CMHC wants to conceal foreclosure information

The CMHC tends to have some pretty rosy forecasts for the future of Canadas housing market.

But if all is well, why are they now trying to get real estate agents to hide foreclosure status from potential buyers?

After recent stories about deceptive marketing practices, it’s heartening to hear that a group of Realtors in Quebec have raised issues of an ethical breech after the CMHC asked them to conceal foreclosure status on properties for sale.

The Quebec Federation of Real Estate Boards, which oversees the 12 real estate boards in the province, says it challenged CMHC about the change requiring them not to report on a detail sheet that properties for sale were part of a foreclosure, despite the fact that information is considered mandatory when loaded by brokers onto the selling system of local boards.

“Because the repossession field is currently a mandatory field in the brokerage system you have no choice by to indicate ‘no’, which goes against ethical rules stipulating that real estate brokers are obliged to publish information that is truthful and verified,” the group said in a statement to members.

The two sides resolved the issue by making it no longer mandatory to reflect the foreclosure status of a home, based on the seller’s instructions.

So why does the CMHC not want you to know about foreclosure status? Because then you might be tempted to bid on cold logic rather than emotion.

“Look at what is going on right now in financial institutions and everybody is ratcheting up their loan-loss provisions,” said Ben Rabidoux, a Canadian analyst for California-based Hanson Advisors, a market research firm whose clients are institutional investors. “Everybody expects loan losses to rise. I can’t imagine CMHC is in the dark on that. My suspicion is they want to limit any loss on that hits their books.”

By limiting the information on whether a property is part of foreclosure, the Crown corporation would potentially avoid a situation in which a buyer knows it has to sell. In the United States, foreclosed properties have sold at huge discounts.

Read the full article here.

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kabloona
Member
kabloona

Yeah, I really don’t know what poor ol’ Laura was thinking. Probably acting under the (mistaken) impression that any news coverage is good coverage, she went ahead with the sky-high $38,000,000 asking price and fake palace pics just to drum up some media attention for the property.

Well, mission accomplished…

Many Franks
Guest
Active Member
Many Franks
Since I’m talking to myself — The other hilarious thing about the whole Laura McLaren debacle is the reception that the fictional design is getting. This design was done by FX40 Building Design Corporation. They are quick to point out that they are not architects but have a background instead in interior design — so presumably the interior design would be well conceived, even if the building isn’t expected to remain free-standing as designed? The UK Daily Mail was one of the outlets mistaking the renderings for an actual building, and their commentary dug a pretty deep hole for FX40’s visionary expertise to climb out of: This gaudy and decrepit looking seafront mansion in west Vancouver is the most expensive residential listing in Canada with an asking price of a quite staggering $37.9 million. The 5,500 square feet mansion is… Read more »
Many Franks
Guest
Active Member
Many Franks
Hello and goodbye to the 2012 RRSP contribution deadline. This survey from BMO about RRSP contribution habits is making the rounds in the news today: A new study says nearly two-thirds of Canadians polled have made or plan to make an RRSP contribution by today’s deadline, but with fewer amounts than last year. The Bank of Montreal survey found that 63 per cent of respondents have contributed or will contribute to an RRSP for the 2012 tax year, up from 38 per cent last year. Such a wild variation in intentions to contribute reeks to me of bad survey methodology. Looking at the report, So while more Canadians contributed, the average amount contributed was lower. For starters, it just lumped “people who intend to contribute” with “people who actually did contribute” (both in terms of numbers and dollars). Reading closely,… Read more »
VMD
Member

Larry posted Vancouver West SFH Feb 1-28 Sold prices. 71 units, not sure if these are all the SFH that sold in Van West though.
http://www.yattermatters.com/2013/02/hair-cut/

He’ll probably post Feb average price graph tomorrow. As YVR2ZRH pointed out, we shouldn’t be surprised if Avg price goes up due to skewed sale-mix in the low sample-size environment.

mclovin
Member
mclovin

Who was the Sr. Manager who resigned?

Seriously, no one quit. Just more lies and deceit

VMD
Member

from paulB (who just posted his first post at the forum!):
New Listings 174
Price Changes 102
Sold Listings 70
TI:15738

JD
Member
JD

Why so many problems with the site?

Some ruffled feathers?

Many Franks
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Active Member
Many Franks

Welcome back, Vancouver Condo Info! You’re missing the fun over at Whispers from the Edge of the Rainforest.

gondola
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gondola

@real_professional: filed a complaint as well. thanks for the instructions.

Anonymous
Guest
Anonymous

…..This smells just like Harper micromanaging and no message gets out of GoC these days without his office vetting….

Especially true given the the uptick in cattle mutilations and the increase in importation of tin foil chapeaus.

real_professional
Member
There is no need to feel like a victim by the CMHC, instead… I filed a complaint with the Competition Bureau of Canada today against the CMHC. This can be done easily online http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/home I encourage you all to do so: I listed Karen Kinsley, CEO of CMHC as the person I was filing a complaint against. My letter: To the relevant individuals in your organization, A home sale in Canada is effectively a business transaction in which each home seller and each home buyer strive for a fair competitive price. Tampering of such systems should fall under your jurisdiction and should be enforceable by your agency. A reminder: The Competition Act is a federal law aimed at preventing anti-competitive practices in the marketplace. This has been taken from your website. If the above is true, then why is the… Read more »
Democrass
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Democrass

“No crash last spring. No crash this spring. Wait till next year again?”

