In addition to the CMP Top 75, this year marks the second year of the Small Market Top 20 – a list celebrating the accomplishments of mortgage professionals in markets with 2012 average home prices of $290,000 or less.
The entry deadline is Friday, June 21st, so don’t delay!
Last year’s Top 75 list included funded volumes (from 2011) ranging from just over $26 million in 75th position to more than $410 million in top spot. If your funded volume for 2012 is above $25 million, it’s definitely worth your while to fill out the submission form.
Please note that your volume submission must only include deals you personally generated and for which you alone received commission. It’s okay if someone else helped you process the deals, but no one else should have been paid commission on these deals.
Click here to enter online today.
Canada’s banking watchdog seems intent on stamping more risk out of the mortgage market.
The latest idea being floated by The Office of the Superintendent of Financial Institutions (OSFI) is to limit amortizations to 25 years for homeowners who have put down 20% of the purchase price or more. The current maximum is 35 years.
If this rule is enacted, OSFI would be targeting a minority of borrowers. According to the latest CAAMP data, of all the buyers from 2008 to 2012 who got a mortgage with over 20% equity, 24% chose an amortization of more than 25 years.
Skeptics contend that long amortizations are used mostly to shoehorn over-leveraged borrowers into homes they can’t afford. A 2012 Altus group study contradicts that. Only one in five purchasers said they chose extended amortizations because: “This was the only way I could qualify for a mortgage.” And only a minority of those 20% would be at risk of missed payments.
In my experience, conventional borrowers most often use 26-to-35-year amortizations for cash management purposes. These people could readily afford a 25-year mortgage but prefer the payment flexibility of a longer amortization.
Click here for the full Globe and Mail article.
Finance Minister Jim Flaherty is dismissing fears about Canada’s housing market, saying the current slowdown is welcome news and that there is no need for further government intervention.
While some observers are expressing fears that a steep correction is underway that will bring down housing values and possibly affect bank credit ratings, Flaherty said yesterday that he believes government mortgage tightening last July actually helped avert what could have turned into a housing bubble.
“I’m comfortable about where we are,” he said in a telephone interview. “I’m pleased in particular that the condo market in big cities has fallen back. I’m also pleased with some other moderation in new house construction and in demand for mortgages. I think these are healthy developments because I think we were beginning to see some indications of the beginning of a bubble.”
He said the recent slowdown is at least in part a consequence of his decision to tighten mortgage rules last July.
Click here for more from CBC News.
Self employment is more common, but banks are more cautious about giving mortgages to people who fall into this category.
Vick Vij knows all about the challenges self-employed folks face when they try to get a mortgage. The Markham-based chartered accountant went through the arduous process a few years back. He also regularly deals with self-employed clients looking to purchase a home. “It can definitely be more complicated for them,” he says.
Where mortgage applicants with steady, salaried jobs can document their annual income with a T4 slip, the self-employed – entrepreneurs, small business owners and freelance professionals with a changing clientele and no regular paycheque – are assessed based on stated income, or the amount the borrower claims to earn, which they must prove with tax returns, contracts and financial statements.
“They don’t have a lot of verifiable pieces of paper that substantiate their income,” Vij says. “So the bank or mortgage broker is going to have to do more due diligence to gain comfort about their numbers.”
Click here to read more in The Star.
When graphic and web designer Andy Stanleigh bought a house in Oakville, ON last summer, he learned the value of having a real estate lawyer on call.
A few days before closing, Stanleigh and his wife received a surprise letter from the vendor’s lawyer, saying that they needed to immediately pay nearly $1,100 in property taxes. The letter stated that the vendors had paid the final property taxes for the year, and so the Stanleighs needed to reimburse them before the house sale could close.
It was a stressful moment, coming on the brink of finalizing the sale. But his wife’s mother, who is a legal secretary for a real estate lawyer, called the city and found out that the venders actually owed the city $500 in unpaid property taxes, which meant the Stanleighs did not, in fact, owe them any money.
The couple’s real estate lawyer drew up a letter insisting the vendors pay the outstanding taxes immediately and send proof of payment. The vendors complied and the sale went through.
“But if I was a first-time homebuyer and didn’t have a lawyer, I might have taken [the letter] at face value and said ‘Okay, this is one of the things you have to do to close, here’s the money,’” said Stanleigh.
Click here for the full Globe and Mail article.
Too many unlicensed brokers and not enough resources have FSCO frustrated with the deluge of public complaints over illegal mortgage brokering advertisements.
“The guys who post the signs on the street posts, under the street lamps, they’re preying on people in dire financial situations,” says Bhan Persaud, the senior licensing approvals officer with the Financial Services Commission of Ontario. “All we can do is threaten them with the police when we are notified, but the police don’t have the resources to charge them. There are just too many lawbreakers and not enough resources.”
Under Ontario’s Mortgage Brokerages, Lenders and Administrators Act, all mortgage brokerages, brokers and agents must prominently disclose the name under which they’re licensed and their licence number in all public relations materials, including ads. Ads for mortgage brokers and agents must also include the name and licensing information for the brokerage they are affiliated with.
In addition, private lenders for mortgages are prohibited from advertising their services. Only the licensed mortgage brokerage that they do business with can advertise.
Click here to read more form MortgageBrokerNews.ca.