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From Newswire.ca
Canada’s household debt still manageable: CIBC World Markets Inc.
CIBC – usually one of the most accurate of the banks when it comes to economic predictions re-buttes the Bank of Canada’s analysis of Canada’s credit market.
“Make no mistake: Canada is not doomed to see a U.S.-style housing and mortgage blow-up,” says Chief Economist Avery Shenfeld in the bank’s latest Economic Insights report. “There are three lines of defense for those with high debt service ratios that the BoC analysis ignored.
“One, some mortgage holders will have substantial home equity, even allowing for a house price slide, and could downsize. Two, others have high debt payments because they are making accelerated pay-downs of principal, which they could stop. Three, history suggests that many will jump into fixed mortgages in time to avoid the full brunt of the variable rate shock.
“The result is that the number of Canadians truly at risk could be substantially less than the (Bank of Canada’s) estimate.”
I haven’t seen the data, but wondered myself how Carney and Flaherty so quickly acquire a pulse on the Canadian financial markets. Their crystal balls must be exquisite.
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Last week I posted an article from the National Post Flaherty Watching for Signs of a Bubble. At the end I predicted that this was just a ploy to try and cool the market via good old fashioned scare tactics.
After several discussion this last week however, the banking industry seems to be at a consensus that the next six months are going to be extremely busy as Flaherty’s threat may do the opposite of what was intended, it may push the market to new highs. Unfortunately, Flaherty thinks he can bully the market in whatever direction he desires. No one man however, can make a market, and when one trys – situations like what happened in the US economy occur.
My questions to you are as follows. Do you think Flaherty is right to even talk about this issue publicly? What do you think would happen to the housing market if he did change the down payment and amortization requirements? Post your comments on Twitter, Facebook, or the comments section below. The winner will be entered to win an Ipod Touch.
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Fresh Faces – Next generation of mortgage professionals reinvents the industry
From The Mortgage Journal – January/February 2010
By Gina Monaco
Nolan Mathias, 26, from Calgary Alberta, who works with Mortgage Architects, is a very busy man. He is in his seventh years as a mortgage agent having started his business while still at the University of Calgary. When he asked his economics professor what business he should get into, his prof pointed at the window and told him to look. Matthias made the decision to get into the financial business.“I took a three-week mortgage course and spent my last two years of school as an agent,” he says. “I actually re-wrote a chapter for the course I took.”
He never thought about mortgages — he saw himself as an investment banker or a wealth manager – but after working for Filogix (more…)
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From the National Post -Federal government ready to deflate any housing bubble
Finance Minister Jim Flaherty speaks out on low interest rates and the hot real estate market.
“The reality is we have low mortgage rates . . . so we can expect some upward pressure on housing,” he said. “That’s OK, as long as it doesn’t become a bubble. We’re watching that.”
If necessary, the government is prepared to further tighten the conditions under which the Canada Mortgage Housing Corporation insures mortgages, the finance minister said.
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