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Friday, January 29, 2010

Canadian Mortgage Broker News - Genworth MI Canada sees positive year-end results

Canadian Mortgage Broker News - Genworth MI Canada sees positive year-end results


Genworth MI Canada sees positive year-end results
Friday, 29 January 2010
Genworth MI Canada ended 2009 on a positive note, with a $6 million increase in new insurance written in the fourth quarter compared to the previous quarter and net income for the year climbing to $87 million.
"Our strong execution against our business objectives combined with improving housing fundamentals contributed favourably to our overall results this quarter," said Brian Hurley, chairman and CEO of the company. "In addition, our proactive Homeownership Assistance Program contributed to lower delinquencies and a corresponding lower loss ratio."
Along with the strong housing market, the private mortgage insurer also said its positive year-end results were "favourably impacted by improving customer confidence and market position gains with key lenders."
The financial standing for 2009 was also marked by Genworth MI Canada's initial public offering last July to raise money for its parent company in the U.S. The offering generated $850 million, with close to $97 million allocated for the Canadian arm of the company to pay off debts and build business. The IPO raised Genworth MI Canada's stock from $19 to a current trading rate of $25.56, according to The Financial Post.

Canadian Mortgage Broker News - Canada Mortgage Bonds grow under the radar

Canadian Mortgage Broker News - Canada Mortgage Bonds grow under the radar


Canada Mortgage Bonds grow under the radar
Friday, 29 January 2010
The CMHC-backed Canada Housing Trust issued $47 billion worth of mortgage bonds in 2009 - the biggest issuance in the Canadian marketplace last year, according to a story in The Financial Post.
The growth is another sign of success for the Canada Mortgage Bonds program, which was launched in 2001 as a way for financial institutions to sell some of their mortgages to the government for liquidity and to lower borrowing costs. The program has proved popular among both financial institutions and investors, the Post said.
"Investors have responded extremely well to the safety and security of Canada's mortgage market as well as the AAA backing from the Canadian government," Doug Bartlett, managing director and head of government finance for CIBC World Markets, told the Post.
The five-year bonds are still the most popular product in the CMB program, but the 10-year bonds have also done well since being introduced to the market in November 2008, with a total of $9.2 billion being sold as of December. Despite the high numbers, CIBC executive director Warren Lovely told the Post the program is "very mature" after the explosive growth it has experienced in the past few years.

Wednesday, January 27, 2010

Canadian Mortgage Broker News - Canadas six most magnetic metro areas for migrants

Canadian Mortgage Broker News - Canadas six most magnetic metro areas for migrants

Hypothèque variable ou fixe?

Hypothèque variable ou fixe?

