The exit strategy

SHARK modified

Erin Sherry decided she wanted out of her CIBC mortgage. And her marriage. That’s when the troubles began.

Her loan was with FirstLine Mortgages, a division of the bank (which hasn’t been accepting any new clients for the past two years). Not only did Sherry get zapped by changes in interest rates, she was nailed by the bank with a mortgage penalty from Hell.

She and her squeeze took out a 10-year home loan for about $440,000 in the summer foo 2008 on their Victoria home. Two years later the marriage went bust, and Erin told the bank she needed to be rid of the obligation. Meanwhile her husband went off to buy another house. FirstLine hit Sherry with the infamous IRD (interest rate differential) formula, which meant on a mortgage with 95 months left in a declining rate environment that she owed $47,868.91. She flipped.

Too bad, said the bank, and gave her three options for reducing the burden: (a) keep the mortgage for another three years, at which point the prepayment charge would have been limited by statute to three months’ interest, (all mortgages become open and payable after five years), (b) port the mortgage to the new digs purchased by her ex; or (c) find a co-borrower or guarantor for the existing mortgage, to replace her departing husband.

But Sherry is no compromiser. She sued the bank.

Fast forward to a few days ago, when a BC court certified a class action against CIBC over the way it calculated mortgage penalties between 2005 and 2009. That means the suit that Sherry started can move ahead, and be joined by others who also have a beef with the process.

It could be a big deal since (as reported here) it’s about how some lenders have played fast and loose with the rules when it comes to the costs of breaking a mortgage. The allegation is that the language used in loan documents was vague and imprecise, open to interpretation and probably unenforceable. If that’s found to be true (nothing has yet been proved), the bank had better start preparing refund cheques.

Also key to this case is the fact most people don’t last all the way through a five-year mortgage. On average, borrowers move, renegotiate or otherwise abrogate their home loan after three or four years. They don’t all pay penalties, but many do, and it can sting.

There are two common ways you can be dinged when a mortgage is broken. First, if you’re lucky, it will be a penalty equal to three monthly payments. Or, more painful, a sum equal to the difference between the mortgage rate and current rates over the period of time left, on the amount owing. This is what nuked Sherry, especially because the loan she took at 6.2% in 2008 carried a big premium relative to where rates sat two years later.

There can be other little surprises, too. For example, you might have scored a fat discount when you were granted the mortgage, but the IRD will be based (of course) on the highest posted rate for that term. Some lenders also use bond yields. Sneaky. Other lenders refuse to let you make a big prepayment within a few months of breaking a mortgage – when such an action would reduce the break fee. Some banks will also charge a ‘reinvestment fee’, plus count on having to pay back any cash incentives you received when you originally took the loan.

And then there are the Kia lenders – the guys who offer those cheapo prices for products that can fall apart and hurt you. Like Investors Group’s headline-grabbing 1.99% three-year teaser loan, which you absolutely can’t get out of unless you sell the house.

Anyway, all this finally led the feds to get involved in the issue of mortgage busting. Now the banks and most trust companies have to outline prepayment penalties in an information box on the mortgage document, plus they must offer an online calculator, like this one.

The bottom line is that mortgages are contracts obligating you to make payments for a defined period of time. Given that 80% of people are now taking five-year, fixed-rate loans (to suck up cheap money), I’ll wager a lot of them think getting out of the mortgage is simple and efficient. It isn’t. And while Sherry got caught in a rate vise that won’t be repeated for some time, there’s a valuable lesson here.

Never take a mortgage without having all the terms explained to you. Then get your lawyer to explain them again. And remember, it’s not just about rates. A sexy exterior isn’t everything. Man, what a painful lesson that is…

133 comments ↓

#1 Piano_Man87 on 07.07.14 at 6:16 pm

FIRST!

#2 Yogi Bear on 07.07.14 at 6:27 pm

Zero sympathy for this woman. The couple yesterday, yes. Today’s post subject? No.

#3 gk on 07.07.14 at 6:31 pm

I must be missing something surely if they sold the house they would have no penalty?

Why? You still have a contractual obligation. — Garth

#4 Randy on 07.07.14 at 6:37 pm

SECOND ! ?

#5 Happy Renting on 07.07.14 at 6:43 pm

Garth, do you ever get nasty e-mails from Kia? I don’t know much about their cars, except they get a regular, hilarious dissing by you. :-)

#6 Not an economist on 07.07.14 at 6:47 pm

“Kia lenders – the guys who offer those cheapo prices for products that can fall apart and hurt you”

Garth, you joke a lot about Kias, but inquiring minds want to know: do you really find Kia cars to be of excessively low quality (i.e. fall apart and hurt you), or are they just a prop for a really corny running joke? Because cringe-worthy jokes are kind of the hallmark of boomers like you, no offence intended.

Reason I’m asking is a Kia car is on the list of maybes for the future, and if you know something I don’t about these Korean cars please let me know. I certainly wouldn’t want to buy the car equivalent of those million dollar slanty semis that litter our downtown.

#7 Entrepreneur on 07.07.14 at 6:50 pm

It just gets worse. The “uppers” hold the purse strings & the regulations. We are just puppets on their strings.
Backward thinking on their part with a “give me your money” attitude without thinking of the consequences of the whole concept. Respecting people will get you ahead a lot further but that is not the case now. Greed is running the show. Watch what you borrow!!!

#8 Babblemaster on 07.07.14 at 6:50 pm

“And while Sherry got caught in a rate vise that won’t be repeated for some time, there’s a valuable lesson here. ” – Garth

————————————————-

Are you sure? Rates may go even lower.

#9 Mean Gene on 07.07.14 at 6:52 pm

Most likely the property didn’t appreciate in value to offset the Banks penalty, ouch.

#10 Alan on 07.07.14 at 6:58 pm

Why is that you bash KIA’s so much? They do make a good product and back it up with a great warranty.

#11 Blacksheep on 07.07.14 at 7:04 pm

Closed mortgages are for the Cattle.

My personal experience is that short term open is the only way to loosen the stranglehold the bank tries to apply, (your a constant flight risk) Pay the lowest rates, (history supports this) Lets you be more nimble with your holdings (as nibble as a discounted home sale can be). If rates go against me so be it, you can’t put a price on freedom.

This all reminds me of this classic, TED talk.

https://www.youtube.com/watch?v=txLap_BCmGA

#12 Ralph Cramdown on 07.07.14 at 7:05 pm

“[…] Investors Group’s headline-grabbing 1.99% three-year teaser loan, which you absolutely can’t get out of unless you sell the house.”

What’s wrong with that? It’s only three years. How many people get an unforeseen situation which requires refinancing but not selling the house or adding a second mortgage? Winning the lottery and wanting to pay out early doesn’t count as an emergency…

I find mortgage brokers’ comments on the subject funny. When rates were higher and banks were lazy, they sold on low rate. Now that banks have sharpened their pencils and some mortgage brokers have gone to an online discount high volume model (buying down clients’ rates by reducing their commissions), many mortgage brokers are moaning that it’s not all about the rates. Aside from onerous IRD formulae which most of the banks have but many other mortgage funders don’t, and whether a mortgage is portable/assumable, it should be all about the rate.

No sympathetic party in Erin’s case though. Signing a ten year mortgage (for “peace of mind” no doubt) and then wanting out in two? Shoulda made hubby keep paying his half until the five year mark. And CIBC’s IRD clause will undoubtedly be vague and obtuse, meaning it’ll get interpreted in Erin’s favour. We may end up seeing different suits for various banks in various provinces. A win for the lawyers!

#13 Catalyst on 07.07.14 at 7:10 pm

People don’t appear to take any obligation or contract seriously and want protection when they brake it. They have no problems signing the dotted line except when it doesn’t suit them anymore.

I’m not in favour of predatory lenders (how can visa still charge 19.99% when interest rates are 1%?) however there should be fees for breaking a contract.

Please no more jaws photos, I had just started sleeping well again after 20 years of seeing the movie.

#14 garthknowsbest on 07.07.14 at 7:10 pm

dumbass

ESL students are in the majority at more than 60 schools across Metro Vancouver, according to data from B.C.’s Ministry of Education.http://www.vancouversun.com/health/students+majority+more+than+schools+Metro+Vancouver/10005768/story.html

#15 Diane on 07.07.14 at 7:16 pm

I wonder if she used a mortgage broker. A good one will flag things like excessive prepayment penalties. But if she just went straight to the bank for a mortgage, then I can see how that would be glossed over by the bank’s mortgage flogger.

#16 triplenet on 07.07.14 at 7:17 pm

Like yesterday, all contracts of purchase and sale (real estate) must/should have a condition precedent (first clause) that states the Buyers solicitor’s approval is required before the contract becomes unconditional.
This is a prerequisite!!
A contract should never be written “unconditional”
A deposit is not a legal requirement – but it is a prudent requirement.

#17 VICTORIA TEA PARTY on 07.07.14 at 7:18 pm

WHAT A LIGHT-WEIGHT WHINER…

is this “plaintiff” in her as yet unresolved case.

She is most definitely entitled, by law, to have her day in court and I wish her good luck as do zillions of other mortgage-holders across this great land who believe a favourable outcome for her will be just a free ride FOR THEM in happy-house-owning-for-free-land.

Am I totally daft or are people who manage to obtain mortgages, either through successful fogging of mirrors or putting “down” some actual money not aware that in life: “good things take time,” that restrained behaviour is not all that bad?

I guess not.

I guess that if a mortgage contract wears a bit thin on the old psyche, because of marriage breakdown or another house comes along that looks even sexier (I just must HAVE this!!), then it’s OK to toast the lender, move on to the next debt-trip and like, dude, whatevrrrr!

In the event that the court decides for the plaintiff, because of sloppy rules-making, those will be then tightened and good luck to the financial-marginals everywhere still seeking their 400 SF sky-boxes. You will be so DONE, renting forever!

