Now, the new federal budget is planning for greater oversight of the federal crown corporation, which was founded to provide insurance on Canadian mortgages where buyers are unable to produce a down payment of 20 percent or more.

“The government will propose legislative amendments to strengthen oversight of CMHC and to ensure its commercial activities are managed in a manner that promotes the stability of the financial system,” the budget said.

Banks are required to insure mortgages that don’t meet the minimum 20-percent down payment threshold. Apparently, in recent years, banks have been insuring mortgages that are eligible to be processed without the insurance. Given that purchasers bear the burden of the insurance cost, it’s no wonder that this approach seems attractive to lenders. No additional cost to them – substantial decrease in potential risk of loss.

Three years ago, CMHC reached the ceiling for mortgages that it was allowed to insure, by law, at $450 billion. That number was adjusted to $600 billion at that time. By the end of 2011, CMHC was insuring $541-billion in Canadian mortgage loans.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Billed as “the first program of its kind in Canada,” the Equity Building Program will be available to those who earn too much to benefit from social housing programs. This $3-million program will provide down payment loans to home buyers earning between $45,000 and $70,000 per year, who are currently renting a home in Saskatoon. As part of the arrangement, the home buyer agrees to pay back the loan, at a low interest rate, over a five-year period of time.

City planner, Alan Wallace is quoted in a story published in the Star Phoenix on February 9. “House prices have risen dramatically. We think there are a number of households out there that are in rental situations that will find it extremely difficult to fund the down payment.

“What we’re concerned about is if incomes aren’t able to keep pace with house prices…people have a tendency to slide backwards on the housing continuum. We want them to move up.”

Interested parties can obtain full details on conditions and qualifiers from the Affinity Credit Union in Saskatoon.

Read the Star Phoenix story here.
A television report from Global News is here.
More details on the Affinity Credit Union website are here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

The new rules also impact upon homeowners who seem all too eager to cash out their equity to “buy boats and cars and big-screen TV’s,” Mr. Flaherty said as he announced that home equity loans will be capped at eighty-five percent of the home’s value, also on March 18. CMHC will discontinue its practice of insuring home equity loans and lines of credit a month later on April 18. Home equity lines of credit have grown by 170% in the last ten years, doubling the rate of growth seen in the mortgage market.

The moves were widely applauded by a number of bank leaders who have recently expressed concern about the rapid expansion of household debt and called upon the government to tighten lending rules. Frank Techar, president of commercial and personal banking for the Bank of Montreal called the actions “prudent, measured, responsible and timely.”

The Bank of Canada has been reluctant to raise interest rates from record low territory as the Canadian economy continues to perform sluggishly. Analysts at Scotia Capital suggest that tightening of lending rules is the more effective way of curbing debt without risking a further slowing of overall economic growth.

Predicting that the rule changes will moderate housing demand across the country, Flaherty announced that the minimum down payment required for a CMHC insured mortgage will remain at 5%. “We do not want to create any shock in the market or any sort of dramatic pressure. We want to be moderate,” Flaherty told reporters at the early morning briefing.

New mortgage rules could price some out of the market – Financial Post
Debt worries trump home sales – Globe and Mail
Buying a home about to get tougher – Financial Post
Flaherty details new mortgage rules – Globe and Mail

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

In hindsight, this is a trend that has been present through most of 2010. Now that the year is behind us I thought it might be interesting to have a good look at the numbers.

First, total residential unit sales in the Saskatoon real estate market declined seven percent in 2010 to 3558 from 3820 the year before. On the surface, this appears to be not such a big deal. The numbers put us in line with the five-year average for this area and make for a pretty typical year. More interesting though is the fact that sales of home at prices that are below the average ($300,000 or less) have fallen quite significantly, by eighteen percent, in fact. At the same time, sales of homes priced above the average have increased by thirteen percent masking what could be the most significant Saskatoon real estate story for 2010. Let’s look at some numbers.

Click image for a larger view.

