What a deal

deal

Do you have a Manulife One mortgage? Or a Scotia Total Equity Plan? How about a mortgage from National Bank, ING or TD? If so, did you understand when you were signing up that you might not be able to transfer your loan in future, or  your lender could arbitrarily increase the interest rate for the life of the debt if you miss payments?

That’s because these aren’t really mortgages, but collateral charges. And they’re all the rage among bankers these days. No wonder.

I first wrote about these things two and a half years ago when TD shocked most people by converting all its new mortgage business to collateral loans. Days ago the CBC probed a bit and tried to entrap a lowly TD loans officer, who I hear is now an attendant in the men’s room. It’s probably only a matter of time before conventional mortgages are hard to find, which would be a shame. And a mistake.

Simply put, as I explained before, a collateral mortgage is a loan which is backed by a promissory note which is in turned backed by security, whereas a conventional mortgage is just a loan secured by a house. Normally the only people who are asked to sign collateral mortgages are those who use their houses to arrange lines of credit with balances that can balloon, not a regular mortgage with a fixed amount owing and a standardized payment. With a conventional mortgage there are strict rules about how much you can borrow determined by the value of the property when you take the loan. Not so with a collateral mortgage, because it’s actually a loan which is backed by your promissory note. That means you can borrow more than your house is worth.

That’s why TD, for example, routinely signs up people for 125% of what they actually need to buy a house. The ‘extra’ is available to them as a line of credit to, you know, buy something useful, like a condo.

There are a few things you should know if dealing with some of the lenders mentioned above. First, a mortgage is secured by a house so moving it to a new lender is simple if you get a better deal. But a collateral mortgage can’t move because it’s backed by a note and acts like a personal loan. So it has to be discharged and a new mortgage arranged – a process which costs big.

Second, not only do some lenders register a collateral mortgage for a greater amount than you borrow, but they also register potential higher interest rates. If you screw up and don’t pay on time, the rate could be increased as much as 10%, since the charge is actually registered at a rate of prime plus ten.

Thirdly, collateral mortgages often encompass more than a real estate loan. You can fold in a line of credit or, in the case of the ManOne product, your savings and chequing accounts, car loans and personal borrowings. There are definite advantages to doing this, since every time you’re paid your loan balance falls and interest charges are reduced. But if you fall behind, the lender has the right to up the cost of the entire package.

That’s a big difference from missing a few mortgage payments, receiving a lawyer’s letter, then getting caught up with no threat of a rate change. It might also make you think twice about having a collateral mortgage at the same place you keep your RRSPs, tax-free accounts or your kids’ RESPs. (Better read the mouse print.)

So why would banks be moving in this direction? Simple. Customers get trapped by the legalities of collateral charges and stay customers longer. After all, moving is now complicated and costly. Plus, with a mortgage that can morph into a LOC with no additional fees to pay or apps to complete, it’s just so damn easy to borrow more. And never forget that what’s a debt to you is an asset to the lender – the bigger than better.

Finally, consider this worthwhile observation from Canadian Mortgage Trends: “In some cases, defaulting on another debt owed to a collateral mortgage lender can put your house at risk. That’s because that lender can theoretically seize your home equity if you don’t pay that other debt. (This is called “offsetting” in legal parlance.)”

As I said, some products like ManOne and the Scotia Equity Plan make perfect sense in a perfect world. All the debt in your life is puddled together and offset by all your income and savings. Interest charges can be slashed and debt repayment time crushed. This financing-for-dummies approach works, until something crappy like a job loss or a real estate crash comes along, and you suddenly have fewer options.

Given what’s ahead, I’d want to know that.

186 comments ↓

#1 Chris on 01.29.13 at 9:43 pm

Thank you for all your hard work Garth!

#2 Dr. Hoof Hearted on 01.29.13 at 9:45 pm

Firrsszztttttt !

PS…..ahahahhahah

#3 pathcontrolmonk on 01.29.13 at 9:46 pm

Ignorance is bliss, and is also a great excuse for financial impropriety.

#4 DJB on 01.29.13 at 9:49 pm

It also makes it hard to put additional charges behind a 1st. like a 2nd mortgage if the borrower ever has a life event and they need the equity out of their home.

Collateral mortgages work in the favor of the lender not the borrower.

#5 Smoking Man on 01.29.13 at 9:50 pm

The evolution of a Smoking Man.

How did I go from an un-schooled rivet bucker in an airplane wing to a world famous precision caller and gambler in the markets, who can’t write worth a shit, a zillionaire entrepreneur….Well that’s a book.

But I will share a few highlights, it’s all about balls and being fearless, it’s about being adaptable to any situation from having lunch with the Sultan of Malaysia, to sharing a smoke with the bum coming to take away your empty wine bottles.

Having no opinion or bias helps, no racisms, no upper classisms, just a strong hidden dislike of people in general, I’m always a chameleon tactician playing a role while chasing a goal. There are people I like and like a lot, in fact some may read this blog, but they are like me, they see the obvious, only types I can respect…

I owned a factory, had to fire people to keep the other slaves in line, didn’t like it but it had to be done every now and then.

I started hating people, especially my suck up employees, so I learned to trade so I wouldn’t need to deal with those losers anymore.

I despise people that have no self-respect, always lips planted on asses. Now ass kissers that have a secrete agenda, and are only doing for a tactical advantage and will pounce at a later date and eat it’s prey. Yes I like them around even if I’m the prey. That’s what I’m talking about.

Had rough start but learned to trade, didn’t make real money till I burned the books and started focusing on the herd. Then it was easy, and it got boring.

After making money hand over fist trading from the prison (my house) always risking my stack, I knew I was a few bad trades from disaster.

I made hug loot in the last 4 years but being big stacked at the poker table, you needed to change tactics, you don’t play a lot of hands, so I decide to gamble less and go back to Code Smithing

Truth is I suck as a code smith,I thought I was good till I meet a few real ones, I can’t even spell. But I had to get out of the house without tag along. 24/7 is to long, plus cracking bottles open before breakfast aint long term thinking.

I end up on Bay Street out of shear boredom and the need to escape.

I’m playing my dog role. It’s fun watching the up and coming alpha males bark…The hierarchy of the floor and the entertainment of watching all the actors struggling to build there brand and figure out what to do to make it up the next step. Bark or Ass -kiss. Reality TV at it’s best, you can’t buy this fun….

Thing is now my goal chest is empty.

I’m a dog without a plan…A stray observer with amazing powers of observation. What to do with is the question…………The Goal should be first….

#6 big mahoney on 01.29.13 at 9:51 pm

foist

#7 KG on 01.29.13 at 9:52 pm

little confused, for conventional mortgages too the mortgage would need to be discharged before it can be moved ? or maybe not ?

#8 TurnerNation on 01.29.13 at 9:53 pm

Flaherty’s Mixture is indeed a bitter pill to swallow. (Or bitter swill that’s tallow.)

Titles for Smoking Man’s book:

Batman down the hatches.
SwapNation.
Trump Ranger.
Duke of Heavin’ pub.
Roger Rodger.
Smoking Manchurian Candidate.
Short Branch: Your line to profits.
The Wealthy Track5er.

Yours,

Dr. TurnerNation.

#9 CrowdedElevatorfartz on 01.29.13 at 9:58 pm

I have a friend ( yes I do have ONE friend!) that had a collaterized loan/mortgage. He used his condo like a bank machine……
He’s renting.

#10 Aleksey on 01.29.13 at 9:59 pm

Wow! Every day I learn something new here. Thank you!

#11 Inglorious Investor on 01.29.13 at 10:01 pm

I’d forgotten about collateral mortgages. Thanks for the info.

#12 Dr Smoking Man on 01.29.13 at 10:03 pm

Today should be Dr day

#13 Uh Oh Canada on 01.29.13 at 10:05 pm

Garth- just read your blog posts for yesterday and today. Are you still in the city of poo-tine? Are you holding a seminar that I somehow missed the date on? If so, you are literally 10 minutes away from me…perhaps I can organize something in my mouldy basement rental?

Escaped. — Garth

#14 gladiator on 01.29.13 at 10:06 pm

If CMHC insures these collateral loans like it insures mortgages, we the taxpayers are truly and deeply f@cKed.
Garth, say it isn’t so. Pleeeaaase!

#15 Bottoms_Up on 01.29.13 at 10:08 pm

I’d forgotten about them too but do remember the post from years back. Scary stuff. I also hate it how the banks have such astronomical mortgage break fees that it essentially keeps you in your mortgage. Why sell and extract what little equity you have when it’s going to cost you $12,000 to do so? That’s pretty sick.

#202 Stickler on 01.29.13 at 5:57 pm:
On another note, a few years back I sat with an almost retired MD on a flight from Colorado to Ottawa. He worked his entire career in the US. Always kept his Canadian citizenship though, as his master plan was to earn as much money in the US as he could but utilize the Canadian healthcare and social system in his retirement.

#16 Steven Rowlandson on 01.29.13 at 10:10 pm

Just pay the mortgage or sell the house before the price crashes if possible. Borrowing more and more money on an asset that could become worthless is foolish.

#17 Puzni on 01.29.13 at 10:13 pm

Wow , that’s great learning experience!!!

#18 T.O. Bubble Boy on 01.29.13 at 10:14 pm

Scotia’s “You’re Richer Than You Think” really just means “We’ve leveraged you more than you think”.

(and TD’s big comfy green chair is actually on layaway)

#19 Cow Man on 01.29.13 at 10:15 pm

Collateral Mortgages: Another reason to invest in financials. They make slaves out of borrowers.

#20 T.O. Bubble Boy on 01.29.13 at 10:15 pm

Side Note: I wonder how many CBC employees have a collateral mortgage and didn’t even know it until the “Marketplace” piece?

#21 White Rock Mom on 01.29.13 at 10:16 pm

Very interesting and informative.
Quick question?
Why can Americans get 25 years mortgages at 3-4% and we Canadians can’t?

#22 Mic D'angelo on 01.29.13 at 10:17 pm

Garth, you said twice in the last few weeks to get a line of credit. You said when was the last time you had an emergency and having a high interest savings account or short term investments (cashable GIC’s )were a bad idea costing a load of money per year. Now you come with this fact that lenders use tricky legal clauses that they use to trap borrowers and increase their interest rates and borrowing costs. You can’t suck and blow at the same time. Make up your mind which side your on. I would rather have money that is mine and not depend on some lender to please loan me money. Come on!