In the end I suspect Erin will not get what she wants but what she, under the laws of this land, she will jolly well deserve (including having trouble finding another mortgage lender!).

But, if the judgment does not play her way will she trudge to a higher court, maybe ultimately to the SCOC? Or to picket lines around Parliament Hill, or to a darkened Starbucks somewhere over the frigging rainbow, where some California-mind doctor will soothe her fevered brow?

This should be fun, Erin. Just another trip to God knows where, eh?

#18 Jeff in Leaside on 07.07.14 at 7:19 pm

I realize that Sherrys’ story is your usual cautionary tale to illustrate a point. But I’m curious about two points:

1) “husband went off to buy another house”, was this house and mortgage soley in Sherrys’ name, and so she eats the penalties?

2) why isn’t she suing the ex to eat some of this heartache?

#19 james on 07.07.14 at 7:55 pm

While shopping for mortgages in the US, I could not help but notice that not a single lender had prepayment penalties of any sort. Perhaps this was a change made by regulators, but it is nice to know that there are no penalties for throwing extra money in or refinancing.

#20 LazyJBird on 07.07.14 at 8:06 pm

She needs to get a better lawyer.

#21 Ralph Cramdown on 07.07.14 at 8:07 pm

#17 VICTORIA TEA PARTY — “But, if the judgment does not play her way will she trudge to a higher court, maybe ultimately to the SCOC? Or to picket lines around Parliament Hill, or to a darkened Starbucks somewhere over the frigging rainbow, where some California-mind doctor will soothe her fevered brow?”

“Seeking class action status” means some lawyers thought this was a good enough case that they agreed to put lots of work into it for free, in exchange for a percentage of the eventual winnings, if any. They’ll be deciding about appeals too.

“Court certified” means a judge also thought it has a decent chance of succeeding.

#22 ILoveCharts on 07.07.14 at 8:07 pm

It’s almost as if there is risk in investing in housing.

#23 Nemesis on 07.07.14 at 8:19 pm

#10cc’sOfExitStrategy. #GoodMorning,Judge! #OrAsRalphWouldSay. #”SettlingIs,Like,SoCongenial”. #WayCheaper,Too.

http://youtu.be/vxT4VgfzKsQ

#24 FormerSaskie on 07.07.14 at 8:28 pm

A friend who lives in the lower mainland and travels on paved roads only has a KIA Soul which is a zippy, light little vehicle that suits her budget and needs. I wouldn’t buy one if you live where there are freezing temperatures or rough roads, Saskatchewan for example.

Erin Sherry would have paid a more than 10% break fee based on her original mortgage amount after two years of payments. The payments would have reduced her principle somewhat and CIBC had the benefit of the interest she had already paid. My FirstLine mortgage sure didn’t spell out a 10% penalty should I want to break the mortgage that I had. This penalty is excessive and I hope her suit is successful. The Harper Government could have enacted laws requiring clarity in mortgages when they decided to jump start this little real estate adventure in 2006.

#25 Paul on 07.07.14 at 8:29 pm

#18 Jeff in Leaside on 07.07.14 at 7:19 pm

I realize that Sherrys’ story is your usual cautionary tale to illustrate a point. But I’m curious about two points:

1) “husband went off to buy another house”, was this house and mortgage soley in Sherrys’ name, and so she eats the penalties?

2) why isn’t she suing the ex to eat some of this heartache?
———————————————————-
Looks like she thought she won and kept the house.

#26 takla on 07.07.14 at 8:38 pm

My guess is any mortgage lender in the Victoria area/hell all Vancouver Island must be shakeing in their boots,as well as all those holding residential morgages as prices just keep resetting lower.
This along with the Okanogan are ground zero at this time for for price deflation in B.C.
Cnn breaking new flash a few min. ago Israeli\palistinian ‘s exchangeing missles as regional tensions escalate…
here in Canada the house horny are squableing over the colour of marble in their over leveraged declineing realestate as geopolitical tentions are escalating on multiple fronts around the world ,tapering stimulus,riseing interest rates,baked employment numbers as less participate and aren’t counted as their ei runs out,more part time jobs created than full time ,stagflation,ect ect ,does anyone else feel we are sitting on an economic powder keg?
This blog will have no shortage of material in the comeing weeks/months/years.

#27 Mark on 07.07.14 at 8:43 pm

“It’s pretty obvious you have absolutely no clue what you’re talking about and look like a complete idiot. Canadian banks have $7.1 trillion (T) in notional derivative interest rate swaps as of Q1. Now go read how banks fund and hedge mortgages with rate swaps and stop talking out of your ass.”

Interest rate swaps are not used to fund mortgages. Deposits, shareholder equity, and other borrowings are. It is fairly obvious that you do not know what you are talking about.

And notional exposure is not the same thing as net exposure. So please stop throwing big numbers around.

#28 Piccaso on 07.07.14 at 8:49 pm

Divorce: The not-so-secret reality of the Calgary Stampede

Party atmosphere, flowing alcohol can lead to end of relationships

http://www.calgaryherald.com/sports/Divorce+secret+reality+Calgary+Stampede/10005530/story.html

Ha Ha… let’s party !!!

#29 Mark on 07.07.14 at 8:50 pm

If the court comes down on the banks for the calculations of IRD, the banks will simply raise their rates to compensate for such. Which means more expensive mortgage financing for everyone, including those who meet all of their obligations under mortgage contracts and who do not require deference to the various clauses for liquidated damages.

Remember, lending is a consensual action of the lender. So if you beat up the lenders in the courts, or worse, in the legislative process (ie: by limiting CMHC insurance payouts on existing subprime mortgage insurance, for example) they can simply exercise their right not to lend.

As we saw in the United States, when banks exercise their right not to lend, the drop in valuations can be extreme. Even more subtle forms of such, such as refusing to lend on favourable terms against the promises of certain guarantors (ie: CMHC) can be devastating to borrowers’ finances if they are relying on low cost credit.

As consumer credit spreads are at historically abnormally low levels, a disfavourable ruling towards CIBC on IRD’s may very well be an accelerant towards a return to more historically normal spreads and beyond. The lady suing CIBC and her class action-cohorts may get a few bucks for their trouble, less legal fees (often 30% or higher of a class action settlement!), but the banks will get the last laugh.

#30 Ronh on 07.07.14 at 8:51 pm

Off topic but a good read for condo owners. Something
else to go wrong.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/what-does-the-future-hold-for-condos-and-how-long-will-they-last/article19295959/

#31 Andrew Woburn on 07.07.14 at 8:54 pm

#13 Catalyst on 07.07.14 at 7:10 pm
(how can visa still charge 19.99% when interest rates are 1%?)
—————————————–

It’s just good business. They give a card to anyone with a pulse. A percentage of borrowers don’t repay their debts. The rest of the borrowers pay crazy rates to cover the losses on the deadbeats. So burn your credit cards. Buy shares in Visa. Simple.

#32 the jaguar on 07.07.14 at 8:59 pm

Mortgages are funded by deposits made by customers of the banks. The banks are obligated to pay the interest due to those customers at the end of their contractural agreement. The banks don’t get to walk from those obligations. Banks are like any other business with an obligation to make money for their shareholders. That’s 95% of the people on this blog. Why are people so engaged in the ‘blame game’ instead of taking personal responsibility for their actions? They had a ‘real estate professional’ who was paid a significant commission to advise them and legal representation from their lawyer. The terms of breaking the mortgage contract are well laid out in the contract. Speaking of reading the fine print, perhaps some who post on this great blog of Garths could be reminded to read his “Helpful Reminders” section at the end of the comments, especially the part about submitting only once.
HELPFUL REMINDERS FROM YOUR FORUM HOST, GARTH TURNER:
• All comments are held a short time for moderation before being published. Please submit only once!

#33 juno on 07.07.14 at 9:02 pm

And you know what she deserves what she gets.

The banks are preditory lenders and seize the situation. Now how do you like your new landlords suckers!!!

Just think of how stupid alot of people are. A house is the only investment that requires you to borrow money.

Not only that, its use to be a commitment of 10 to 25 years to pay it off. Now adays, Its infinite. Because some are paying interest only. And yet so many are jumping in blindly without doing their homework.

But the banks should also take a hit on this, because alot of these people should of never been given mortgages.

#34 Smoking Man on 07.07.14 at 9:02 pm

Just had a green piece activist knock on my door for donations, the bastard not know he’s in the heart of Ford Nation.

I went along, would you like a coffee, beer. Oh no he says, he only drinks organic tea.

I load my bank app, and purposely let him take a peek at my checking account, like it was an accident on my part.

I said well you’re shit out of luck on tea. . For the next 1/2
hour he goes guns a blazing, every emotional argument that these tree huggers have up there Sleave.

The bastard is having fantacies about my checking account but is afraid to close… Son one could sure give him a lesson.

Well finally gets the courage to ask…….

That’s when I let him have it… I destroyed even argument he had on man made global warming..

People really get upset when you trash their beliefs.

I let him know,If he could show me how I could get of that gravel train, I would give him a donation, and a cut.

He told me to go F myself….

I have problems making friends..

#35 KWkid on 07.07.14 at 9:05 pm

As they say the devil is in the details. My grandpa used to say only the government and the banks have a license to steal. Nothing personal Garth.

#36 Rick on 07.07.14 at 9:07 pm

Lotsa feedback about Kias here, huh chum?

No, really. I loved my Rondo. Jeez man. It was almost as nice as my Hyundai back in ’89.

Signed:
Another Vulture, watching the central BC housing market (read: retirement dwellings) slowly decline every single day…

#37 Okanagan Mortgage on 07.07.14 at 9:14 pm

Hey Garth

Wife and I are almost on the same page…. Think we should downsize our house and our mortgage when the kiddo is done the elementary school in our neighbourhood. Kiddo done in 2 years in elementary school before mid-school, which means out of our neighbourhood. Mortgage is up for renewal in 9 months and we owe about a third of its present value ? Any advice? Short term 2 year mortgage ?
Thanks
Keep up the Great Work!