One’s first inclination may be to assume that Saskatoon home buyers who are active are buying higher priced homes and this is probably true in some cases. For instance, it’s not that difficult to imagine that a buyer shopping in the $250,000 to $300,000 range stretches to the $300,000 to $350,000 range but the $250,000 to $300,000 range softened by just seven percent. It’s not at all likely that buyers who would typically have budgeted up to $250,000 would even be able to consider the $300,000 plus range. The market at $250,000 or less dropped by a stunning twenty-three percent. As I said to Cassandra Kyle in a Star Phoenix story last week, I believe these buyers exited the market for affordability reasons.

2010 brought a number of small changes that impacted on affordability. First, you’ll recall that there were some changes to mortgage lending requirements that made it more difficult to qualify for mortgage money. For the most part, these changes were welcomed as prudent by almost everyone but they did change the game and eliminate “marginal buyers” from the market. No sensible person could argue against that. Secondly, rates increased. The changes were small, but they certainly impacted on some. Finally, by spring of 2010, prices for some types of housing, particularly those with the greatest appeal to entry-level buyers had found their way back towards the previous highs of 2008. Inventory, while higher than the previous year, remained stubbornly low in the lowest price ranges throughout the year, insulating prices to some extent. The combination of these factors meant that many people who might have opted to buy simply couldn’t afford to be in the market and that’s probably a good thing given what lies ahead.

It’s all but certain that interest rates will soon be on the rise with many economists predicting a one-percent increase in the prime lending rate by the close of 2011. There is increasing talk of further changes to mortgage lending requirements that may limit the market more. With a number of major banks calling for tighter rules, some action is almost a given, in spite of CREA’s rally cry against it. While consumer confidence in our province remains high debt levels are at record levels, income growth is largely expected to soften in the year ahead, and taxes are expected to increase. All of these potential affordability influences will have their largest impact on first time buyers. The only other variable that comes to my mind is price. Will they soften as the other variables take a further whack at affordability or will they continue to defy common sense, as some would argue they have for years? The answer seems obvious, but it has seemed obvious for some time now, hasn’t it? It might be hard to find more failed predictions than have accumulated across the Internet for Canadian housing in the last few years.

This we know for sure; first time buyers are the foundation of a healthy real estate market. Without new entrants, people who are already in a home of their own can hardly consider a move up, so when eighteen to twenty-three percent of that market disappears we should be concerned.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

In the included form letter that CREA is asking members to sign and send to their MP, the mortgage rule changes that took effect earlier this year were characterized as “measured and balanced.” The author argues that those changes have had the desired effect and warns that a further tightening of the rules could destabilize Canadian housing markets and the economy.

From CREA’s letter.

“Additional changes to mortgage financing rules would raise the barrier to homeownership excessively and destabilize housing markets and the economy. In particular, we are concerned about the negative impact modifications to the allowable amortization period or minimum down payment requirements would have. These changes would create affordability problems, especially for first-time buyers. First-time buyers are the first link in a chain reaction of real estate activity. They allow existing home owners to change properties or rent. Creating burdensome barriers for first-time buyers will seriously impact the rest of the market, including retirees looking to downsize.

Further tightening of mortgage rules would have other far reaching consequences for the economy. It risks causing a home price correction, a drop in the net worth of Canadian households, lowered economic growth and reduced tax revenues. Consumer confidence would be damaged, labour mobility would be impeded, and unemployment would stay elevated.”

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

The BMO release offered the following tips for becoming mortgage free faster.

Consider a shorter amortization

• The shorter the life of the mortgage, the less you pay in interest.
• A shorter amortization means that you can become mortgage free faster and begin saving more for retirement.

Make sure you can afford what you signed up for

• Stress-test your financial budget using a mortgage payment based on a higher interest rate.
• Total housing costs (mortgage payments, property taxes, heating costs, etc.) should not consume more than one-third of household income.

Make a larger down payment

• If you can provide a bigger down payment, it’s a significant way of helping you pay less interest over the life of your mortgage.
• If you make a down payment of least 20 per cent, you avoid paying mortgage default insurance.

Make pre-payments when you can

• Pay weekly or bi-weekly instead of monthly.
• Increase your mortgage payment (principal and interest).
 This option can be exercised once each calendar year, at any time, without charge.

