Sunday, November 30, 2008

10 great reasons to use a mortgage broker ... #8

8) Get expert advice.

When it comes to mortgages, rates and the housing market, we'll speak to you in plain language. We can explain the various mortgage terms and conditions so you can choose confidently.

Reason #9 to use a mortgage broker is coming up soon so please visit again ... you'll be glad you did!

Friday, November 28, 2008

10 great reasons to use a mortgage broker ... #7

7) Things move quickly!

Our job isn't done until your closing date goes smoothly.

We'll help ensure your mortgage transaction takes place on time and to your satisfaction.

Come back in a couple of days to see reason #8 to use a mortgage broker.

Thursday, November 27, 2008

Happy Thanksgiving !

Just a quick hello to our American friends today as they celebrate the Thanksgiving holiday.

We wish you all the best that a family holiday can bring.

Best wishes to all our readers no matter where they may be.

Wednesday, November 26, 2008

10 great reasons to use a mortgage broker ... #6

6) Get access to special deals and add-ons.

Many financial institutions would love to have you as a client, which is why they often offer incentives to attract credit-worthy customers. These can include retail points programs, discounts on appliances, shopping clubs and more. We do the math on which offers might be worth your attention when it comes to financing or mortgage insurance - so you get the perks you deserve.

Reason #7 to use a mortgage broker is coming out in a couple of days ... look forward to seeing you again.

Monday, November 24, 2008

10 great reasons to use a mortgage broker ... #5

5) Ensure that you're getting the best rates and terms.

Even if you've already been pre-approved for a mortgage by your bank or another financial institution, you're not obliged to stop shopping!

Let us investigate to see if there is an alternative to better suit your needs.

Please visit again in a couple of days to find out the 6th great reason to use a mortgage broker.

Saturday, November 22, 2008

10 great reasons to use a mortgage broker ... #4

4) More choice means more competitive rates.

We have access to a network of major lenders in Canada, so your options are extensive. In addition to traditional lenders, we also know what's being offered by credit unions, trust companies and other sources. And we can help you take care of other requirements before your closing date, such as sourcing mortgage default insurance if your downpayment is less than 20% of the purchase price.

Check back again in a couple of days for reason #5 to use a mortgage broker.

Thursday, November 20, 2008

10 great reasons to use a mortgage broker ... #3

3) We negotiate on your behalf.

Many people are uncertain or uncomfortable negotiating mortgages directly with their bank. Brokers negotiate mortgages each and every day on behalf of Canadian home buyers.

You can count on our market knowledge to secure competitive rates and terms that benefit you.

Check back in a couple of days to see reason #4.

Wednesday, November 19, 2008

10 great reasons to use a mortgage broker ... #2

2) Save time with one-stop shopping.

It could take weeks for you to organize appointments with competing mortgage lenders - and we know you'd probably rather spend your time house hunting! We work directly with dozens of lenders, and can narrow down a list of those that suit you best.

Also, you make only one application and only one inquiry is done to your credit bureau file when using a mortgage broker. This preserves your existing credit score since multiple inquiries can have a negative effect on your score which can mean the difference between approval and decline in some cases.

It makes comparison-shopping fast, easy and convenient.

Check back in a couple of days for reason #3

Monday, November 17, 2008

10 great reasons to use a mortgage broker ... #1

1) Get independent advice on your financial options

As an independent mortgage broker or agent, we are not tied to any one lender or range of products. Our goal is to help you successfully finance your home or property.

We'll start by getting to know you and your homeownership goals. We'll make a recommendation, drawing from available mortgage products that match your needs, and we will decide together on what's right for you.

Check back in a couple of days to see reason number 2 ...

Sunday, November 16, 2008

Not so bad as the media would have you believe

House prices in Canada are falling. Pick up any newspaper, turn on any t.v. station and you hear the chorus of "Chicken Little" reports. But is it really all that bad?

Simply looking at the headline numbers can be very misleading. I can't really fault them for not taking a step back to see the big picture and analyzing the information.

I want to look at 2 things. Firstly, it was (up til recently) a common saying that the real estate market is "in the 12th year of a 7 year cycle". Nothing could go wrong. Remember those days? They weren't that long ago.

So if year after year, prices were pretty well guaranteed to go up AND this went on for longer than the usual cycle then any drop is cause for concern since it has been ages since the last drop and we have very short memories.

Further, a drop off of a record year (preceeded by a record year which preceeded a record year which ... well, you get it right ?) is a little unfair to compare to the end of days. Prices have dropped significantly in many markets. But, when the drop is from a record high then the bottom stability point should still be higher than where the cycle began. Sounds like the common wisdom about the stock market, doesn't it?