Michel Girard
La Presse
(Montréal) Autre répit pour tous les emprunteurs. La Banque du Canada a fait fi hier des récentes pressions de la reprise économique pour laisser le taux directeur à son creux historique de 0,25%. C'est donc encore de bon augure pour le renouvellement des hypothèques.
Mais pour combien de temps? Trois, six, neuf mois...
Les économistes croient que la Banque du Canada gardera le statu quo au moins jusqu'au mois de juin prochain, se fiant au fait que la Réserve fédérale américaine (Fed) attendra vraisemblablement plusieurs trimestres avant de commencer à resserrer un tant soit peu le crédit. La Fed veut absolument éviter de donner le moindre petit croc-en-jambe qui risquerait de bousiller la frêle reprise économique américaine.
Pas plus folle que la Fed, pourquoi la Banque du Canada grimperait-elle son taux directeur avant que sa consoeur américaine n'amorce la hausse de son taux d'escompte? Hausser le taux directeur canadien avant celui de la Fed, cela aurait pour effet immédiat de faire grimper le dollar canadien et ainsi risquer de nuire à la reprise économique canadienne.
Un conseil: n'attendez pas que le gouverneur de la Banque du Canada nous annonce sa première hausse du taux directeur avant d'arrêter votre décision hypothécaire d'opter pour le taux variable ou le terme fixe de cinq ans.
Je vous rappelle qu'aucun gourou, ni analyste financier, ni économiste dans le monde entier n'avait anticipé l'ampleur et la rapidité de la chute du taux directeur des diverses banques centrales à la suite de la fabuleuse crise financière qui a éclaté en 2008. Au début de janvier 2008, le taux directeur de la Banque du Canada s'élevait 4,25%. En avril 2009, à peine donc 15 mois plus tard, le taux directeur se retrouvait au plancher, à 0,25%. On parle ici d'une dramatique chute de quatre points de pourcentage.
Si aucun futé de l'économie mondiale n'a réussi à anticiper la spectaculaire baisse du taux directeur de toutes les grandes banques centrales, comment les mêmes futés de la haute finance pourraient-ils, cette fois, anticiper avec exactitude l'ampleur du retour à la hausse des taux d'intérêt?
Soyons pratico-pratiques. Il est clair pour tout le monde que les taux d'intérêt sont artificiellement bas, à l'heure actuelle. Conséquemment, ils ne peuvent que remonter.
Actuellement, la plupart des institutions bancaires nous offrent une hypothèque à taux variable d'à peine 2,25%, soit le niveau du taux préférentiel consenti par les institutions à leurs meilleurs clients.
Ce taux variable est nettement au-dessous du taux hypothécaire de cinq ans que les mêmes institutions bancaires exigent «officiellement» des emprunteurs. Le taux officiel du terme de cinq ans s'élève présentement à 5,49%. Historiquement parlant, c'est certes un taux hypothécaire relativement bas. Il n'en demeure toutefois pas moins que c'est presque 2,5 fois plus élevé que le taux variable.
Le taux variable procure ainsi à l'emprunteur hypothécaire une juteuse marge de manoeuvre de 3,24 points de pourcentage. Ce qui donne à première vue une alléchante économie de frais d'intérêt hypothécaires.
Voyons les chiffres. Par tranche d'hypothèque de 100 000$, amortie sur 25 ans, l'emprunteur devra débourser mensuellement 610$ s'il détient une hypothèque d'un terme fixe de cinq ans à 5,49%. La même hypothèque à taux variable de 2,25% lui coûtera seulement 435$ par mois. On parle d'une économie mensuelle de 175$ par mois, soit potentiellement 2100$ par année ou 10 500$ sur cinq ans!
Je mettrais un gros bémol sur cet hypothétique avantage de l'hypothèque à taux variable.
Un, il est actuellement possible de négocier (par l'entremise d'un courtier hypothécaire ou en tordant le bras de son banquier) une hypothèque fermée de cinq ans à seulement 3,84%, au lieu du taux officiel de 5,49%. Dans un tel cas, le coût mensuel de l'hypothèque de 100 000$ revient à 517$. Cela représente une surcharge mensuelle de 82$ par rapport à la mensualité de l'hypothèque à taux variable (435$).
Deux, cette surcharge mensuelle de 82$ nécessitera donc un débours de 984$ par année. C'est certes une prime importante à payer par tranche de 10 000$ d'hypothèque, mais est-elle trop élevée quand on veut acheter la paix pour cinq ans?
Absolument pas. On ne connaît peut-être pas l'ampleur mais... on s'attend à que la Banque du Canada hausse son taux d'ici la fin de l'année. Sitôt cette première hausse anticipée, les banques et caisses vont rajuster à la hausse la grille des taux hypothécaires. Le taux hypothécaire variable risque à ce moment-là de subir une prime de risque...
Et, ainsi, le gros avantage de l'hypothèque actuelle à taux variable s'évaporera. Et l'hypothèque à terme fixe coûtera nettement plus cher.
Bonne nouvelle: vous avez encore devant vous quelques mois de délai pour décider si oui ou non vous opterez pour la paix du terme fixe de cinq ans ou pour le haut risque du taux variable.

Tuesday, January 26, 2010

Mortgage rate as of 26/01/2010

Our commitment:
* Negociate on your behalf the best interest rates and loan conditions
* Provide you with a pre-approval service
* Explain to you the range of government programs (Home Buyers Plan, ...)
* Protect your mortgage rate for up to 120 days
* Transfer your mortgage free of charge*


Mortgage product Posted rate Our rate
     
5 years Variable 3.75 %2.05 %
5 years Var Promo PAP2.25 %2.00 %
1 year 4.35 %2.33 %
1 year open6.55 %6.55 %
2 years3.95 %2.95 %
3 years5.25 %3.25 %
4 years5.14 %3.89 %
5 years6.10 %3.84 %
6 years6.10 %4.69 %
7 years6.60 %5.19 %
9 years5.67 %5.37 %
10 years 6.95 %5.35 %
15 years9.55 %9.25 %
18 years9.55 %9.25 %
25 years9.65 %9.35 %


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Economic Outlook: What to expect in 2010

Economic Outlook

What to expect in 2010

By Ben Tal

Predictions for economic growth, interest rates, the Canadian dollar, and the housing, bond and stock markets

 

Economic Growth: Despite a relatively strong performance in the latter part of 2009, overall economic growth in 2010 will disappoint. Look for only 2.1% increase in real GDP next year—a much slower pace than a typical recovery year. The reasons for the relatively slow rebound are: continued weak manufacturing and exports performance given a slow recovery south of the border and a strong Canadian dollar; some softening in the housing market; and the end of government stimulus.