Think carefully about fixed vs. variable

While variable rates mortgages have been a winning strategy over the long term, fixed rate mortgages (currently at historic lows) come with the peace of mind of being insulated against rate increases and knowing how much of your mortgage you will have paid down at the end of your term.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Clause 4.1 of the Saskatchewan Real Estate Commission’s standard form “Residential Contract of Purchase and Sale” used by Saskatoon’s Realtors states the following:

The Buyer agrees to pay to the Seller interest at the Bank of Canada Overnight Rate Target at the Completion Date plus 4% per annum, on any portion of the Purchase Price, less mortgages or other encumbrances assumed, not received by the Seller, his/her solicitors or his/her Brokerage as at the Completion Day, until monies are received by the Seller or his/her solicitor….

Thus, this clause creates a contractual obligation on the part of the buyer to pay interest to the seller.  As it provides, part of the interest rate is static (four percent) while part of the interest rate is dynamic, fluctuating in accordance with the bank of Canada Overnight interest rate (which is currently one percent).  If anyone is struggling to come up with what the total current interest rate is, you may borrow my calculator once I am done double checking my arithmetic.

As a matter of practicality, in order to ensure that the buyer will actually pay the interest to the seller, most lawyers acting for a buyer will collect about ten days of interest up front from them (along with the rest of their down payment and closing costs) on the outstanding mortgage amount.  Following registration at Land Titles, the buyer’s lawyer will send the mortgage proceeds to the seller’s lawyer along with the extra interest that has accrued thereon.  Any residual interest money that was collected by the buyer’s lawyer and not paid to the seller will be reimbursed to the buyer.

Ideally, each and every buyer and/or seller that comes to see me is well versed with the particulars of the contract that they have signed to buy/sell their property.  This is not always the case, however, most clients understand and appreciate why interest must be paid following a good explanation of ‘the process.’

Please feel free to provide your comments and/or questions.

Mike Derbowka

In order for a buyer to take possession of their new property, he or she must have signed their mortgage documentation and tendered their total down payment amount to their lawyer by the possession date (in addition to having home insurance in place if the dwelling is a house).  On the seller’s end, their sale documentation must also be fully executed by the possession date.  On that basis, the buyer will be entitled to take possession.  However, just because the mortgage has been signed does not mean that a bank’s mortgage proceeds will automatically be wired by them into the buyer’s lawyer’s trust account.  Rather, before mortgage proceeds can be requisitioned by the buyer’s lawyer (which in turn are then sent over to the seller’s lawyer), two important changes must be made on title to the subject matter property at the Saskatchewan Land Titles Registry:  1)  The seller’s name has to be removed off of title and replaced with the buyer’s name (this is effected by way of the seller’s sale documentation, which will include a properly executed ‘transfer authorization’); and 2) The buyer’s mortgage has to be registered against title (an actual copy of the mortgage signed by the buyer is sent to Land Titles); the lender of the mortgage funds must have a “secured interest” against the buyer’s title to the subject matter property before any money is actually dispersed by that lender to the buyer’s lawyer.  Describing the above is much easier when I am able to reference an actual title with my client, but I hope this makes sense.

About ten years ago, the Saskatchewan Land Titles system had a massive overhaul and converted to an electronic, automated system that, for example, now enables lawyers and the like to scan and email documents to them.  Whereas in the “old” system, Land Titles took weeks to transfer title and register a mortgage against title, they now take on average two to four business days (the actual amount of time varies based on how busy Land Titles is in processing).  As I had explained above, both the buyer and seller must have their respective documentation fully executed by the possession date (this is explicitly stated in the standard form Offer to Purchase that realtors use).  The usual practice is for the seller and buyer to go to see their lawyer(s) two or three days prior to the possession date (Why so late?  The buyer’s lawyer often does not have what he or she needs from the buyer’s bank to prepare the actual mortgage until two or three days prior to the possession date while on the seller’s end, it is simply the normal time frame and a function of narrow time lines.)  So, let’s say it is two days prior to the possession date and the buyer’s mortgage and seller’s transfer authorization have been signed.  Documents will then be submitted to Land Titles for registration and changes to be made on title.  If, for example, Land Titles is running at four business days to register changes at the time the documents are submitted, we will run into a situation where the buyer will take possession but the actual mortgage funds are not yet in place.  I know it seems odd that someone can move into a house without it, in effect, being paid for.  However, this potentially concerning concept is underscored by the importance of the mortgage documentation having to be signed by the buyer (because we know that once the mortgage documentation has been signed, the mortgage money is coming, simply delayed, pending registration) and lawyers operating on trust conditions (another blog entry for another day).