#38 liquidincalgary on 07.07.14 at 9:15 pm

@ #8 Babblemaster

you said :

Are you sure? Rates may go even lower.

— this would have made Erin’s metaphorical vise even tighter. her penalty was based on the DIFFERENCE in rates between when she got the mortgage, and when she wanted out of it; ergo, the larger the rate differential, the larger the penalty

#39 -=jwk=- on 07.07.14 at 9:27 pm

Hope she wins. A contract that is 100% in favor of one party (the bank) isn’t a fair contract, period.

Those whining that she pay what she ‘owes’ need to realize she owes whatever imaginary number the bank makes up. She has no recourse, no rights, and no way to challenge the banks interpretation of the contract.

The whiners sound like those in the USA, when the collapse first started who insisted that people should ‘pay what the signed for’…only later was it revealed that he whole game was rigged, and everyone (buyers, investors, co signers,local, state, federal, governments too!) was lied to by the banks.

You think our banks are angels? You think their contract, that they write and force you to sign to purchase a home, is perfectly fair and balanced?

Canada is the only country I know of (and I know plenty) where you can’t pay the principal back without penalty. It’s barbaric and baseless. No where else in the world folks, no excuses for doing it here.

#40 Freedom First on 07.07.14 at 9:47 pm

Financial mistakes are very costly. Act accordingly. Garth is trying to help you. Problem is that there is so many financially unaware people that can’t see good financial advice for what it is, even when it is served up to them on a silver platter, and at $0 charge. Consequences for financial illiteracy, plus being cheap and not hiring good financial advocates for yourself is very expensive. The photo today is very fitting for today’s post. The Sharks are writing up the contracts, while the lemmings are signing them. There will be blood. Look worldwide. Blood has already been spilled in many countries. No country is safe from Sharks, as the lemmings are abundant. Already proven true.

#41 Ralph Cramdown on 07.07.14 at 9:48 pm

#29 Mark — “Remember, lending is a consensual action of the lender. […] As consumer credit spreads are at historically abnormally low levels, a disfavourable ruling towards CIBC on IRD’s may very well be an accelerant towards a return to more historically normal spreads and beyond. […] the banks will get the last laugh.”

So, in summary, the banks are currently lending at lower than normal spreads (i.e. lower than normal compensation for the credit risk they’re taking) in the face of high consumer debt ratios and high collateral prices, but they’re going to get the last laugh?

After seeing a few credit cycles, I’ve come to the conclusion that banks aren’t really consensual lenders. The only acceptable reason for them to pare back lending is to rebuild a damaged balance sheet. As long as the balance sheet is solid, they’re pretty much obligated to lend to the best customers they can find… even if those customers aren’t that good. At the end of the cycle, they’re making poor loans at low margins to iffy risks against inflated collateral — and telling themselves that it’s all good. Half a cycle later, they wouldn’t dream of lending fewer of those same dollars to a better risk against the same collateral valued at 1/3 less.

“As long as the music is playing, you’ve got to get up and dance. We’re still dancing.” — Citigroup CEO Chuck Prince, July 2007

“A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him.” — John Maynard Keynes, 1931

#42 Dr. Talc on 07.07.14 at 10:00 pm

Come on people, who actually reads those big contracts at the bank? The ‘adviser’ give you a summary, and you sign, you don’t even read it later, you throw it in a drawer, it was written by a bank so you know it must be a mine field. And when you want out? You’re walking through a mine field….backwards

#43 Mr. Frugal on 07.07.14 at 10:03 pm

I hate to point out the obvious but divorce is one of the leading causes of financial problems. What the bankers don’t take the lawyers will. Anyway you look at it, your spouse is your #1 business partner. Be careful who you setup shop with!

#44 Andrew Woburn on 07.07.14 at 10:08 pm

How can anyone possibly believe an unregulated, rogue, volatile medium of exchange [Bitcoin] will morph into a currency? — Garth
———————————————–

Bitcoin may not be as goofy as it now looks to the general public. I claim no expertise but from what I am reading, the “block chain” concept underlying Bitcoin has many potential uses. If I understand it, the block chain is a specialized data base which prevents a bitcoin from being spent more than once by the same person and prevents the same bitcoin from being held by by more than one person at a time. As far as anyone knows, it is effectively impossible to counterfeit bitcoins.

Apparently the whole point of the block chain is that ownership of any bitcoin can be tracked at any point in time. The notion that they would be the currency of choice for drug barons and tax evaders is therefore fanciful. However this means the technology could be extended to land and vehicle registries for example. The lack of effective land registry systems in third world countries is a major impediment to economic development. It is not hard to imagine them embracing a block chain model in the same way they used cellphone systems to leapfrog the cost of setting up land lines.

While most of us in the developed world are not yet likely to rush out and pay for our groceries in bitcoins, there are many places in the world where a semi-reliable crypto-currency would be at least as attractive as the official currency. If somebody like Google figured out how to run it and make money off it, it could emerge quickly. Cellphone banking is developing rapidly in Asian and African countries so they are obviously open to experiment.

#45 Aggregator on 07.07.14 at 10:17 pm

Can anyone guess what's wrong with these two charts regarding Canadian banks' balance sheets? Charts

#46 The Man From Nantucket on 07.07.14 at 10:17 pm

DELETED

#47 stop lying on 07.07.14 at 10:21 pm

A 10 year rate at 6.2%, damn. But if mortgages are really funded by bonds the bank purchases why should people be able to get out of them without paying penalties? Why should the bank be stuck holding the bag, because we all know they won’t, they’ll just stick it to the rest of us instead. I hope she loses, again.

#48 young & foolish on 07.07.14 at 10:24 pm

“On average, borrowers move, renegotiate or otherwise abrogate their home loan after three or four years.”

Wow … what’s the point of being an “owner” then … except if you are expecting prices to go up (speculating).

#49 Mark on 07.07.14 at 10:25 pm

” Hope she wins. A contract that is 100% in favor of one party (the bank) isn’t a fair contract, period.”

The bank offered up the consideration of advancing the money on the terms proposed. So how is that 100% in favour of “the bank”?

“Canada is the only country I know of (and I know plenty) where you can’t pay the principal back without penalty. It’s barbaric and baseless. No where else in the world folks, no excuses for doing it here.”

Not true. Nearly all countries have a legal doctrine of liquidated damages if one fails to perform on a financial contract for borrowing. And borrowing in the hands of the borrower, is an investment in the hands of the lender. If legislation is used to alter the rights of each, then the willingness of lenders to lend may be significantly reduced.

“You think our banks are angels? You think their contract, that they write and force you to sign to purchase a home, is perfectly fair and balanced?”

Nobody forces anyone to sign a bank loan contract to buy a house. You can buy a house for cash if you want. But if you want credit, you have to play by the rules of the creditors.

#50 Mark on 07.07.14 at 10:34 pm

“So, in summary, the banks are currently lending at lower than normal spreads (i.e. lower than normal compensation for the credit risk they’re taking) in the face of high consumer debt ratios and high collateral prices, but they’re going to get the last laugh?”

Yes, as the spreads are going to blow out much wider at some not-so-distant point in the future. And since nearly all Canadian mortgage loans are ARM’s, lenders will enjoy the benefit of the entirety of the re-adjustment in the form of incremental profit.

At the moment, bank profitability is being suppressed significantly through the abnormally low spreads. Canadian banks have sacrificed short-term profit, for long-term sustainability.

Ordinarily widening spreads would lead to increased defaults, but this is where the CMHC subprime mortgage insurance comes in — protecting the banks against the entirety of the default risk on these loans, as any defaults are redeemed, in full, through the exercise of CMHC subprime mortgage insurance policies.

Meanwhile, throughout such housing and debt deflation, the BoC will be suppressing policy rates as much as possible. So not only will the banks’ funding costs remain low, but they will be enjoying incremental spread revenue. It all adds up to a significant amount of earnings growth for the Canadian banks, even in the face of housing stagnation. Similar setup occurred in the 1990s, BTW, and bank earnings and stocks quadrupled through the decade. Only political risk, of Finance Minister Paul Martin’s prohibition of bank mergers, and a raging tech bubble, kept bank stock down in the 1998-2000 time period.

#51 Smoking Man on 07.07.14 at 10:35 pm

#37 Okanagan Mortgage on 07.07.14 at 9:14 pm

Hey Garth

Wife and I are almost on the same page…. Think we should downsize our house and our mortgage when the kiddo is done the elementary school in our neighbourhood. Kiddo done in 2 years in elementary school before mid-school, which means out of our neighbourhood. Mortgage is up for renewal in 9 months and we owe about a third of its present value ? Any advice? Short term 2 year mortgage ?
Thanks
Keep up the Great Work!

………..
Sure ask the teacher, the authority figure..

No chance you will even contemplate asking the disruptive child who gets his jollies flinging elastic bands at the teachers face.

The schooled is all im saying.

Grow some balls and go with your gut.

#52 Mark on 07.07.14 at 10:42 pm

“At the end of the cycle, they’re making poor loans at low margins to iffy risks against inflated collateral “

At the end of the cycle, in Canada, they made the highest quality loans possible, because they CMHC-subprime mortgage insured pretty much everything. CMHC subprime insured loans are effectively the equivalent of sovereign GoC bonds, the highest quality loans possible in the contemporary financial system.

Canadian bankers are smart, they know when to walk away from an overheated market, and the evidence exists in spades that they did so back in 2008. While their US and foreign counterparts were destroyed.

#53 Ralph Cramdown on 07.07.14 at 11:01 pm

#39 -=jwk=- — “Canada is the only country I know of (and I know plenty) where you can’t pay the principal back without penalty.”

It isn’t a free option elsewhere. If you want to borrow money with the option to pay it back early, lenders will demand more than if there’s no option.