 

Interest Rates: It appears that monetary policy in Canada is to a large degree being determined in Washington. The Bank of Canada will not be willing to raise rates independently of the Fed. And given the ongoing weakness in the U.S., interest rates there will not be an increase anytime soon. Accordingly, do not look for rates to start rising until after the mid-year move expected by the market.

 

The Canadian Dollar: While it appears that the Canadian dollar is overshooting a bit now and, in fact, might lose some ground in the very near future, it is still reasonable that the dollar will continue to improve during most of 2010 to reach parity by the end of the year. The main factors here are: a general weakness of the U.S. dollar, stable to elevated commodity prices and better economic fundamentals in Canada.

 

The Housing Market: It appears that the housing market is already overshooting by close to 7% and by 10%-15% in western Canada. While we do not expect a dramatic correction in the market, we expect the market to stagnate—mostly towards the second half of the year.

 

The Bond Market: Given our view that the Bank of Canada and the Fed will take their time with regard to the timing of the first upward move, it appears that markets' expectations of at least two moves by the third quarter are unjustifiable. This mispricing provides some upside opportunities in the bond market—mainly at the short end of the curve.

 

The Stock Market: It appears that the stock market is fairly valued from a short-term perspective, and still has some upward potential relative to its long-term potential (given a full cycle earning expectations). At this point, index investing will not be the best way to go. It seems that the nature of the demand will determine valuations in 2010, and this demand is for large recognizable names with high dividend payouts. Older conservative investors continue to sit on no less than $120 billion of extra cash.

   

Ben Tal is senior economist at CIBC.

Taux variable un choix intéressant


 

 

Comment choisir entre la sécurité d'un taux fixe ou l'épargne d'un taux variable?

 


Les prêts ne sont pas tous égaux. En plus de choisir le capital, le taux d'intérêt, la période d'amortissement, les options de remboursement anticipé et un prêt ouvert ou fermé, il vous faut décider si le taux sera fixe ou variable.

 

Les prêts à taux fixe ou à taux variable prévoient tous les deux des versements mensuels réguliers servant à couvrir les frais d'intérêt et à rembourser le capital. Là où ils diffèrent, c'est dans la façon dont le paiement est réparti entre l'intérêt et le capital.

 

Dans le cas d'un prêt à taux fixe, la répartition du paiement entre l'intérêt et le capital varie au fil du temps selon un tableau établi. Au cours des premières années, une plus grande part du paiement est affectée à l'intérêt et une moins grande au remboursement du capital. Dans les dernières années, c'est l'inverse.

 

Pour le prêt à taux variable, les montants affectés à l'intérêt et au capital sont déterminés en fonction des variations du taux d'intérêt. Lors d'une hausse des taux d'intérêt, la part affectée à l'intérêt est supérieure à celle affectée au capital et inversement lors d'une baisse des taux.

 

Le choix du produit qui vous convient dépendra de votre niveau de tolérance au risque. Si vous croyez qu'une hausse de 0,25 pour cent des taux d'intérêt vous inquiéterait ou affecterait considérablement votre budget, mieux vaut choisir un prêt à taux fixe. Aujourd'hui, cependant, la sécurité d'un taux fixe se paie légèrement plus cher.

 

Selon une étude publiée en 2001 par le Professeur Moshe Milevsky de l'Université York, les prêts à taux variable avantagent les consommateurs. M. Milevsky a découvert qu'entre 1950 et 2000, les propriétaires qui détenaient un prêt hypothécaire de 100 000 $ sur 15 ans auraient économisé près de

22 000 $ en frais d'intérêt s'ils avaient emprunté au taux préférentiel au lieu d'un taux de 5 ans. De plus, il a établi que le propriétaire était avantagé par un taux variable pendant 88 pour cent de la période faisant l'objet de l'étude.

 

Pour en connaître davantage sur la différence entre les prêts à taux fixe et à taux variable ou pour savoir ce qui vous convient le mieux, communiquez avec moi dès aujourd'hui!