A LOC is not a collateral mortgage. Pay attention. — Garth

#23 T.O. Bubble Boy on 01.29.13 at 10:19 pm

Anyone have comments on Chinese local governments essentially defaulting on most of the $482 Billion in debts due in 2012?

http://globaleconomicanalysis.blogspot.ca/2013/01/china-averts-482-billion-in-local-bank.html

#24 Chickenlittle on 01.29.13 at 10:21 pm

If drug companies are by law supposed to release the benefits as well as the side effects of the drugs they are pushing, shouldn’t the banks by law have to do the same thing? I mean life happens, and no one knows where or what they will be doing in 25 years.
Both loans and drugs have many of the same side effects: hair loss, erectile dysfunction, loss of appetite, low sex drive, depression, etc.
All joking aside, it should be mandatory for banks to disclose ALL information, good and bad. If drug companies have to do it on commercials, so should banks have to do it when you go in for a pre approval.

#25 AK on 01.29.13 at 10:22 pm

#2 Dr. Hoof Hearted on 01.29.13 at 9:45 pm
“Firrsszztttttt !

PS…..ahahahhahah”

All that hype and bullshit and you came in Second. Loser!!!

#26 Chickenlittle on 01.29.13 at 10:22 pm

And I’m not talking about the fine print either…that’s not enough!

#27 LilyJoe~ on 01.29.13 at 10:23 pm

Good to know Garth! Thanks~

#28 Elmer on 01.29.13 at 10:25 pm

Mortgages suck. Renting till you can afford to buy the whole house in cash is the best way to go.

#29 AK on 01.29.13 at 10:25 pm

#6 big mahoney on 01.29.13 at 9:51 pm

“foist”

Nice try. You are out of the Money, Dude..

#30 The Man From Nantucket on 01.29.13 at 10:26 pm

I just heard a pitch from TNL@TB for an equity plan type arrangement.

Access to a pile of money at rate lower than portfolio returns was tempting, but I smelled some of the BS.

These things are stacked a bit in the house’s favour, and God help you if you miss two payments or need to sell.

#31 Jordy on 01.29.13 at 10:27 pm

That’s interesting, they don’t point out the down side of these hydrid structures. Is there a good way to make mortgage interest deductable?

#32 ozy - what the hell this price? hyperinflation has arrived on 01.29.13 at 10:40 pm

Here is the link:
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12780978&PidKey=-958946423

C2546380 $1,679,000 for sale in Leaside, a normal home for the normal middle-klass torontonian, on a modest 35 feet lot opening, 4brd, 1 garage. Nothing like space you do not need, or waste rooms, not a mansion.
Guys, ask for double / triple salaries, if you do not get them, move out of kanata, becaaaaaause yeah, the hyperinflation has arrived and it’s fricking your purchase power to a level your kids will tell you (when they mature) that you were trully-stupido for staying in kanata all of this time.
Courageous countries that finished with collonial system hundreds of years ago, are waiting.

#33 ApplePi on 01.29.13 at 10:43 pm

Garth. I learn so much from your blog. One day, I’ll be ready to move on down to becoming an owner and this blog, will have, in part made things easier. Keep up the good fight.

#34 Mike on 01.29.13 at 10:43 pm

What happens if you go to TD and want a conventional mortgage? They’ll provide one, right? They can’t possibly convert all their mortgages to collateralize loans can they?

#35 ozy - Smoker Man - you talk too much on 01.29.13 at 10:45 pm

SM – keep in mind, like u txt in short form – can’t waste mental energy on your recent never ending rants

Better read this
Neighbourhood Change > The Three Cities Home
http://3cities.neighbourhoodchange.ca/

See 3rd article especially called:
Neighbourhood Polarization since 1970: Three distinct cities emerge in Toronto

Middle class eviscerated, upper-class profiting big time, lower class expanding with most of former middle-class.

I say, if your neighbor house is not worth 1 mil, you lost the train this decade.

#36 Smoking Man on 01.29.13 at 10:48 pm

Have some amazing trades coming up, charts are starting to come alive. Apart from Turner Nation anyone else trade?

#37 Humpty Dumpty on 01.29.13 at 10:50 pm

It looks like Gordon Pape brought his shovel with him while visiting Korea…..

http://www.bloomberg.com/news/2013-01-29/korean-tapping-inheritances-with-reverse-loans-mortgages.html

At least with a Time Share promo they offer you a free dinner….

#38 Devore on 01.29.13 at 11:03 pm

#24 Chickenlittle

All joking aside, it should be mandatory for banks to disclose ALL information, good and bad. If drug companies have to do it on commercials, so should banks have to do it when you go in for a pre approval.

It’s all spelled out in the fine print (just like drug side effects). You can take the papers home or to a lawyer to review, you don’t have to sign them right there on the spot, you know.

#39 Dr. WAYNE on 01.29.13 at 11:03 pm

#2 Dr. Hoof Hearted on 01.29.13 at 9:45 pm

Firrsszztttttt !

================

Isn’t it amazing what three functioning brain cells can come up with … eh, a$$hole?

#40 Smoking Man on 01.29.13 at 11:04 pm

#35 ozy, looks about right,

Long Branch is in white, and now that I moved into the hood, it will be blue on the next survey..

Next time I see a occupy guy and he chirps me, going to bitch slap them. A friend pointed out that we 1 precenters, 10 precent of the population

pay 1/4 of all the tax…… That’s not fair…… It’s bs.

LONG BRANCH the most up and coming hood in the city, South of lakeshore

#41 [email protected] on 01.29.13 at 11:08 pm

Thanks for this Garth. Next blog on the meaning of life perhaps?

#42 neo on 01.29.13 at 11:09 pm

at #23T.O. Bubble Boy on 01.29.13 at 10:19 pm
Anyone have comments on Chinese local governments essentially defaulting on most of the $482 Billion in debts due in 2012?

http://globaleconomicanalysis.blogspot.ca/2013/01/china-averts-482-billion-in-local-bank.html

********************************************

Yes I do…

It won’t end well…

#43 Weedeater on 01.29.13 at 11:09 pm

@#34 Mike
Indeed I believe TD has abandoned conventional mortgages. The banks know a good thing when they see it and package this under every other name but collateral mortgage. But then, the average Joe doesn’t know what that is, or what a conventional mortgage is. Most homebuyers are so eager to get into debt they sign whatever paper TNL@TB pushes at them, no questions asked.

#44 visorman30 on 01.29.13 at 11:12 pm

I just watched the show and in a way I understand their point about it being a sneaky practice. However, it almost came off as if Canadians are children. Seriously, page 3 and there wasn’t anything else on the page hardly qualifies as burying and whipping out a magnifying glass is such a tired trope even their consultant called them out on it.

Overall, I’m glad this piece came out, but I have zero expectation that any of the banks will change.

#45 marco on 01.29.13 at 11:15 pm

wow the banks sound like mafiosos
geee may be we should buy their stock

o

#46 Julia on 01.29.13 at 11:17 pm

A mortgage broker recommended the ManOne for my mother as a cross between a LOC and a reverse mortgage, advantage being she can borrow what she needs as she needs it and only pay interest on when she needs, but she has the flexibility to make any size or no payments. Her house is paid off but she doesn’t have enough income to cover big expenses like a new roof and major dental work.

Garth would you warn her not to choose this product? Or would it be okay in her situation?

#47 Neil on 01.29.13 at 11:17 pm

Another good reason to own the banks.

#48 AK on 01.29.13 at 11:19 pm

The US 10 year Bond now trading @ 2.016%

#49 Toronto Real Estate Boy on 01.29.13 at 11:20 pm

You know everything Garth. Thanks for all your wonderful posts. As a New Years resolution I’ve decided to stay more in touch with real estate news and share the information I’ve gained through my new website, http://www.DELETED.

Nice try. — Garth

#50 White Rock Mom on 01.29.13 at 11:21 pm

Chickenlittle #24
I fully agree with you and you are very funny.

#51 Rural Rick on 01.29.13 at 11:23 pm

Smoking Man need a goal? Save the planet! The atmosphere is only breathable up a couple of miles, 5 at the max. The planet has a circumference of roughly 25,000 miles. I don’t know the math for computing this volume but it is not very much.This earth is an infinitesimally small place in the universe with lots of fat smelly people on it. Perhaps you could cast your insight to ways that would strengthen and enhance the natural biodiversity of this planet. Do it now! Don’t wait for spring. It maybe silent.
Is it getting hotter in here or is it just me?

#52 Smoking Man on 01.29.13 at 11:28 pm

AK don’t worry,

chopper Ben will buy the yield down if it goes to high

#53 Mark on 01.29.13 at 11:32 pm

“Her house is paid off but she doesn’t have enough income to cover big expenses like a new roof and major dental work.”

Sounds like she needs to rationalize her life and downsize while there is still a decent amount of liquidity in the asset class she is obviously quite overweight in.

#54 Retired lawyer on 01.29.13 at 11:41 pm

“That’s a big difference from missing a few mortgage payments, receiving a sleazy lawyer’s letter, then getting caught up with no threat of a rate change.”

I am a retired lawyer.

If you miss “a few mortgage payments” that will result in consequences. A letter from a lawyer is one of those consequences, which if ignored will almost certainly lead to more serious, and more expensive, consequences.

That is how the system works, and, as far as I can see, has to work. If lenders are not able to take steps to get their money back, then they will not lend money in the first place.

I had to write a number of such letters throughout my career, and although I never liked it, I certainly did not think that by doing so I was being “sleazy”.

I like your blog a lot and read it every day, but please don’t take cheap shots at lawyers.

Why should you be excluded? — Garth

#55 Nonno Nicola on 01.29.13 at 11:42 pm

ehhh biga rida, i wasa getting ascared that you where a lost, I buy a the semi detache in toronto, nice a neyborhood lots of italiano, soma bambini but nota to much.

did you buya realesteta? this mana Gartha hava you scared, listen to nonno i buya lotsa realestate in the 50 years and meka lot ofa denaro.

dont be a scared, lota crazy man on this webasite, some take to much a farmaci canta tink straight and they scaring you.

