Sort by:   newest | oldest | most voted
Anonymous
Guest
Anonymous

@vangrl: Nobody is retiring at 65 any more (curiously enough, because many will still be paying a mortgage). Not sure what the big deal is.

vangrl
Member
vangrl
I dunno, Deb’s comment seems to make more sense than Flaherty’s “If changes are necessary in order to guarantee the future funding of OAS, for goodness sakes be fair about it! The Conservatives have attacked lower-income Canadians who are younger than 54 years of age (by this weekend), in terms of full, partial and lower eligibility, which will be phased in between 2023 and 2029. Instead of looking at a reformulation of the current clawback of OAS benefits, based on income, he has targeted an entire demographic, no matter what their income, to pay the price. In other words, if you are a hard-working, low-income Canadian who happens to have been born at a certain point in Conservative history: It’s Your Fault! I am so mad at this man, I will leave now to have a second cup of tea,… Read more »
patriotz
Member

@Guy Smiley:
“But as Beargirl has pointed out, some offshore buyers are getting loans from Cdn banks. If so, why wouldn’t CMHC insure them? ”

Because CMHC has no recourse against offshore buyers. What could be more obvious?

Any loan that a Canadian bank makes to an offshore buyer has to be secured against the property itself. Remember that banks can lend to anyone they want if the LTV is under 80%, but they don’t have to.

Guy Smiley
Member
Guy Smiley

I was suggesting that perhaps some of these cash purchases are using loans that originate offshore. There would be no default to RBC as the home has been fully paid. If the buyer defaults, it would be a loan shark in Guangzhou trying to recoup their losses and probaby putting some house in Richmond up for sale.

But as Beargirl has pointed out, some offshore buyers are getting loans from Cdn banks. If so, why wouldn’t CMHC insure them? They haven’t been so incredibly picky otherwise. How about Genworth?

registered
Member
registered

44 Guy Smiley: “Personally i doubt Chinese buyers need money from Canadian banks. The homeland is flush with cash that finds many creative ways to lend itself to anyone willing to sign their life on the dotted line and pay interest for the next 50 years.”

The last part is a possible explanation of why ‘need’ may be irrelevant. How does RBC collect on a Mainland default?

patriotz
Member

@HAM Solo:
“I think where “everybody” is, is being fatigued of being bearish and unrewarded,”

The reward for being bearish is paying a smaller monthly cost for the same property EVERY month.

If you don’t understand this, you don’t understand the bear case, period.

patriotz
Member

@Guy Smiley:
CMHC will not insure purchases by offshore buyers.

If the buyers are legally Canadian residents – whether they actually live here or not – that’s another story.

Guy Smiley
Member
Guy Smiley

@Girlbear

Well, maybe so. I’ve long suspected that the rules were different if you could outlay $1.5M as opposed to my $1500. And maybe it’s not a bad bet on the banks part – especially if they managed to insure it through CMHC.

Girlbear
Guest
Girlbear

@Anonymous: Ditto. I have friends who bought place in Palm Desert and used their West Van house as collateral. US Bank. But yes 25% down and not the best rate out there. But it can be done.

Guy Smiley
Member
Guy Smiley

PS – once again, great find Makaya. Lots of fun from that article. I personally liked the quote from Mr. Holden:

“The average paid claim in the fourth quarter had risen to $80,500 from $71,000 two years ago. Genworth is hoping to cut this number back down by selling foreclosed homes faster and getting more for them”.

It’s a great hope. I’m hoping to watch alot of reality TV this year and vastly improve my physique by doing so.

Maybe we’ve actually located the long-lost mr holden caulfield:
“I’m the most terrific liar you ever saw in your life. It’s awful. If I’m on my way to the store to buy a magazine, even, and somebody asks me where I’m going, I’m liable to say I’m going to the opera. It’s terrible.”

Anonymous
Guest
Anonymous

@McLovin: ….They don’t. Won’t even consider it. Virtually no US institution will even lend to a Canadian regardless of downpayment. …

Not true. A buddy of mine bought a place in Glacier (on the way to Mount Baker) financed through a US bank and he used his Canadian home as collateral (late 1990’s). Maybe weird, but it is done.

Girlbear
Guest
Girlbear

@Guy Smiley: I can tell you of a personal situtation I am aware of. $4mill house purchased in Vancouver by Shanghai-ese family. They put $1.5mill in cash down on the DP. The remainder is mortgaged with a Canadian bank. The owners live in Shanghai, and have no businesses in Canada.