That said, Canadian banks’ prepayment penalties are beyond compensation for reinvestment risk and more about screwing the unwary.

#54 devore on 07.07.14 at 11:01 pm

#44 Andrew Woburn

If I understand it, the block chain is a specialized data base which prevents a bitcoin from being spent more than once by the same person and prevents the same bitcoin from being held by by more than one person at a time.

It is not only theoretically possible, but in practice as well. All you need to do is own more than 50% of the hash mining rate. Impossible? Not at all, in fact currently an organization called GHash controls 51%, which means they can allow an arbitrary wallet to double spend their bitcoins, invalidate any arbitrary transaction on the network, or prevent new Bitcoins from entering the network.

This situation has also happened a couple of times in Bitcoin’s earlier infancy.

GHash promise not to do any such thing. This requirement for trust is quite ironic.

However, trust is entirely unnecessary and beside the point. The current Bitcoin network can never be trusted in the future, because its state cannot be audited. It cannot be audited, because the majority hashrate owner can make it look like anything they like, and no one can prove different.

Anyone moving any serious money through Bitcoin today is flat out gambling.

I don’t doubt that some form of cryptocurrency will be a serious contender in the future, but we can say with 100% certainty it will not be Bitcoin. Perhaps one of the 100s of other cryptocoins? Nah, they’re smaller and even more vulnerable.

#55 OttawaMike on 07.07.14 at 11:03 pm

45 Aggregator on 07.07.14 at 10:17 pm
Can anyone guess what’s wrong..
———————————————-

Bank complacency. Big warning signal in those purple lines

#56 Aggregator on 07.07.14 at 11:11 pm

CMHC Insurance And Covered Bonds—What Will Happen When The Training Wheels Come Off?

In Torys' Capital Markets 2012 Mid-Year Report, our article "CMHC Insurance and Covered Bonds—What Will Happen When the Training Wheels Come Off?"1 was written in response to actions taken by the federal government to significantly reduce its direct exposure to the Canadian residential mortgage market. During the financial crisis, Canadian banks and other mortgage lenders relied heavily on securitization programs sponsored by Canada Mortgage and Housing Corporation (CMHC) to provide liquidity during challenging times. In the two years since that article was published, the training wheels have not yet been removed, although the government has tested a number of tools it can use to remove them if and when it decides to do that...

Creating an Uninsured Canadian RMBS Market

We believe that in order to permit the federal government to further reduce its exposure to the Canadian mortgage market, it would like to see a private RMBS market develop before it drastically reduces the ability of the Canadian mortgage market to rely on its NHA MBS guarantee. Increasing the limit on covered bonds would obviate the need for such a market, but in the absence of an increase in this limit, the withdrawal of so much liquidity in the mortgage market could have a material adverse impact on the Canadian housing market. We believe that a robust uninsured RMBS market in Canada can only evolve once several developments have occurred. The balance of this article discusses these needed developments.

In other words, if the federal government wishes to stop socializing our entire housing market and stop playing Mr. Market Maker (and Mr. Buying Votes) with insurance and guaranteed schemes at taxpayers expense, they'll have to allow the private sector to start pricing risky mortgages, and that would mean more data transparency amongst government, lenders and organized real estate in order to price deadbeats who want to speculate in housing.

It reads like a return to free market pricing. And that means adding risk and allowing accidents to happen. So perhaps it's better to keep the training wheels on because Canada is not ready.

#57 JSS on 07.07.14 at 11:21 pm

Is it okay if I send this website to Kia Canada’s attention? Maybe their legal department can help out.

Hee hee

#58 Go Sherry, Go! on 07.07.14 at 11:23 pm

IRD penalties should be outlawed; I’ve been saying this for years. Just another way banks are robbing from the poor to give to the rich. Mortgage break penalties should be capped at three months’ interest. Got stung with one of these myself a few years back, and because of it, I will never hold a closed mortgage again.

#59 Aggregator on 07.07.14 at 11:35 pm

#55 OttawaMike – Big warning signal in those purple lines

This purple line is an even bigger warning. Chart

With Genworth set to report new record premiums written and insurance-in-force near its government-imposed limit, Oliver will have no choice but to come up with some other scheme to keep banks lending.

It's like 2008 in slow motion, but this time you'll get to see every bailout and/or intervention scheme in plain sight.

#60 D.D. Corkum on 07.07.14 at 11:40 pm

#8 Babblemaster on 07.07.14 at 6:50 pm

“…rates might go even lower.”

—-

I certainly hope not! Interest rates are already low enough to almost consider the money “free.”

#61 Nemesis on 07.07.14 at 11:42 pm

#TheSiliconeDivorceStampede. #OriginalPictorialBonusZen. #JustForPicasso.

http://tinyurl.com/kg3b3q3

#BonusCaptionArt.

…”For some inexplicable reason she couldnt fathom, WestBank esthetician BillyJoBob, while stuck in an annoying traffic jam on Highway 97 (occasioned by yet another landslide)… suddenly thought… that if only she had larger breasts… she could finally dispense with her lackluster DayJob and disappointing StarterHusband.

“At last!”… she mused, while checking her mascara in the rear view mirror, adjusting her PushUps and smiling OhSo quietly to herself, “I can see it all now… so very clearly… that it’s practically excruciating. Oh, the simplicity!”

Just then… BillyJoBob suddenly realized that she owed an enormous debt of posthumous gratitude to Jane Austen.”…

#62 Mark on 07.07.14 at 11:51 pm

“It reads like a return to free market pricing. And that means adding risk and allowing accidents to happen. So perhaps it’s better to keep the training wheels on because Canada is not ready.”

Lending and borrowing transactions should be between consenting adults, without government involvement. So what’s the big deal here?

The travesty is that the government and the CMHC have encumbered the Crown to the tune of $900B of potential contingent liabilities relating to the guarantee of subprime mortgages. And only have a $20B of capital raised from such efforts to show for it.

If you look at the balance sheets of the Big-5 banks, they mostly stopped taking on non-CMHC-insured mortgages in 2008 and haven’t resumed since. The government’s role, and interference in the housing finance market is now so pervasive that even minor amounts of tightening, such as what we saw in Budget 2013, has had a significant impact on pricing. And the noose continues to tighten as prices continue to decline in the major cities.

#63 Andrew Woburn on 07.07.14 at 11:54 pm

#45 Aggregator on 07.07.14 at 10:17 pm
Can anyone guess what’s wrong with these two charts regarding Canadian banks’ balance sheets?
————————————————-

Hey, its only $8 billion dollars. Just because they’re called “impaired assets” it’s not like they’re imaginary or anything. I mean being impaired is not a big deal. Just ask Rob Ford.

Sure a few folks are late on their payments but there’s no point in writing down the book value of their loans yet. I’m sure they will find some loose change in their couch cushions and settle up. Their cheques are probably in the mail right now.

I mean, really, if this was such a big deal, the auditors wouldn’t have signed off on a clean audit opinion. Credit ratings agencies would be upset. Financial regulators would ask questions. So obviously, there’s nothing to see here.

#64 Shawn on 07.08.14 at 12:03 am

Why Banks Charge Interest Differential

Mark, Jaguar and Stop Lying have covered the reasons why.

Banks can’t offer five year deposits at a fixed rate and then lend at an open rate. If you want open take open. If you want fixed then take fixed and live with the deal including the break penalty.

In the U.S. 30 year mortgages can be broken with a small penalty. This is because it is the law and because those mortgages are sold to investors willing to accept the risk of early pre-payment of the mortgage.

To get low break fees Canada needs a more open securitization market. Yes Virginia, securitization is not inherently evil.

#65 45north on 07.08.14 at 12:11 am

Mark : “Canada is the only country I know of (and I know plenty) where you can’t pay the principal back without penalty. It’s barbaric and baseless. No where else in the world folks, no excuses for doing it here.”

Not true. Nearly all countries have a legal doctrine of liquidated damages if one fails to perform on a financial contract for borrowing. And borrowing in the hands of the borrower, is an investment in the hands of the lender. If legislation is used to alter the rights of each, then the willingness of lenders to lend may be significantly reduced.

my feeling too

a BC court certified a class action against CIBC over the way it calculated mortgage penalties between 2005 and 2009. That means the suit that Sherry started can move ahead, and be joined by others who also have a beef with the process.

which means other people can contribute to her legal expenses but it’s a long way from being settled.

#66 Shawn on 07.08.14 at 12:22 am

How to Get a Bank to Bend its Rules

Ask nicely and ask at the highest levels

Circa 2008 a friend in financial need faced an IRD of $13k from Home Capital.

I called a Vice President there and explained a bit about her situation. I noted respectfully that bank policy had somewhat forced her to sign for three years even though she was trying sell. Her mortgage had reached the end of a term and as long as she did not sign a new fixed term (she left it open) they were charging an exorbitant rate. (Strange but true)

I let the VP know that I found their system somewhat unfair but I was polite and acknowledged they had the contractual right to do it.

He pretty quickly offered to knock the penalty down to $7 k, and as I was about to hang up after thanking him I asked if he could possibly go any lower. He said okay $6k. I thanked him some more. He made a note on the file and the $6k was the penalty. Better than $13 k and all it took was a polite phone call, I made my point but did it respectfully and also, most importantly, I went to an executive.

Also about 25 years ago I got my own mortgage opened up (just to sign for a new lower rate) by writing to the top executive of the mortgage business at Bank of Montreal. It was a technicality, I owned a rental property with my brother and he had not signed the renewal at a rate which later seemed high. Branch staff were not going to let us break on that basis but the executive did. I am not entirely pound of weaseling out of that on a technicality but I was young and a few grand meant a LOT to me at the time.

If in doubt, with any company write to the President first. Not email but paper letter to president may get attention. Or call the executive offices. Forget the call center. (Never take a no from a person with no authority to say yes)

#67 Shawn on 07.08.14 at 12:40 am

BIT COIN should be BIT Dollar

I understand bit coin has interesting distributed technology for a non-centralized exchange of value.