#56 mortgagebrokeront on 01.29.13 at 11:42 pm

i broker for over 75 different banks and credit unions, and have never sold a collateral charge, why would i do that? Sink someone into td and kiss the customer goodbye, they will never be able to leave without a huge penalty, work with a broker and ask for for a mortgage and not! a collateral charge,

#57 45north on 01.29.13 at 11:44 pm

As I said, some products like ManOne and the Scotia Equity Plan make perfect sense in a perfect world.

good for you Garth for making this known

Rob McLister has a good piece on this too:

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2013/01/td-takes-heat-for-its-collateral-mortgages.html

ozy: 3cites has my attention

#58 mortgagebrokeront on 01.29.13 at 11:44 pm

also, the reasons banks are doing collateral charges is because this way they can fence of the mortgage brokers from taking a client to another bank

#59 Herf on 01.29.13 at 11:45 pm

Proverbs 22:7 The rich rules over the poor, And the borrower becomes the lender’s slave.

#60 T. on 01.29.13 at 11:45 pm

Garth, did you see the power and politics interview today with Jim Stanford and some other guy talking about the bank downgrade? From both extremes of the political spectrum the took shots at the rating agencies for the downgrade and missed the point over and over again. The one guy even claimed that 1 trillion in debt is perfectly fine because we apparently have 7 trillion in assets. Which even if true doesn’t take into account liquidity.

It was quite a spectacle.

#61 Bottoms_Up on 01.29.13 at 11:48 pm

#40 Smoking Man on 01.29.13 at 11:04 pm
——————————————–
That is the key question, what share of income tax should the top 1 or 5% of earners pay? Today we are at historic lows, so likely they need to pay more (the pendulum has swung too far). But, how much more?

Remember, you can’t drive your porsche on pock-marked roads and through crumbling tunnels.

#62 T.O. Bubble Boy on 01.29.13 at 11:48 pm

Garth – it would be great if you could re-visit the RRSP Mortgage topic.

The Financial Post just published a personal finance article that suggests a RRSP mortgage can screw up the asset mix for your investments:
http://business.financialpost.com/2013/01/29/rrsp-structured-poorly-for-long-retirement/

I’d be interested to hear your comments on what types of investments a RRSP Mortgage should replace in a portfolio.

For example, if someone had a 60% equities / 40% fixed income mix, would the RRSP Mortgage replace part of the Fixed Income component? (e.g. 10% Bonds, 10% Preferreds, 20% RRSP Mortgage)

Since it is essentially just like a REIT, having the RRSP Mortgage as a Fixed Income component makes the most sense to me.

Or, would this holding be completely separate — not factored into the investment mix… so all other investments would still be targeted for 60/40?

The RRSP mortgage is a bad idea in an ultra-low rate environment like this. Why would you want a 3% investment? — Garth

#63 Bottoms_Up on 01.29.13 at 11:50 pm

Why should you be excluded? — Garth
————————————————
Careful Garth, the response might cost you a few bills.

#64 AK on 01.29.13 at 11:50 pm

#49 Smoking Man on 01.29.13 at 11:28 pm
“AK don’t worry,
chopper Ben will buy the yield down if it goes to high”

He can’t control the long end. I am hearing that a lot of money is coming out of Bond Funds and going into Equities.

#65 Comrade-conrad on 01.29.13 at 11:54 pm

See the Rock Mercer report skit pushing Flaherty’s blend? Too funny and ooh so true.

#66 Dr. Hoof-Hearted on 01.29.13 at 11:55 pm

#25 AK on 01.29.13 at 10:22 pm

#2 Dr. Hoof Hearted on 01.29.13 at 9:45 pm
“Firrsszztttttt !

PS…..ahahahhahah”

All that hype and bullshit and you came in Second. Loser!!!

====================================

Listen….

I earn my spot on merit….those that ” somehow ” get ahead of me bribe the moderator.

That said ……..$ilver is better than Bronze…..you minion of Dr. A$$hole.

#67 Coho on 01.29.13 at 11:55 pm

This trend of consolidating is gaining momentum. One bank having and knowing all of your financial business. You lose your job, bells will ring and red flags will go up. Your bank will panic figuring you are hooped and rather than cut you and your family a break they’ll make things more difficult with penalties and interest rate hikes.

This is a typical method of operation. Maneouvre people into a position where they’re dependent and thus held by the wee ones. Big banks, big government, and soon to come one world government just to serve you better.

#68 Bottoms_Up on 01.29.13 at 11:56 pm

#38 Devore on 01.29.13 at 11:03 pm
——————————————
I call bs on that. All these contracts we have to sign for everything, if someone actually took the time to read all the fine print, they’d turn old and grey before they finished anything. And even if you have the patience for reading 50 pages of ‘fine’ print containing 200,000 words, ok you find things you don’t like so what do you do? You put in all that effort and strike items, revise items and then guess what? You don’t get the service/item you wanted because the counterparty won’t sign/negotiate.

It’s all bs. Banks should be required to highlight in large print on one page exactly what you are receiving and the biggest impacts this has on your life.

#69 Lucky on 01.29.13 at 11:57 pm

Garth im 31 w a 750k house paid in cash with money in the bank. 300+. I know im an exception to most my age but ive worked hard and dont wanna f it up.

Sell the house and rent? Really? Your thoughts.

#70 Bottoms_Up on 01.29.13 at 11:59 pm

#28 Elmer on 01.29.13 at 10:25 pm
—————————————
Seriously? Are you from the 1890′s? Even in the past century it has been typical to take on a mortgage (albeit at 50% or less). Paying cash for a house would put us back to the dark ages.

#71 Maelstrom on 01.30.13 at 12:04 am

Garth,

If its not to much work on your end is it possible to permanently block these idiots who type “first” (or some alternate moronic of the spelling of the word)?
Thanks

#72 Smoking Man on 01.30.13 at 12:05 am

AK not retail money, just hedge funds setting a trap.

#73 richmond bc on 01.30.13 at 12:07 am

It’s not just collateral mortgages, but you need to discharge a conventional mortgage before you can transfer to another financial institution. You actually believe that Royal Bank would be okay with CIBC staying on title? There is no difference in this aspect with regards to cost.

#74 Who? on 01.30.13 at 12:11 am

#36 Smoking Man on 01.29.13 at 10:48 pm Have some amazing trades coming up, charts are starting to come alive. Apart from Turner Nation anyone else trade?

Yeah I do. I just saw my financial advisor tonight. The nice lady at shoppers drug mart said I was overweight Lottomax and should diversify with 6/49 and cash for life.

You are an idiot.

#75 Concessionman on 01.30.13 at 12:13 am

What’s the difference between a jellyfish and a lawyer?

#76 a prairie dawg on 01.30.13 at 12:16 am

#15 Bottoms_Up

I also hate it how the banks have such astronomical mortgage break fees that it essentially keeps you in your mortgage. Why sell and extract what little equity you have when it’s going to cost you $12,000 to do so? That’s pretty sick.

- — -

First, it’s written in the fine print that no one reads. And then you sign it anyway, and it becomes a legal contract.

Second, I’m not defending the banks, but that contract allows them a regular revenue stream (principal + interest) on the ‘loan’.

When you break the contract by selling early, you’re forfeiting what you legally agreed to pay them over that contract term, and you’re penalized whatever the contract states as the penalty. (the contract you signed, willingly)

How is this greed on the banks part?

Luckily, enough people sell houses often enough. And they allow most a 3-4 month interest payment as their lost compensation penalty vs. what they actually would have made over the entire remaining balance of the term had you paid it out as you legally agreed to.

If they were really evil, there would be NO mortgage breaking clause at all…

So they’re only half evil. lol

#77 Don on 01.30.13 at 12:43 am

Thanks for the info Garth!

Nothing like 21st Century enslavement.

The picture _ Nice.

Hopefully, Amazon Air rescued you from the snow bound airport.

#78 45north on 01.30.13 at 12:43 am

Retired lawyer: I am a retired lawyer.

Q: What’s the difference between a lawyer and God?
A: God doesn’t think he’s a lawyer.

http://www.iciclesoftware.com/LawJokes/IcicleLawJokes.html

#79 Bo Xilai on 01.30.13 at 12:48 am

Never underestimate Canadian Banks’ desire to turn their clients into debt slaves.

Scotiabank’s tagline should be “We’re RICHER and CRAFTIER than you think”

#80 45north on 01.30.13 at 12:50 am

and another thing

The lithium ion batteries installed on the Boeing 787 are inherently unsafe, says Elon Musk, founder of SpaceX and owner of electric car maker Tesla.

http://www.flightglobal.com/news/articles/elon-musk-boeing-787-battery-fundamentally-unsafe-381627/

sounds credible to me

#81 a prairie dawg on 01.30.13 at 12:53 am

#18 T.O. Bubble Boy

“We’ve leveraged you more than you think”.

- — -

That’s a keeper. lol

#82 Cici on 01.30.13 at 12:59 am

#5 Smoking Man

No offense dude, but you should stop kissing your own ass and get a real hobby!

Here are some ideas of what I would do if I were as loaded as you say you are:

1) Go XC skiing in Gatineau Park every weekend (you can afford it).
2) Travel the world and go on lots of vacations.
3) Do volunteer work (helping the unfortunate or supporting Greenpeace or something). Who knows? You just might get addicted to doing something good. Maybe show some kid whose fairly quick but struggling at school how to trade so he/she can help his/her family? Lord knows, there are a lot of single parents out there living in poverty and unable to help their kids succeed in school or otherwise.
4)Build an indoor tennis court on your property and charge people to use it when you are tired of playing. Donate the money to a worthwhile cause.
5) Buy a Harley and join Garth’s biker gang.
6) Create your own brand of cigarettes (with cool packaging!) For inspiration, check out American Spirits.
7) Finish writing your damn book!