Secondly, and I won't get into heavy math (don't worry, I wouldn't do that to you) ... the "headline" numbers so often referred to reflect a current weighting for each city. This makes for a huge bias to the overall average price. So its not difficult to see that a drastic change in the sales volume in certain cities - Vancouver or Toronto for example - can significantly influence the average price on a national basis.

Let's look at Vancouver. The year over year drop is almost 45% when talking about the number of homes sold in the city. Ooh that's terrible! Now let's start qualifying that for a minute and add in that Vancouver prices are much higher than the national average. By combining these 2 facts, it looks like national home prices fell just as sharply when in reality, the driving factor was that fewer expensive homes were being sold in Vancouver. It may seem like a big market out there but really they are just a fraction of the marketplace on the whole.

So what do we get from all this? Nationally, the numbers are down by about 6% year over year for October but by using proper weighting, home prices really fell by closer to 1%.

So while we agree that in general prices are falling and are expected to continue trending downwards, the headlines are exaggerating the real weakness in the housing market by not taking all factors into account and explaining the weighting certain markets have on the whole picture.

Friday, November 14, 2008

MP Jim Flaherty offers tips from "boring" Canada

The financial crisis that began 14 months ago in the U.S. has intensified and spread around the world, threatening to roll back economic progress that has been made over the past two decades. Governments have been responding in a co-ordinated fashion and will continue this work in the lead-up to the summit of the Group of 20 leading economies.

Few countries are as dependent on trade or as integrated into the global financial system as Canada. Yet our financial sector continues to weather the turbulence better than many other countries. This did not happen by chance. Canadians by nature are prudent and our financial system has been characterized as unexciting. Canada's regulatory regime ensures that stability and efficiency are balanced. As a result, Canadian taxpayers have not had their money put at risk in response to this crisis. If Canada's financial system is boring, perhaps the world needs to be more like Canada.

Before we examine grand designs for global regulatory regimes, we need to recognize that good regulation begins at home. Effective national regulatory regimes could have prevented this crisis and must be our first line of defence against any future one. We all need to draw lessons from those systems that worked well and apply them to our national regulatory regimes.

First, we need to regulate all pools of capital that rely on leverage. The crisis has demonstrated the devastating impact that unregulated entities can have. Transparency requirements must be the price of admission to global markets. Different financial services may have different regulatory requirements, but we need to bring them all under a regulatory umbrella.

Second, capital and liquidity buffers need to be large enough to handle big shocks. Moreover, regulators must restrain overall use of leverage. Some have criticised high Canadian capital requirements for banks as being too conservative. But the strong balance sheets of Canada's banks through this period speak for themselves.

Third, it is not enough for regulation to look at individual institutions. It needs to look at the system as a whole. Risks that may appear sensible in isolation can be unsustainable from a systemic perspective. This systemic vantage point must be used to mitigate any tendency to underestimate risk when times are good. This requires co-ordination across the government, central bank and regulatory agencies.

Fourth, we need to make market infrastructure more transparent and resilient. Non-transparent over-the-counter trades and naked short-selling reduced the stability of the system.

This crisis has demonstrated that even countries with strong financial systems can feel the effects of inadequate regulatory regimes elsewhere.

Countries may hesitate to impose new requirements on their own institutions if these measures will create a competitive disadvantage. This points to the importance of the fifth step: strengthening international co-ordination, review and surveillance to create a better second line of defence. Canada was a pioneer of the joint International Monetary Fund-World Bank financial sector assessment program. This independent review of domestic financial systems should be mandatory and public. We need to strengthen the role of international colleges of supervisors to ensure better understanding of systemic risks and to co-ordinate national actions. We need IMF surveillance with teeth. Countries must live up to their responsibilities to support global financial stability and growth. Nowhere is this more important than incorrecting global imbalances through appropriate exchange rate and macroeconomic policies to support growth.

The process of how we make decisions is equally important. In two decades of unprecedented growth, we have seen the emergence of dynamic new economic players that must be full participants at the global table. Canada took one of the largest share cuts of any country in the recent IMF reform exercise to ensure that emerging economies are better represented. This broader range of voices must be heard in other venues such as the Financial Stability Forum.

Together, these reforms must ensure that incentives are aligned to support stability and that resilience is built into the financial system.

The open market system did not fail in this crisis. However, some forgot Adam Smith's maxim that the invisible hand needs to be supported by an appropriate legal and regulatory framework. We need to work together to strengthen those frameworks, and that work must begin at home.

