Bankers and Brokers may be in agreement
A new survey suggests Canadian bankers may be less concerned about mortgage credit risk than they were two years ago or, indeed, the government is now, given speculation it will again tinker with the country’s mortgage rules.
While credit risk topped the list of concerns for Canadian bankers participating in the 2010 Banking Banana Skins survey – produced by the Centre for the Study of Financial Innovation in association with PwC – it fell to fifth place in this year’s polling.
More pressing concerns for Canadian respondents were macro-economic risk, liquidity and regulation, with the availability of capital also moving up ahead of any risk associated with their mortgage and consumer loan portfolios.
The survey results lend support to brokers and others who continue to challenge the need for additional tightening of mortgage rules.
Click here for more from MortgageBrokerNews.ca.
No housing crash for Canada: BMO
Canada will likely avoid a crash or serious correction in its “somewhat pricey” housing market, with the possible exception of Vancouver, says a new paper from Bank of Montreal.
The analysis by BMO economists suggests alarms about Canada’s housing market by international observers, from the International Monetary Fund to The Economist magazine, are exaggerated or simplistic.
“The main takeaway is that the national housing market appears somewhat pricey, but is far removed from a bubble,” said Economists Sherry Cooper and Sal Guatieri in the report released Monday.
“In our view, the [market] is more like a balloon than a bubble. While bubbles always burst, a balloon often deflates slowly in the absence of a ‘pin’.”
Click here for the full Globe and Mail article.
CMHC Insurance Limits: A Wake-up Call for Lenders
Many have now seen this Financial Post article – CMHC Backing Fewer Loans.
The gist of it: CMHC is approaching its $600 billion government-imposed limit on issuing mortgage default insurance. That’s happening largely because of lenders’ enormous appetite for something called portfolio insurance (aka, “bulk insurance”).
No one fully grasps the repercussions yet, but our sense is that the news is not great (at least in the short-to-medium term) for mortgage consumers, smaller lenders and brokers.
On the other hand, it may be healthy long-term for the housing market. Click here to find out why from CanadianMortgageTrends.com.
Don’t take an RRSP loan, unless…
Despite promises of stellar long-term growth and the dangling carrot of big, fat refunds, people are finally figuring out that the only beneficiary of an RRSP loan is the lender, unless…
1. You’re in the highest tax bracket AND
2. You can pay off the loan within one year AND
3. You’ll still be able to make the current’s year RRSP contribution
from your cash flow
Click here to read more from MoneySense.