 

 


 

 

 

 

 

Voici des points important sur le Taux variable de First National.

·        Taux Préférentiel - 0.20%

·        Qualifier au taux Courtiers 3ans

·        Convertible au taux fixe en tout temps sans frais

·        Intérêts calculé semi-annuellement

 


 

 

 

 


Insider Real Estate Secrets Revealed


In this issue (#9) of "Insider Real Estate Secrets Revealed",
we'll discuss two topics that are important to both buyers and
sellers.  The first article talks about legal issues, and 3
common issues that can cause legal problems during the purchase
or sale of your home.

For those trading up to a new home, surely the most stressful
issue is what happens if you don't sell the old home before you
must purchase the new one, or worse, what if the old home sells
before you've purchased?  In this nasty "Catch 22", you end up
owing financial obligations on two houses, or you end up
homeless!  The second article in this issue talks more about this
problem and what you can do to prevent it, including an
innovative program offered by some agents that actually
guarantees the sale of your old home.

-----------------------------------------

3 LEGAL MISTAKES TO AVOID WHEN BUYING OR SELLING A HOME

When you're buying or selling a home, there are many important
legal issues, large and small, that you should be aware of. To
begin with, residential real estate is not an uncomplicated
process.  When such a major investment is transferred from one
party to another, even the subtle legal details need to be taken
care of. If not they can turn into major problems if not handled
correctly.

It is essential to be as informed as possible in order to
properly protect yourself in the process of buying or selling a
home.  There are several issues that will certainly cost you if
you are not properly informed.  In this report, we identify 3 of
the most common of these issues.

Because there are many legal issues to consider, your first step
is to consider choosing reputable and experienced professionals
to represent your interests.  When selecting your real estate
agent, ensure you find someone who has extensive experience with
the process. They should also refer you to a local real estate
lawyer who can ensure your interests are protected.

Following are 3 common examples of legal clauses that can work to
your disadvantage if not worded correctly:

1. Survey Clause.
Homebuyers have the right to have a survey clause added to the
real estate contract on the home they wish to purchase.  When
this home is yours, you should be aware of the implications of
this clause.

Your current survey may no longer be up-to-date if you have had a
swimming pool built, or an addition added, since the survey was
drawn up.  If your survey is not up-to-date by these standards,
the buyer may request an updated survey.  The homeseller may be
required to bear the cost to have a new survey prepared.  The
cost for this process typically runs anywhere from $700 to
$1,000.  This is $700-$1,000 less that you will net for your
home.

An experienced real estate agent should provide you with a survey
and it is up to the buyer to decide if the survey is acceptable.

Your agent should be able to advise you appropriately when
dealing with this issue, but if you or your agent are unsure, you
have the right to consult your lawyer before you sign the offer.
Don't be afraid to take this important step, as thousands of
dollars could be riding on the decisions you make at this point.

2. Home Inspection Clause.
Some real estate transactions have fallen through because of the
wording of the inspection clause.  This clause previously stated
that the buyer has the right to rescind their offer if they were
dissatisfied with the outcome of a home inspection.  In some
cases, this was used unfairly against the seller when a minor
repair issue would give a buyer a legal loophole to their change
of heart.

Meanwhile, the seller lost both time and money because of this
technicality.  First, they may have declined other offers (offers
which may now be lost forever) in favor of the one which has now
fallen through, and missed the opportunity for other offers which
might have come through during the current negotiations.
Secondly, their home may have been unfairly labeled as a "problem
house" which could cost them in terms of the dollar amount of
subsequent offers.  And thirdly, they then found themselves back
on the market, incurring the inconvenience and additional
carrying costs of having to market their property for a longer
period of time.

This clause should read that the seller has the option to fix any
items that the home inspection flags.  This wording protects both
the buyer and the seller.  The buyer is assured that the home
they are buying meets objective structural standards, and the
seller is protected against the whim of a buyer who changes
his/her mind.

Not all contracts will be written in this way.  Make sure you are
working with a lawyer experienced in real estate matters to
ensure your interests are protected.

3. Swimming Pool Clause.
If the home you are buying or selling has a swimming pool, there
should be a specific legal clause which addresses this costly
item.  Some contracts are written to provide a warranty to the
pool to survive closing. The broadness of this wording protects
buyers, but is not necessarily in the best interest of sellers
who might instead request that the clause be worded to indicate
that, at the time of closing, they believe the pool to be in good
working condition.