Once the buyer’s lawyer has confirmation that changes have been made on title to the subject matter property (an automatic notice is sent by Land Titles to the buyer’s lawyer), mortgage funds are then requisitioned (it takes a day or two to actually receive the mortgage funds following requisition – some banks are quicker than others!) and forwarded to the seller’s lawyer for dispersal, which includes paying out the seller’s mortgage (if applicable), paying real estate commissions and legal fees and then finally sending the sale proceeds to the seller.  The seller’s lawyer will usually ask the seller to bring a void cheque to their meeting, since direct deposit of your sale proceeds is the quickest and most efficient way to get your money!

This is the basic explanation as to why a seller usually does not have his or her sale money until after the possession date.  I appreciate any comments or questions that readers may have!

Mike Derbowka
Cuelenaere and Company

I had the opportunity to help a few clients purchase a home who had the interpretation they would not be able to enter the housing market for another year. These clients had solid credit, good job stability but they lacked one of the most common first time buyer requirements, a down payment.

In these, like all cases, we explored every option available for a down payment ranging from grants, HBP (RRSP Home Buyers Plan),  a gift from family, borrowed funds (Line of Credit, etc.) but none were feasible for clients.

This left us with one option which only a couple banks offer, a “Lender Cash Back”. This specific program covers the 5% down payment which is paid from the bank and they also covered an additional .5% to help with closing costs or to help increase the clients minimal savings. As with anything today, this is not free. The bank increases your interest rate in order to make back the down payment over 5 years. Today you can get a 5 year fixed rate at 3.65%.  With this program you get the posted rate which today is 5.39%.

So in all cases the bank makes back the full down payment and you end up paying less towards your principle (along with higher monthly payments) due to the higher interest rate. In some scenarios it can get you into a home sooner than expected but I encourage clients to explore all other options before settling for a Lender Cash Back.

The mortgage you choose should always suit your needs, this is just another option available in the market today that not all are aware of. Please feel free to comment or call me at 306-260-9918 to ask any questions you may have.

Have a great weekend.

Riel Syrenne
The Mortgage Group

I’m here for everyone on the site and able to answer any financing questions you may have or come across during your home shopping. Feel free to ask about rates or bring forth any questions you may have as I am happy to help. My service is always free and I look forward to helping anyone with their current or future home purchases!

I’d also like to thank Norm for giving me this opportunity to post on his always informative and growing site!

I’m always happy to answer your mortgage related questions. Please leave me a comment below or call me at 306-260-9918.

Riel Syrenne
The Mortgage Group

Mr. Tal clearly feels that Canadian housing is overvalued but he doesn’t think there is an unmanageable affordability problem in Canada.

First, Tal believes that “at least 1.5 million houses in Canada are overvalued” and his research indicates that prices on those properties are inflated by as much as 14%. Provincially, British Columbia is the worst with an over valuation of 20.7% and Alberta is the least inflated at 8.6%. Saskatchewan fits neatly between the two at 13.2%, just below the national average.

Tal goes on to say that the market is showing clear signs of cooling and that price growth has “rapidly decelerated” over the past few months. He goes on to suggest that absent a “trigger” to a violent correction, prices will not necessarily crash. According to Tal, rising rates will not be the trigger some believe it to be. He speculates that rates will climb slowly and that most Canadians will be able to manage the costs associated with those changes.

According to Tal and CIBC’s affordability index, which is based on actual transactions as opposed to “synthetic mortgage” assumptions, we can afford it. On average, Canadians are using just 15.6% of their income to make mortgage payments. “Manitoba and Saskatchewan still enjoy the best home ownership affordability in the nation” with just less than 12% of income being used on to service mortgage debt.