This is a guest column by Finance Minister Jim Flaherty inThursday's Financial Times, posted on the Department of Finance's website and titled 'Boring' Canada's financial tips for the world

Wednesday, November 12, 2008

Good news for Canadians seeking credit

Ottawa pushes to get credit markets working

Globe and Mail November 12, 2008 at 4:11 PM EST TORONTO

Ottawa has announced three aggressive measures to get Canada's credit markets back in working order.

Finance Minister Jim Flaherty said Wednesday the government would add $50-billion to its mortgage purchase program. He has also agreed to slash the price the government is charging to Canadian banks to insure their wholesale lending. At the same time, the Bank of Canada is injecting another $8-billion into money markets over the next few weeks,in one-month money, through a new Canadian-dollar term lending facility it is setting up.

Mr. Flaherty said the government has already made significant moves to support the financial sector, and credit markets have recently improved, but "we have to expect an extended period of stress in global credit markets.

"This could limit the availability of credit to households and businesses in the months ahead, he said in Toronto.

The credit crisis gripped global markets 15 months ago, and credit essentially froze around the world in September. Since then, frequent aggressive interventions by key central banks have brought a bit of a thaw.

But the global economy has deteriorated sharply in recent weeks, prompting fears that financial institutions, already struggling to stay afloat, would succumb.

Canada's credit markets have not been as severely hit as elsewhere, but spreads have been far wider than normal and have not narrowed much recently. At the same time, economic prospects have slid along with troubles in the auto sector and plunging commodity prices. Wednesday's moves are meant to bolster confidence among banks to get them lending freely again, despite the weakening economy.

Mr. Flaherty said he met Wednesday morning with the chief executive officers of the major banks, and his message to them was that "we each have an important role to play. It is up to private sector lenders to keep on doing their job, making loans to credit-worthy people and enterprises of all sizes. It is up to governments to step in when markets are profoundly disrupted, so that private sector lenders can maintain access to the funds they need to keep lending and supporting economic growth.

"The move to buy up more mortgage pools should make consumer and mortgage loans "more affordable and more available," Mr. Flaherty said. "At a time when GDP growth is slowing down, it will help companies to invest in the new productive technologies we need to move our economy forward.

"Gordon Nixon, chief executive officer of Royal Bank of Canada, the country's largest lender, welcomed Wednesday's changes.

"Mr. Flaherty's announcement was a constructive step in improving the functioning of the financial markets," he said, through a spokeswoman."It helps ensure consumers and businesses have access to credit and Canadian banks continue to operate from a position of strength.

"Toronto Dominion Bank chief economist Don Drummond said the changes Mr.Flaherty made are exactly what the banks wanted.

The banks wanted the mortgage bond program extended, the loan insurance scheme to be cheaper, a term facility such as the one launched by the Bank of Canada, and changes to capital rules such as those announced by the bank regulator on Tuesday.

"We asked for four things, and we got all four of them," Mr. Drummond said.

Mr. Flaherty's announcement means the government will now buy up to $75-billion of insured mortgage pools from the major banks, up from $25-billion. The extended mortgage purchase program will earn a "modest" rate of return for the government, but there will be no additional risk for taxpayers, Mr. Flaherty added.

The change in the fees on bank lending insurance will ensure that Canadian banks "are not put at a competitive disadvantage by policy actions in other countries," said Mr. Flaherty. When he looked at pricing of similar programs in other countries, it became apparent the Canadian program had to be changed to be more competitive, he said.

The two changes in pricing will effectively cut the fees for the lending insurance by half a percentage point. The lowest rate will now be 1.10 per cent of the loan value.

Commercial banks have complained loudly that the loan guarantee program designed by Ottawa a few weeks ago was too expensive to be of much use.

While other countries' banks could buy what amounts to insurance at a low price, Canadian banks were paying higher rates. The program was only useful for banks in dire trouble, and was putting the Canadian financial institutions at a competitive disadvantage globally.

Canadian Bankers Association CEO Nancy Hughes Anthony welcomed the measures announced by Mr. Flaherty, calling them very helpful.

"I think from the beginning, the CMHC auction was ... fully subscribed and there was a strong feeling that more might be needed in that area," she said in a telephone interview. "So we're very pleased to see that has been increased.

"And obviously, too, when the Lenders Assurance Facility was announced.. .there was a lot of commentary that ... the pricing just wasn't internationally competitive."

Bank of Nova Scotia spokesman Frank Switzer also welcomed the news from the finance minister, saying the changes were in line with what the industry has been asking for. "It puts Canada in the same ballpark as other countries that have initiated similar supports," he said.

