Training Time: Running a Property Title Search

We tricked you already! You may be interested in running a property title search because you want to verify things like who owns a home and the financial status of the home – registered mortgages, etc. Many mortgage professionals think that searching for this type of information is running a property title search. In fact, a property title search is something that a lawyer performs that involves a variety of searches and other information including things like the homeowner’s status with the municipality.

If you want to verify who owns a home or what mortgages are registered against the home, a basic property search in Purview For Lenders will do it! Check out these training videos below to learn how to access homeownership information, registered mortgages and more…

The more you know, the better prepared you’ll be to mitigate fraud and avoid toxic deals. Contact Purview For Lenders today at 1.855.787.8439.

How to validate homeownership information

How to find registered mortgages on title

 

For more info on Purview For Lenders please visit www.purviewforlenders.com. 

HPI Monthly Report - Home Prices UP 0.1% in October

In October the Teranet–National Bank National Composite House Price Index™ was up 0.1% from the previous month, a 10th consecutive monthly increase. This rise was about average for a month of October. Prices were up on the month in only five of the 11 metropolitan markets surveyed – 1.9% in Winnipeg, 0.6% in Vancouver, 0.3% in Toronto and Victoria and 0.2% in Edmonton. For Vancouver it was the 10th consecutive month in which prices did not fall, for Toronto the eighth – a trend consistent with the seller’s-market conditions prevailing in those two markets, as measured by the ratios of listings to sales calculated from the data reported by the Calgary and Toronto real estate boards. Elsewhere prices fell – by 0.2% in Quebec City, 0.3% in Montreal and Hamilton, 0.6% in Ottawa-Gatineau, 0.8% in Calgary and 1.7% in Halifax. For Quebec City it was the fifth consecutive monthly decline, for Montreal the third (the fourth for the Montreal condo market). The October rise in Edmonton ended a run of four straight months with no increase. The decline in Hamilton ended a run of five straight rises.

Teranet – National Bank National Composite House Price Index™

In October the composite index was up 5.6% from a year earlier, the same 12-month rise as in September and the strongest since May 2012. In Vancouver (+9.8%) and in Toronto and Hamilton (+9.3%), the 12-month gain was well above the countrywide average. In Victoria (+6.4%) it was closer to the average. Prices were up only 1.4% from a year earlier in Edmonton and were flat in Winnipeg and Ottawa-Gatineau. Prices were down from 12 months earlier in Montreal (−0.6%), in Calgary (-1.0%), in Halifax (-1.1%) and in Quebec City (−3.2%). It was the first month since October 2009 that prices were up from a year earlier in only five of the 11 metropolitan markets surveyed.

Adapting to Canadian Market Conditions: 2015 Turbulent Housing Markets

When it comes to real estate investment, where are Canada’s worst markets? Well, nowhere that we could classify as turbulent at least. Housing numbers stayed steady, nationally, the entire year.

It has widely been reported throughout the year that the Canadian economy could be headed for trouble. Some would even say that the BOC’s rate drop this past summer is evidence of that, and articles like this one are suggesting that provinces such as Alberta are headed for a correction: http://globalnews.ca/news/1860605/sturdy-as-a-house-of-cards-a-look-at-canadas-property-boom/.

It can be hard to forecast and adapt to Canadian Market conditions with wide speculation of turbulent housing markets and the potential that a housing bubble exists in Canada. After all, a wise person once said there are two sides to every story, but the truth lands somewhere in the middle!

The best way to adapt to Canadian market conditions is to be in the know and this could involve a multi-lateral approach.

1.      Make sure you are subscribed to all the financial/news publications in your area of focus and not just one – only subscribing to one could leave you influenced by that publication’s positioning. Pick out your top 3-4 trusted publications to receive in your inbox.

2.      Who releases white papers? National corporations like Pricewaterhouse Cooper routinely release annual publications about Canadian real estate trends http://www.pwc.com/ca/en/real-estate/publications/pwc-emerging-trends-in-real-estate-2015-en.pdf.

3.      House price indices – Consider subscribing to Canadian house price indices like the Teranet-National Bank House Price Index™ to keep on top of national housing numbers.

4.      Provincial reports – Provincial reports like the Ontario Mortgage Insights Report drills down on provincial housing data at a more granular level.