#83 Nostradamus Le Mad Vlad on 01.30.13 at 1:04 am

-
Neat post, but mtgs. / loans / debts are not my bag.
*
Iceland “The legal precedent is set; the people of a nation do not have to pay when a private bank goes bust!”; Kannaduhhh See headline; Inflation Unchained; Banxters So that’s what banks do with their bailout loot; Saving Twinkies? For Mikey the Realtor and BPOE World’s wealthy are buying in . . .; Irish Ex-pats Rather silly; Zimbabwe Not much of a bank account; Hoof-Hearted Remember him? Gold and Silver Coins Selling well; China’s extend and pretend; Berkshire Hathaway increases employee levels; Boeing will get better; Tiny Cyprus Blowing the EZone up; Global Reserve Currency With or without the US$; Money Printing is one reason for stock exchange heights; Disappearing Gold Into TPTB’s pockets? Ford Fiasco It exists in Euro losses.
*
100 ft. wave and surfer rides it; 0:51 clip Chinese sinkhole swallows building; Moody Moggy Reminds me of some of the bloggers here, and Killer Cats; Too Big To Chew I’ll say; Conversion To each their own, but as one fades away (Christianity), another rises up (Islam); Soccer Nice scorpion kick; Obomba The Last American President, and Chinese Govt. wants gun control; Far Reaching Drone spying capabilities; 10:52 clip (Sandy Hook) — Father speaks, and the problem isn’t guns; Queen (BdB) Beatrix abdicates for her son; Connection Big Food / Big Pharma / Nutrition; Oz Gun Law Update “Australia-wide, homicides are up 6.2 percent, assaults are up 9.6 percent and armed robberies are up 44 percent (yes, 44 percent)!”; Nevada wants its own cops; Climate Change causing ‘stupid’ flu epidemics to randomly break out; 100 yr. old Office Boy Retirement bored him; Civil Liberties / Rights Fading away.
*
Smoking Man, Blacksheep (and a few others) — The Truth Hurts and this.

#84 Dr. WAYNE on 01.30.13 at 1:13 am

#21 White Rock Mom on 01.29.13 at 10:16 pm

Very interesting and informative.
Quick question?
Why can Americans get 25 years mortgages at 3-4% and we Canadians can’t?

==================

Because we Canadians don’t live in America … duh …

#85 Cici on 01.30.13 at 1:15 am

#46 Julia

I’m sure Garth would say she should cash out by selling the home she cannot afford to maintain without resorting to credit.

Sounds like a dangerous product for her situation.

I she sells, she can invest the money (and hire Garth for a %!) The interest would probably almost pay her rent :-)

#86 Rabbit-One on 01.30.13 at 1:34 am

Very true, rarely available information. Thank you Garth. I used to work at that green bank, collateral mortgage used to be harder to get back in 90′s.

After 2004, all of a sudden, banker was given HESLOC carrot and we just ran. To buy $500K home, set $350K LOC although client only needs 100K mortgage. You get more sale credit! As Garth said, bank allowed us to set 90% collateral LTV on appraised value.

Remember TD (and other big banks) suddenly raised HESLOC variable rate to Bank Prime +1% in 2009?
Bank prime from 2009 became government prime plus 1% all of a sudden. So, your HESLOC rate raised 2%.
I personally didn’t see much news media picked on this, but this was big.

As Garth said, banks have right to do that, because in the collateral HESLOC charge form (Form a, or B , C, one of them) states clearly, bank will charge Prime +7%. This form is provincial government form, separate from your mortgage /LOC agreement.
Your LOC agreement says “Prime+0%”.

One of my client asked about this, I escalated to regional lending manager, she said nothing to worry about it, his HESLOC rate is “prime”, so ignore what the charge paper says.
I am glad I am no longer at the green bank.

Also for the refinance, we used Title insurance co. for charging collateral, not lawyer. This title insurance co. in Canada, only funcationed to “charge”, but not to protect borrower. Details, refer to your legal representatives.

In those years, pretty sure still now, many credit unions in BC only did Collateral mortgages, no conventional mortgage. So, it was not transferrable, not assumable.
Annoying, and people complained about that then.
But as Garth said it is major Real Estate lending practice for last several years – for the benefit of the banks.

#87 overskooled1 on 01.30.13 at 1:37 am

Garth, I’ve been a reader for a couple of months and now a first time poster. I look forward to reading your posts everyday as you provide a refreshing contrarian view (compared to most mainstream pulications) that always leaves me thinking about my options and altenatives. Please keep up the great work.

#88 Patiently Waiting on 01.30.13 at 1:39 am

This one is for you White Rock mom …

Sales of single family homes in White Rock BC are down 75% as compared to the same 30 day period last year … here are some recent price reductions … note that the ones that don’t show the price reductions overtly have all had at least $100,000 reductions but the listings were renewed with a “new price” so as to hide the price reduction …

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1999555563&s=BRC&t=BRC

Cheers
pw

#89 LEAFSBIG FAN on 01.30.13 at 1:42 am

Prarie Dawg.
“How is this greed on the banks part?”
Are you kidding?
Scenario: You have an RBC mortgage . Balance is $154,195. Rate is 4.29% with 24 months left on a 5 year term. You want to pay it out. Bank says your penalty is $7024.58 . You say how so? 3 months interest penalty is $1653. The banks own rate for a 2 year mortgage is currently 3.14% so bank will lose 1.15% on the $154,195 for the remaining 24 months so you figure you will have to pay them $3546.48 as this amount is the greater of the two penalty calculations.
Upon questioning the bank discloses to you that they did not calculate using the same numbers you did. They tell you that 3 years ago when they gave you your mortgage the posted 5 year rate was 5.59% and that they “gave” you a 1.13% discount. They then assume that since you are paying out they will be lending that money out for the next two years not at the 3.14% rate you calculated but they assume 3.14 less the same discount of 1.3 % or only 1.84% so they collect that difference from you as well. Nice of them isn’t it. I would like to see RBC actually agree to a 2 year term mortgage at 1.84%.
If anybody but a bank did this in this country you would be in jail. Here it is our priveledge to pad their profits.

You might want to rethink if this is fair or not.

#90 Mic D'angelo on 01.30.13 at 2:25 am

Garth, there is nothing stopping banks or other lenders from changing line of credits to include new clauses in their contracts to trap borrowers, add new fees or charges, increase interest rates etc. I was paying attention and like I said in my other posts, I was not born yesterday. It is the oldest trick in the book, it’s called benchmarking. Basically, other services or products from all companies follow the industry in the same direction, revenue increases with existing customers. It does not matter where you go it’s a monopoly or duopoly, oligopoly.

#91 Richard and Zeus on 01.30.13 at 2:56 am

DELETED

#92 Richard and Zeus on 01.30.13 at 3:00 am

#28 Elmer on 01.29.13 at 10:25 pm
—————————————
Seriously? Are you from the 1890′s? Even in the past century it has been typical to take on a mortgage (albeit at 50% or less). Paying cash for a house would put us back to the dark ages.

They do it in dozens of countries around the world today. Developed countries. People here are so brainwashed with govt approved media from banks and corporations…. They are laughing their guts out at how stupid people are for indebting themselves into oblivion.

Of course lazy govt workers don’t care because they are pissing away your money.

#93 Dr. Bailing in BC on 01.30.13 at 3:22 am

Re: #71 Maelstrom

Garth,

If its not to much work on your end is it possible to permanently block these idiots who want to block people who type “first”? For some reason they think the word “first” is laborious to read, yet they subject us to their constant lengthy whingeing that is not limited to the first half dozen posts but continues throughout the entire blog. Thanks

#94 happy renter on 01.30.13 at 3:52 am

Scam mortgages,lucky Canadians are conservetive and pay their bills.Its sad are mortgages are becoming like credit card debt.

#95 Freedom First on 01.30.13 at 5:00 am

Nice post Garth. Glad you are home safe and sound from that Province.

This post got me thinking. When talking with TNL@TB, one who has no idea who you are, and you don’t feel like she is talking to you as if you are an idiot, well, bad news, you are an idiot. TNL@TB is used to meeting a lot of idiots, so she can’t help herself.

#96 Victoria Real Estate Update on 01.30.13 at 5:36 am

Hi all you Victoria people, Victoria girl here to share what I’ve learned about the Victoria housing market over the past 3 years. We were looking for a house and very serious about buying a couple of years ago, but decided against it once we started to learn what we know now.

I am very comfortable with renting right now, especially since house prices in Victoria have been declining for the past couple of years. In fact prices started to decline right after we decided that we would rent and wait for lower prices. I am so happy with our decision. Now we are saving our money and watching our bank account grow. So many of our friends that bought in Victoria in the last 3 or 4 years now owe more on their mortgages than the value of their homes. I feel so sorry for them. It seems so unfair. Their realtors told them that house prices only go up.

Victoria’s housing market is considered to be extremely overvalued and extremely unaffordable. Prices have come down some, but they have a long way to go before they will hit bottom. Canada is in a housing bubble right now. Many economists around the world have pointed this out. It seems the rest of the world sees our bubble, but some Canadians are having a hard time admitting that it exists. A lot of denial out there. The same attitude was present in the US before their bubble burst in 2006. House prices there came back down to where incomes supported them. Now the average US family can afford the average home. Don’t you wish it was that way in Victoria? We know prices in Victoria will come down a long way. It’s exciting to watch prices come down knowing we have made the right decision to rent for now.

Girls, I know what it is like to want that house more than anything. It isn’t worth it to buy at these sky high bubble prices. You will be so glad that you waited for lower prices. Guys, save your money and rent for now. You will look way smarter than all the other guys that bought at peak prices once the market declines more. You will have more money than them as well.

Until next time – Cheers!

#97 aggie on 01.30.13 at 7:52 am

One of those sleepless nights tonight.

Well, Aggie is still reading this darling pathetic blog faithfully from her 120 sf basement rental dungeon, determined to stay positive and always moving one foot ahead of the other.

When she felt herself sinking recently, she had to face up to the fact that she’d overshot on the self-imposed austerity measures, sacrificing a bit too much quality of life, so she is now upgrading to a 500 sf bright cheery studio suite above a garage. Woohoo, a private shower! (It’s been a bit hard for her to get used to sharing just one, when she’d been used to her choice of tub and shower.)

She’s paid off almost half of the shortfall from selling her condo in the nick of time last September, for less than she owed — the strings of For Sale signs have been hanging there almost a year now, tho a couple of Sold stickers went up recently.

Next, Aggie will start splitting her cash flow between paying off the unsecured hsbc LOC (at prime for some miraculous reason), dropping a bit towards an RRSP repayment, and starting up her first TFSA. She just paid off the cibc LOCs (at prime + 8.75) when the other bank raised the ceiling on the cheaper LOC.

Heck, if yesterday’s Kristi isn’t too old to start learning at age 27, why should double that, plus a few, be any less ‘too old’? Never too old to learn, maybe too old to catch up, but we can’t know if we don’t try!

@Bottoms Up, I’m with ya on the plain English. We shouldn’t need a degree in law and accounting to understand what we’re signing up for when we buy a home.

