Category Archives: foreclosure

Mortgage brokers warn about new rules

Canadian mortgage brokers are freaking out about new refinancing rules proposed by the OSFI which has taken over responsibility for the CMHC. Reasonably enough, they’re asking for clarification about proposals to require banks to check income and current house value before refinancing.

Currently, when mortgages come up for renewal, banks tend to focus on the borrower’s payment history. They rarely appraise the property again and not all banks will check the borrower’s updated income level, Mr. Murphy said.

“CAAMP strongly recommends that this concept be clarified so that mortgages continue to be renewed at maturity without requalification,” the industry association said in a submission to the Office of the Superintendent of Financial Institutions (OSFI).

“If not, homeowners who have been in compliance may no longer qualify. This would result in a number of properties hitting the market at the same time and thereby driving down prices.”

Such a phenomenon could add further fuel to a real estate downturn if lower house prices and higher unemployment caused more people to lose their homes upon renewal, Mr. Murphy suggested.

Read the full article in the Globe and Mail.

Disappearing ghost towns in the media

This is odd.  The Globe and Mail published an article about the condo boom titled “How condo boom threatens a ghost city phenomenon” and included the following alarming section:

“CMHC estimates that roughly 25 per cent of condominiums in the Greater Toronto Area are sold but sitting vacant — shades of Miami at the height of its collapsed condo bubble in 2007. Other analysts say the 25 per cent figure may be too low.

“This is the ghost city phenomenon,” Mr. Holt said.

Condo developers in Eastern cities such as Toronto, Montreal and Ottawa, appear to be rushing to sell and build units before interest rates start to climb, and the market crashes.”

But if you visit that link you’ll no longer find that text and the headline has been changed to “Housing starts shoot higher on back of condo boom” (although as of this writing the URL still shows the original title).  Why the dramatic change in tone?

Foreclosure tours come to BC

Remember just after the US bubble peaked? There were foreclosure bus tours in places like Vegas and Miami.

Did you ever think you’d see something like that in British Columbia?

Apparently it’s happening on Vancouver island right now.

This video clip from CHEK news shows people shopping for a good deal to flip or rent out now that there are so many owners going into foreclosure who were unable to flip or rent out their property.

Might be a tad early on that one.