5.      Automated valuations – you can use AVMs to generate assessments of cities or even entire neighbourhoods.  

Taking the above 5 actions means more reading, yes, however it also means that you can hand your intel down to your team to not only identify areas of risk but also areas of opportunity! You can either act using this intel to mitigate risk in these areas or work with your marketing group to ensure that you are maximizing your efforts in hot areas, even marketing the right products according to the market.

One thing that is very positive is that, throughout 2015, despite the low oil prices impacting the dollar and economist speculation, the Canadian housing market appears as strong as ever and a great market for lenders and real estate investors.

Don’t let a lack of knowledge about the Canadian housing market mean lost opportunities. Stay on top of what is happening. Contact Purview For Lenders today at 1.855.787.8439.

Mortgage Fraud in Canada – What Are You Doing About it?

We write a lot about mortgage fraud in Canada, for various reasons. Obviously offering a tool that is a solution for mortgage fraud is one reason, but another, far more important, reason is because of the dire impact that mortgage fraud has in Canada and how it can lead to overall economic instability.

The more aligned our industry is – whether you are a lender, broker, lender, insurer, technology and other service providers, etc. - the more we can work together to combat fraud.

You can neatly sort into groups who commits fraud and why:

1.   The seasoned fraudster – This is someone who knows that they are committing fraud and do it for profit – this could be the borrower, a mortgage agent or flat out delinquent.

2.   The client who “forgot” or was “confused” – This is when the customer’s actions result in fraud. It could be missing, undisclosed or incorrect information. If uncovered, the customer’s usual response is that they were confused or simply forgot – not that they internally omitted or gave wrong information. Often this proves to be true.

3.   The mortgage agent who turned their cheek – This is when flags are appearing that an agent/broker chooses not to see because they think their deal will go through anyways. This is when mortgage agent underwriting steps into the grey and your bottom line takes a hit as a result.

You can perform a strong interview and ask that the client or broker to provide supporting documents as well as conducting your own independent verifications to ensure that you have a good, clean deal.

When it comes to doing your due diligence on a property to which you are thinking of extending financing, there are certain things that you can independently verify that will help mitigate the likelihood that fraud, with respect to the property being financed, will occur. Here are 5 things that you can independently verify at the application stage that can significantly reduce mortgage fraud:

·         Validate homeownership information

·         Check the financial history on the property

·         Check the sales history on the property

·         Look at the property from the sky and from the street

·         Generate an AVM to validate value

Now, we know that are you a lender, not the RCMP, and unfortunately some fraud will slip past you, but the more you do to ensure that you are not dealing with a fraudster, the better. You are somewhat challenged because if the deal is coming from an agent or broker they may not give you direct contact with the client. The more you do to independently verify applicant information, the higher the likelihood of stopping fraud in its tracks.

Basic due diligence, the type made easy with the tools from Purview For Lenders, can help you mitigate the losses caused by fraud, and make the industry more stable as a whole. 

Call us today at 1.855.787.8439.

Training Blog – Fraud Check

Lenders use Purview For Lenders for many and sometimes all of the benefits it offers. If you haven’t yet fully explored every aspect of the report and how you can be making the maximum use of the report – let us introduce you to Fraud Check.

Fraud Check is a Purview For Lenders tool that scans the report for information that may indicate that you need to look more deeply into an aspect of your deal. On a wider scale it can be used in risk management scoring and to apply practices to your department as a whole. Fraud Check performs 18 customizable real estate fraud checks in once instance.

This quick tutorial walks you through the Fraud Check features:

Not using Purview For Lenders yet? Find out why you should be by booking an appointment with one of our sales people today http://lenders.purview.ca/contact.php. 

Teranet – National Bank House Price Index™– Your Key to Forecasting

Lenders and economists alike turn to house price indices like the Teranet – National Bank House Price Index™ to analyse performance in the housing market and to make predictions for the future. In a very competitive lending environment, lenders from smaller credit unions all the way up to major banks use a preferred house price index or a few house price indices to keep a competitive edge, manage risk and to plan for the future.

House price indices analyse housing sales data and generate index values which are monitored over time. Over time, looking at the data month over month and year over year, trends begin to emerge that economists use to forecast changes in the economy and that lenders use in strategic planning in every aspect of their organizations from underwriting to operations to risk management to product development.

There are many different providers of house price indices and what makes each distinctly difference is their data they use to produce their house price indices and also the formula they are using to arrive at their number.