The existence of a pool in any home negotiation is certainly
reason enough to ensure that you seek advice from a real estate
professional and obtain legal counsel so that your interests are
represented properly.


To sum up, by being aware of these and other legal issues, and by
seeking advice from an experienced real estate professional and
obtaining legal counsel, you can protect yourself against
unnecessary cost and potential hardship.

-----------------------------------------

HOW TO AVOID GETTING STUCK WITH TWO HOMES:
The Real Estate Catch 22

We've all heard the old saying about being caught between a rock
and a hard place.  Well, unfortunately, that's where most
homeowners find themselves when they decide to move from one home
to another.

You see, if you buy before selling, you could run the risk of
owning two homes.  Or, just as bad, if you sell first, you could
end up homeless.  That's what is known as the Real Estate Catch
22, and for thousands of homeowners, it's an extremely stressful
position they find themselves in.

This financial and emotional tightrope is one many homeowners
feel they have to walk alone.  However, you should seek out
agents offering specialized programs that can eliminate the
stress and worry associated with selling and buying another home.


THE DILEMMA

The biggest dilemma when considering purchasing another home is
deciding whether to buy first or sell first.  Either way is risky
because you could end up owning two homes or no home at all.
Let's face it, the real estate market has become a tough
environment for buyers and sellers alike. The fact is that it's
more difficult to get homes sold today and therefore it's
essential that real estate agents look for new and innovative
ways to meet the demands of the market.


THE SOLUTION

A new and innovative program that some agents offer actually
guarantees the sale of your home and takes away all of the worry
and stress associated with selling and buying another home.

HERE'S HOW IT WORKS:
1. Your agent will prepare a total market analysis including a
computerized print-out of all comparable home sales and listings
in your area.
2. With this information you and your agent can determine a
market value for your home.
3. This establishes your guaranteed price and list price which
you will receive up front (in writing) before your home is
marketed.
4. You are doubly protected because you know that your home will
sell for the guaranteed price. However if you receive an offer
from an outside buyer for more than the guarantee price you get
the higher offer.
5. You can confidently look for your next home and immediately
place a firm cash offer (not a conditional one) when you find a
home you like because you know the minimum that your home will
sell for and when you can expect to receive the money from it's
sale.

This service eliminates the emotional roller coaster ride of
whether to buy first or sell first so you can avoid the risk of
getting stuck with two homes or no home at all.


One More Thing...

Remember, not all agents are alike and you should consider only
those that can offer you the most innovative marketing plan
available to ensure that your needs are completely and properly
met.

-----------------------------------------

NEXT ISSUE:
- BEST FINANCING: A 3-Point Plan
- How to Sell a House That Didn't Sell

-----------------------------------------------------------------
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Find Out How Much You Can Afford In Your Next Home:
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Gabriel Purcarus
Adresz Elite
3295 Souvenir
Laval, QC, H7W 1A9
Phone: 514-998-7927
Fax:  450-472-7910
Website:  ImmoGrandMontreal.com
Email:  Info@ImmoGrandMontreal.com

Canadian Mortgage Broker News - A revolution in real time

Canadian Mortgage Broker News - A revolution in real time

A revolution in real time


You can't blame Greg Stanley, president of Home n Work Mortgages, for being excited. After all, it's not every day that you get to change the way an industry does its business - which is exactly what he says will be the result of the new Smart Equity program and its claim to save the average homeowner over $100,000 in interest over the life of a mortgage.

Stanley, also a certified financial planner, says that it's all part of what he believes should be the true role of a mortgage broker - being the clients' personal coach to help relieve them of debt as efficiently as possible. Most lenders and competitors shy away from encouraging clients to be clear title and debt-free, he says.

"They are more renewal-motivated rather than referral-motivated, but as coaches we don't want to see people simply refinancing every five years. We want them focused - without needing to change their current budget - to pay off all debt as quickly as possible."

Smart Equity
The premise to the program sounds surprisingly simple, but it is the result of complex software that Stanley says will reduce the time it takes to pay down mortgages as well as other debts that any client may have at any given time, and will tell the client when to pay what on a monthly basis.

"What we're doing is using a line of credit to make a pay down on their actual existing first mortgage, so on the very first day Smart Equity will prompt you to take $5,000 and throw it on your mortgage, so on a $100,000 mortgage that is now $95,000, it's still accepting payments as if it was $100,000," he says.

