It’s a buyers market for.. well stocks and oil anyways.
Will plummeting interest rates make real estate more appealing or will a hit to the wider economy drive down house prices?
What’s your bet?
Category Archives: mortgage
Buyers Market
19% mortgage fraud rate?
Bullwhip29 shared this story claiming 1 in 5 millennials commit mortgage fraud:
Around one in five (19 per cent) of Millennial home buyers responding to the survey admitted to inflating their annual income on their mortgage application. And nearly 23 per cent of Millennial home buyers said they think this is an acceptable course of action in today’s mortgage climate — nearly double the 12 per cent of all respondents who agreed this was OK.
Read the full article here.
Mortgage brokers stuck in the middle
Mortgage brokers make their money by getting people mortgages. In a softening market this can present a challenge.
FICOM is the agency that regulates mortgage brokers and they are issuing a warning:
Brokers should not overleverage their clients; this may be done by fudging applications – overstating the income of a borrower to obtain a bigger loan (and hence a bigger commission), said Carter, who also warned brokers of working with unregistered fixers.
Carter told brokers in Vancouver that the days of “how to get to yes” are over with new market uncertainty, and slumping sales and prices. Now, brokers need to be extra vigilant and learn “when to say no.”
He said Canadians could be in for a rude awakening if real estate prices fall and they’re still saddled with big mortgages and even loans against their equity, suggested Carter. And the brokers who brought loans to those homebuyers will face extra scrutiny, he said, which is why he’s calling on the industry to ease back the throttle on new mortgages that may be contrary to the best interests of the public.
Read the full article here.
Bank of Canada warns of housing market vulnerability
The bank that cried wolf: Housing market vulnerabilities are still high.
Vulnerabilities in the Canadian housing market are still high despite rising interest rates and tighter mortgage rules, Bank of Canada Senior Deputy Governor Carolyn Wilkins said on Thursday.
…
It also released results of a model it said showed Canadian banks’ capital positions would not be affected by a 20 percent correction in the housing market, with the biggest declines in Toronto and Vancouver.
Read the full article here.
28% of Canadians say rate hike would cause bankruptcy
From southseacompany: this survey claims that more than a quarter of Canadians think that another rate increase would push them into bankruptcy.
The poll comes just days before an anticipated interest rate hike by the Bank of Canada and was conducted on behalf of MNP, a leading Canadian bankruptcy firm, between June 15 and June 19. The same poll found that 42% of Canadians say that if interest rates rise much more their financial well-being will be put in jeopardy.
The Bank of Canada has raised interest rates three times since last summer, and investors expect the central bank will boost its target for the overnight rate to 1.5% this Wednesday (July 11).
Read the full article here.