Before relying on any house price indices – make sure you know where the data comes from! The data source of the house price index you are relying upon is critical because you are relying on this information to help you make important strategic decisions. Some data is more current than others.

The most common data sources for house price indices are as follows:

1.   Tax Assessment Data – Municipalities charge property taxes based on their assessed value of a property. These assessed values are stored in a database and relied upon in some house price indices.

2.    Multiple Listing Service Data – Real estate boards often maintain an MLS system which stores all listings and the sales of all properties in its region. Every time a real estate sales professional lists or sells a property, they add the listing to the MLS. This data is relied upon in some house price indices.

3.    Statistics Canada Data

4.    Land Registry Data – The Teranet – National Bank House Price Index™ relies upon, in the example of Ontario, land registry information from the province of Ontario’s land database. This is a reliable and current source of housing price data available.

You can follow one or all house price indices to have an idea at any point in time where the Canadian housing market stands and what trends that are occurring may or may not impact you. If you would like to register for the Teranet – National Bank House Price Index™ click here: http://www.housepriceindex.ca/default.aspx.

HPI Monthly Report: Home Prices up 0.6% in September

In September the Teranet–National Bank National Composite House Price Index™ was up 0.6% from the previous month, a ninth consecutive monthly increase. This rise was well above the 17-year September average of 0.2%. However, prices were up on the month in only six of the 11 metropolitan markets surveyed – 1.9% in Halifax, 1.6% in Vancouver, 1.3% in Hamilton, 0.8% in Victoria, 0.7% in Calgary and 0.6% in Toronto. Prices in Edmonton were flat. Prices were down 1.9% in Quebec City, 1.4% in Winnipeg, 0.5% in Ottawa-Gatineau and 0.4% in Montreal. The composite index was at an all-time high in September for a seventh consecutive month, though only the Victoria, Vancouver, Hamilton and Toronto component indexes matched it in this regard. The resale market in those centres is a seller’s market by the Canadian Real Estate Association criterion of sales relative to new listings. For the last three of these four markets it was the fifth consecutive monthly rise. For Edmonton and Quebec City, it was a fourth straight month with no rise in prices. The Vancouver index, at 201.2 in September, is the first to top 200, meaning that prices in that market are slightly more than twice as high as in June 2005.

In September the composite index was up 5.6% from a year earlier, the largest 12-month rise since May 2012. The 12-month gain was well above the countrywide average in Hamilton (10.6%), Vancouver (10.4%) and Toronto (8.6%). It was close to the average in Victoria (5.9%). Prices were barely up from a year earlier in Edmonton (0.8%), Calgary (0.3%) and Ottawa-Gatineau (0.2%). Prices were flat in Montreal, and down from a year earlier in Quebec City (−2.9%), Winnipeg (−2.3%) and Halifax (−0.2%).

Multiple Listings Service – The Best Tool for Lenders/Investors to Validate Value?

The multiple listings service (MLS), for a long time, has been what many real estate professionals and lenders alike have used to pull sales comps when trying to establish the list value of a property. Comparably, many appraisers have also relied up upon tools like the multiple listings service and GeoWarehouse to pull sales comparables.

But do mere sales comparables go far enough in today’s lending environment?

In the past 10-15 years, this practice has changed significantly. The internet and technological advances have brought us other tools such as Automated Valuation Models (AVM), and have provided a more comprehensive way to crunch data in order to generate property value.

Automated Valuation Models generate a value based on all comparable sales in an area entirely, not just 2 or 3 that appeal - what often occurs when a human is browsing their local MLS. 

The multiple listings service is a database that stores information around sales and listings, while AVMs have their own respective data sources and methods for analyzing the data. The 3 most common types of AVMs draw their data from distinctive sources or using different approaches.

1.    The House Price Index Model – This model looks at multiple repeat sales which then result in house price indices in different geographical locations. This is then applied to the past transaction price to generate a current valuation.

2.    The Tax Assessed Value Model – This uses data from municipalities that store property value information in connection with tax assessments. In this model past values and subsequent values are used to create a ratio which is often relied upon when updated the tax assessed values of properties.

3.    The Hedonic Model – This model uses price information about all sales related to comparable/similar properties in an area using property specific attributes. The value is then generated using a radius search pattern and other logical search parameters.

Some tools only produce AVMs, while other tools produce AVMs within a report containing other property data.