So you were the guy saying the same thing in the USA in years one and two of their crash. 🙂

Anonymous
Guest
Anonymous

No crash last spring. No crash this spring. Wait till next year again?

Keeping An Eye On The Pimps
Guest
Keeping An Eye On The Pimps

CMHC Control to Major MAC

Your circuit’s dead, there’s something wrong

Can you hear me, Major Brenda?
Can you hear me, Major Cam?
Can you hear me, Major Muir?
Can you….

patriotz
Member

“It helps understand why CMHC is so screwed and taking desperate measure to avoid what is inevitable, bankruptcy…”

Bailout, not bankruptcy. CMHC’s obligations are guaranteed by the taxpayer.

Nest my butt on your face!
Guest
Nest my butt on your face!

But these are the high-sale spring months. MOI will almost definitely trend upwards from the end of spring onwards. And this snowball will continue to grow heavier and faster as it rolls ever farther down the hill.

bust a nut on your face!!!
Guest
bust a nut on your face!!!

It looks like we may not see as crash this spring. 9 moi isn’t high enough for prices to fall like in the where moi was 20-30+. Looks like a slide, so maybe another 6-8% off for the year is this trend continues.

Anonymous
Guest
Anonymous
“So why does the CMHC not want you to know about foreclosure status? Because then you might be tempted to bid on cold logic rather than emotion.” No, because CMHC is run by idiots. I actually think having a property advertised as a foreclosure helps market the property. There is a reason there are websites dedicated to this. Everyone wants a good deal on what they buy and a foreclosure sounds like a sale even though it will still go to the highest bidder and must meet a price acceptable to the lender the same as every other property. Having foreclosure in the listing will bring more people to look at the property thinking they can get a good deal and this may end up getting a higher price. It is the same logic realtors list ‘motivated seller’ in listings… Read more »
RaggedyRenter
Member
RaggedyRenter
Relax guys, we’re different here. Canadians are more conservative than Americans. There’s no subprime, we require downpayments so our buyers are great savers, and people are really rich here. There is no one who’s stretching their finances to buy RE. Besides the Chinese will soon come and 2 bedroom condos in Coquitlam will be $1m soon. sequel138.com “Sequel 138′s Affordable Homeownership (AHO) Model provides the downpayment support that many home purchasers do not have. The equity for the purchase is being provided by Sequel138. Sequel138 will register a 2nd mortgage against the property to secure the loan which will be equal to 10% of the purchase price. There will be no interest and no payments required until such time as the home is sold or the 1st mortgage is renegotiated. CMHC* has approved this form of down payment for the… Read more »
Vote Down The Facts
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Vote Down The Facts

Not sure how Garth thinks it would affect the bidding process, given the court proceedings where bids are presented to the judge. But I say that having never bought a foreclosure, so perhaps he knows something I don’t.

VMD
Member

@#32 Not sure if we Made Garth talk about CMHC, but one thing’s likely true, that Garth uses our data:

“the Greater Vancouver Real Estate Board recorded just 1,666 sales of all properties in the first 26 days of the month, compared with 2,302 during the same time last year”

– the 1,666 number is the exact sum of paulB’s daily numbers up until yesterday. As we know, the daily sales numbers slowly add up until very end of day, which explains some discrepency between paulB’s numbers and say, Rob Chipman’s. For Garth to obtain the 1,666 sales Feb data, either him or his staffs are most likely regulars at VCI.

Makaya
Member
Makaya
Here is a little abstract form the article I wrote back in April last year. It helps understand why CMHC is so screwed and taking desperate measure to avoid what is inevitable, bankruptcy… It won’t take long for it to happen, unfortunately. These changes have had also a direct effect on CMHC’s balance sheet. Between 2000 and 2010, the amount of mortgages insured by CMHC, which had $11 billion of net assets at the end of 2010, grew from $200 billion to $515 billion, representing about 80% of the mortgage insurance market. In addition, the amount of MBS backed by CMHC grew from $40 billion to $326 billion during the same period. CMHC’s total exposure now represents $840 billion68 or 145% of Canadian public debt. CMHC is therefore in a more precarious financial position than Fannie Mae at the peak… Read more »
crashcow
Member

“Hoda Seraji is experiencing Vancouver’s housing slowdown firsthand. Seraji blames fading interest from foreign investors, especially in China. Changes to Canada’s mortgage rules have accelerated the sales drop, she says.”

Haha. The downturn is just beginning and the specs & pumpers are already blaming the absence of HAM and easy credit. So much for the “strong fundamentals” they kept touting during the boom!

UBC in Crisis Mode
Guest
UBC in Crisis Mode

Wow, VCI made Garth Turner talk about CMHC today:

http://www.greaterfool.ca/

Troll Feeder
Guest
Troll Feeder

I think the competition bureau should have an opinion in this. They’ve gone after the CREA a few times for ‘anti-competitive’ behaviour:

http://www.thestar.com/news/gta/2013/02/01/competition_bureau_sets_sights_on_industry_associations.html

I believe that this move by the CMHC creates a very anti-competitive imbalance in the property market. It would mean that it’s easy for Realtors or those directly involved in the real estate industry to find foreclosed property but it would no longer be easy for the general public to find out which properties are in foreclosure.

I also believe it introduces a real risk of a prolonged downturn. The foreclosure process is about finding market value and quickly clearing out inventory where buyers can no longer afford it. By meddling in this process they may delay the speed of price collapse, but it certainly wouldn’t prevent it.