It might be better if they used that technology to allow transfer of dollars. In other words peg the COINs to the dollar. There are possibilities there.

As is BIT Coin mixes a payment system with a speculation.

We could use competition in the payments field. Transferring money electronically should cost maybe 0.01% or 0.10%. VISA is charging merchants more like 2.5% and mixing in credit for the customer.

Debit cards (with FAR lower merchant fees) usually can’t be used online or to hold a Hotel room. Much room for competition exists.

BIT COIN as it is now will not be that competition because it is too off the wall and refuses to measure in coin of the realm.

#68 Turtle on 07.08.14 at 1:01 am

To all KIA people: How tall are you? Have you ever been inside Taurus 2013-2014, or Charger (those are the ones that police drives)? Do you see the difference? Any size man up to 6 foot 6 can comfortably relax on a back seat of the car even with the hands behind his back.

Try that in KIA…

#69 Frank Blood on 07.08.14 at 1:14 am

The Kia is no longer an econobox…the new K900 (sounds like a Russian submarine) has a V8 and tops out at $71000.

#70 Son of Ponzi on 07.08.14 at 1:16 am

#41 Ralph

“?A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him.” — John Maynard Keynes, 1931
——————-
It’s amazing that policy makers still quote and follow this fool’s meanderings.

#71 Londoner on 07.08.14 at 4:19 am

There’s a little more to this story if you read the details of the judgement. This isn’t the first 10yr mortgage that Erin and her husband took from Firstline and nor is this the first IRD penalty that the couple have had to pay to break their mortgage. They had a 10yr mortgage (from Firstline) on a Prince George property which they broke and paid an IRD penalty on in 2008. They then took another 10yr fixed mortgage (again from Fristline) for their Victoria property. In fact, Ms Sherry has another mortgage of $500k on a new property, of which she used part of the mortgage proceeds to make a prepayment on her Victoria property mortgage to reduce the IRD penalty. And get this, the interest on the new $500k mortgage is prime minus 0.65%.

Any person suggesting that she was taken advantage of by the bank is naive or missing the details. Given her history, I would say she’s quite familiar with IRD penalties and, instead, her motive is to take advantage of the low rate environment. If not, then she could have easily ported her mortgage to the new property instead of taking a new variable rate mortgage (for a higher amount!) from another lender. She has, no doubt, already saved the IRD penalty amount by the way of lower interest payments, but is not happy with just that and now wants claw back some of the fees she paid in the past.

#72 Skip Breakfast on 07.08.14 at 6:00 am

Class action suit? Count us in! We broke our mortgage in 2010 when we sold our Toronto house. The IRD penalty was nearly 10,000 and we flipped too. We were shocked and furious and swore we would never take another l

#73 Crossbordershopper on 07.08.14 at 6:41 am

why do people divorce? get yourself an old fashioned girl and you wont have these problems.
number 2, dont get a mortgage, pay cash, you wont have interest or penalties or anything to worry about.
number 3, buy bank stocks, make money off all the little people, who go to work and get screwed by the banks, insurance companies, their employers etc every day.
People make such poor decisions on who they hook up with, and buy everything the tv or their stupid friends tell them to. Be independent and chicken breasts are $1.29 lb at topps this week for all you cross border shoppers.

#74 Ralph Cramdown on 07.08.14 at 7:20 am

#71 Londoner — “Any person suggesting that she was taken advantage of by the bank is naive or missing the details. Given her history, I would say she’s quite familiar with IRD penalties and, instead, her motive is to take advantage of the low rate environment.”

The bank is a sophisticated party with smart lawyers who wrote the mortgage contract, and it presents this contract to small customers as a take it or leave it proposition, with no changes allowed.

If the part of the contract that details the IRD calculation is vague or open to multiple interpretations, then a court will, if asked, interpret the clause in the way more favourable to the party that didn’t write the contract. Contra Preferendum

“Your Honour, she’s been a customer of ours before, and she didn’t complain when we screwed her last time” isn’t a defense that the Court is likely to favour.

#75 Ralph Cramdown on 07.08.14 at 7:27 am

Now Nemesis is going to correct my latin. I just know it.

https://www.youtube.com/watch?v=IIAdHEwiAy8

#76 2CntsCdn on 07.08.14 at 7:31 am

I read somewhere that within the next two to three years Kia actually expects to have it’s cars able to last as long as it’s financing deals : ) (making your last year or two’s payments while your car is in the wreckers is no fun)

re: mortgages and escape penalties … I’d love to see how much money each bank makes on mortgage fee’s, insurance and penalties. I guarantee you it’s a significant portion of their mortgage lending profit goals.

But seriously …. Hyundai and Kia have made huge strides in the car industry and both make very decent cars now and are nibbling away at the car industry market share every day. And realizing the mentality of the avg, consumer their 7 and 8 year car loan was a great sales tool. But a short sighted and risky sales tool. Lets see if it bites them on the ass like it did Ford and Chrysler 10 or 12 years ago when the people walk on their loans or leases and the cars aren’t worth what’s left owing on them.

#77 Smithy on 07.08.14 at 7:42 am

After taking a 10yr fixed mortgage in 2005, breaking it and paying an IRD penalty, these 2 geniuses decided to do it all again in 2008. And using the same lender no less. So the second time around they we’re surprised about the penalty? Talk about making bad financial decisions.

#78 everyone is a guru these days on 07.08.14 at 7:48 am

Mark..Smoking Man and a bunch of other so called no it all.
Life is a continuos learning experience and many wise people have grown throughout their lifetime by having a open mind and understand that just by thinking you know it all you have severelly limited your own future growth.
I am in fitness and wife is 2nd degree black belt.
I have been noticing a lot of younger people are very dellusional.
I meet people daily who speak like half the people on this blog who beleieve in their mind that for some reason they are wiser,smarter .
I guess is it easy to be a star in your own mind especially when you only speak to people who share your views and surf web sites to find articles(not hard)that confirm your beliefs.
This is one reason i like competitive sports and believe most young people now turn to weight lifting instead of competative sports because they can keep the illusion going in ther mind.
Smoking man …Mark….and the rest of you keep this in mind…
…………Your Not AS Smart AS You Think………

#79 pbrasseur on 07.08.14 at 8:00 am

@Alan #10

Why is that you bash KIA’s so much? They do make a good product and back it up with a great warranty.

Garth rides a Harley, that should suffice as an explanantion ;)

But you’re right about Kia, nice product, good value, good warranty and service at a reasonable price, what’s not to like?

#80 tom harrington on 07.08.14 at 8:18 am

Seriously,

Invest in your future

Proximity :
Golf, Park – green area, Bicycle path, Elementary school, Alpine skiing, High school, Cross-country skiing

http://passerelle.centris.ca/Redirect2.aspx?CodeDest=VIACAPITALE&NoMls=OU19440543&Source=BETA.REALTOR.CA&Langue=E

#81 Holy Crap Wheres The Tylenol on 07.08.14 at 8:29 am

34 Smoking Man on 07.07.14 at 9:02 pm
Just had a green piece activist knock on my door for donations, the bastard not know he’s in the heart of Ford Nation.
I went along, would you like a coffee, beer. Oh no he says, he only drinks organic tea.
I load my bank app, and purposely let him take a peek at my checking account, like it was an accident on my part.
I said well you’re shit out of luck on tea. . For the next 1/2 hour he goes guns a blazing, every emotional argument that these tree huggers have up there Sleave.
The bastard is having fantacies about my checking account but is afraid to close… Son one could sure give him a lesson.
Well finally gets the courage to ask…….
That’s when I let him have it… I destroyed even argument he had on man made global warming..
People really get upset when you trash their beliefs.
I let him know,If he could show me how I could get of that gravel train, I would give him a donation, and a cut.
He told me to go F myself….
I have problems making friends..

_____________________________________________

Don’t blame you at all for going ape on the tree huggers. I don’t get it Toronto is a huge city full of tree huggers. I live out here in what Toronto people call the “boonies” with lots of green trees and beautiful parks and we only rarely run into a bonafide “Tree Hugger”. Huh I thought Oakville would be full of them. Oh well its just another business really. They are selling their stuff. You have to give them credit though for trying to sell their crap, at least they believe in it! Oh ya by the way after he told you to go screw yourself did you have a cigarette?

#82 Holy Crap Wheres The Tylenol on 07.08.14 at 8:38 am

Kia, huh back in the sixties when I was in the Military this stood for Killed In Action. Perhaps a metaphor? A precursor to what you are driving, what could be worse than driving a Kia? A Lada, Skoda, Yaris. Again back in the day this would equate to driving a Vauxhall Viva. Crap pure cheap unadulterated rusty crap.

#83 Londoner on 07.08.14 at 8:39 am

#74 Ralph Cramdown

That’s not the point. She’s portrayed here as an innocent consumer that, after suffering from a marriage breakdown, was slapped with an IRD penalty by the bank for trying to sell the marital home. On top of this it says that she was surprised by the penalty amount. But given the fact that she had previously taken a 10yr fixed mortgage from the same lender and broken that mortgage, how can this be a surprise at all? If she didn’t like the terms of the mortgage she could have gone variable or not taken out a mortgage at all. The judgement actually says that CIBC (Firstline) has been using the same process to calculate the IRD since their first mortgage. Firstline even offered a concession on the IRD and rate if they ported the mortgage to the new property. But instead, these people chose to pay the penalty and take out a brand new 10yr mortgage at a higher rate. So after being fully made aware of the consequences they did it again anyways.

The fact that she now has a variable mortgage with another lender at a much lower rate says it all. She didn’t want to take the risk of a variable rate so she locked into a 10yr fixed. She bet the wrong way. Once she saw rates going in the other direction she backed out of the deal and now she wants the bank to pay for her mistake.