@Garth, I delight in your way with words and ability to inform while also entertain, and please… keep up the cheap shots. They’re all well-intended to keep us in line, even when they bring a tear to the cheeks of idiots like me and retired lawyers and such. We all know you love us, have a true concern for the wellbeing of the people.

Eureka, Smoking Man! There is a worthy and achievable goal: to figure out how to like people. And then to actually start liking them. Even the ass kissers. C’mon, I know you’ve got it in you!

#98 neo on 01.30.13 at 8:18 am

#48AK on 01.29.13 at 11:19 pm
The US 10 year Bond now trading @ 2.016%

It won’t get to 2.4% before the market starts to crash to get it back down. That is the tipping point in this pendulum game.

#99 Bottoms_Up on 01.30.13 at 8:19 am

#95 Victoria Real Estate Update on 01.30.13 at 5:36 am
————————————————–
I’m not sure if you responded to my previous request but if you could provide some numbers that could really enlighten us as to how much you’ve saved thus far.

#100 maxx on 01.30.13 at 8:20 am

Excellent point about keeping different investments with different banks.

It also strikes me that yet another convenient portal, aka “product” has been arranged by big finance so that when RE prices drop and things get messy with lower sale yields, they will not lose money. Au contraire, they’ll be raking it in without skipping a beat.
The most blatant testimony to coming RE price drops I have ever seen.

The perspective of big finance, I think, trumps any BS emanating from the realtard cartel.

#101 Jaguar on 01.30.13 at 8:36 am

Garth…you made a comment on the Flyboy blog piece about the ‘shrivelling mortgage market’….”the banks know this is coming and they have a plan’. What is their plan, Garth? What can we look forward to? What ‘backup plan’ do those cagey bankers have? We know they always have one…..

Keep your womenfolk safe. — Garth

#102 Bigrider on 01.30.13 at 8:42 am

#45 Nonno.

Why did you buy in Toronto again? Why not in any of the many places all over the world that have already had their real estate markets devastated?

Nonno I am not scared ( nor foolish) but what in your mind makes Toronto so differenti ?

Help me to understand pleeeasee.

#103 Buy? Curious? on 01.30.13 at 8:49 am

The legal system in Canaduh is toothless. The process is incredibly, easily manipulated and unenforcable. If you are sued by a bank *yawn* and they get a judgement against you, they eventually sell on the debt to some collection agency. By that time, you have either sold everything off and bought a few ounces of gold that is at your mother’s house or you’ve transfered everything into your cousin’s name.

I’ve been served? Ya? just put it there with the junk mail.

http://www.youtube.com/watch?v=iqWploC1Kyg

#104 Weedeater on 01.30.13 at 8:55 am

@73 richmond bc
Suggest you read this post by an entertaining blogger who succintly explains the difference between the two kinds of mortgage obligations: http://www.greaterfool.ca/2010/10/25/pricks/
There IS a difference in the cost, and it’s not just financial.

#105 Ann on 01.30.13 at 9:15 am

.#88 Patiently Waiting on 01.30.13 at 1:39 am
This one is for you White Rock mom …

Sales of single family homes in White Rock BC are down 75% as compared to the same 30 day period last year … here are some recent price reductions … note that the ones that don’t show the price reductions overtly have all had at least $100,000 reductions but the listings were renewed with a “new price” so as to hide the price reduction …

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1999555563&s=BRC&t=BRC
——————————————————————-
Boy ,you can’t ‘hide’ The original price only a Greater fool of Greater fools would buy a property without checking the history of listing back at least three years and what the owner paid and any improvements since his purchase!

#106 AK on 01.30.13 at 9:16 am

#98 neo on 01.30.13 at 8:18 am
“It won’t get to 2.4% before the market starts to crash to get it back down. That is the tipping point in this pendulum game.”

It will be interesting to see what happens. I believe it’s going through this time. The US is beginning a major uptrend.

#107 Nonno Nicola on 01.30.13 at 9:21 am

ehhh biga rida, i buya in toronto becuz me and my famiglia live here, i no care about anywere elz, i buy for 50 yers biga rida, i make lots of denaro. They no make any more land in the toronto biga rida, lost of pepoles are a coming all the time to buy.

if you a scared you gona live with a your mamma forever, go to the la banca and gets soma denaro and buya som realesteta. fugetabut all these crazy man on the webasite, they no care, nonno nicola care about your a futur.

#108 AK on 01.30.13 at 9:34 am

#72 Smoking Man on 01.30.13 at 12:05 am
“AK not retail money, just hedge funds setting a trap.”

I believe that we are in for a surprise, Smokie. I like the way the Money Supply is trending.

#109 a prairie dawg on 01.30.13 at 9:36 am

#89 LEAFSBIG FAN

- — -

Read your contract. If you don’t like the terms, then don’t sign it.

#110 Have a laugh on 01.30.13 at 9:40 am

Thanks for the wisdom Garth, really enjoy your blog.

Do banks still offer both kind of mortgages? How do one ensure that he is getting a conventional mortgage and not tricked by the bank?

Btw my buddy got the following from his realtor… have a laugh!

*******

UNDERSTANDING THE CONDO MARKET IN 2013:

1) We are currently in a Market Pause! Our best guess is that it will end by March. Why? Humans are very adaptable and our guess is that they will adjust to the new CMHC rules.

2) All those construction cranes are really a good thing! Many of those cranes are for new office towers. Many companies are relocating back downtown to be closer to the new work force. Young people who live in ‘416’ do not want to work in ‘905’ and smart companies get that. Each construction crane represents about 500 jobs for about four years.

3) No matter how many New Home or Pre-Construction sales take place each year, the construction industry can only deliver about 15,000 new condo units each year – a natural bottle neck for supply.

4) While condo resales were lower in 2012, there were record condo rentals which offset the decline in sales. Young and older people still want to live downtown. With rents continuing to rise, buying will soon be the preferred option again.

5) Long term, more and more people not only will want to live downtown but will have to, with a crumbling Gardiner Expressway that will be under construction for years and no rapid transit in place for years. People wanting to avoid long commute, is just inevitable!

6) The economic fundamentals remain unchanged – interest rates will remain low with growing employment and income figures for the GTA and downtown Toronto.

7) With Governor Carney moving to England, do not expect to see more changes to CMHC rules in 2013.

#111 Tony Right on 01.30.13 at 9:46 am

Wow! Whatever happened to ethics and morality in this country. Canadians have become super greedy!

#112 neo on 01.30.13 at 9:50 am

Garth,

So the Fed launches QE3/4/infinity in the 4th quarter and the U.S. still prints a negative GDP in what you called a “recovery”. Raise your hands if you think Q1 will be negative as well. Personal Consumption Expenditures was the only metric that prevented this number from being ugly. With consumer confidence at 58% because they all noticed their paychecks cut due to the payroll tax. Do you really think Q1 spending will save the day again?

#113 Anon for Obv. reasons on 01.30.13 at 10:02 am

Garth I work at MFC’s head office on Bloor and I watch our shifty Manulife Bank & Trust reps try and con people into Manulife One deals at semniars every week. Snake-oil salesmen (and women), the lot of them. I wouldn’t trust the product or the person selling it as far as I could toss them

#114 Frank le skank on 01.30.13 at 10:06 am

#104 Weedeater on 01.30.13 at 8:55 am
Thanks for the link to the previous post on collateral mortgages. The old post does a really good job at explaining the cons of a collateral mortgage.

#115 White Rock Mom on 01.30.13 at 10:28 am

Thanks Patiently Waiting!

#116 Bargains everywhere on 01.30.13 at 10:31 am

Brad Lamb, ‘Condo King’, is hosting a free condominium workshop.

LEARN HOW TO BECOME A MULTI-MILLIONAIRE THROUGH BRAD J. LAMB’S P.O.W.E.R. INVESTING

Bwahahahahaha
The only one making any money is the Bradster himself.

http://new.bradjlamb.ca/2013/01/29/workshop-p-o-w-e-r-investing-to-real-estate-millions/

#117 Chris on 01.30.13 at 10:32 am

If you, or your parents, have a RIF with the Bank of Montreal be VERY careful before you sign anything. The Bank of Montreal now has only ONE form for the re-investment of all RIF’s. These investments range from savings accounts, G.I.C., mutual funds, etc.

The form is four pages long with two additional pages of “Terms and Conditions.” It is very difficult to read. You may think your RIF is in a ‘safe’ investment when in reality you may sign up (or be signed up) for a ‘risky’ investment.

I would suggest you take this confusing RIF form home with you and read it over where you are not being rushed to sign it. (Hope you have good eye-sight.)

#118 hangfire on 01.30.13 at 10:40 am

DELETED

#119 neo on 01.30.13 at 10:59 am

#106AK on 01.30.13 at 9:16 am
#98 neo on 01.30.13 at 8:18 am
“It won’t get to 2.4% before the market starts to crash to get it back down. That is the tipping point in this pendulum game.”

It will be interesting to see what happens. I believe it’s going through this time. The US is beginning a major uptrend.

********************************************

It is more important to keep their funding costs lower than to keep the DOW/S&P nominal higher. The major uptrend not breaking is debt/deficits. Besides GDP is now negative so “US beginning a major uptrend” isn’t very accurate.

#120 HD on 01.30.13 at 11:22 am

#62 T.O. Bubble Boy on 01.29.13 at 11:48 pm

The RRSP mortgage is a bad idea in an ultra-low rate environment like this. Why would you want a 3% investment? — Garth

——————————————

Garth,

I was under the impression that you could use any rate available on the market on a RRSP mortgage.

So someone could choose a 5 year term or 10 year term as long as the rate is comparable to what other institutions have to offer.

Would that be correct?

Best,

HD

Yes, it must be market rates – which are not posted rates. Still too low, given the high cost of plan set-up and maintenance. — Garth

#121 Toronto_CA on 01.30.13 at 11:32 am

I guess we’re not de-leveraging just yet?

http://www.theglobeandmail.com/report-on-business/top-business-stories/household-borrowing-has-popped-again-back-near-troubling-levels/article7997806/

“But, Mr. Porter noted, consumer borrowing “popped” last month, marking a three-month pace of 4.8 per cent.”

So we’re borrowing 4.8% a year to pay for things, the economy is growing less than 2% a year, wage gains largely static…what happens to us when people finally stop borrowing and are forced to pay off their credit cards/mortgages/HELOCs?

