Subprime lending in Canada ‘rockets’ to record high

It’s a been a while since CMHC mortgage lending rules have been ramped back to more historical levels.

After dabbling in American style 40 year zero down mortgages we decided that might not be the best idea. Unfortunately we never did get the American style locked in interest rate for the full duration of the loan.

So now we’re back to 25 year terms and it’s more difficult to get a loan if you’re self employed.  A lot of loan applications that would have been approved a year or two ago are now being rejected.

So what affect has this had on the market so far?

Well apparently the sub-prime lending market in Canada has rocketed to a record level for one.

Capital Corp is a non-bank lender that has been operating since 1988. Their chief executive Eli Dadouch says there’s a lot of money out there for non-bank loans to higher risk borrowers.

He said there is no question it’s the top of the real estate cycle, so anybody lending out money has to be more careful today.

“People always want to deal with a bank, it’s the cheapest form of money,” he said. “When they come to us and people like us, it is because there is some type of story [behind why they can’t get credit]. It’s easy  to lend money, the talent in this business is getting it back.”

Read the full article in the Financial Post.

 

Sort by:   newest | oldest | most voted
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

subprime lending rockets to a record high, yet prices are stagnant. how strange. it’s almost as if subprime borrowers don’t drive prices.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

also, admin, my post from yesterday is in the moderator queue. please be a dear and copy and paste it in this thread for everyone to enjoy. i think it’s a real gem.

southseacompany
Member
southseacompany
Re Oil & Housing, from 2011; “Canada is ‘a purely random success story’: Shiller” http://www.financialpost.com/news/Canada+random+success+story+Shiller/4246526/story.html#__federated=1 “Robert Shiller, the Yale professor who correctly predicted the 1987 stock market collapse and the recent U.S. housing market meltdown, said Canada’s robust financial health compared to other nations is largely due to a random run-up in oil prices in the midst of the global financial crisis.” ““It’s a major export for Canada and it went to US$140 a barrel in 2008, right when Canada needed it,” Prof. Shiller said in an interview Tuesday.” ““It seems that if the country didn’t have that boost from oil, it would have done worse than the United States,” Prof. Shiller said.” “He advises Calgary homeowners worried about their home values to hedge their bets by shorting oil. “If oil prices go down, your home prices is going to… Read more »
Westside Realtor
Guest
Westside Realtor
Man oh Man, This could be the perfect storm for Alberta. How bad could things get? If the primary breadwinner gets said off, and the family cannot make all of their debt and lifestyle payments, and lifestyle gets cut to the bone and still there is not enough cash to pay the bills, then what? Yes, outright liquidation. Ever see a stock go into a freefall/deathspiral? It happens. I can’t see how Alberta house prices go up in the spring. Then again, this market has fooled me several times over the past three years with its Teflon toughness. That said, I think this the accident that proves the rule, that the bigger they come the harder they will fall. I suspect that upper end sfh’s on the westside will be at least 7.5% cheaper than the prior year. The boss… Read more »
Newcomer
Member
Newcomer

Percentage of Toronto (and Vancouver) condos owned by foreign investors is very low, CMHC says
http://www.thestar.com/business/2014/12/16/percentage_of_toronto_condos_owned_by_foreign_investors_is_very_low_cmhc_says.html

VCI Admin
Admin

@Bull! Bull! Bull!

Promoting a new business venture? Your comment is out of moderation here:

http://vancouvercondo.info/2014/12/cmhc-cutting-jobs-laying-off-employees.html#comment-245928

long dong
Guest
long dong

Langley condo prices are at 2006 levels. Negative equity, much?

http://stats.fvreb.bc.ca/infoserv/s-v1/t3RF-IY8

@long dong
Guest
@long dong

It’s all about SFD. Can you raise a family and live 40 years in a condo?

Happy to be an Ex-Vancouverite
Guest
Happy to be an Ex-Vancouverite

More reporting about poor old Vancouver in the National Post.

A quote from one of the young women on Ultra-Rich Asian Girls:

The four women feasted on B.C. crab and argued over what to look for in a potential husband. Forget handsome but poor, declared Ms. Jiang. “Ugly rich guys can use their wealth to get plastic surgery and become handsome,” she said. “Hot and rich.”

http://news.nationalpost.com/2014/12/12/vancouver-being-transformed-by-new-wave-of-brash-rich-asians-looking-for-safe-place-to-park-their-cash/

Mortgageslave
Guest
Mortgageslave

The last 3 bull arguments have gotten pretty desperate and pathetic….

-TSX is up today so the energy selloff is done
(oil is down 3.4% agains today dumass!)

Mortgageslave
Guest
Mortgageslave

hit the wrong button (cont)….

“subprime lending rockets to a record high, yet prices are stagnant. how strange. it’s almost as if subprime borrowers don’t drive prices”
-Not at all, just adds fuel to the fire and shows how broke homeowners are.

“It’s all about SFD. Can you raise a family and live 40 years in a condo?”
– Who cares? the rise and fall all starts with Condos. Go buy a big fat SFD then. Let me know how that worked out for you next year.

Bulls, it’s time to throw in the towel. Or at least put up a fight. Based on these comments you’ve all but given up.