The result is a lower amortization, which is accompanied by having normal revenue and expenses flow out of the line of credit until it is back to zero, in which the program will prompt the client to put another $2,500 down on the mortgage, and so on, until the debt is gone. Basically, it first sets the monthly payment at a fully discounted bank rate. Then it will power down the effective rate of the mortgage to be lower while keeping the payment the same, explains Stanley.

"Naturally what is going to happen is that it's paid off quicker, so rather than 30 years it's done possibly in 12 or nine."

Home n Work also has an extensive financial adviser network across Canada, with plans to train 1,000 more in the next year. All Home n Work mortgage consultants are assigned to the advisers in order to work together to "come up with creative solutions that improve immediate cash flow, plan for wealth accumulation and pay off debts faster," he says.

Another one of the benefits of the program, says Stanley, is that "we don't need to wait for the next five-year renewal to see what is happening with our clients' finance because the household budget of each client is uploaded every 30 days - that is as close to real time tracking as you can get in the mortgage brokerage industry."

All this, he says, will simply mean more clients paying off their debts sooner.

"Our mission is to be the national mortgage broker that saves thousands of Canadian households billions in unnecessary interest costs."

Monday, January 25, 2010

Canadian Mortgage Broker News - U.S. mortgage rate breaks downward cycle

Canadian Mortgage Broker News - U.S. mortgage rate breaks downward cycle

U.S. mortgage rate breaks downward cycle


Breaking a five-week streak of declines, the 30-year fixed-rate mortgage average rose to 4.81 per cent, according to Freddie Mac's weekly survey of U.S. mortgage rates.

The previous week was at 4.71 per cent, although the rate was still well below a year ago when it was 5.47 per cent.

The 15-year fixed-rate was also up, at 4.32 per cent from 4.27 per cent the week before.

Freddie Mac suggested the upward shift related to the latest strong employment figures.

Canadian Mortgage Broker News - New house prices rise most in Quebec City

Canadian Mortgage Broker News - New house prices rise most in Quebec City

New house prices rise most in Quebec City


The price of a new house in Canada rose again, according to Statistics Canada, most notably in Quebec City where prices were up 1.1 per cent over last month.

The agency's New Housing Price Index rose 0.3 per cent in October from the month earlier. It is fourth straight month with an increase, although the index shows prices are still down 2.1 per cent from a year earlier. Land prices dropped on the month by 0.1 per cent.

Following Quebec City, Vancouver prices went up by 0.7 per cent . Only two cities saw prices drop on the month - Charlottetown at 0.7 per cent, and Edmonton at 0.3 per cent. Edmonton has performed the worst on the year, with new house prices dropping 10.1 per cent according to the index. In contrast, Quebec has risen 7.5 per cent on the year.

Canadian Mortgage Broker News - More U.S. banks seized as real estate foreclosures continue their damage

Canadian Mortgage Broker News - More U.S. banks seized as real estate foreclosures continue their damage

More U.S. banks seized as real estate foreclosures continue their damage


The Federal Deposit Insurance Corp. (FDIC) seized three more U.S. banks last week, bringing the total to 133. A weak real estate market has been blamed.

Hundreds of more banks are on the problem list for next year, so more failures could be on the way. The 133 bank failures in 2009 are the largest number of seized banks since the 181 the fell in 1992 from the consequences of the savings-and-loan debacle.

The FDIC most recently seized banks in Florida, Kansas and Arizona. The 133 bank failures this year is the largest since 1992, when 181 were seized following the savings-and-loan scandal. Florida's daily newspaper called it a "Friday ritual," as the bank closings have become so commonplace there in one of the leading states for foreclosed properties.

RealtyTrac, an online marketplace for foreclosures, reported that Florida posted the nation's second highest state foreclosure rate in November, with one in every 165 properties receiving a foreclosure filing during the month. Nevada ranked first, and California third.

Canadian Mortgage Broker News - Growing debt threatens economic stability: BOC

Canadian Mortgage Broker News - Growing debt threatens economic stability: BOC

Growing debt threatens economic stability: BOC


With household debt-to-income ratios in Canada at historical highs, the Bank of Canada is warning both borrowers and financial institutions to practice caution, particularly when it comes to mortgage lending.

"Financial institutions need to carefully consider the aggregate risk to their entire portfolio of household exposures when evaluating even an insured mortgage, since a household defaulting on an insured mortgage would likely be unable to meet its other debt obligations," the central bank's financial system review said.

On the borrower side, the bank stressed the need for households to "assess their ability to service these debt obligations over their entire maturity, taking into account likely changes in both income and interest rates." The warnings can be seen as a response to the current views that Canada could be heading toward a housing bubble.