·        The old fashioned way of investing in real estate: See a property, ask to see multiple listings comps, if deciding to move forward – order an appraisal.

·        The new way of investing in real estate: See a property, generate an AVM on your tablet or at the office, if moving forward you may or may not request an appraisal to accompany your AVM depending on equity.

Appraisals are not AVMs and AVMs are not appraisals. AVMs don’t take into consideration the condition of a property or things that real-time boots on the ground can. Lenders who want to dig deeper use their AVM as a first search measure and then couple it with an appraisal to get a more complete and accurate picture.

Sound complicated? Not so much. In fact, the big banks have been using AVMs for the past 10-15 years. Technology has made them so much more accessible that many smaller lenders, such as credit unions, finance companies and even individual private lenders, have integrated the use of AVMs into their workflows.

Get more information on why an AVM is the new way of doing things by visiting https://lenders.purview.ca/property-valuation.php.

Real Estate Fraud 101 – What Every Underwriter Needs to Know

We continue to bang the fraud awareness drum! Why? Because it is too costly to our industry to be ignored. There are so many types of real estate fraud that while the financial industry as a whole is dealing with the latest and greatest schemes to hit the marketplace – the fraudsters are already working on a strategy to roll out a new one.

While focusing on types of real estate fraud helps us to learn from others in the industry about what to look for, focusing on fraud awareness techniques can help you to uncover these types of fraud and even more issues that could be prevalent on a deal.

There are easier ways that you can go about doing this – and of course more difficult ones - but all hinge on you taking the steps to really review your client’s information, verifying it, and asking the questions needed to ensure that there is no funny business going on.

You can also make your own checklists to ensure that you cover your bases:

• Was the last transaction a cash sale? 
• Have you checked for real estate fraud? Has there been a recent sale or multiple sales activity on the subject property?
• Is the property profile suspect? Who was the previous owner? Is the property in power of sale, owned by a corporation or a party to the transaction like the real estate lawyer?
• Is it a non-arm's-length transaction? Is the person taking out the mortgage a past owner of the property or are parties to the transaction related? 
• Have you checked for title fraud? Has there been any recent discharge of mortgages following a recent transfer where mortgagor is the same?
• Have you checked for value fraud? Have you looked at an AVM to ensure that the property is actually worth what was stated in the application?
• Have you checked for fraud by income? This is something technology can’t do and is something where mere moments can mean all the difference – did you call the employer to verify employment?

We sound like a record on repeat: reviewing the legal homeowner, the sales/transaction history on a property, financial encumbrances and value are the fastest way to identify real estate fraud. Checklists are helpful too! Some technology summarizes information for you:

These are some examples that you can put into your checklist to cover your bases and ensure that you are doing everything you can to avoid real estate fraud. As an underwriter you have a lot of responsibility on your shoulders – the more organized you are and the more tools you have at your disposal the easier it is to perform your very vital role.

Purview For Lenders’ Fraud Check is just one of the many tools we offer to help you mitigate mortgage fraud - contact us today at 1.855.787.8439.

CAAMP Conference and Other Must Attend Conferences for Lenders

As 2015 wraps up, there are still a few must attend conferences that lenders should be considering. Aside from the big annual CAAMP Conference, Mortgage Forum, there are many other smaller events left in 2015 where you can network with others in your profession.

Meeting other lenders and brokers are great opportunities to stay connected to the industry, stay more competitive and even become aware of new trends.

Here is a list of what events are left for 2015:

·         October 6, 2015 Toronto, Ontario – CAAMP Fraud Summit http://caamp.org/info.php?pid=675

·         October 7, 2015 Stoney Creek, Ontario – IMBA, Professional Development Symposium – Alternative Lending http://imba.ca/events/professional-development-symposiums/

·         November 15, 2015 – November 17 Toronto, Ontario – CAMMP Mortgage Forum 2015 http://www.mortgageconference.ca/Welcome

·         November 17, 2015 – CAAMP Mortgage Hall of Fame and Awards Night

The Purview team at Teranet has confirmed that we will be at both the Fraud Summit and the Mortgage Forum!

What conferences will you be attending?

Mortgage Fraud in Canada and What Brokers Have to Say!

We recently concluded our first Fraud Awareness Month during which we dedicated our social media to fraud awareness and increasing the dialogue between lenders and brokers about types of mortgage fraud in Canada that are prevalent in the industry. It was a huge success!