Recession, or at the very least abysmal growth.

#122 AK on 01.30.13 at 11:35 am

#121 neo on 01.30.13 at 10:59 am
“Besides GDP is now negative”

Minor detail. The Market has already ignored it. Employment numbers will surprise on the upside this Friday as well.

#123 Harvard Grad on 01.30.13 at 12:14 pm

I was watching the piece on CBC – the undercover part in which they asked “3 times” if this mortgage had any strings attached to it and the mortgage specialist finally admitted that it was a collateral mortgage – if I inquire about an issue – I will ask once – maybe twice for clarification – but never 3 times -

this seems to be a terrible case of covering up the facts, yes, it is hidden in the agreement, but obviously the guy they interviewed missed it – and I take his lawyer did as well –

If you can’t trust your bank – who can you trust (turning off my sarcasm) – you’re poorer than you think -

#124 Holy Crap Wheres the Tylenol on 01.30.13 at 12:19 pm

#35 ozy – Smoker Man – you talk too much on 01.29.13 at 10:45 pm

SM – keep in mind, like u txt in short form – can’t waste mental energy on your recent never ending rants

Better read this
Neighbourhood Change > The Three Cities Home
http://3cities.neighbourhoodchange.ca/

Holy Crap wheres the middle class wage earners? They have vacated the city and polarized it. The new Detroit to come?

#125 Musty basement wannabe on 01.30.13 at 12:34 pm

Greetings from the mouldy city of Nanaimo. I have talked to about 20 people who say sale prices in their neighborhood are down approximately 20 percent in the past six months based on actual neighbors they know who have bought and sold . It’s funny how the real estate agents cartel shows no change. How can this be?

#126 Dr. Hoof Hearted on 01.30.13 at 12:35 pm

#83 Nostradamus Le Mad Vlad on 01.30.13 at 1:04 am

Are you referring to that cross -dressing drunk named Winston Churchill ?

#127 vreaa on 01.30.13 at 12:54 pm

Reversion To What Mean?

The Vancouver market is weakening, and prices are heading down. Where will they settle?

For a discussion of long-term trend-line support, see ‘The Froogle Scott Chronicles: Mortgaging Our Souls In Paradise – Part 10: Reversion To The Mean’
VREAA 30 Jan 2013
http://wp.me/pcq1o-59a

#128 Smoking Man on 01.30.13 at 1:07 pm

All over MSM USA GDP, In deep do do…….

I TOLD YOU SO.

THE BIG HOUSING BS NEXT, Short HD NOW!!!

I may be insane but rarely wrong…….

NEVER BET AGAINST A SMOKING MAN

#129 Andrew on 01.30.13 at 1:52 pm

Food for thought- 2 Edmonton Listings :

Condo-Original List according to Realtor ad $348, 700/ Listed $152,900

House-Original List(same Realtor) 705,500. Mls search shows another reduction from ad price from $424,900 to 399,900.

Links to MLS listing:

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12105232&PidKey=-480131121

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12782597&PidKey=-1723332520

Harbinger? Who Knows?

(Post dedicated to DABob. I’m not good at figuring out percentages but maybe DABob can do the math and let us all know ((are under his current alias)) how big a drop this is…)

#130 smartalox on 01.30.13 at 1:55 pm

@#104:
Wow, thanks for the trip in the wayback machine. It’s funny to think that back in 2010, The Economist thought Canadian Real Estate was only 23% overvalued relative to disposable income.

What’s the most recent figure? Oh yes, as of a couple of weeks ago, it’s now 34% overvalued relative to disposable incomes.

I’ll let you draw your own conclusions.

#131 Deb L on 01.30.13 at 2:09 pm

Rick Mercer is the best – Flaherty’s Mixture and Flaherty’s Other Mixture

http://www.youtube.com/watch?v=5ER0Tn0jV7w

#132 Dr. Hoof Hearted on 01.30.13 at 2:13 pm

France is totally ‘bankrupt’, jobs minister admits as concerns grow over Hollande’s tax-and-spend policies

http://www.thetruthseeker.co.uk/?p=64514

France’s Socialist government was involved in a vast damage limitation exercise today after a senior minister admitted that the country was ‘totally bankrupt.’

Colleagues of Michel Sapin, secretary of state for employment, insisted that he was merely highlighting the faults of the last conservative administration, after the minister said the government’s tax-and-spend policies are just not working.

Finance minister Pierre Moscovici said: ‘What he meant was that the fiscal situation was worrying’, and added that the last government, led by Nicolas Sarkozy, had accumulated £513billion of debt.

=================================

First dibs on the Eiffel tower(scrap)….and a few paintings in the Louvre.

Other than that, not much of value there anyway.

#133 pjwlk on 01.30.13 at 2:27 pm

#38 Devore said:
All these contracts we have to sign for everything, if someone actually took the time to read all the fine print, they’d turn old and grey before they finished… …ok you find things you don’t like so what do you do? You put in all that effort and strike items, revise items and then guess what? You don’t get the service/item you wanted because the counterparty won’t sign/negotiate.
—————————————
Correct.

I am one of the very few people I know that reads everything I sign. I ran into this exact situation over a LOC. Three clauses I didn’t like and wanted reworded slightly. At the end of the day the bank’s legal department told me that “they can’t change the contract just for me” to which I answered I’m not asking you to, I’m asking you to change it for everyone. Nope, can’t do it – so I walked.

The next bank I went to had a better agreement but no one (not one person) could tell me how their mystery “bank rate” was calculated or what it was based on. Another non-starter for me and I walked from them as well.

So yeah, the only way to win is to not play the game.

#134 wetsern observer on 01.30.13 at 2:32 pm

It is different here in BC.

The liberal government here has an ad campaign advising us that it is so.

While government policies around the world have failed and destroyed economies – we are still strong here in BC.

And , oh yeah , we have trades training.

All thanks to the liberal government.

I’m sure it has nothing to do with the upcoming election.

#135 wetsern observer on 01.30.13 at 2:38 pm

It is different here in BC.

The Liberal government has an ad campaign telling us that it is so.

While government policies around the world fail and economies crumble we are still strong here in BC.

Oh yeah, and we have trades training.

All thanks to the BC Liberals – they are the best- they have made BC immune to world events.

I’m sure this has nothing to do with the upcoming election.

#136 Devore on 01.30.13 at 3:05 pm

#54 Retired lawyer

I like your blog a lot and read it every day, but please don’t take cheap shots at lawyers.

Why should you be excluded? — Garth

Oh, come on Garth, they’re just following orders.

#137 Holy Crap Wheres the Tylenol on 01.30.13 at 3:10 pm

RIMM Here we go again just received a lambasting from a friend commenting on RIM stock and how it dipped again today with the release of the BB10. His comment was I told you RIM is dead and won’t make it. What he forgot was he told me this in the fall and there has been some decent movement in the last quarter. Holy Crap people by late morning, RIM stock was down 55 cents or 3.5 per cent to $15.16. Yes, yes I know about the last two sessions decline of – 3.4 per cent. Apparently profit taking was rampant. The 52-week low of $6.10 last September was the bottom, where can it go from there? This drop is typical; the real proof in the pudding will be the product hitting the market with the consumer driving RIM to heaven or hell. I’m still in either way I’ve made some $$. Lets give this RIM ride a few months then all the doubtful side-liners can come back and kick my sorry a$$.

#138 Devore on 01.30.13 at 3:14 pm

#68 Bottoms_Up

Who’s to blame when people refuse to make use of the information presented to them, often in surprisingly plain English? In today’s ultra-litigious society (for which we’re as much to blame as corporations and governments) the amount of “fine print” has exploded, this is true, but it is all there for you to read, most of it is boilerplate, and it’s not hard to understand.

Why should someone signing papers for a 1 million dollar mortgage not be expected to read them, or even understand the basic nature of the product they are purchasing?

Your suggestion is merely more marketing and bureaucracy. What if they “miss” some information on your “hilite sheet”? Because they will, it’s inevitable. Who will decide what goes on it? Who will make the rules? Police them?

In either case, none of this will happen on its own. Banks will only do it if consumers demand it (they’re not) and politicians have a thousand other more important things to worry about.

#139 smartalox on 01.30.13 at 3:34 pm

@western observer #137:
Trades training is perhaps one of the best investments a government can make to support a slowing economy. Now of course, some may point out that the BC govt has actually CUT spending on trades training, but still, the principal is sound.

#140 Devore on 01.30.13 at 3:38 pm

#80 45north

Tesla would know a thing or two about batteries, I think. Li-ion batteries ARE unsafe, for some definition of “safe” anyway. Actually, every battery technology developed with higher energy density is less safe than the one before it. Li-ions are rather sensitive to high temperatures. They tend to explode. It’s what happens when you pack to much energy into one space.

#141 adamant on 01.30.13 at 4:14 pm

BCREA 2013 First Quarter Housing Forecast Update

Vancouver, BC – January 30, 2013.The British Columbia Real Estate Association (BCREA) released its 2013 First Quarter Housing Forecast Update today.

http://www.bcrea.bc.ca/sf-images/economics/2013-01forecastchart.gif?sfvrsn=2BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 5.6 per cent to 71,450 units this year, before increasing a further 6.1 per cent to 75,830 units in 2014. The five-year average is 74,600 unit sales, while the ten-year average is 86,800 unit sales. A record 106,300 MLS® residential sales were recorded in 2005.

“2013 is shaping up to be a transition year in the BC housing market,” said Cameron Muir, BCREA Chief Economist. “The groundwork has already begun for stronger housing demand as a significant number of part-time jobs in BC were converted into full-time employment last year.”

“Residential values are expected to be on a more solid footing in 2013 as lower prices, both actual and inflation adjusted, have improved affordability. Many potential buyers that stayed on the sidelines in 2012 will likely enter the marketplace over the next year as the relatively strong financial condition of BC households precludes any deflationary spiral.”

The average MLS® residential price in BC is forecast to edge down nearly 1 per cent to $510,400 this year and remain relatively unchanged in 2014, albeit up 0.6 per cent to $513,500.