I figured the bank thinks it has pretty good downside protection with the $1.5mill down. But what if things get really ugly?

Just saying.

Guy Smiley
Member
Guy Smiley
Canadian banks will not give out mortgage loans on foreign property as far as i know, but i’m not sure that is a global norm. I know Japanese banks will if you have sufficient income within Japan to cover the payments plus some sort of actuarial-derived geographic fudge factor. Personally i doubt Chinese buyers need money from Canadian banks. The homeland is flush with cash that finds many creative ways to lend itself to anyone willing to sign their life on the dotted line and pay interest for the next 50 years. And you can bet there is a great deal of competition in that industry leading to rates that are much better than officially posted. Pure speculation on my part, but i doubt all HAM purchases are cash directly out of pocket. If a hard landing does happen there,… Read more »
Hugh G Rection
Guest
Hugh G Rection

@girlbear

“The Chinese borrowers here are using Canadian banks as their mortgage providers. The Canadian banks are not liasoning with Chinese banks to secure these loans.”

If the second statement was a question, the answer is no.

Girlbear
Guest
Girlbear

@Makaya: Also, I would like to say that I did not know that Genworth was going into the home “staging” biz.

😉

Anonymous
Guest
Anonymous

@Makaya: So, help me with this. You take on high ratio mortgages that even the CMHC wouldn’t touch which would make them the human equivalent of lepers. You have roughly 10% equity and 90% outstanding. You believe that you could withstand the “stress” of a 40% correction, because “insurance” would handle this. Who is the bigger idiot? Glenworth or their insurers?

Girlbear
Guest
Girlbear

@McLovin: “Canadian credit scores with a 25% down payment, regular rates +1.5-+2.0% and several other restrictions.”

Yes. Agreed. Those are exactly the conditions. But what if property goes down by more than that DP and it happens quickly? The Chinese borrowers here are using Canadian banks as their mortgage providers. The Canadian banks are not liasoning with Chinese banks to secure these loans.

McLovin
Guest
McLovin

“How would all the snowbirds from Canada buy houses in the US if banks did not accept out of country collateral? ”

They don’t. Won’t even consider it. Virtually no US institution will even lend to a Canadian regardless of downpayment.

They need to take a HELOC out on their property in Canada with a Canadian bank and use the money to buy the US property in cash unless they are dealing with the US arm of a Canadian bank such as BMO or RY in which case they will extend credit based on Canadian credit scores with a 25% down payment, regular rates +1.5-+2.0% and several other restrictions.

UnagiDon
Guest
UnagiDon

@McLovin: Maybe their calculations are based on the assumption that foreclosures are uncorrelated. Like the people who bought the crappy tranches of the CDOs in the US.

McLovin
Guest
McLovin

Mr. Hurley said Genworth’s stress tests suggest it could withstand either a 40-per-cent drop in home prices or a sharp spike in unemployment before its insurance business became unprofitable.

Bull Fu*king SH*T!

If they have an insurance business that can take a 40% loss in the value of the underwritten asset before they become “unprofitable” they have the best business since drug dealing!

Hugh G Rection
Guest
Hugh G Rection

@girlbear

Do you have any idea how the mortgage market works? There is no chance that a Canadian bank is taking a foreign property as security. No chance.

Anonymous
Guest
Anonymous

@Conrad: they chew the same grass every day. nothing else to do in the basement.

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 Mar-22 219 107 136 15,904 40 62.1 Mar-23 204 113 123 15,940 36 60.3 Mar-26 303 161 127 16,038… Read more »
Conrad
Guest
Conrad

@Makaya: you guys have been getting that popcorn for at least 5 years now. Must be getting statle

Girlbear
Guest
Girlbear

@Makaya: This comment on the Globe Genworth piece is spot on…

Gord108

9:14 PM on March 28, 2012

Genworth has over $260B of mortgage insurance outstanding (primarily on the dodgiest zero-down mortgages that even the CMHC won’t touch) and only $2.6B of equity. Although the government guarantees its customers a 90% covereage in the event that Genworth defaults, its equity holders have no such guarantee and they stand to be wiped out in the event of even a mild housing downturn across the country (or in the event of a deep housing downturn in one sizable region of the country).

There are rapidly rising foreclosure counts in numerous regions of the country (Okanagan valley, Vancouver Island, Kootenays, Richmond, Whistler in BC, plus cottage country, Southwest Ontario, Halifax region). Genworth is putting together this group to try to stem or forestall the tide of losses.