So many financial professionals chimed in with amazing insights and feedback that we wanted to highlight some of those dialogues.

Brokers acknowledge that lender/broker relationships are incredibly important. Lenders who receive business primarily from brokers count on brokers as a first line of defense. This is one thing that is very attractive about accepting mortgages from brokers – they do so much of the legwork. One thing that came out of Fraud Awareness Month was that brokers across the board really care about the quality of the deals they bring forward to their lenders and are summarily committed to deploying whatever tools they have in their arsenal to combating mortgage fraud in Canada.

Many are even leveraging the most current technology, incurring personal expense to take extra measures when performing due diligence including verifying:

·         Home ownership information

·         Registered mortgage information

·         Sales history information

·         Value of the property and more

Many are using much of the same technology that you use – like AVMs, running property searches, even independently picking up the phone to verify employment. Mortgage fraud in Canada and as a whole has been acknowledged across the board as a major issue and it seems financial professionals on every level are realizing that we all play a valuable role in the process of spotting fraud.

Working with brokers the likes of whom were vocal during Fraud Awareness Month can give you peace of mind that you are going to receive deals that close and are unlikely to have issues later. How can you know if you’re dealing with one of these types of brokers?

When interviewing new brokers – ask lots of questions. What is their position on mortgage fraud? Do they see mitigating mortgage fraud as one of their roles in the mortgage process? What tools do they deploy to combat mortgage fraud?

Also, sharing with brokers the tools you use to mitigate mortgage fraud (like Purviews fraud check as one example) is a great way for brokers to seek out broker versions of these tools so that your information is aligned with their information.

Increased alignment, dialogue and sharing on issues surrounding mortgage fraud in Canada lead to strong relationships and a healthier Canadian financial industry.

When it comes to conquering mortgage fraud, we all play a roll, and working together makes it that much easier. Check out how Purview For Lenders contributes to the challenge: http://lenders.purview.ca/. 

HPI Monthly Report: Home Prices up 1% in August

In August the Teranet–National Bank National Composite House Price Index™ was up 1.0% from the previous month, an eighth consecutive monthly increase. The rise exceeded the 11-year August average of 0.9%. Prices were up on the month in six of the 11 metropolitan markets surveyed – 3.9% in Calgary, 2.4% in Hamilton, 1.6% in Toronto, 0.6% in Vancouver, Ottawa-Gatineau and Winnipeg. Prices were down on the month in Victoria (-0.3%), Halifax ( 0.4%), Edmonton and Montreal (−0.5%) and Quebec City (−1.1%). The composite index was at an all-time high in August for a sixth consecutive month, though only the Vancouver, Hamilton and Toronto component indexes were at an historical high in August. The resale market in those three centres is a seller’s market according to the Canadian Real Estate Association criterion of sales relative to new listings.

Teranet-National Bank National Composite House Price Index™

In August the composite index was up 5.4% from a year earlier, the highest 12-month increase since November 2014. The 12-month gain was well above the countrywide average in Vancouver (9.7%), Hamilton (8.8%) and Toronto (8.7%). It was below the average in Victoria (3.2%), Edmonton (0.8%) and Calgary (0.7%). Prices were down from a year earlier in Winnipeg and Ottawa-Gatineau (-0.4%), Montreal (-0,5%), Quebec City (-0.7%) and Halifax ( 1.4%).

For the full report including historical data, please visit: www.housepriceindex.ca.

What Could Average Canadian Debt Mean to FIs Across the Board?

It can’t be denied that Canadian debt levels continue to skyrocket. Just about every news outlet from the CBC to Global has reported on this trend. Economists and even the Prime Minister has chimed.

Take a look at the infographic below produced by Equifax, according to an article released by Global News last, consumer debt is up in every single province: year http://globalnews.ca/news/1544506/infographic-debt-levels-jump-sharply-east-of-ontario/.  With the exception of Manitoba and Quebec, all provinces are seeing an average over $20,000.00.

The CBC released an article earlier this past summer that suggests that Canadians are continuing to rack up their household debt. The article looks at household debt which includes mortgages, lines of credit and credit card debt vs. consumer debt which is highlighted in the above infographic. The article sites a BMO annual debt report that resulted in the average debt of those surveyed as sitting at a staggering $92,699 which is $4,000 higher than the previous 4 year average: http://www.cbc.ca/news/business/canadian-households-are-racking-up-more-debt-poll-suggests-1.3146766.

