April 23, 2018

Some Ways The Budget Could Cool This Market

In the current housing market, we are all appalled at the crazy increases, how can anyone afford to purchase a home!!  Something has to be done and hopefully in the budget next week we will see some changes to cool the market.

I was elated to hear that Ontario Finance Minister Charles Sousa will be targeting real estate speculators and investors, or as he calls them “property scalpers”, which are speculators that resell contracts for pre-construction homes multiple times before closing.  They go into new developments, buy up a slew of properties, and then flip them, while avoiding paying their fair share of taxes.

A similar practice called  “shadow flipping” became very common in Vancouver.  Typically a real estate agent would resell the same home multiple times before the closing date, driving up the price of the house, sometimes by hundreds of thousands of dollars.  In May 2016, the B.C. government put in place new rules that require real estate agents to draft offers that require the seller’s consent to a contract transfer, and any resulting profit to be returned to the seller.  That I would like to see in our budget.

Sousa’s office is considering a number of possible measures, including implementing a tax on foreign buyers, vacant homes and speculators and to close a loophole on profits and capital gains.

Speaking of vacant properties, just in the GTA, it is estimated there are as many as 65,000 vacant dwellings.  Typically it is almost impossible to get home insurance on a vacant property.  An empty homes tax introduced in Vancouver this year charges 1 per cent or $10,000 on a $1 million property that isn’t occupied by the owner or family or, rented to a tenant, at least six months of the year, another fabulous idea!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offers all mortgage related services such as 1st and 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

http://www.mortgagebrokernews.ca/business-news/sousa-hints-upcoming-housing-measures-will-target-property-scalpers-224231.aspx

Wells Fargo $110 million Settlement Of Fake-accounts Suit

Wells Fargo just keeps hemorrhaging money over its fake-accounts scandal. It’s already paid $185 million in penalties to state and federal agencies – including a $100 million CFPB fine, the largest penalty of its kind ever imposed. And now the banking giant will have to fork over another $110 million to settle a class-action suit filed by customers affected by the scandal.

Wells Fargo found itself in hot water last year when it was revealed that its employees had opened 2 million unauthorized accounts in order to meet sales goals. The bank has announced that it’s reached a settlement in a suit filed in 2015 in California.

“The settlement class will consist of all persons who claim that Wells Fargo opened an account in their name without consent, enrolled them in a product or service without consent, or submitted an application for a product or service without their consent,” the bank said.

“This agreement is another step in our journey to make things right with customers and to rebuild trust,” Wells Fargo CEO Tim Sloan said. “We want to ensure that each customer impacted by our sales practices issue has every opportunity for remediation, and this agreement presents an additional option.”

Sloan said the bank encouraged affected customers to contact it directly “so that we can act quickly to refund fees and address any concerns.”  The settlement must be approved by the court before it becomes final.

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offers all mortgage related services such as 1st and 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

http://www.mpamag.com/news/wells-fargo-to-shell-out-110-million-to-settle-fakeaccounts-suit-64086.aspx

In Such A Crazy Market, What A Beautiful Story

All we hear about is the ridiculous prices homes in the GTA are selling for.  For one couple, the Crofts’, they sold for $150,000 less than the highest bid on their Oakville home because of a letter attached to the offer to purchase.

After 6 weeks of missionary work in Uganda last year, Joo-Meng and Rosanna Soh, with their four children ages 9 to 14, found their lives had changed.  “Our desire is to downsize and live simply so others may simply live.”  “Part of our goal is not just becoming mortgage free but also allowing us to work less and to have more available time to go on mission trips.”  The education therapist and her husband, a physician, call their move a journey of faith. They are trading a 3,600-square-foot home for 1,983 square feet.

Taking less than they could get for the house was “by no means a loss for us,” Croft said. The couple had a number in mind that would mean a no-stress move in terms of buying another home in Colorado.  The Crofts’ said that money wasn’t the most important thing to them.  That kids would fill the home where she raised her daughter.  It’s about memories not furnishings and renovations.