#84 Holy Crap Wheres The Tylenol on 07.08.14 at 8:42 am

#78 everyone is a guru these days on 07.08.14 at 7:48 am
You sure spell like Smoking Man, or perhaps I should say can not spell.

Yoi ichinichi o

#85 colthepol on 07.08.14 at 8:54 am

Kia’s are guaranteed for 7 years with a mileage limit.
Me’thinks GM Chry.Fd.would be out of business with the same terms

#86 Hoser on 07.08.14 at 8:58 am

>>To all KIA people: How tall are you?

6′ 4″ and I fit in my Rondo just fine.

#87 Shawn on 07.08.14 at 9:05 am

On Government Worker Bashing

I had occasion on the weekend to spend a lot of hours in two different emergency wards regarding a family member’s broken bone injury that needed to be triaged, diagnosed and scheduled for surgery among other steps.

It was, as always, an eye-opening experience to watch that system in action. The patients are mostly polite but some are in an aggravated state, many are elderly, some arrive on stretchers, some have limited English. It’s a crowded scene to say the least.

In my experience the nurses, doctors and other staff were ALL very polite and patient.

Yes, it was frustrating to wait a long time for each step in the process (the unknown wait time is perhaps the worse) but in the end I was highly satisfied with the service and very grateful.

When I look at the action-oriented, highly important, stressful and busy nature of these jobs I feel sort of humbled by what they do in a day compared to what I do. I suspect 90% of us could say the same.

Hopefully THESE are not included in the wide net of government worker bashing.

#88 Chump on a Stump on 07.08.14 at 9:23 am

I wonder if this story is just a bird in the coal mine, and an indication of where we are heading.

Because this story sure smells like 2008.

#89 Rabbit One on 07.08.14 at 9:30 am

If you are an investor and have $600K to allocate into bonds, you won’t put all $600K in 10Y bonds, or 30 days treasury auto-renew.
Because either way, it is a high risk.

I know people who extended their 5Y mortgage in their 3rd year of 5Y fixed, in 2011, @ 4.79% and their belief was they got the best deal till 2016.

So, you never know what contract you are sigining into.

Mortgage is contractual term, just like bonds.
But, big difference is mortgage holder will never make profit on “selling” (porting, breaking, or assuming) mortgage in rising rate environment, but banks always charge you break fees.
(Selling bonds in decreasing rate time, you may make profit, no capital loss)

Someone mentioned about bank mortgage rate margin.
Agree, bank charge high risk borrower a very yhin profit margin, but they go by mortgage volume.
Huge volume.

#90 brainsail on 07.08.14 at 9:45 am

“House hunting? Download these apps first”

http://money.cnn.com/2014/07/08/real_estate/home-buying-tech/index.html?iid=Lead

“From enabling us to virtually walk through an open house to instantly learning about the social scene in a neighborhood we’re thinking about moving to, a new generation of apps and other technologies are taking the real estate shopping experience to the next level.”

#91 NoName on 07.08.14 at 9:51 am

#44 Andrew Woburn on 07.07.14 at 10:08 pm

I am not fan of bitcoin for many reasons, and i am very cinical when it comes to bitcoin, for me bitcoin is just commodity that I can live without it. What attracted a people to bitcoin is just made fact that was created out of thin air. Like house equity. Turn on your desktop and few hours later you have 1bitcoin worth x amount of dollars… Reason why bitcon will not take of its because is to complicated for an average person, people like me don’t understand it and don’t want it, I’ll stick with paypal, where my funds are insufed against from to some degree, and I don’t have to vorry about public keys, private keys, wallet backup, wallet encryption………
Ani if each bitcoin can be tracked how is different that any fiat currency? How difficult would be to find all stolen bitcoins just by updating blochchain. Actually in this day and age “paper” money gives you more privacy than anything electronic. Think NSA.
And if some things seems reliable now, doesn’t mean that actually is. Just think about Thalidomide over the counter med recomended to pregnant woman based on manufacturer SAFETY claims…
WHAT DO YOU THINK WHO STANDS BEHIND BITCOIN cripto CURRENCY.

Got drunk on a weekend, went full bore in filosofer mode, only thing what I remember I keep asking my self what is perfect society? Free one or moral one…

There are more important things to worry about than usfulnes of bit coin.

http://www.marketwatch.com/story/margin-of-error-on-food-labels-20-2013-11-07

#92 Aggregator on 07.08.14 at 10:13 am

*Moody's expects lower predictability of government support for Canadian banks; changes banking system outlook to negative

Toronto, July 08, 2014 — Moody's changed its outlook for the Canadian banking system to negative from stable, citing the evolving lower systemic support environment as a primary concern in its report titled, "Banking System Outlook: Canada."

The banking system outlook focuses on the seven largest Moody's-rated Canadian banks that together hold approximately 93% of system assets, making Canada a highly concentrated banking system.

Moody's assessment of the standalone credit profiles of its rated Canadian banks remains unchanged, and Canada remains one of the highest rated banking systems in the world. "The accelerating global trend of governments to share the burden of bank resolutions with senior bondholders could reduce the predictability of government support in bank failure scenarios," said a Moody's Senior Vice President David Beattie, report author. "Most of the Canadian banks we rate receive rating uplift based on our very high expectation of support from the Canadian government and that expectation may diminish in the future."

The Canadian government's previously announced plans to implement a 'bail-in regime' for domestic, systemically important banks, which, coupled with the accelerating global trend by governments to seek increased 'burden-sharing' from creditors, led the rating agency to change its outlook on the banking system.

Looking ahead, the banks' enduring earnings power generated by formidable franchises in a concentrated market will be the Canadian banking system's major strength over the next 12 to 18 months, says Moody's. However, the growth sought by the banks has led them to diversify into riskier businesses and geographies which dilute their strong domestic credit profiles and represent a growing risk to the Canadian system's stability. Moody's also notes that while the potential for external shocks to the Canadian economy has receded, high household indebtedness and elevated housing prices remain key risks to banking system stability in Canada.

The minute the government withdraws government-backed support schemes the whole thing will go kaboom. That's why Oliver won't pull back and is more likely to start increasing insurance and/or guarantee limits or come up with some sort of new scheme to support housing.

#93 David Hawke on 07.08.14 at 10:16 am

#6 pay NO attention to Garth’s uninformed nattering regarding Kias, they are good reliable reasonably priced cars. Have been driving a used one for the past 3 1/2 yrs with only routine maintenance.

#6 what you smokin’, there are days I could use some of that LOL

#82 News Flash, the ’60’s were half a century ago, things change.

#85/86 Spot on!

#94 Kevin on 07.08.14 at 10:21 am

@Go Sherry, Go (#58)

IRD penalties should be outlawed; I’ve been saying this for years. Just another way banks are robbing from the poor to give to the rich. Mortgage break penalties should be capped at three months’ interest.

Comments like this belie a lack of understanding of market economics and how/why banks fund mortgages. Quite simply, there is no free lunch.

When a bank lends you $400,000 at 4.00% for a home, they get that money from deposits (on which they’re paying the depositors interest), or they borrow it (on the bond market), where they also must pay some interest. In either case, it is costing the bank money to extend the mortgage to you at the agreed upon rate. However, they do this because they know that over the length of the mortgage term, they’ll recoup those expenses, plus some profit, in the interest you’ll be paying them.

If IRD penalties were outlawed, then the bank would have no assurances that they would recoup their expenses, and the loan would be profitable. What do you think would happen in such a world? Do you think nothing else would change, and banks would simply continue lending money at 4.00%, and eat the occassional loss? Their profits would drop, shareholders would scream, and that would be that? No other consequences?

Obviously, the banks would raise the rates of their mortgages to compensate for the increased risk and maintain the same level of profitability. That is, the extra expense of you having the option to walk away from a signed agreement would be spread across all borrowers. We’d all end up paying more for all mortgages. The banks’ profits would remain the same, and the entire pool of borrowers would suffer paying more interest, in order to afford you the option of breaking the agreement. It’s socialism.

#95 liquidincalgary on 07.08.14 at 10:23 am

@ #78 everyone is a guru these days

you said:

“I guess is it easy to be a star in your own mind especially when you only speak to people who share your views”

+++++++++++++++++++++++++++++++++++++

you mean, like yourself??

#96 Grantmi on 07.08.14 at 10:39 am

#1 Piano_Man87 on 07.07.14 at 6:16 pm

FIRST!

NOPE! First IDIOT!!!

#97 Ralph Cramdown on 07.08.14 at 10:49 am

#83 Londoner — “That’s not the point. She’s portrayed here as an innocent consumer that, after suffering from a marriage breakdown, was slapped with an IRD penalty by the bank for trying to sell the marital home. On top of this it says that she was surprised by the penalty amount. But given the fact that she had previously taken a 10yr fixed mortgage from the same lender and broken that mortgage, how can this be a surprise at all?”

I’m not going to get into how she’s being portrayed by her lawyers and the media.

Surprised at the amount? Maybe interest rates didn’t fall much during the term of her previous mortgage. Maybe she’d paid posted for it, making the penalty smaller.

Even if she wasn’t surprised at the amount, and it was the exact same amount she’d paid last time, that doesn’t preclude her from suing this time over a vague, poorly worded contract of adhesion. This isn’t an equity case, it’s straight contract law. It’s no defense for CIBC to say she put up with that crap before and knew what to expect.

That’s my opinion, having looked at very little to do with her case. But her class action suit is in all probability being funded by her lawyers on a contingency basis, and they don’t do that for longshot cases against lawyered up big banks. The Judge has certified the class action, and she doesn’t do that unless she believes that there’s a reasonable cause of action for a large group of people in similar circumstances.

———-

OK, I read the Judgment for class certification. CIBC’s IRD calculation isn’t vague or misinterpretable, it isn’t even in the contract. “The prepayment charge will be the higher amount of the following two amounts each of which will be calculated by us using a method determined by us from time to time at our discretion.”