#142 Grim Reaper/Crypt Speculator on 01.30.13 at 4:17 pm

Another text on my Samsung from Steve Jobs

Telepathy is the next big thing….sell all your Hi Tech stock

#143 Inglorious Investor on 01.30.13 at 4:30 pm

#139 Holy Crap Wheres the Tylenol on 01.30.13 at 3:10 pm

RIM was down a lot more than 3.4% the last two sessions prior today. The run up from September looks more like a combination of hope/hype and a short squeeze.

Well the Canadian media is doing everything they can, short of changing their respective call letters to R-I-M, or declaring, “We are all Blackberries now” in order to generate hype and pump the stock.

I saw most of the product launch today. As a presentation it was forced, poorly planned and even more poorly executed. Heins had to cue the audience on when to clap, and you can tell they were annoyed with the whole, bloated introduction and back slapping. This should not have been treated as a Steve Jobs type event. By the way, if Jobs was the presenter he would have made the audience swoon over every new feature like each was a world-changing technology. They should have been more direct and humble, but confident. Instead they came across like the spoiled little princess who declares herself the prettiest girl in school.

The products unveiled today look interesting from a software perspective. Some very nice improvements in functionality, such as multi-threading. Will it be enough? They are definitely ahead of iOS in some respects, but you have to know that Apple is not sitting on its hands. They can easily wipe away RIM’s functional advantages in a couple of strokes (or the next major update?). It’s only a matter of time.

When I first saw the hardware, I was very disappointed. The touchscreen version looks fine at first blush, but when I saw the keyboard version, my heart sank. It looks like the same old Blackberry. They should have come up with a fresh industrial design to compliment the new operating system. Looks are very important when you are trying to communicate that this is a whole new product.

There was also buzz about licensing deals, but as far as I can tell, there was no mention of any such deals. I wonder if this played a role in the stock’s decline.

Pricing looks very competitive, but this is proof of weakness, not evidence of strength (and no surprise). RIM’s market share has been slaughtered and I believe last quarter they lost subscribers. We’ll have to see over the next few months how well received the products will be. RIM is definitely a “show me the goods” company now.

RIM could have a lot of potential locked up in QNX for a wider range of products, but it seems they need to prove themselves with smartphones first. So, it looks like all does hinge on BB10. I like the fact that Heins does not cow tow to Wall Street. He seems to have a plan centred on saving and growing the company, not kissing the butts of Wall Street analysts. I like that.

I bought a bit of RIM on the momentum, and got stopped out today. The stock is really deteriorating as I write. If we don’t see a nice ramp into the close, I’d be very worried if I was a shareholder. Just my opinion.

#144 Old Man on 01.30.13 at 4:52 pm

You all stop trashing the Smoking Man, as am waiting for his online courses to enroll, as he is no fool as has insight about how the machine works, and will sign up for his knowledge, as need an expert on option trading, as he is the man.

#145 rosie "moving forward" on 01.30.13 at 4:59 pm

Moving forward, I wonder how these numbers equate to the average Canadians financial situation. If even close, yikes. http://www.salon.com/2013/01/30/nearly_half_of_americans_on_edge_of_financial_disaster/

#146 Holy Crap Wheres the Tylenol on 01.30.13 at 5:16 pm

#145 Inglorious Investor on 01.30.13 at 4:30 pm

Yes you are correct +7% ????? I wasn’t paying attention to my rant. I also agree if Steve Jobs did it Apple Gundom Style this would have been a completely different venue. RIM has some good products but they lack the Apple appearance. The whole show was a façade. Too bad oh well they are not even “el Segundo” in the market. I don’t even own a Black Berry I’m Apple all the way. Like I say in for a penny in for a pound!

#147 jess on 01.30.13 at 6:01 pm

zombie titles
when a bank sends a foreclose notice and then changes it mind without telling the homeowner.

Michelle Conlin

COLUMBUS, Ohio | Thu Jan 10, 2013 1:58pm EST
http://www.reuters.com/article/2013/01/10/us-usa-foreclosures-zombies-idUSBRE9090G920130110

#148 Frustrated Kiwi on 01.30.13 at 6:19 pm

#69 Lucky
I think you didn’t get a reply because you haven’t really provided enough info. How much do you love your house? Do you have kids are are there good stable family rental options in your area? If you sell your house how much are you going to start obsessing over house price movements – this is going to be a long process with ups and downs. My 2c is that if you have no kids and are tough skinned with respect to risk then you should sell the house and get someone like Garth to invest your money wisely. If you do that, you should plan on staying out of the housing market for at least five years, maybe ten.

#149 Herb on 01.30.13 at 6:23 pm

#146 Old Man,

while waiting for SM’s on-line course, I suggest you enrol in a Continuing Education English course at your local high school. You’ll discover that “as” is not the only preposition in the English language. But then you wouldn’t be writing in fake Dickensonian …

#150 AprilNewwest on 01.30.13 at 6:25 pm

Adamant #143
I wouldn’t believe a word of it from that lot.

#151 Beach Girl on 01.30.13 at 6:36 pm

DELETED

#152 Beach Girl on 01.30.13 at 6:51 pm

Something is wrong with my computer. Pissed off. I always read this site daily. I love Smokin Man, Herb is a gentleman, Western man is a homo or just hateful. I am going for minor face lift. WOW, I weigh 124 pds, this summer will be awesome. And Garth, why am I making so much money on the stock market. Made 18,000 without even knowing, what is up? Should I buy RIM.

I also wish to acquire a family to live on site, as I have no interest in pool maintenance and food preparation, or any thing involved in those transactions. There is a seperate house on the premises.

#153 jess on 01.30.13 at 6:52 pm

What’s the biggest battle raging on the front lines of the foreclosure wars? The failure of nearly all the banks to comply with the pre-acceleration notice requirements contained in paragraph 22 of the mortgage.

http://floridaforeclosurefraud.com/2013/01/the-bring-a-court-action-language-does-not-substantially-comply-with-paragraph-22-says-broward-county-judge-in-blistering-opinion/

#154 HD on 01.30.13 at 7:00 pm

#153 Beach Girl on 01.30.13 at 6:36 pm

DELETED
————————-

Beach Girl!

It’s been a while.

Glad to see that you haven’t lost your wit.

Best,

HD

#155 Smoking Man on 01.30.13 at 7:01 pm

#145 Inglorious Investor on 01.30.13 at 4:30 pm

On Rim, took my profit yesterday, but might buy back. Need hold one in my hand first and see what my kids think. I’m still a Samsung bull.

13 p down today, I have seen this many times some hedge funds will put good size market orders driving the price down, then buy huge qtys over a length period of time.. When it falls this much one day after a great launch. It’sin play , I’d your holding, don’t sell….

#156 Westernman on 01.30.13 at 7:06 pm

Beach Girl @ # 154,
I’ll bet you need more than a minor face lift…

#157 Patiently Waiting on 01.30.13 at 7:10 pm

Here is another one that I came across today … though it seems I see so many of these nowadays that it makes me sick …

MLS F1302237
Asking $1,049,000
Purchased for $975,000 in Jan / 2012
Mortgage – you guessed it $975,000 … WTF …
Interest Rate Prime Pus 7% (So 10 %)

Who the F are the idiots that take out these loans … and who the F are the idiots who make these loans … actually this one was by Royal Bank …

shheeeshh … I see so many of these now that I think there really is just no hope for a soft landing …

pw

#158 Lucky Sometimes on 01.30.13 at 7:16 pm

Very appropriate statement on Bankers and politicians
http://www.buggerthebankers.com/

#159 Devore on 01.30.13 at 7:18 pm

#118 Bargains everywhere

You know there’s no value in condos left when instead of making money on real estate, you have people making money teaching others how to make money on real estate. Hmm, if it’s such a great way to get rich, why don’t you do it yourself, instead of saturating the market with trend following morons?

#160 wallflower on 01.30.13 at 7:38 pm

Yup, just received hardmail notification my business VISA is being replaced by a Line of Credit product. Same shite, different blend.

#161 Esoteric on 01.30.13 at 7:48 pm

Hi Garth,

As a long time reader and someone who unreservedly agrees with your point of view on the mortgage market in Canada (especially in Vancouver where I live) I did want to make a few comments about collateral mortgages as I work for RBC with these products everyday.

I can’t speak for other banks but RBC does not do collateral mortgages for greater than 100% of the property value.

In fact we will not actually lend more than 80%. We will REGISTER the charge for 100% of the property value so that at a later time (assuming home prices increase… HA!) we can increase the limit based on the old registration without having to re-register and have the client incur fees from First Canadian Title.

Having said that, you are absolutely correct regarding the assessment for using the product to “cement” the relationship with the client. It’s certainly harder to get out of one than just a plain old vanilla mortgage, but hey, there’s a lot of client benefits too.

Also: it really is not a product for everyone. The credit line really takes a lot of discipline and all banks are probably approving these more than they should. Most clients shouldn’t have this product as it’s complicated and the dangers of getting in over your head are just too prevalent.

A lot of people are going to be hit hard when they realize they are maxed out and when they want to increase their HELOC’s limit, their appraisal comes back lower than they wanted and they won’t be approved for an increase.

It doesn’t look pretty. A lot of people use these lines of credit to purchase cars or rental properties. If you have the income it can be beneficial but most people don’t.

#162 Nostradamus Le Mad Vlad on 01.30.13 at 8:11 pm

-
#129 Dr. Hoof Hearted — “Are you referring to that cross -dressing drunk named Winston Churchill ?” — Aaahhh yes, Winnie the (sad sack) Pooh Churchillian. We shall fight them on the beaches, and all that hyperbole.
*
Thought For The Day! “We have two American flags always: one for the rich and one for the poor. When the rich fly it means that things are under control; when the poor fly it means danger, revolution, anarchy.” — Henry Miller (wrh.com)
*
IMF Confirmation Yuan / Renmibi set for Global Reserve Currency status; 0.19 clip YouTube charging for subscriptions soon; Control Freaks Elitists; US, UK and rest of the west back into recess- depression; Different clips from comedian Bill Burr; US$27 bln. So raise taxes; Gold and Silver Americans buy close to half a billion worth in Jan., and 1:50 clip German gold grab; Fiscal Cliff Debt getting larger; Gold and Silver Registration “It had to come. It has been introduced in Illinois, the most anti-gun state in the USA.”; 7:09 clip ‘The system is biased towards Goldman Sachs and JPMorgan.’
*
Overbearing Cop? The kid was seven; Computers Truly stupid ideas; Myth? Judge for yourself; Turkey Heading east instead of the EU? Occupying Yemen French, Brits. and US troops and planes, and Israel atttacks Lebanon; Japan and Israel hit new lows in press freedom; Dictatorship Gone Wild Couple facing two months in jail for rescuing a fawn; The Sun Good for one.