The report concludes by saying, “While higher interest rates will clearly erode affordability, our detailed look at the distribution of mortgage payments as a share of income does not reveal major pockets of vulnerability. Accordingly, the most likely scenario is that higher interest rates will lead to a modest decline in prices (probably in the magnitude of 5%-10%) in the coming year or two. But given relatively modest rate hikes and the current balanced affordability position, the more significant adjustment will be in housing market fundamentals that are likely to catch up with prices in the coming years—paving the way for a healthier housing market by mid decade.”

What do you think?

Read to full report here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Legal documents obtained exclusively by CBC News allege the bank was the target of a sophisticated fraud operated by 14 inter-connected groups. The documents allege the scheme generated at least $140 million, about $70 million of which was for phoney mortgages.

Read more here.

Update: BMO’s fraud claims won’t be probed (Police decline on criminal investigation).

I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Saskatoon Real Estate

Effective tomorrow, the posted rate for a five-year closed mortgage climbs by six-tenths of a percentage point with all three lenders, the largest one-day rate hike since 1996. Shorter-term fixed rate mortgages will also increase as much as four-tenths of a percentage point.

Fixed term mortgage rates are impacted by five-year bond yields, which have been climbing in recent months. Still, as early as just last week major lenders have been aggressively competing for market share. Just last week, the TD dropped its ten-year fixed rate to its lowest point ever, 4.99 percent. Today’s announcement represents a sudden and sharp change that seems to have taken the market by surprise.

All three lenders are currently offering promotional rates on their five-year fixed product that range from 4.54 percent to 4.59 percent, but effective April 19 when new mortgage rules take effect buyers selecting terms of less than five-years, fixed or variable, will be required to qualify using the five-year posted rates. A Saskatoon home buyer who qualifies for $300,000 in mortgage debt based on the current posted rate of 5.25 percent amortized over 25 years, will see their maximum allowable mortgage drop to $283,000 at the new rate, assuming it’s still in effect on April 19.

I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

One of the changes requires that buyers qualify for their high-ratio mortgage based on the “five-year fixed rate” even if their mortgage payments are actually calculated on an available lower rate. In other words, the lender must calculate and evaluate your debt service ratios as if you were taking a five-year fixed.

For the most part, the changes were met with a “no big deal” kind of attitude but not long after the announcement questions began to surface about which five-year fixed rate would prevail for the purpose of “qualification.” After all, RBC’s posted five-year fixed rate is 5.39% today, while some brokers have offers for the same term available as low as 3.59%.

CanadianMortgageTrends.com is reporting today that the “chartered bank 5-year posted rate” which is currently at 5.39% will be the benchmark lenders use to determine how much house a buyer can afford.

So how might that impact the Saskatoon real estate market?

Let’s assume that you have a household income of $75,000. Let’s also assume that property taxes and/or condo fees will set you back $2,400, and that you’d like to pay this puppy off within 25 years. Mortgage calculators, enthusiastic lenders and motivated real estate agents would suggest that you could afford to service debt of $356,109. Now, bump that rate up to 5.39% and suddenly you can only afford $296,279. Any buyer who is pushing the limits of their debt service ratio at brokerage level rates must seriously adjust their expectations, if they don’t just happen to be borderline enough to fall out the bottom end of the market.

Oh, by the way. If you’ve been thinking about taking a 35-year mortgage, the same assumptions outlined above result in a $90,000 trim to the housing budget.

This suddenly sounds like a tough pill to swallow if you ask me.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Effective April 19, 2010 the following changes will take effect.

Home buyers must qualify for their mortgage using the five-year fixed mortgage rate, regardless of the term that they chose to finance their home.

Refinance loans will be limited to ninety percent of a home’s value.

A twenty percent down payment will be required to finance government backed mortgage insurance on investment property.

Do these changes go far enough to cool the Canadian housing market?

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Norm Fisher
Royal LePage Saskatoon Real Estate

Photo of Flaherty by Joshua Sherurcij

Canada’s Finance Minister, Jim Flaherty will announce this morning a change in lending rules that will further limit the amount of cash buyers can borrow to finance a home according to a report on Globe and Mail.