Some good news in the report came on the topic of liquidity, with the Bank of Canada saying Canada's major banks have increased their stock of liquid assets and reliance on stable funding sources, "bolstering" their ability to provide credit during periods of stress. The report also said market-based funding is improving and that conditions in the international financial system have improved considerably since the last financial system review in June.

Canadian Mortgage Broker News - Household net worth rises nationally

Canadian Mortgage Broker News - Household net worth rises nationally

Household net worth rises nationally


Canadian household net worth rose 2.3 per cent in the third quarter, boosted by stock market and property gains.

The figures, which calculate the value of families' assets such as real estate and savings accounts minus liability, were released today by Statistics Canada. Overall household net worth totaled $5.7 trillion, up $127 billion from the previous quarter.

Statistics Canada highlighted the 10 per cent gain in Standard and Poor's composite index, adding significantly to net worth gains. Sinking mortgage rates and an increase in existing home sales and renovations has also contributed as mortgage demand remains strong.

But along side that, the ratio of household debt to income rose to a record 145 per cent, up 2 percentage points, as Canadians have taken on more debt.

Last week, the Bank of Canada warned that rising household debt, coupled with growing government debt, could set back the national recovery.

Canadian Mortgage Broker News - Ottawa, Montreal show biggest 12-month gains in housing index

Canadian Mortgage Broker News - Ottawa, Montreal show biggest 12-month gains in housing index

Ottawa, Montreal show biggest 12-month gains in housing index


Home resale prices rose in Canada for a fifth straight month, however they were still down from this time a year ago.

According to the Teranet-National Bank Composite House Price Index, which is a measure of price changes for repeat sales of single-family homes, overall prices were up 1.3 per cent in September from August. Prices were down 1.8 per cent from a year earlier.

The latest trend, the report says, is that more homes have been selling and fewer have been coming on the market in Canada.

Some cities showed strong price growth since last year, especially those that showed modest gains in the boom years. Ottawa was up 3.4 per cent from last year, and Montreal was up 2.9 per cent, according to the index.

Over the previous month, however, the largest gains have come from Vancouver and Toronto, at 2.1 per cent and 1.1 per cent respectively. Those two cities had taken the biggest 12 month drops, and appear to be recovering some of those losses.

CAAMP Stats


December 2009
Welcome to the December issue of CAAMP Stats. CAAMP recently released its fall annual report on the state of the residential mortgage market in Canada. For a copy of the report - click here
For further information visit
www.caamp.org

Bank of Canada Interest Rate

September 10, 2009 0.25%
October 20, 2009 0.25%*
December 8, 2009 Next meeting date

Source: Bank of Canada
*Bank of Canada statement included reference to hold rate to end of second quarter 2010

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Bank Prime Lending Rate

September 11, 2009 2.25%
October 21, 2009 2.25%
December 9, 2009 Next meeting date

Source: Bank of Canada

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US Federal Reserve Board Discount Rate

September 22, 2009 0.00% – 0.25%
November 4, 2009 0.00% – 0.25%
December 15, 2009 Next meeting date

Source: US Federal Reserve

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Exchange Rate $CDN($US)

October 30, 2009 .9243
November 13, 2009 .9519
November 27, 2009 .9421

Source: Bank of Canada

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Government of Canada Bonds

Bond Type October 28,
2009
November 12, 2009 November 25, 2009
1 year Treasury Bill 0.60% 0.54% 0.48%
3 year Benchmark
Bond Yield
1.90% 1.87% 1.62%
5 year Benchmark
Bond Yield
2.70% 2.70% 2.41%
10 year Benchmark
Bond Yield
3.45% 3.51% 3.25%

Source: Bank of Canada

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Total New Housing Starts (Seasonable adjusted and annualized)

Province

August
2009

August
2008

September
2009

September
2008

October
 2009

October 2008

Newfoundland/Labrador

2,400

3,100

2,800

3,200

2,900

3,100

PEI 

1,000

700

700

500

1,200

 600

Nova Scotia

4,200

3,300

4,500

4,400

4,000

4,300

New Brunswick

3,700

3,800

2,900

4,500

3,600

5,000

Quebec

47,300

43,300

41,300

70,100

37,200

48,400

Ontario

44,200

89,800

50,200

84,200

57,600

82,600

Manitoba

5,000

5,400

4,400

5,600

4,200

5,800

Saskatchewan

5,100

5,300

3,700

6,400

3,600

4,900

Alberta

18,400

22,900

22,600

57,300

25,000

24,700

British Columbia

19,200

33,500

16,200

43,900

18,200

32,300

Canada

150,500

211,100

149,300

281,300

157,400

211,800

Source: CMHC Housing Now – November 2009 and November 2008.
This seasonally adjusted data goes through stages of revision at different times of the year.

