Tag Archives: loans

BC Premier has a message for first time buyers

A recent petition seems to have gotten enough attention to get the Premier to comment on the issue of limits to foreign buyers of BC real estate.  This article say’s she’s sitting on the fence, but her quote seems to pretty clearly have a message for struggling first time buyers in BC:

“By trying to move foreign buyers out of the market, housing prices overall will drop. That’s good for first time home buyers, but not for anybody who’s depending on the equity in their home to maybe get a loan or use that to finance some other projects.”

Which category do you think holds about 70% of the voting population?

Canadians deep in debt and getting deeper

The Globe and Mail nicely sums up the current Canadian obsession with taking on household debt. This infographic has all the pretty charts related to the current situation in which current debt totals a record $1.8 trillion. Just over a trillion of that is Mortgage debt, with the other big growth seen in lines of credit and car loans.

One Trillion is a big number and it can be hard to visualize.  Here’s one way to put it into perspective:

If you spent $1-million every day, it would take you 2,740 years to spend $1-trillion.

Albertans carry the largest debt to income ratio followed by BC. It seems the nation loves debt, but the west loves it best.

Read the full article here.

Should you walk away from your Alberta mortgage?

southseacompany pointed out this article in the Financial Post:

You can walk away from your mortgage (if you live in Alberta) but should you?

“Francis, a 34-year-old welder from the mining town of Grande Cache, Alberta, says he wishes he could get out of the townhouse he bought four years ago.”

“He bought the home for $175,000 with a five per cent downpayment but still owes $150,000 on his mortgage. He says the market for his home has collapsed in his town and a realtor just told him the best price he could expect is $75,000.”

“Since the loan is “under water,” his bank would be left with a shortfall that CMHC would have to cover. The Crown corporation would likely sue him for any losses it has to cover, so if he has any assets, CMHC will go after him.”

“Handing over the keys to the house and walking away from your mortgage, called “jingle mail,” was a defining act of the American housing crisis and helped send the market south of the border into a deeper tailspin.”

Interesting theory, but as we actually saw in the US states with recourse loans (i.e. Nevada, Florida) saw just as much of a collapse as non-recourse states.

About that BOC / IMF conspiracy…

Now normally when you hear about a conspiracy lawsuit against the Bank of Canada, the International Monetary Fund and the Queen of England you would assume Lizard People are involved right?

But in this case the government has already exhausted all but one chance to have the case thrown out and their last chance expires in the next week.

Is it possible the tin foil hats might have something here? Certainly it helps that their lawyer has a history of winning unlikely cases.

So what’s it all about?  Here’s what the Epoch Times says:

Toronto-based COMER and its fellow plaintiffs Ann Emmett and William Krehm are suing over fundamental changes to the Bank of Canada’s role that were made in 1974 when the bank stopped making loans to the government.

The Bank of Canada (BoC) was founded in the Great Depression and played a major role loaning money to the government. It helped finance Canada’s war effort during World War II and could loan money to the government, without interest, if it chose to do so. Any profits the BoC made were returned to the government minus the Bank’s operating expenses. That last point remains the case today, with $1.7 billion sent to the Receiver General annually.

COMER alleges that by no longer providing these loans, the Bank and others named in the suit have forced the government to finance budget deficits by borrowing from private markets and paying hundreds of billions of dollars in interest. Last year, $28 billion—over 10 percent of the federal government’s $277 billion in expenditures—went to servicing the debt.

That’s more than what was spent on National Defence ($21.5 billion) and nearly as much as the Canada health transfer ($30.5 billion).

The Bank of Canada Act allows, or as COMER alleges—requires—the BoC to give the federal government loans up to a total value of one-third of the government’s predicted annual revenues. For provincial governments it is a quarter of those revenues. The loans have to be repaid within the first quarter of the next fiscal year. At that point, the government just needs to pay back the loan with incoming revenues, and take out another loan to make up any deficit.

So in essence, unless our translator has the lizard people language interpretation incorrect, this case is about the national debt and the Bank of Canada’s failure to loan money to the Government of Canada for free.

What do you think? Lizard People are coming to eat your children of something is going to change?

Read the full article here.

Friday Free-for-all!

It’s that time of the week again…

Friday Free-for-all time!

This is our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

What size house are you happy with?
CMHC no longer loans for condo dev
Bidding wars spread to suburbs
Minimum loan payment reduced
Low rates to save housing market?
Shiller worried about canada prices

Thanks to southseacompany and everyone else for the links!

So what are you seeing out there? Post you news links, thoughts and anecdotes here and have an excellent weekend!