Stimulus cash, and historically low interest rates have created an enticing environment for Canadian home buyers who have flooded the market to produce near record sale numbers across much of the nation. The average selling price of a Canadian home gained nineteen percent in a year while the economy was largely stagnant, prompting talk of a housing bubble and concern that some buyers may not be able to service their current debt levels when rates return to historical norms.

There is general consensus in the financial community that raising interest rates is not the right answer to cool what some see as an overheated housing market. Bringing this beast under control without mucking things up for the economy in general is a delicate dance. Some are speculating that the rule changes will bring tougher qualification rules, and perhaps a reduction in the maximum allowable amortization period to repay a mortgage. The Canadian government reduced the maximum allowable amortization period from 40 years to 35 years in July of 2008 following a massive run up in home prices across Canada.

Flaherty will address reporters in Ottawa this morning at 8:00 AM Eastern.

Update: New Canadian mortgage rules effective April 19 2010

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Norm Fisher
Royal LePage Saskatoon Real Estate

“If we see further evidence that there’s excessive demand in the housing market, or that there’s an indication that people are taking on obligations that they will not be able to handle in the future when interest rates do rise, then we’ll take some action,” Flaherty told the CTV.

Historically low interest rates intended to spur economic activity have pushed demand for homes higher resulting in sharp price increases in many Canadian markets. Near record level activity in our largest and priciest markets, Vancouver and Toronto has helped push the average selling price of a Canadian home to $368,665 (according to the Canadian Real Estate Association) , roughly twenty-percent higher than it was at this time last year.

“The likely action we would take is to increase the size of the down payment from five percent to a higher amount and probably, once again, reduce the amortization period. So, bring it down from a maximum of thirty-five years to something less than that,” Flaherty said.

I’m going to guess that December’s sale numbers will continue to fuel concern and bring us closer to seeing at least one of these changes implemented. Also uncertain is whether these changes would take effect immediately or if they would be effective at some future date.

Thanks to @JenCT for the heads up.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Knowing full well that calling these loans will lead to losses, these sub-prime lenders are hard at work using lobbyists to try to convince your government that you ought to be on the hook. Apparently, these are “healthy mortgages” given to individuals with “impeccable payment histories.”  The lenders will be “forced to foreclose on them” if the government doesn’t establish a one billion dollar fund to bail them out.

The effort is cleverly disguised as a bailout of unfortunate homeowners, but hopefully the Canadian people can read between the lines. Apparently, most of these mortgagors would not qualify for financing through a mainstream lender, or for mortgage insurance. As the Canadian Mortgage Trends blog points out, “Makes you wonder how healthy they are if the borrowers can’t re-qualify.”

Ivan Wahl, CEO for Xceed, a sub-prime lender who will call loans on 1,100 Canadians when they come due reportedly said in an interview with the Globe, “The government certainly should step up to the plate to provide some facilities for people who got caught in the crunch.”

It’s clear what a win this proposal would be for these investors who would land on their feet with every penny due after milking this risky scheme for all it was worth. As sad as it would be for those homeowners who took these loans and lived up to their agreement, the taxpayer should not be on the hook for these mortgages. The mortgages should be dealt with in the manner prescribed within the agreement. Some people will lose their homes. That’s a harsh reality of these types of risky ventures. For those that have sufficient equity, the months ahead should provide some strong selling opportunities. For those who are in for more than the home is worth, let’s send that loss back where it belongs, to those who cooked up the hair brained scheme in the first place.

Homeowners that have been notified that their mortgage will not be renewed should immediately explore their options. Can you re-finance with another lender? Is there enough equity in the home that you may be able to sell the property? See a lawyer who understands foreclosure to find out what rights you have under the law.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Norm Fisher
Royal LePage Saskatoon Real Estate

In a story just published on the Star Phoenix website, Mayor Don Atchison is quoted as saying, “It’s all about certainty, and in the financial markets today it’s all about certainty, not guesswork. This is absolute certainty now. You heard me at the end there tell (Lake Placid CEO Michael) Lobsinger if he doesn’t come up with the $214,197.14, the deal is finished, or if it doesn’t come up with the money for the land, it’s terminated as well. There’s no more chances.”