#163 a prairie dawg on 01.30.13 at 8:12 pm

@ #134 Deb L

thanks for that link. :)

#164 Herb on 01.30.13 at 8:19 pm

#153 Beach Girl,

the story of my life! Ladies like gentlemen (like me), but they adore wretches like SM. There is no justice in this world.

#165 Smoking Man on 01.30.13 at 8:28 pm

Beach Girl buy it…But Rim is volatile…. I have made and lost fortunes on that puppy over the years…

From the kids, and palls and I quote…..They have iphone5

BB10 IS BOSS……….. Tyred of iPhone freezing….

Going to get one for the wife and see….

I’m buying back in, But not much, need the loot for some big shorts…

#166 Smoking Man on 01.30.13 at 8:29 pm

Sorry Herb, it is what it is…..

#167 Dr. Hoof Hearted on 01.30.13 at 8:36 pm

It is great to see many Blog colleagues change their moniker with the addition of ” Dr.”

See how easy it is to impress the hot babes ?

PS : Beach Girl : Are you a nurse ?
Also: If you are not hot please advise.

#168 marco on 01.30.13 at 8:39 pm

DELETED

#169 Old Man on 01.30.13 at 8:39 pm

#154 Beach Girl – I use to give lessons to those with computer skills on the Internet with Netscape when nobody knew that the internet existed, and you are not alone, as my plate is full with this and that, but will work around this all, as know a lot.

#170 Bigrider on 01.30.13 at 8:58 pm

This is for Garth or anyone. If there is no response from anyone tonight I will probably repost tommorrow.

Scotia Itrade is doing a booming business convincing people to invest their respective retirement savings, RRSP’s and the like into their second mortgage products.

The sales pitch, 15% gauranteed, secured by REAL ESTATE.

A week does not go by when I don’t here about someone liquidating their financial assets and going for these.

The other side of the house humping mania is the private house lending mania.

Any comments about these from anyone knowledgeable?

Fools and their money, soon parted. — Garth

#171 Smoking Man on 01.30.13 at 9:03 pm

Beach Girl you should post more, your shtic is awesome..

Don’t let a Hill Billy discourage you, no one likes him..

As far as you other dogs thinking of taking advice from me.. WARNING!!!!!!

1 You know I am a pathological lier.

2 luck is defiantly under rated. I have been lucky.
3 I’m un unemployed rivit bucker, doing some hobby work on bay street, what do I really know.
4. I’m a certified alcoholic.
5 I am truly insane….. In a good way..

#172 Herb on 01.30.13 at 9:04 pm

#168 Smoking Man,

that’s the most sense you have made in months!

#173 CrowdedElevatorfartz on 01.30.13 at 9:06 pm

What! No comment from Beach Girl about #158 Westernman’s slag……

She must be busy counting all her moolah…

#174 Inglorious Investor on 01.30.13 at 9:38 pm

#157 Smoking Man on 01.30.13 at 7:01 pm

I had a very small speculative position in RIM. After the ramp from $6+, I figured the momentum going into the launch was just too strong to pass up so I bought in. I was up about 23% at the high. Usually, I’d sell on a gain like that, but again, my position was small and I was hoping the presentation would at least meet expectations. Sure, I knew it could very well be a “sell the news” day, but today’s sell-off was ridiculous, and largely based on plain old disappointment. After today’s presentation, the market is not confident that RIM can pull it off. And if you read some reviews, you’ll see the techies are not very impressed.

This is do or die for them. So either you buy in on the hopes that they will pull it off, in which case it’s a buy and hold because this stock is so volatile that trying to time it makes little sense unless you day trade it with big money. Or you buy on the hopes of a buy-out. IMO a buy-out would be the last resort and therefore there may not be much of a premium to profit from. Furthermore, this is a consumer tech product we’re talking about. In order to survive you must re-invent the wheel constantly. I don’t see this as a long-term strategy for RIM. I think they should leverage QNX for a new product category that they can own for a while, the way they owned mobile e-mail.

#175 Bottoms_Up on 01.30.13 at 9:40 pm

#140 Devore on 01.30.13 at 3:14 pm
———————————————
My point is that people want that mortgage, they want that dental work, they want that surgery, they want that access to facebook or that on-line gaming system. So ultimately you are FORCED to sign what the counterparty has down on paper — it is NOT a negotiation. That is the problem I have with fine print. It should be clear, concise, and negotiable.

The dentist and doctor makes you sign saying you will not sue if they hack a nerve or you lose your life. You can’t just strike this clause from the papers you have to sign?

Facebook and on-line gaming sites want to sell your information to 3rd parties. You can’t just strike that off the list.

Banksters want you stuck in mortgages by having crazy break fees etc. You can’t just strike this out of the agreement?

Thus, in my mind, it’s really up to consumer protection groups to be ensuring these companies aren’t taking advantage of the consumers.

#176 AK on 01.30.13 at 9:45 pm

#154 Beach Girl on 01.30.13 at 6:51 pm

“Should I buy RIM.”

RIM, or BB under the new symbol is heading back down to $6.00. Therefore, I would not touch it.

Why would you even consider it, when there are many other places to invest your loot.

#177 a prairie dawg on 01.30.13 at 9:47 pm

#171 Old Man on 01.30.13 at 8:39 pm

#154 Beach Girl – I use to give lessons to those with computer skills on the Internet with Netscape when nobody knew that the internet existed

- — -

And some of us were using DOS, long before Windows and the Internet was invented. Dial up bulletin boards on private computer servers. None of it was point and click. And average people were not invited.

Those days are gone forever. lol

#178 Brad in Van on 01.30.13 at 10:05 pm

Of course Americans care about Canada and Canadians. Nobody, but nobody, will ever tell me that Americans aren’t informed about Canada! See, it’s all over our news throughout the years!

http://www.theonion.com/search/?q=canada

http://www.theonion.com/articles/maple-syrup-reactors-safe-canadian-prime-minister,20511/

http://www.theonion.com/articles/obama-rejects-keystone-pipeline,27099/

http://www.theonion.com/articles/us-protests-mexicanadian-overpass,104/

http://www.theonion.com/articles/visitor-from-canada-protected-like-baby-lamb,27554/

http://www.theonion.com/articles/that-trip-to-canada-really-broadened-my-horizons,10812/

http://www.theonion.com/articles/report-us-may-have-been-abused-during-formative-ye,1988/

http://www.theonion.com/articles/canada-keeps-marijuana-illegal,26749/

http://www.theonion.com/articles/canada-india-sheepishly-resolve-border-dispute,752/

http://www.theonion.com/articles/man-from-canada-acts-like-hes-not-cold,3635/

http://www.theonion.com/articles/cia-america-may-have-an-unknown-number-of-secret-a,2334/

http://www.theonion.com/articles/us-briefly-on-canadian-torture-list,15381/

http://www.theonion.com/articles/us-students-lead-world-in-detention,38/

http://www.theonion.com/articles/on-canadas-first-gold-medal-as-an-olympic-host,16121/

http://www.theonion.com/articles/us-deserters-not-safe-in-canada,15507/

http://www.theonion.com/articles/canadian-immigration-under-fire,14436/

http://www.theonion.com/articles/conservatives-rule-canada,14912/

http://www.theonion.com/articles/canada-terror-plot,15007/

#179 Beach Girl on 01.31.13 at 12:36 am

Yah, I am rich and beautiful. I am 55 and look 35. So slim all the young women around me are pissed. But I HAVE THE POWER, AND I AM ON FIRE. Not racist but stick to my kind. But, seriously, am making money. Now, I have mentioned I would prefer to hire a family to look after me and Miss Daisy (Jack Russell). As I am rich and have no desire to leave my beach house, or sell the other ones. I dislike cooking, cleaning not even a close second. And I do not wish to marry. I AM FREE.

#180 Beach Girl on 01.31.13 at 12:46 am

DELETED

#181 InLimbo on 01.31.13 at 2:14 am

When I closed my mortgage a few years ago, I opened up a LOC (I didn’ really need it at all…bank rep put out some suggestions I think, and I said why not). It was based on the value of original mortgage (near value of my condo)…without any request for papers to back it up…the rep just took it by word of mouth.

Well when I sold it recently I was kind of miffed (on principal, not on the amount) that it took several hundred dollars to close a LOC that I never really needed or used.

#182 Nanaimo – “I have talked to about 20 people who say sale prices in their neighborhood are down approximately 20 percent in the past six months based on actual neighbors they know who have bought and sold.” | Vancouver Real Estate Anecdot on 01.31.13 at 12:14 pm

[...] “Greetings from the mouldy city of Nanaimo. I have talked to about 20 people who say sale prices in their neighborhood are down approximately 20 percent in the past six months based on actual neighbors they know who have bought and sold. It’s funny how the real estate agents’ cartel shows no change. How can this be?” – from Musty basement wannabe, greaterfool.ca, 30 Jan 2013 12:34pm [...]

#183 Brico9 on 01.31.13 at 2:16 pm

Widespread price-fixing alleged in Toronto home construction

Link:

http://www.cbc.ca/news/canada/toronto/story/2013/01/30/concrete-forming-competition-bureau-price-fixing-allegations.html?cmp=rss

Is everyting in the RE market fixed? If it not MLS and the RE cartel it is the builders.
New home warranty scam too.

I bet it is the same here in Calgary?

So much content for GT to write about.

#184 Bo Boka on 01.31.13 at 2:28 pm

# Beach Girl
Get a grip or maybe a life.

#185 Bryn on 02.01.13 at 12:05 am

Garth, I’d love if you can explain how these qualify as “mortgages” as far as CMHC is concerned. Given that CMHC doesn’t insure lines of credit anymore (and collateral charges sound an awful lot like a mortgage!!) how do these qualify?

Why is CMHC insuring a 125% loan against a property?? So if I get a 125% “collateral charge” against a property and default on it, the bank gets a bunch of extra “free” money from CMHC?

Before I go kicking and screaming to my MLA, can you help me understand exactly what the hell is going on here?

#186 C on 02.01.13 at 2:40 pm

… and which part of what you just described make Canadian banks …safer ? :)