but I’ll reserve my sympathy for when I volunteer at BC Children’s hospital.

As for indebted homeowners facing financial hardship, showing no emotion at all seems like the least morally hazardous approach to me.

Troll
Guest
Troll

@pricedoutfornow: Have a heart for the people that might get caught in that situation. I know that most here are keen to see prices crash, and understandably so. That said, many families will suffer, perhaps never fully recover. Call them fools if you wish, but please try not to gloat over the misfortune of the ignorant. It’s not nice.

Navin R. Johnson
Guest
Navin R. Johnson

This may be a bit of a daft question, but I’ll take full responsibility for it. We’ve seen the sell/list percentage increase…but, there are also a fair amount of price changes…this “could” mean that sellers and coming down with prices to unload, right?

Patiently Waiting
Member
Patiently Waiting

Speaking of politics, a poll came out today indicating the BCNDP will win 75 of 85 seats with 47% support.

http://www.ctvbc.ctv.ca/servlet/an/local/CTVNews/20120321/bc_poll_ndp_trouncing_liberals_120321/20120321?hub=BritishColumbiaHome

Probably the worst news for anti-NDP forces, is the Cummins Conservative upward momentum has stalled. They would get zero seats and their support has stopped growing at 21% (tied with the Liberals). The problem for Cummins is, despite his great health for his age, he is nonetheless 70 years old.

The last Premier we had that age, was soundly turfed the next election, back in 1972. And Cummins isn’t even premier yet, and has to start from zero. He would be about 75 in the following election.

The question is will the business community whip up enough fear of a massive NDP majority, to help crash the real estate market?

fixie guy
Guest
fixie guy

15 jesse Says: “@fixie guy: “misrepresenting to the world the true nature of its relationship with the CMHC”

It’s been obvious for years now that the government has been taking on significant liability by guaranteeing loans in the overinflated housing market.”

Unfortunate phrasing? If the conditons for the relative solidity of Canadian banks was ‘obvious’, that doesn’t explain the complete lack of international press coverage until recently or how our government felt justified traveling the world to brag about it last fall. Presumably everyone is aware that any idiot can bolster an industry by backstopping it with massive injections of goverment guarantees.

Patiently Waiting
Member
Patiently Waiting

@pricedoutfornow: “There would be blood on the streets!”

Are they trying to hurry the inevitable? That’s the only political reason I can think of for purposely initiating a crash.

good-format
Guest
good-format
Copied from PaulB’s number http://www.laurenandpaul.ca Date Listing Price(+-) Sold Inv Inv(+-) S/L(%) Mar 01 313 94 123 14,912 5 39.3 Mar 02 251 97 163 14,919 7 64.9 Mar 05 338 134 118 15,069 150 34.9 Mar 06 298 114 163 15,161 92 54.7 Mar-07 260 114 71 15,305 144 27.3 Mar-08 237 106 152 15,345 40 64.1 Mar-09 229 76 69 15,454 109 30.1 Mar-12 306 119 120 15,588 134 39.2 Mar-13 290 122 146 15,640 52 50.3 Mar-14 238 97 133 15,701 61 55.9 Mar-15 208 83 180 15,693 -8 86.5 Mar-16 224 91 97 15,734 41 43.3 Mar-19 319 138 193 15,778 44 60.5 Mar-20 267 118 158 15,837 59 59.2 Mar-21 238 104 153 15,864 27 64.3 Total-Cur 4,016 1,607 2,039 957 50.8 5 day-avg 251 107 156 33 62.2 Total-Est 5,774 2,355 3,132 16,092 1,185… Read more »
Anonymous
Guest
Anonymous

@Conrad:
It will be another record sale and average price of SFH will increase another 10 %.Thanx so much, Chinese investors and Chinese government which inject capital into once a dead-city,Vancouver.Cheer for every vancouver home owner.

Devore
Member
Devore

@pricedoutfornow: Those are recommendations from the OSFI document. Some of those will probably become law. But I don’t think requalifying at renewal is realistic. If the borrower is able to keep making payments, why rock the boat? This would make a bad housing market even worse.

Conrad
Guest
Conrad

@paulb.:

Wow epic inventory stall. Just the start of a big spring in the metro Vancouver region

pricedoutfornow
Guest
pricedoutfornow

Check out Garth’s blog tonight. He seems to suggest that new mortgage rules would not allow automatic renewals for mortgsges-they would have to maintain the same LTV rate. This would be HUGE news-I have clients in Kelowna who are already deep underwater (by $100k or more) and they will absolutely be up s**t creek with no paddle if they had to cough up the difference between the mortgage amount and the value of the property. Recently I reviewed one situation where the mortgage value is $275k and the value of the property is only $165k. Imagine what would happen if the bank would only renew the mortgage for $165k. There would be blood on the streets!

paulb.
Guest
paulb.

New Listings 238
Price Changes 104
Sold Listings 153

TI:15864

http://www.laurenandpaul.ca

Anonymous
Guest
Anonymous

I havent seen anything on the web about scotia pulling their special other than the one on cmt. Have they really pulled it?

Many Franks
Guest

Here’s a decent editorial on the bulk insurance that has been taking CMHC up to its cap so rapidly.

http://opinion.financialpost.com/2012/03/21/risks-of-cmhc-mortgage-cover/

Anonymous
Guest
Anonymous

@Yalie:

Or a marketer like Bob Rennie or that Brad J. Lamb douchebag.

Clockbike
Member
Clockbike

@Yalie:
Oh you.

In other news, landlords had better do proper upkeep of their holdings or else face fines:

http://www.theprovince.com/news/Surrey+landlord+slapped+with+115K+fine+becoming+first+face+penalties+under+tenancy/6333299/story.html

Yalie
Guest
Yalie

@Clockbike:

Good afternoon, everybody. I’m Ian Morfitt from The Globe’s Personal Finance website, and today we’re joined by housing and consumer credit expert Ben Rabidoux, who will answer your questions about Canada’s frothy housing market.

Ben Rabidoux is a housing expert? He’s just some guy with a blog and bunch of fancy “facts” and “statistics”. What does he know about housing? They should have gotten a real housing expert, i.e. someone who can provide honest, objective analysis of where house prices are heading – like a mortgage broker, a developer, a REALTOR(R), or somebody from the CMHC.

ReadyToPop
Guest
ReadyToPop

Dan McLean Says:

The OSFI put out recommendations not requirements. For now they can be ignored by most banks. I wouldn’t think that this is means mortgage tightening is now “too much too fast”. Changes to accommodate the recommendations may take many months thus ameliorating any blow to house price trends.

Having said that, its good news for those of us looking forward to a return to sane house prices in BC.

Just to add to your comment…..according to Wikipedia, they report to the Minister of Finance. The same guy who’s going to be delivering something in a few days? Just a casual observation…..RTP

patriotz
Member

@Frank:
“So why is he offering 2.9% four year mortgages?”

Because he runs a business and it’s his responsibility to the shareholders to make money. It’s either lend at 2.9% or give the mortgage business to someone else.

Banks like every other business have a responsibility to obey the law and that’s what they are doing. If you don’t like the parameters that the government has established, blame them not the banks.