CIBC’s lawyers deliberately wrote in a clause that’s wide open and vague. Now that enforceability has come into question, they’re going to have to convince a judge that it isn’t really so vague, and their discretion is really very limited…

Can anyone be said to “know what they’re getting into” with such an indefinite penalty clause? N.B. I love CIBC’s assertion at [64]. Totally irrelevant in contract, and their lawyers know it.

#98 saskatoon on 07.08.14 at 11:04 am

#91 NoName

dude…you really gotta educate.

#99 Smoking Man on 07.08.14 at 11:21 am

#81 Holy Crap Wheres The Tylenol on 07.08.14 at 8:29 am

I smoked 2 during his sermon, was tempted to pull out my Texas micky of JD bring it out to the porch.

Anyway the smoking really bothered him, I guess I should have made a better effort of not blowing it has way.

But your right, they are sales, and I do respect him for that. But man he could use some training.

#100 saskatoon on 07.08.14 at 11:34 am

#54 devore

apparently,

Ghash.io was only close to 50% of FOUND BLOCKS on a lucky day.

Not TOTAL hashrate, which was at its most just over 40%.

BTCguild was in the same position last year–even stronger–all summer long.

The community will correct itself.

#101 Panhead on 07.08.14 at 11:44 am

#73 Crossbordershopper on 07.08.14 at 6:41 am
Be independent and chicken breasts are $1.29 lb at topps this week for all you cross border shoppers.

—————————————————————-

Are they dressed?

#102 World Traveller on 07.08.14 at 11:48 am

Sure, keep making fun of Kia…

http://www.kia.ca/premium?sourceid=hp-banner

#103 Summer Time on 07.08.14 at 11:58 am

#87 Shawn on 07.08.14 at 9:05 am

On Government Worker Bashing

I had occasion on the weekend to spend a lot of hours in two different emergency wards regarding a family member’s broken bone injury that needed to be triaged, diagnosed and scheduled for surgery among other steps…..

… In my experience the nurses, doctors and other staff were ALL very polite and patient….

….When I look at the action-oriented, highly important, stressful and busy nature of these jobs I feel sort of humbled by what they do in a day compared to what I do. I suspect 90% of us could say the same.

Hopefully THESE are not included in the wide net of government worker bashing.
____________________________________________

Touche!!!

Doctors, and particularly nurses are among the most hard-working people I’ve ever met. They are daily exposed not only to diseases but also to patients and family members in distress, not to mention very limited resources.

People tend to blame nurses for waiting times as they do not understand that ratio patient/nurse keeps going up. On the other hand, It is sad that ratio patient/back office workers keeps going down.

Every time I go to a hospital is like two tier world. On the one hand, nurses are always busy and in a hurry. On the other hand, administrative workers, except front line ones, are often chatting and relax.

Stop including nurses when bashing government workers

Cheers

#104 -=jwk=- on 07.08.14 at 12:11 pm

” Hope she wins. A contract that is 100% in favor of one party (the bank) isn’t a fair contract, period.”

The bank offered up the consideration of advancing the money on the terms proposed. So how is that 100% in favour of “the bank”?

—–

Every single clause in the contract favors the bank. Read one. She cant sue, there is a clause that the banks gets to pick a mediator, she cant transfer w/o banks permission (Even if they were made whole, they can still nail her) etc, etc.

I’ve already lived through this once. I’ve seen it. Google ‘robo signing scandal’.

You think this is a ‘fair deal’? That’s what the Americans thought. Lots of tough talk about paying your obligations. Real MEN fulfill their contracts, right? Until they realized they were all screwed by the banks.
———-
“Canada is the only country I know of (and I know plenty) where you can’t pay the principal back without penalty. It’s barbaric and baseless. No where else in the world folks, no excuses for doing it here.”

Not true. Nearly all countries have a legal doctrine of liquidated damages if one fails to perform on a financial contract for borrowing. And borrowing in the hands of the borrower, is an investment in the hands of the lender. If legislation is used to alter the rights of each, then the willingness of lenders to lend may be significantly reduced.

No they don’t, there is no ‘legal doctrine’ of ‘liquidated damages’, there is only contract law. Damages are up to the courts to decide or parties to negotiate. Stop using terms you don’t understand. And we were discussing home mortgages, a tightly controlled subset of lending that are restricted to banks and a few other hand picked providers.
———————
“You think our banks are angels? You think their contract, that they write and force you to sign to purchase a home, is perfectly fair and balanced?”

Nobody forces anyone to sign a bank loan contract to buy a house. You can buy a house for cash if you want. But if you want credit, you have to play by the rules of the creditors.

right, the rules they write, change at will, break at will and keep secret? Those rules?

#105 -=jwk=- on 07.08.14 at 12:15 pm

@97 ralph. OK, I read the Judgment for class certification. CIBC’s IRD calculation isn’t vague or misinterpretable, it isn’t even in the contract. “The prepayment charge will be the higher amount of the following two amounts each of which will be calculated by us using a method determined by us from time to time at our discretion.”

That sounds like a perfectly fair and reasonable clause for both parties, right Mark?

#106 wilbur on 07.08.14 at 12:22 pm

http://www.cbc.ca/news/business/high-end-home-sales-booming-across-canada-1.2698908

This will not end well…

#107 OttawaMike on 07.08.14 at 12:46 pm

Here is a fellow that got himself into trouble with the Potato Revenue Agency and needs some kickstarter funding for his potato salad.

Come on dogs, pony up. You proved you could step up lat weekend:
https://www.kickstarter.com/projects/324283889/potato-salad

#108 Mark on 07.08.14 at 12:48 pm

“That sounds like a perfectly fair and reasonable clause for both parties, right Mark?”

Its obviously not, and some clarity is definitely needed. However, borrowers should have been boycotting lenders that only offer such vague terms in their contracts, as being unsavoury.

There was once a video rental shop where I live that rented those old VHS tapes to people. And if you were more than 2 days late, they slapped a $100 charge onto your VISA card, and practically refused to remove it even if you coughed up the tape even a day later.

First impressions of the place were positive. They had the best selection, and some of the cheapest rental prices. Clean premises. They were a really, really busy outfit for at least the first few months. But then word got around that they had a really oppressive late policy when enough local soccer moms got burned with the big charges on their VISA. This is what needs to happen to lenders who behave the same way with only offering vague contracts. Consumers need to use their market power to simply go elsewhere, or not to borrow at all.

#109 OttawaMike on 07.08.14 at 12:52 pm

Smokingman

Green Peace door knockers are paid fund raising agents.
Many are not even affiliated with the organization any other way. He was pitching you as if he was a part of the movement and you fell for it. i would say he did OK other than leaving empty handed.

#110 OttawaMike on 07.08.14 at 12:58 pm

Herr Turner, I suggest you bring back the ad panel you once ran on the upper right hand corner.

I would place a wager that Kia would pay big to run an ad here and tame your journalist integrity.

#111 Kevin on 07.08.14 at 12:58 pm

@Shawn (#67):

VISA is charging merchants more like 2.5% and mixing in credit for the customer.

Not true, VISA doesn’t lend money. They just provide the infrastructure to complete the transaction. The money is lent by the customer’s bank.

The exception is American Express, who actually does lend money. But VISA and MasterCard do not. They’re just intermediaries.

Transferring money electronically should cost maybe 0.01% or 0.10%.

VISA/MasterCard provide much more than a simple transfer of currency. The fee covers terminal rental/repair/replacement, fraud protection for the merchant and customer, technical support, and of course, profit.

Debit cards (with FAR lower merchant fees) usually can’t be used online or to hold a Hotel room.

The fees are lower because there is less protection. If someone steals my VISA card and spends $5,000 on it, I’m not liable for one penny of it. VISA takes care of the problem, my credit is preserved, and my life goes on undisrupted. If someone captures my debit card information and drains my account, I will likely be reimbursed by the bank, but at least for now, that money is gone. Any upcoming automated bill pay activities could put me into overdraft, which again, can likely be reimbursed, but not without more paperwork and hassle.

Also, with the proliferation of VISA debit cards, I believe it’s becoming much more commonplace to be able to use your debit card for online purchases that up until now could only be paid for by credit card.

#112 happity on 07.08.14 at 1:05 pm

We are living in the largest debt bubble the world has ever seen, better think carefully about what you invest in because every debt bubble and fiat currency had never lasted

#113 Sebee on 07.08.14 at 1:55 pm

There you go…

http://money.cnn.com/2014/07/08/real_estate/home-sales-to-chinese/index.html?iid=HP_LN

#114 brainsail on 07.08.14 at 1:57 pm

“Land Grab: Rich Chinese are snapping up America’s real estate”

http://money.cnn.com/2014/07/08/real_estate/home-sales-to-chinese/index.html

“Chinese buying was up more than 70% to $22 billion — nearly 1 in 4 dollars of all foreign purchases, according to the National Association of Realtors.”

“Canadians are actually No. 1 in terms of total homes bought, but the Chinese buy much more expensive homes: An average price of $591,000.”

#115 NoName on 07.08.14 at 2:00 pm

#98 saskatoon on 07.08.14 at 11:04 am

I speak with an accent, and I also write with an accent.

#116 Ralph Cramdown on 07.08.14 at 2:27 pm

#108 Mark — “Its obviously not, and some clarity is definitely needed. However, borrowers should have been boycotting lenders that only offer such vague terms in their contracts, as being unsavoury.”

You’ve never actually been through the process, have you? Borrowers aren’t typically presented with the details of their mortgage contracts until closing day at their lawyers’ offices. At that point your only options are to sign, or not be in a position to tender the money to close. Your lawyer — who curiously also works for the lender in this transaction, though that would be misconduct in any other transaction — is going to advise you that, if you don’t sign the mortgage and close the deal, the sellers will be grumpy and damages are liable to add up very quickly.