Amongst all the negativity and fear we hear about today, isn’t it heart warming to hear about people putting their families and others ahead of their bottom line?  Just beautiful!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offers all mortgage related services such as 1st and 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

https://www.thestar.com/business/real_estate/2017/03/30/their-bid-was-150k-less-than-the-highest-offer-but-they-still-got-the-oakville-home-the-reason-why-will-leave-you-heartened.html

What Is Wrong With This System?

There have been many challenges resulting from the changes to the mortgage regulations.  A delegation of mortgage industry leaders went to Ottawa this month to discuss the impact on the industry and consumers.  Very sadly, the message was:  “We don’t care about consumer debt, because we don’t guarantee it.”

This refers to mortgages that are backed by CMHC, Genworth, or Canada Guaranty, effectively the federal government, and increasing concerns in Ottawa around “taxpayer backed” mortgages.  The crazy thing is this segment is incredibly profitable and has generated tens of billions of revenue for the Federal Government over the years (and arguably one of the most profitable Crown Corporations ever created).

And when you get right down to it, all debt in Canada is in effect government guaranteed because should the need arise and bail out of privately-owned banks be necessary, they would have to step in.

The worst part about this comment towards consumer debt is how are they protecting the consumer from themselves?  Anyone with or without a job or established credit can get a 14% car loan or a credit card at 21%.  What is wrong with a system where the major banks approve the mortgage under strict guidelines and then the moment the mortgage is approved, offer the newly leveraged client an additional $5,000 – $80,000 in unsecured credit “just in case” the new homeowners need new furniture or for other expenses.

How can they not see that this is a significant factor in the stability and security of the guaranteed mortgage product?  Absolutely insane!!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offers all mortgage related services such as 1st and 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

https://www.canadianmortgagetrends.com/canadian_mortgage_trends/2017/03/mortgage-industry-voices-concerns-to-ottawa.html

Banks Should All Be Scrutinized

Have you been reading about the high pressure the Banks are putting on their employees to sell, sell, sell at all costs?  Have you noticed when you walk into your branch how frequently staff greet you with the purpose to up sell you more of their products?

As a previous banker, I am still in contact with people working in the branch system and I have heard first hand how difficult it is to work with the main goal to sell services even if the client doesn’t need the product.  I know when I was in the branch, I was incapable of putting someone in further debt just to sell a loan.  Now, that is the job of branch staff to cover the shrinking margins, the bank’s bottom line is everything.  I recently met an ex banker that actually had a breakdown due to the high demands to sell.

TD Bank seems to have been the target of the recent complaints but it is all the banks that should be scrutinized.  “I’m in survival mode now,” one teller who has worked at TD for more than 15 years, told CBC in its initial report. “Because it’s a choice between keeping my job and feeding my family … or doing what’s right for the customer.”  Following that report, CBC claims “hundreds” of former TD Bank employees contacted it and explained “poisoned,” “insane,” work practices that have “zero focus on ethics.”

“We’ll certainly be monitoring our complaint volumes and monitoring the situation,” Sarah Bradley, the head of the Ombudsman for Banking Services and Investments, told the Canadian Press.

I recently did a blog on the Wells Fargo and how high pressure sales forced employees to charge excessive rates above what the clients qualified for and forged client applications just to meet sales targets.  The end result, 5,300 people lost their jobs and the company paid $270,000 in fines. http://mortgagesbycolleen.ca/wells-fargo-fiasco/

Is this where we are heading?  Is the excessive pressure being put on bank employees going to cause employees to charge higher interest rates, automatically increase our credit limits and put already indebted Canadians in more debt?  Maybe it is time for the consumer to speak out to top bank officials, stop inundating us with your sales tactics.

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offers all mortgage related services such as 1st and 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

http://www.mortgagebrokernews.ca/news/a-lending/not-just-td-222756.aspx