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Average MLS resale price for local markets

City October 2008 October 2009
Halifax $224,607 $235,465
Saint John, NB $151,709 $178,632
Quebec $198,357 $219,719
Montreal $257,242 $284,024
Ottawa $280,870 $320,561
Toronto $353,018 $403,507
Hamilton/Burlington $254,004 $296,253
Winnipeg $190,374 $210,618
Saskatoon $285,310 $274,759
Calgary $388,565 $399,679
Edmonton $317,744 $318,969
Vancouver $556,682 $638,948
Victoria $469,243 $481,500

Source: Canadian Real Estate Association

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Housing Affordability Index


Standard Two-Storey

Average Price

Qualifying Income($)

Affordability Measure

Region

Q3 2009
($)

Y/Y
% ch.
Q3 2009

Q3 2009
(%)

Q/Q
Ppt. ch.

Y/Y
Ppt. ch.

Avg. since '85
(%)
Canada 344,100 -0.3 79,100 45.8 1.2 -5.8 43.3
British Columbia 557,400 -1.2 113,600 67.6 2.9 -8.5 53.7
Alberta 368,200 -4.9 82,200 37.9 1.3 -7.5 38.5
Saskatchewan 305,500 -0.8 73,200 44.0 1.0 -4.6 37.6
Manitoba 244,900 3.5 61,300 37.5 0.3 -3.4 37.5
Ontario 362,100 -0.3 85,300 45.2 1.0 -5.8 44.0
Quebec 240,100 2.8 59,000 40.4 1.2 -3.7 39.0
Atlantic 210,000 1.3 55,000 35.9 0.4 -4.7 38.7
Toronto 522,600 0.2 115,300 57.8 1.9 -7.5 53.7
Montreal 305,800 0.7 71,300 47.4 0.8 -5.5 41.3
Vancouver 678,900 -1.9 135,500 74.2 4.3 -10.2 61.7
Ottawa 320,800 1.0 81,000 40.5 0.4 -4.4 39.5
Calgary 414,600 -4.7 88,100 38.5 2.0 -8.1 40.0
Edmonton 365,300 -2.6 83,100 38.9 0.9 -6.7 36.8

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Standard Condominium

Average Price

Qualifying Income($)

Affordability Measure

Region

Q3 2009
($)

Y/Y
% ch.
Q3 2009

Q3 2009
(%)

Q/Q
Ppt. ch.

Y/Y
Ppt. ch.

Avg. since '85
(%)
Canada 205,700 -1.0 47,600 27.6 0.5 -3.6 26.9
British Columbia 275,600 -0.3 57,100 34.0 1.2 -3.9 28.0
Alberta 219,300 -7.9 48,700 22.4 0.5 -5.2 22.1
Saskatchewan 186,200 -8.7 44,600 26.8 0.8 -4.7 24.1
Manitoba 130,100 4.8 33,400 20.5 0.3 -1.6 20.9
Ontario 217,200 -0.9 51,800 27.4 0.5 -3.6 27.9
Quebec 170,300 1.2 40,700 27.8 0.1 -3.0 27.0
Atlantic 149,800 4.8 37,700 24.6 0.3 -2.5 24.7
Toronto 292,700 -1.5 65,400 32.8 1.0 -4.7 31.2
Montreal 204,500 3.9 47,100 31.3 0.9 -2.8 29.0
Vancouver 351,500 0.4 70,600 38.7 1.7 -4.4 31.4
Ottawa 209,000 1.3 51,600 25.8 0.3 -2.8 23.6
Calgary 249,500 -7.3 52,700 23.0 0.3 -5.5 22.8
Edmonton 206,000 -6.8 46,800 21.9 0.5 -4.7 18.1

Source: RBC Financial Group Housing Affordability Index, November 2009. Index based on a 25% down payment and a 25 year mortgage loan at a five year fixed rate. The higher the index, the more difficult it is to afford a home. An affordability index of 50 means that homeownership costs including mortgage payments, utilities and property taxes take up half of a typical household's monthly pre-tax income.