Anybody here been presented with complete details of their mortgage contract before closing day? If so, who was the lender, and was it through a mortgage broker, or direct?

#117 gladiator on 07.08.14 at 2:27 pm

@106 Wilbur:

May it be the same people who are now colonizing the high-end RE market in the US? Just wondering…

http://www.zerohedge.com/news/2014-07-08/chinas-colonization-americas-luxury-real-estate-market-one-chart

#118 Ralph Cramdown on 07.08.14 at 2:28 pm

#115 NoName — “I speak with an accent, and I also write with an accent.”

No Hyundai jokes, NoName. We’re picking on Kia today.

#119 Holy Crap Wheres The Tylenol on 07.08.14 at 2:34 pm

#93 David Hawke on 07.08.14 at 10:16 am
#6 pay NO attention to Garth’s uninformed nattering regarding Kias, they are good reliable reasonably priced cars. Have been driving a used one for the past 3 1/2 yrs with only routine maintenance.
#6 what you smokin’, there are days I could use some of that LOL
#82 News Flash, the ’60′s were half a century ago, things change.
#85/86 Spot on!
_____________________________________________

Stand by my word KIA Killed In Action! it is roughly translated as “arise or come up out of Asia” or “rising out of Asia” Piece of Crap in my opinion having ben in two of them only, how many 15 year old Kias do you see on the road?

#120 Holy Crap Wheres The Tylenol on 07.08.14 at 2:37 pm

#93 David Hawke on 07.08.14 at 10:16 am
Yep the 60’s were a half a century ago, things do change and some things are still the same old same, Like Kias and Vauxhalls.

#121 Holy Crap Wheres The Tylenol on 07.08.14 at 2:45 pm

#99 Smoking Man on 07.08.14 at 11:21 am
#81 Holy Crap Wheres The Tylenol on 07.08.14 at 8:29 am
I smoked 2 during his sermon, was tempted to pull out my Texas micky of JD bring it out to the porch.
Anyway the smoking really bothered him, I guess I should have made a better effort of not blowing it has way.
But your right, they are sales, and I do respect him for that. But man he could use some training.
_____________________________________________

Yep had some religious dude come to my door two weeks ago selling his interpretation of heaven to me. I let him do his schpeel, then I asked him if he had found God. Why yes he said, I have found him. I said good then tell him I’m not packing my bags quite yet and I’m staying here for a while longer. You should have seen the look on his face! I’m an old guy Ive seen quite a bit in my lifetime so I gave him a pat on his back and sent him away with a smile. Not for me buddy but I gave him credit for believing in something. Well in this life you got to stand for something otherwise you stand for nothing!

#122 Blacksheep on 07.08.14 at 3:41 pm

This whole topic is a non issue.

Any body whining about the unfairness of IRD penalties needs to give their head a shake.

When I bought our first place, 23 years ago, I read in plain language the consequences of breaking the contract with the bank. Society has become a herd of defenceless f-ing Cattle, assuming some altruistic third party should enforce “don’t take advantage of the stupid livestock” policies.

Has no one been paying attention to all the recent references, as to “whom can you trust”?

You can trust no one.(beyond a handful of family/friends)

No one is ultimately responsible for financial well being, except you.

#123 Flawed on 07.08.14 at 4:48 pm

How can anyone possibly believe an unregulated, rogue, volatile medium of exchange [Bitcoin] will morph into a currency? — Garth

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

I would agree with you if the “current” hierarchical system he have was 100% fair and regulated for “EVERYONE”.

Its not.

Just ask the boys at HSBC how great life is with the 500 billion in drug money they legally laundered with no one going to jail.

There are thousands of such stories about how the “current” supposed regulation of “sovereign” currency is regulated. For the plebs maybe. But the boys on top of this co-opted and corrupted hierarchical system can do as they please with impunity.

#124 Flawed on 07.08.14 at 4:52 pm

It is not only theoretically possible, but in practice as well. All you need to do is own more than 50% of the hash mining rate. Impossible? Not at all, in fact currently an organization called GHash controls 51%, which means they can allow an arbitrary wallet to double spend their bitcoins, invalidate any arbitrary transaction on the network, or prevent new Bitcoins from entering the network.

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

You think the devolopers in Bitcoin do not watch this? There will never by a 51% double spend event again. As soon as Ghash came close everyone started bailing because they were scared about being excommunicated. Please don’t scare people over rubbish and research all the facts.

#125 brainsail on 07.08.14 at 4:56 pm

A very humbling story…

“This is what happened when I drove my Mercedes to pick up food stamps”

http://www.washingtonpost.com/posteverything/wp/2014/07/08/this-is-what-happened-when-i-drove-my-mercedes-to-pick-up-food-stamps/

#126 Flawed on 07.08.14 at 4:57 pm

I am not fan of bitcoin for many reasons, and i am very cinical when it comes to bitcoin, for me bitcoin is just commodity that I can live without it. What attracted a people to bitcoin is just made fact that was created out of thin air. Like house equity. Turn on your desktop and few hours later you have 1bitcoin worth x amount of dollars… Reason why bitcon will not take of its because is to complicated for an average person, people like me don’t understand it and don’t want it, I’ll stick with paypal, where my funds are insufed against from to some degree, and I don’t have to vorry about public keys, private keys, wallet backup, wallet encryption………

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

I’ve been involved in IT for 17 years. I remember “are ya connected to the world wide web” “no…whats that?”

Yes….its complicated but with all technology its getting less complicated.

Bitcoin will never take off huh? Spend a few hours at http://www.coindesk.com and just see for yourself how its “not” taking off…..

#127 allanrsmith on 07.08.14 at 5:07 pm

People must take responsibility for contracts they enter into, that’s the big takeaway here in my opinion

#128 Habs76-79 on 07.08.14 at 6:39 pm

#125 Brainsail,

Great link to the Washington Post Story.

——-

Lesson learned in the story is that $h*t can happen and happen to most anyone at most any time. Life is not and never will be peaches and cream perfect, white picket fence and 2 perfect, smiling kids perfect.

As to those who were written in the story by the lady who were all going off on her and being IGNORANTLY judgmental. Man oh man they deserve a kick in the teeth. If I were present at this stuff I tell those blow hard jerks to GO TO HELL!

MIND YOUR OWN BUSINESS! Most of these types are ignorant, a**holes and full of self-righteousness.

Anyways, to any person who thinks THEIR little peon life will always be peaches and cream, WHAT CAN GO WRONG? attitude, well it can all turn on a dime no matter WHO THE HELL YOU ARE NOR HOW MUCH MONEY OR WEALTH YOU MAY HAVE!

Society has a responsibility to no just look after oneself and family, but to make sure we have capable and proper things are in place to help others.

#129 jess on 07.08.14 at 7:20 pm

… the cmhc doesn’t cover fraud right?

Former Lawyer Admits Role in $40.8 Million Mortgage Fraud Scheme
U.S. Attorney’s Office July 07, 2014

…”According to documents filed in this case and statements made in court:

Witkowski and his conspirators located oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, N.,J.; premier real estate in vacation destinations in Georgia and South Carolina; and properties in New Jersey owned by financially distressed homeowners facing foreclosure. They then recruited “straw buyers” – people with good credit scores but lacking the financial resources to qualify for mortgage loans – to purchase those properties.

Witkowski and his conspirators created false documents, including fake W-2 forms, income tax returns, investment statements, and rental agreements, to make the straw buyers appear more creditworthy than they actually were. They also established numerous telephone lines for companies owned by some of the conspirators so that when a lender contacted the telephone number, the conspirators could falsely verify that a straw buyer was employed by the company listed on his or her fraudulent loan application.

Witkowski also caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents, which attributed to the straw buyers inflated income and assets, to be submitted to mortgage lenders. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators had some of the funds wired or checks deposited into various accounts that he and his conspirators controlled.
lagging indicators
http://www.fbi.gov/about-us/investigate/white_collar/mortgage-fraud

#130 Entrepreneur on 07.08.14 at 7:27 pm

We did a little test run on a Kia…couldn’t even make a slight slant without engine working. Won’t go there again. We like our vehicles with some power just like our lifestyle.

We were young once; signed contracts through the bank without reading it, too much to read, too fast pace. That is what youth is all about. The banks know and play on it.

Be careful on signing contracts; read every detail; know what each paragraph means, and it not, ask.

#131 Mark on 07.08.14 at 7:33 pm

“… the cmhc doesn’t cover fraud right?”

As long as the bank made a good faith effort to ensure that everything was in order, of course the CMHC covers fraud.

Besides, if the CMHC decides to play tough with the banks, the bank have a pretty big hammer, in the ability to refuse to lend, that they can use against the CMHC.

#132 Nomad on 07.09.14 at 10:09 am

In LesAffaire this morning: “Since we are still in a buyers market and that the inventory remains high, we note a downward pressure on house prices, says Dominic St-Pierre, director of Royal LePage for the region of Québec”

«Puisque nous naviguons toujours dans un marché d’acheteurs et que l’inventaire demeure tout de même élevé, on remarque une pression à la baisse sur le prix des propriétés», souligne dans un communiqué Dominic St-Pierre, directeur, Royal LePage pour la région du Québec.

And: “Those who accept to reduce their prices seem to have more success”

De l’avis de M. St-Pierre, les vendeurs qui acceptent de «réduire un peu leur prix» selon leur secteur et type de propriété semblent avoir plus de succès.

#133 David Hawke on 07.09.14 at 11:07 am

#119 “Piece of Crap in my opinion having ben in two of them only, how many 15 year old Kias do you see on the road?”

The opinion of someone with such atrocious sentence structure, punctuation and spelling plus the apparent lack of ability to use spell check doesn’t mean diddly squat to me.

Actually my Kia is a 1997, 17 yrs. old and fits right in with the many of that vintage here.

#120 Gee, I drive by a Kia dealership every time I go into the city centre, can’t remember the last time I saw a Vauxhall, you need to get out more.