In Ottawa, the Bank of Canada said it will put the additional $8-billion into one-month money markets, spread out in four auctions over the next few weeks, through a newly created Canadian-dollar term loan facility.

The Bank of Canada has hinted heavily in recent weeks that it had further measures in store, to make sure financial institutions have cash on hand to finance their transactions.

Financial institutions can post almost any kind of loan on their books as collateral, in order to take part in the auctions, the bank said.

"By providing greater flexibility for liquidity provision with respect to eligible collateral, the [new facility] will facilitate further improvement in money and credit markets.

"Canadian banks have been pressuring Ottawa to boost their help for the sector, and all countries have been urged, in a series of international meetings, to do much more in order to get the global economy back on track.

While lending spreads in some markets have edged down gradually in the past few weeks, Canada's key spreads have not moved much for a month, suggesting a lingering risk aversion among banks in Canada.

Mr. Flaherty indicated last weekend that he understood the banks' complaints, and would consider acting. But Bank of Canada Governor MarkCarney said in an interview that Ottawa had carefully designed the program, and suggested Canadian banks weren't at a global disadvantage because they are in far better shape than other banks around the world.

Mr. Flaherty told reporters Wednesday that the government is still on track to report a small budget surplus for the current fiscal year, "and I emphasize small."

The fall economic update coming in the next few weeks will provide the numbers, he said.

He also said Ottawa is "monitoring" the automotive industry, but it has not yet decided what action can be taken to support that sector. He said Industry Minister Tony Clement is talking to the auto companies "and we'll see what we're able to formulate for the industry."

Ottawa has increased the borrowing room of the Business Development Bank of Canada to $11.5-billion from $9.7-billion. The move is designed to give the bank "greater flexibility in meeting the credit demands of its small and medium-size business clients," Mr. Clement said in a statement.

Bank of Canada spokesman Jeremy Harrison said the new term loan facility announced Wednesday will have the same "economic impact" as the so-called term purchase and resale agreements (PRAs) the central bank is already offering to help lenders with liquidity.

The "nuance" is that in a PRA, the central bank buys a marketable security from a commercial bank with an agreement to sell it back later. However, the new program is designed to cover commercial banks' non-mortgage loan portfolios which are not marketable securities, Mr.Harrison said, because there is no secondary market for them, unlike bonds and corporate paper.

As a result, liquidity provided against these portfolios cannot be structured as PRAs.

"What it ends up being is a collateralized loan," he said, with the commercial banks pledging the portfolios as collateral for cash from the central bank.

Tuesday, November 11, 2008

Lest we Forget

The Your Mortgage Matters Blog takes a few minutes today to remember and be thankful for all those who sacrificed their youth, freedom and lives for us to enjoy what we sometimes take for granted today.

Monday, November 10, 2008

Going away ? Are you covered ?

Here's a great contribution from one of our trusted professionals and business partners ... hope you enjoy it! With all the snowbirds getting ready to go south - or even when you are getting away at any time of year - this is great advice. Get in touch with Christine if you have more questions or would like to get her looking after your place while you enjoy a getaway. Oh and don't forget to mention that you read about her on the Your Mortgage Matters Blog ! Best, Marshall

Did you know that if you leave your home empty, for more than a few days, you risk your home insurance coverage being affected? Many people ask their neighbour’s son to keep an eye on things or have a family member stop by once a week during a vacation or business trip. The same also applies to empty homes in the process of being sold, probate properties, relocations and properties of contract workers. Unfortunately this may no longer be enough should you be unfortunate enough to have a claim, such as a burst pipe, electrical fault or break-in, arising from the time of your absence. Under the terms of your home insurance policy proof of a visit every few days is needed to ensure full coverage with the protection it offers.

Last year a neighbour of mine, down in Florida for the winter, received a telephone call from her sister in law who was popping in once a week to check the house. She’d had a leak in the basement, which her sister in law only found when she noticed a strange smell four weeks after my neighbour’s departure. By this time it was too late and the small leak became a big insurance claim, involving not only repairs but replacement of carpets and furnishings. Unfortunately my neighbour was not aware of the conditions of her home insurance policy, which stipulated that someone had to inspect the property every 72 hours minimum during her absence.

The moral of that tale is check the small print and be aware of the conditions of your policy. Go away with total peace of mind knowing that you’ve covered all the bases and made formal arrangements for your home to be taken care of during your absence.