What does this skyrocketing household debt mean to FIs across Canada? This in itself is a very complicated question with many variables that include performance in the capital markets (oil), interest rates, job growth, performance of the dollar and much, much more.

Economists from both BMO and RBC this last quarter called for rate cuts from the Bank of Canada citing signs of a faltering recovery http://www.bnn.ca/News/2015/7/8/Bank-of-Montreal-and-RBC-join-Bank-of-Canada-rate-cut-call.aspx. This occurred while an economist at TDCT went as far as to proclaim that Canada is in recession territory.

The top TD economist wasn’t alone in his sentiment according to this article in the BNN: http://www.bnn.ca/News/2015/7/6/TD-Bank-flip-flopped-on-Canadas-economic-outlook-over-the-weekeend.aspx. Apparently Bank of America Merrill Lynch has said Canada ‘appears’ to have slumped into a recession. According to the article, CIBC called it “a real possibility.”

Add to this the fact that, while economists have mixed emotions on the state of the economy and Canadians are carrying more debt than ever, this past summer the Huffington Post also reported that, according to Stats Canada, while the economy grew – incomes stagnated: http://www.huffingtonpost.ca/2015/07/08/canadian-income-survey-2013_n_7754884.html. The report noted “The median after-tax income of Canadian households was $53,500 in 2013, up by just $100 from 2012, according to StatsCan’s Canadian IncomeSurvey.”

Interest rates continue to be a hot topic when it comes to lending - and continuous changes mean constantly having to stay on top with current trends. Purview For Lenders can help - visit lenders.purview.ca today.

Training Time – How to Use the AVM Component in Purview

Did you know that when you generate a Purview Report the component that provides the value range is in fact the Automated Valuation Model for your subject property?

You can even change your parameters to include a customized valuation model for the Province of Ontario. If a customized model does exist, by default, each estimate value for a subject property located in the Province of Ontario will be generated using your company’s customized model.

This step by step video tutorial will help you learn the ABCs of generating AVMs using Purview

Real Estate Investing in Canada – Top Places to Invest

Real estate investing in Canada can take many forms and a mortgage is one of them. Every mortgage financed in Canada is in itself a real estate investment. Your portfolio is as strong as the properties you hold as security. It is important to be on top of what is taking place in the Canadian housing market to be able to identify hot areas and also not so hot areas.

MoneySense Magazine recently released a report highlighting the top 35 places in Canada. The article measured average home price in 2014, time to buy in years, 5 year price appreciation, average 5 year rent increase and previous year’s unemployment rate (2013).

Here are the numbers organized into a table:

What tools are you using to determine what makes a solid investment? This is some great info that you can use to determine your most effective strategy. 

Contact Purview For Lenders today for more info: 1.855.787.8439.

Trust Playing a Major Role in Real Estate Investing in Canada

Investment in the real estate market continues to be a vital component of a healthy housing market in Canada – but what happens when trust in real estate investing begins to wane?

Our attention was drawn to a recent Globe and Mail article that points out that a widespread lack of trust in the financial services industry may be what is keeping Canadians from achieving their financial goals. According to Ms. Hamilton-Keen, director of private client management for Mawer Investment Management Ltd., a recent study, “Investor Trust Study,” done by the CFA Institute & Edelman, found that financial services sit at the bottom of industries most trusted among clients. Only 52% of investors stated they trust the financial services industry.

Apparently, the number one reason that investors said they are losing trust and confidence in the financial services sector was the lack of ethical culture within global financial firms.

Improving investor trust as it relates to ethics is something that the financial community as a whole has to look at. The only solution for this is ongoing dialogue – dialogue in training, amongst colleagues, and in the industry as a whole. We now know that there is such a thing as “to big to fail” and ethics can mean the difference between a recession and a healthy market. Once something as monumental as this occurs that calls ethics into question it can be a very long road back, as we can clearly see in the afore mentioned study.

How about the mounting issue of trust in the economy? In the last BOC rate announcement, economists from across the board, including the big banks, are calling for further Bank of Canada interest rate cuts, some even going as far to say that Canada is in/headed for a recession.