Slagathor
Guest
Slagathor

….The four women feasted on B.C. crab and argued over what to look for in a potential husband. Forget handsome but poor, declared Ms. Jiang. “Ugly rich guys can use their wealth to get plastic surgery and become handsome,” she said. “Hot and rich.”….

Maybe I’m missing something: why do ultra rich Asian girls need to find rich husbands? You mean, they’re not really ultra rich? Who would have made that call?

Yunak
Guest
Yunak

@9

Just by watching the attached video one would think what pile of shit Vancouver managed to absorb. Regrettably scum can’t be naturally ghettoized due to a social prejudice (“racism”) and their ubiquity backed up with shitload of easy money that need a showoff.

patriotz
Member

@12: “Maybe I’m missing something: why do ultra rich Asian girls need to find rich husbands?”

Same reason as any rich girl I think – they don’t want to “marry down”.

bullwhip29
Guest
bullwhip29

@ #12

there’s no verifiable proof any of these girls actually are ultra rich. imho, they have become experts at playing the part and never hook up with someone for looks (unless they are butt ugly themselves). at the end of the day, it’s always about money, wealth and power 100% of time (and who is better at playing all those cat and mouse games) if the guy is silly enough to allow his weenie to make the decisions for him, then he deserves whatever the inevitable outcome is. most guys with half a brain can spot this nonsense from a mile away. as for those gold digging women, remember too much of good time will lead to an unsightly muffin top, wrinkles and early relocation to the roadside curb.

@Yunak
Guest
@Yunak

Don’t worry, they self segregate. But once they exceed the majority, like in Richmond, who is the ghettoized and who simply represents the established norm.

CanuckDownUnder
Member
CanuckDownUnder

It doesn’t matter if WR is an actual realtor or not, Alberta is going to be in a lot of trouble.

I was just speaking with a friend who works in Calgary and he says while the overall mood is down people are underestimating how bad it’s going to be. Lots of job losses are coming, companies are just holding off until after the holidays.

Harry Wang
Guest
Harry Wang
space889
Guest
space889

@bullwhip29 – The pair of shoes Chelse Jiang wore to an interview costs like $3K or more, probably more than what you make in a month, and I don’t think you can rent those kinds of shoes.

One of the girls is also shopping for a $2M+ house in Richmond, while Joy was shown on TV about wanting to pay cash for a Van West house.

They are freaking loaded and no, they aren’t going to marry guys whose family are less rich than they are. Rich family never allow commoners to come in and potentially take away 50% in a divorce. Commoners are for play around and thrown out when bored.

bullwhip29
Guest
bullwhip29

@ #8

Will you earn enough over a 40 yr period to cover the costs of raising a family, living in a SFD not to mention paying off all debts and saving for a comfortable retirement? The average person out there grossly underestimates what is req’d to achieve this (or is counting heavily on taking a big chunk of equity out of their home to fund this down the road). What if the author of the following article is correct?

http://www.cbc.ca/news/business/face-it-canada-s-housing-market-could-fall-like-oil-don-pittis-1.2873740

*hint: if he is, then many Cdns will find out the hard way that they essentially gambled away the remainder of their lives for the sake of maybe a decade of living it up

Slagathor
Guest
Slagathor

…Same reason as any rich girl I think – they don’t want to “marry down”….

Seems to me that marrying an ugly rich guy to have him go under the knife is the very definition of ‘marrying down’ (for the guy).

space889
Guest
space889

The YouTube views for that Ultra Rich Asian Girls series didn’t even crack 100K, despite all the hype. I don’t know where the hell National Post got that millions of views crap from. The series sucked for the simple fact that the series is boring and the “acting” and production value just suck. This series makes the Real Housewives of Vancouver looks like an Emmy worthy production.

Also, Chelse Jiang is born in Ottawa so she’s Canadian, not a mainlander/foreigner, but a bonifide Canadian. Apparently she’s got a PhD in math from UBC as well (according to promos).

There are way funnier series out there poking fun of rich Chinese immigrants produced by actual Chinese people that actually hit the mark and gets 10M+ views.

bullwhip29
Guest
bullwhip29

@ #20

exactly. you think guys like zuckerberg, bezos and jack ma require (or desire) plastic surgery?

@14
Guest
@14

@14
http://tinyurl.com/lskuk69

The floating suitcases and the battered wife paralyzed from being flung down the stairs were from poorer background. Money dictates the statue of a married woman (or man).

bullwhip29
Guest
bullwhip29
@ #4 “This could be the perfect storm for Alberta” totally agree, with the exception that the contagion spreads way beyond the alta border to the rest of Cda and beyond. imho, the powers that be are playing with fire as it pertains to russia and the energy sector. in the last several days the markets are starting to place bets that the genie can’t be kept in the bottle as chatter of another russian financial crisis (like 1998) is beginning to spread like wildfire. we’ll see in the coming days if there is any actual meat to these stories. i have said in prev posts that the US Fed would be willing to step back into the ring should conditions warrant such a move. perhaps this new crisis, whether manufactured or not, might give them the perfect excuse to… Read more »
wpDiscuz