Christine Raynor.
Home Or Away Property Services

Friday, November 7, 2008

Canada may skirt recession: IMF

Julian Beltrame The Canadian Press

Evidence was mounting yesterday that Canada may be following the rest of the world on the path to recession, even as global policy-makers look to new measures to combat the economy-destroying financial crisis.
In its latest update, the International Monetary Fund sharply downgrades the economic outlook for Canada and the rest of the world from its previous projection a month ago.
The world organization, head quartered in Washington, said Canada's economy will avoid recession by the slightest of margins with 0.3 percent growth next year, while all other G7 leading industrial counties will see their economies actually contract, led by Germany and the U.S.
The IMF's latest forecast for Canada is well down from the relatively robust 1.2 per cent advance it had predicted only last month.
"Prospects for global growth have deteriorated over the past month,'' the body said, urging governments to act to stimulate their economies.
The darkening outlook shook markets around the world, with stocks plunging the Tokyo index more than six per cent, while shares fell 3.3 per cent in Toronto and 4.8 per cent in New York's main exchange.
Yesterday brought more indications that the economy in Canada is slowing sharply.
An official government report showed bankruptcies in Canada were climbing steeply even before the worst of the financial crisis hit, increasing by almost 19 per cent in September from the previous month and 28 per cent from a year ago.
And in an indication that Canada's housing slump is deepening, permits for new housing fell 4.9 per cent during September, the second straight monthly decrease and sixth during the year.
Overall, building permits rose 13.4 per cent in September largely on the strength of publicly financed non-residential construction.
Worse news is expected to come this morning with the new employment report from Statistics Canada.
Many economists believe the October jobs number will usher in an uncomfortable period of monthly job losses that will begin to track what is occurring in the U.S., which has already shed 760,000 jobs this year.
"The worst part for the economy is largely still ahead of us,'' said Derek Holt, vice-president of economics with Scotia Capital.
"The speed at which things are deteriorating is alarming.''

Thursday, November 6, 2008

Canada's Banking System a model for others: Harper

TAVIA GRANT Globe and Mail Update November 6, 2008 at 3:38 PM EST

TORONTO - Canada's financial system, which is weathering the economic storm better than most countries, could serve as a model for other nations, Prime Minister Stephen Harper said Thursday.

"We certainly have not avoided all of the pitfalls that have occurred in other countries, but they've been much more limited," he said after a meeting in Toronto.

His remarks come ahead of a summit of G-20 leaders next week in Washington to discuss the financial crisis.

He attributed Canada's relative strength to "a broad and developed system of financial regulations" as well as fiscal and monetary policies. "We have entered this period from a good position," he said. "At the same time, we're in a position where we're important players - people will listen to us - but not so important that they're worried we have an alternative agenda."

Mr. Harper said he hopes to focus on "selective" improvements to the global regulatory system that will strengthen oversight, rather than a more radical overhaul suggested by several European leaders.

Mr. Harper is in Toronto to meet with economists and senior financial executives to discuss the slowing Canadian economy and the global financial crisis.

He met this morning with economists at the C.D. Howe Institute's monetary policy council.

Anyone unsure of the European central banks' reasoning needed only to look to Washington, where the International Monetary Fund cut its month-old forecast for global economic growth next year to 2.2 per cent from 3 per cent, adding that of the world's major industrialized countries, only Canada's economy will grow in 2009.

But their actions are loosening credit markets, suggesting the global economy will show signs of life by the later half of next year, said Stéfane Marion, economist at National Bank Financial.

"We are going into a global convergence of very low interest rates," Mr. Marion said from Montreal.

"They aren't done in continental Europe. They aren't done in the U.K."

With files from Bloomberg News

Monday, November 3, 2008

Another lender leaving the mortgage broker channel

Mortgage Brokers still offer Canadians the best in unbiased choice when it comes to your mortgage needs. Here is a brief announcement received late this afternoon from one of our lender partners. We're sorry to see them go and wish them the best in the future:

"CitiFinancial Canada, Inc. has taken the decision to exit its broker referral business. As such, we are hereby providing you written notice of termination of the aforementioned agreement (the “Agreement”), effective immediately.

Please be advised that we will honour any pending mortgage transactions in respect of which we have provided a signed commitment to your office, provided that we receive any outstanding documentation and are able to close the transaction on or before December 3, 2008.

We will be in contact with you or your designee to discuss and finalize the following:

(1) Return and/or destruction of information or materials that are confidential or proprietary to CitiFinancial Canada, Inc., if any is in your possession; and
(2) Return and/or destruction of information or materials that are confidential or proprietary to Broker, if any is in our possession.

Please note that any provision in the Agreement, which by its sense and context is meant to survive expiration or termination of the Agreement, including, but not limited to, covenants, and all confidentiality and indemnification provisions, shall survive this termination.

We thank you for your consideration herein; it has been a pleasure working with you."