In the Toronto Star – top TD Canada Trust economist Randall Bartlett stated “It is likely the economy was in recession in the first half of the year, thanks to the damage from a collapse in oil and commodity prices that has persisted since 2014.” http://www.thestar.com/business/economy/2015/07/06/canada-in-recession-rate-cut-likely-td.html

Other bank economists have come out calling for the Bank of Canada to cut its rate another quarter point, this leading up to the July 15^th Bank of Canada rate announcement that passed this past month. In a recent article posted on BNN, “Doug Porter of Bank of Montreal and Mark Chandler of Royal Bank of Canada joined a growing list of economists calling for Canada’s central bank to cut interest rates next week on signs of a faltering recovery,” wrote Greg Quinn and Erik Hertzberg, Bloomberg. http://www.bnn.ca/News/2015/7/8/Bank-of-Montreal-and-RBC-join-Bank-of-Canada-rate-cut-call.aspx

Ask and you shall receive? Well, the BOC did cut Canada’s interest rate another .5% this past July.

If trust in the Canadian housing and financial markets is unpredictable, this will make it hard to have trust and confidence to invest. Trust is everything when it comes to the financial markets! The best that we can do to stay on top of how trust is impacting investors and make predictions is to have access to the data needed to look at short and long term trends.

When looking at the housing market in Canada – aside from looking at factors that impact the interest rate, also pay attention to housing trends and sales, if the economists at all of the major banks look at house indices like the Teranet – National Bank House Price Index™ when making predictions, you should too.

Get the up-to-date data and information when you needed, and stay informed. Visit Purview For Lenders at lenders.purview.ca today.

Mortgage Rates Canada - Where Will Canadian Mortgage Interest Rates Go? 2016 Predictions

2015 has been an interesting year with respect to the economy. We began 2015 with a .25% interest rate reduction, bringing the BOC’s lending rate down to .75%. We also began the year with oil prices hitting lows we haven’t seen for a very long time. The Canadian dollar has softened and just a month ago the BOC announced another rate change, slashing the key interest rate by a further .25%. This makes the BOC’s current interest rate .5%!

Mortgage rates in Canada are so low that really, where the interest rates are concerned, the BOC only has .5% left and the key interest rate will be 0% meaning that latest interest rate drop will have to make a big impact or the Canadian economy could be in for some turbulence. Generally the interest rate is reduced to protect the economy but with rates so low it doesn’t leave much wiggle room.

Following the BOC’s announcement, it was reported in the Globe and Mail that the major Canadian Banks followed suit and also cut their lending rates:/http://www.theglobeandmail.com/report-on-business/economy/interest-rates/td-cuts-prime-rate-in-wake-of-bank-of-canada-move/article25515826.

The article reports that:

·         Toronto-Dominion Bank initially decreased its prime rate – the benchmark for creditworthy borrowers – to 2.75 per cent, down 0.10 percentage points.

·         Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce responded, reducing theirs by 0.15 points to 2.70 per cent from 2.85 per cent.

While the key lending rate has less wiggle room, the banks inching down their rates has left them far more room to breathe.

This year and coming into 2016 is the hardest ever when it comes to predicting where interest rates will go. So many factors are contributing to the performance of the Canadian economy: the dollar, employment rates, income rates, household debt, oil prices, the housing market and much, much more…

The Bank of Canada key interest rate - this page provides both the current rate but also a 12 month history of past rate announcements and a schedule of future rate announcements. Check it out: http://www.bankofcanada.ca/core-functions/monetary-policy/key-interest-rate/.

Want to follow interest rates? Here is a table from the BOC website outlining 2015’s rate announcements and adjustments as well as the schedule for Canadian interest rate announcements for the rest of the year.

·         January 21, 2015 – interest rate was reduced by .25% making the lending rate .75%

·         March 4, 2015 – no change was made to the interest rate

·         April 15, 2015 – no change was made to the interest rate

·         May 27, 2015 – no change was made to the interest rate

·         July 15, 2015 – Interest rate was reduced by .25% making the lending rate .5%

·         September 2015 – Interest rate announcement

·         October 21, 2015 – Interest rate announcement and Monetary Policy Report

·         December 2, 2015 – Interest rate announcement

If you could predict where interest rates will go coming into 2016 – what would your prediction be? Let us know on Twitter: @purview4lenders.