Read the Star Phoenix story here.
CBC’s report is here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @Norm_Fisher.

Norm Fisher
Royal LePage Saskatoon Real Estate

“Under the program, which will replace the home start affordable housing initiative, people with a household income of $52,000 or less will be given a five per cent downpayment toward a mortgage on a new affordable housing development, if they’re approved.”

The story is here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @Norm_Fisher.

Norm Fisher
Royal LePage Saskatoon Real Estate

Since the subprime mortgage meltdown in the United States, Canadian leaders have assured the public that a similar tidal wave of foreclosures can’t hit here. They have cited the prudence and market dominance of Canada’s five most prominent banks, the conservatism of Canadian consumers and the tiny, 7-per-cent market share of subprime lenders, which is much lower than their 22-per-cent market share in the United States. Just four days ago in a speech, Prime Minister Harper said: “We have avoided the extreme of the unregulated, or barely regulated, financial and mortgage industries that has caused such grief around the world.”

However, The Globe’s investigation shows that while Canada’s real estate sector hasn’t suffered as much as its counterpart in the United States, the Prime Minister and others have grossly underestimated the impact of that small portion of subprime lenders. Until recently, companies who touted their low standards with slogans such as “We Say Yes When The Banks Say No!” and “No Income Verification” proliferated here.

Read the Globe and Mail story here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Saskatoon Real Estate

Flahrety insists that not a single Canadian bank is at risk of failing but that liquidity is the primary issue threatening the unimpeded flow of credit for Canadians.

“It is important to underline that Canada’s banks and other financial institutions are sound, well capitalized and less leveraged than their international peers,” he said.

Read the Globe and Mail story here

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Good idea Ben! It would be foolhardy to encourage a second mortgage crisis while you’re busy dealing with the first one.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

At the top of the do not approve list is the 40-year mortgage. Effective October 15 of this year, CMHC, Canada’s housing agency won’t be insuring mortgages with amortization periods of more than 35 years.

Zero-down mortgages also meet their end when the new policies take effect. All CMHC insured mortgages will require a minimum down payment of 5%.

Other changes include the establishment of “consistent minimum credit score requirements” and the introduction on “new loan documentation standards.”

“Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-Style housing bubble developing in Canada.”

Prior to November of 2006 when CMHC relaxed its standards, the maximum amortization period allowed on a government insured mortgage was 25 years and a minimum down payment equal to 5% of the purchase price of the home was required. Introduced as “financial innovations,” zero-down mortgages and 40-year mortgages added fuel to a housing market that was already out of control in a number of Canadian cities.

Record house price increases followed in a number of Canadian cities including Saskatoon and Regina.

How do you see these changes affecting the Saskatoon real estate market?

Read the announcement here.

Read the Globe and Mail coverage here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

New home construction is also experiencing change as residential building permits saw “sharp declines” and inventories of unsold new homes are trending higher.

Warren goes on to say, “Canada’s recent record of price appreciation, averaging an annualized 10% from 2002 to 2007, was unsustainable, and a return to more historical norms is a welcome development.” In explaining her confidence that the market is unlikely to see major declines like it did following the last two Canadian housing booms, Warren makes the following points.

• Home prices in Canada are not substantially overvalued
• There is little evidence of widespread speculative home buying that often accompanies the later stages of a housing boom
• Canada’s real estate market is not overbuilt
• Canadian households are not overleveraged
• Overall mortgage quality is still sound.

“From a regional perspective, the cooling in overall activity is most notable in many of Canada’s hottest urban housing markets in recent years, including Calgary and Edmonton. Both centres have officially moved into buyers’ territory as soaring prices weaken demand and fuel new listings. More generally, however, economic conditions continue to favour the resource-rich markets in the West over manufacturing-dominated centres in Central Canada hampered by a strong Canadian dollar and softening U.S. import demand. Regina and Saskatoon are currently in the strongest sellers’ position nationally, supported by good affordability, rising population inflows and tight supply.”

Read the Scotiabank Real Estate Trends Report here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate