Posted on 01/30/2010 5:12:42 PM PST by reaganaut1
...
Meryl Witmer: Genworth Canada insures consumer mortgages in Canada, whose residential market is safer than ours. It isn't overbuilt. Lenders have had tougher underwriting standards because they retain most of their mortgages. Proof of the difference can be seen in 90-day delinquency rates. In Canada they are below 0.5 basis points [half a percentage point], and in the U.S. they are over 400 basis points.
The Canadian consumer also is different from the U.S. consumer, and not as comfortable with debt. The mortgage borrower is on the hook for life, and the insurer can garnish his wages in perpetuity. The only way to escape a secured loan is by filing for bankruptcy, and in Canada little in the way of owned assets are retained. Also, given Canada's national health system, there are few medical-related bankruptcies. The competitive dynamic is different, too.
...
Oscar Schafer: Mortgage-interest payments aren't deductible in Canada.
Witmer: Good point. Canadians are incentivized to pay down their mortgages, and they do.
(Excerpt) Read more at online.barrons.com ...
They also don’t have Bawney Frank.
That is an incredible delinquency rate!
It isn’t a lower cost of Candadian real estate, either. Housing in Southwest B.C. is very expensive.
They don’t seemto have much in the way of 30 year fixed rate, either. They like you to go in 5 year chunks. That would scare me to death.
Odd; I thought Canada HAD had a housing bubble, judging from the news reports I had been hearing while visiting there this past summer. Maybe its a matter of scale. But looking at some data I found, it looks like prices have actually gone up strongly. Maybe they had just meant the rental market.
As we speak, the leftist bureaucrats in Canada at CMHC are trying to emulate the fannie /freddie affrmative mortgage fiasco. They keep pushing for less oversight by the federal governmen so thay can pllay the leftist afformativeaction lending gane, and cripple the economy for the instigation of “Class warfare.” However, Harper knows what they are up to.
They offer 95% mortgages ( and recently offered 100% mortgages). Housing bubbles are being created in the areas of greatest immigrant population: Toronto, Vancouver and Montreal.
Real EState prices are through the roof punative. You buy now, you get punished.
That bubble will burst in the larger cities over the next 3 years.
Things are not as rosey in Canada as folks would lead you to believe.70% of real estate in Canada is overvalued by as much as 45% because of easy money.
Anyone else wonder why Greenspan under Bush, kept the rates so low claiming necessity to keep the economy afloat (meaning the economy was in a precarious position) and Bush kept pushing for minority home ownership and creating govt. programs to help them? Even going so far as to call for tax dollars to subsidize down payments for them?
the last sixteen years were filled with manipulation and lies by Clinton and Bush regarding housing.
They convinced people having a mortgage was the same as owning a home. Equity was touted as "money in the bank". Congress pushed for easing of requirements and no one complained as long as the tax dollars off of the housing industry kept floating in.
And, there are people who think only one side of the aisle is corrupt.
Yep. My sister and BiL started with 5%, at five years it was 12%. They had to sell the house. When they moved to the USA, my BiL loved the fixed 30 year rate.
Maybe the Banking Queen can convince them that they really need make banks give government guaranteed mortgages to deadbeats and illegal aliens
Just another attempt to raise taxes.
No Fannie Mae. No Freddie Mac. No Barney Frank. No Chris Dodd.
Some counterpoints here:
A Canadian Says “Short Canada”
http://globaleconomicanalysis.blogspot.com/2009/11/canadian-says-short-canada.html
Also no sub-prime mortgages, to offload to fannie and freddie.
The article misses the biggeswt point about real estate (at least in BC and Alberta) - and that is the folks from East India.
They are hard working families that don’t mind living three or four families to a house. They all go in together on the mortgage, and pay it off in 5 years. Then they buy another house, and one or two of the families move into it. They keep buying houses until they all have their own. since they have multiple incomes, they can afford it.
That is why housing prices are at the old California prices right now up there, with no defaults. Average home price in Vancouver or Kelowna is over $500K.
That’s interesting. Good idea too.
Canada, while quite liberal, does not have a racial-grievance industry and a race-conscious government forcing lenders to lend money to people who don’t deserve to have money lent to them.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.