HPI Monthly Report: Home Prices up 1.2% in July

In July the Teranet–National Bank National Composite House Price Index™ was up 1.2% from the previous month, a seventh consecutive monthly increase. The rise exceeded the 14-year July average of 1.0%. Prices were up on the month in six of the 11 metropolitan markets surveyed – 2.7% in Hamilton, 2.4% in Toronto, 2.3% in Ottawa-Gatineau, 1.7% in Victoria, 1.6% in Vancouver and 0.3% in Montreal. Prices were down on the month in Winnipeg (−0.5%), Quebec City (−0.6%), Edmonton (−0.7%), Halifax (−1.0%) and Calgary (−1.9%). The composite index was at another all-time high in July, though only the Vancouver, Hamilton and Toronto component indexes matched it in this regard. The resale market in those three centres is a seller’s market according to the Canadian Real Estate Association criterion of sales relative to new listings. In recent months sales have been rising strongly in all the markets surveyed except Halifax and Winnipeg, though in Calgary and Edmonton sales are still below their year-ago level.

In July the composite index was up 5.1% from a year earlier, the same as in June. The 12-month gain was well above the countrywide average in Vancouver (9.9%), Toronto (8.4%) and Hamilton (6.7%). It was below the average in Victoria (3.9%), Edmonton (1.9%), Winnipeg (0.9%), Quebec City (0.6%) and Ottawa-Gatineau (0.5%). Prices were down from a year earlier in in Montreal and Halifax (−0.6%) and in Calgary (−2.3%). With an index at 196.94 as of July, Vancouver just outpaced Winnipeg (195.89) as the metropolitan area where house prices increased the most since June 2005.

For the full report including historical data, please visit: www.housepriceindex.ca.

Canadian Housing Market Bubble - Economists Weigh In

The Canadian housing market has seen continual growth over the years, especially in and surrounding urban centres. This ongoing growth in the value of Canadian properties has led some to rejoice, while others, including well known economists, seem to be all over the map with respect to whether Canada is in fact in danger of a housing bubble.

At the beginning of this year Torsten Slok, chief international economist from Deutsche Bank released a report surmising that Canada’s housing prices are 63% over value and that Canada is in danger of serious financial problems: http://business.financialpost.com/business-insider/deutsche-bank-reveals-7-reasons-why-canada-is-in-serious-trouble-starting-with-a-63-overvalued-housing-market.He chalked up his findings to a few distinct issues:

1.    Canadian household debt to income still seeing historical highs

2.    The mortgage credit market has seen a slow down

3.    Canadian household debt exploding across the board – credit cards, loans and mortgages

4.    Construction of multi-level apartments and condos have seen all-time highs while construction of homes has leveled out over the past decade

5.    Urban centres like Toronto have seen slowing growth in the past couple of years

Following this article in the Financial Post, in April of 2015 financial adviser and author Hillard MacBeth commented in a CBC interview on an analysis released by Economist Magazine
http://www.economist.com/news/finance-and-economics/21648624-housing-markets-across-globe-both-underperform-and-overwhelm-property-puzzles “that tracked Canada's housing prices as being overvalued by 35 per cent”http://www.cbc.ca/news/business/overvalued-home-prices-could-put-new-owners-at-risk-1.3042790.

Some economists have cited record Canadian household debts as the reason that the Canadian housing market could be inflated, while others cite puffed up ultra-low borrowing rates.

When we say opinions on this topic are all over the map – we mean it.

In the same month that the Economist Magazine analysis was released, so was an opinion by Bank of Canada Governor Stephen Poloz in the Globe and Mail:  “We don’t believe we’re in a bubble…Canada’s long-running boom in the housing market hasn’t been underpinned by the kind of rampant speculative buying that is the hallmark of an asset bubble.” http://www.theglobeandmail.com/report-on-business/economy/economic-strengths-to-overtake-oil-gloom-poloz-says/article24149175/

Canada’s Finance Minister Joe Oliver was quoted this past May in a closed media session on the topic of further planned CMHC changes, saying “We do not see the need for major changes at this time, we will continue to monitor the market and make adjustments, if needed, although none are being actively considered right now.” This seems to signal that the Canadian government is satisfied with the performance of the Canadian housing market.

http://www.bnn.ca/News/2015/5/20/There-is-no-housing-bubble-in-Canada-Finance-Minister-Joe-Oliver-.aspx

We are interested in knowing what you think. Weigh in on Twitter @purview4lenders

How are you dealing with the myriad changes? Purview For Lenders can help. Contact us today at 1.855.787.8439.