Changing the Landscape of the Canadian Mortgage Industry

Financial Update

Canadian First Financial Group (CFF Bank) announces that they have just launched 7 NEW banking retail offices in Western Canada.

President of CFF Bank, Peter Vukanovick, has this to say:

“By joining the Canadian First Financial network, mortgage professionals are empowered to do more for their clients by assisting with additional banking and financial service needs,” said Peter Vukanovich, President and CEO.  “Our recently launched CFF Bank EASYONE Account (a no-fee unsecured line of credit combined with a high interest rate savings account) and Tax-Free Savings Account are adding value to their mortgage businesses and client relationships.  We are receiving positive feedback from CFF Centre owners on how easy it is to help their clients with more than just mortgages,” said Vukanovich.

Included as one of the new Distribution Centers is Calgary’s own, Canada First Mortgage.  Being a part of the Canadian mortgage industry for the past 14 years has been fast-paced and constantly evolving.  To be a part of the latest launch of Retail Banking Distribution Centers changes things drastically; for us, our clients, and consumers yet again - and for the better!  Offering mortgages to Canadians from Canada’s leading banks and lenders has been something we’re used to doing, but now we get to guide consumers to alternative banking products that compete with the best of the best.  Canadian consumers need choice, and we are proud to be a part of this unique opportunity; assisting Canadian’s with yet more saving opportunities.

Canadian First Financial plans to continue expanding locations in communities across the country. It is also committed to building additional retail banking product options to help Canadians with all their banking and financial needs.

Find out more… let us know how we can save you MORE.

Alberta Flood - The Aftermath - And your Mortgage…

Financial Update, Lenders

Reports suggest that satellite imagery had notice that a flood was on its way - .  We can become unsettled with that, but then again we ask ourselves “how much time would have that given us to DO anything about it?”  The fact of the matter is that it came, it saw, and it kicked our behinds.  The first ever (that we know of), of this magnitude and now we’re left to deal with the aftermath…

Unlike many residents of High River, most of the affected in Calgary have now began to restore, rebuild, and move back into their homes.  High River… well, a lot of the residents there can only watch in heartache and come to grips that their homes are now and forever uninhabitable.  So many material items…lost - with all but memories remaining.

As the communities pull together to help our fellow man, woman, and families (and what an honor to live in such a community where we witnessed SO many helping hands of support!), many are left to deal with finances that leave them wondering how they will pull it together.

“Our government wants to help rebuild safer homes and stronger communities,” said Doug Griffiths, Minister of Municipal Affairs. “We have worked hard to find practical ways homeowners and small businesses can better protect their property from flood damage in the future.”  He also announced that “No eligible homeowner with flood damage will go without financial support.”  So as we wait to see this program unfold, many of us have lives to deal with at the same time, and pay our mortgage.  It’s an awful lot to take on at one time:  kids, food, gas, home, entertainment, on and on… all of this while we deal with rebuilding and restoring - and waiting.

Mortgage Insurers (Genworth in particular) has offered a helping hand during this time of uncertainty.  Genworth has a HomeOwnership Assistance Program whereby they are assisting flood affected homeowners (insured by Genworth) by offering up to 6 months relief of mortgage payment.  All of the scenario’s of course are different and are reviewed on a case by case scenario, but it can be a beacon of light in times like these.

If you are in need of assistance for your mortgage payments and are affected by the flood - BUT, do not know if your mortgage is insured by Genworth (and Canada First Mortgage did your mortgage for you) - let us know.  We would be happy to find out for you.

Here’s a video showing a real life case, and glimpse as to how it works: Genworth Home Owners Assistance

Do you have room for a Mortgage Payment Increase?

Financial Update

In a study performed in late 2012, 80% of Canadians (who was surveyed) said they could comfortably handle a monthly payment increase of at least $200…

Do you fall in this category of Canadians?

If so, that means you are placing more towards your mortgage payment now…. right?  Why wait for interest rates to rise… when you’re forced to pay more?  And further to that, why wouldn’t you want to put more money towards your principle and knock thousands of your overall interest payments off, and decreasing your amortization by YEARS?  Well like most people, your answer might be - “it’s hard”!

There’s a lot to be said about style of living when you ‘have the money’.  To put your extra money towards a structured plan isn’t really in everyone’s DNA.  Let the good times roll as they say :)

Now stop and think for a second what it could mean to expedite your debt-freedom date through this interest cancellation program.  What would you do with the extra money THEN?

I love that I’ve found this system.

Click on the image below:


Dan & Stacey Mass, AMP’s


Mortgage Rule Changes Continue

Financial Update, First Time Homebuyer, Lenders

That’s four for four.  Four years in a row now the Minister of Finance, Jim Flaherty, has been spooked into curbing mortgage allowances in Canada.  The premise?  Of course, nothing other than the national debt levels that Canadians statistically hold.  For every $1.00 we make, we are spending $1.52.  That’s a nation in debt 152%.

The new changes consist of:

1.)  Maximum amortization period to 25 yrs. (Down from 30 years)
2.)  Maximum refinance allowance to 80% of the value of your home (Down from 85%)
3.)  Maximum insured loan - homes under $1M (Homes worth more require 20% down)
4.)  Maximum Gross debt service ratio - 39% (changed from “unlimited” when credit scores are greater than 680).

Changes are to take effect JULY 9th, 2012.

(It is important to note that if you have a pre-approval in with us, you will have until JULY 8th to turn your pre-approval into a “live deal” - which means you shopped for a home, made an offer on a home, and it was accepted.  If that happens, these changes should not affect you.)

Let us not forget…

Extended amortization periods only entered the arena of possibility in 2006
Greater allowances to debt-service ratios were only introduced to Canada a few years ago
(As a reminder, this was the same government that we see today who introduced these allowances not so long ago.)

*The government of finance giveth….and also taketh away*

25 yrs. is what I remember the maximum amortization period to be when I started brokering in 2001.  Borrowers still borrowed, and interest rates were higher back then.  The unfortunate demographic that I feel will be hit the hardest with this change, is that of the first time homebuyer.

REFINANCE CHANGE: (Down to 80% of the value of your home)
That means, for example - that if you have a house worth $300,000.00 - you can refinance your home up to $240,000.00.  If you owe more than that on your home right now - the option to refinance will not be on the table.  For those of us in that situation, neck deep into credit card debt, and wish to clear them off with equity in your home - the time bomb may be ticking a little louder.

Ultimately the move to make these changes are simply posturing for future considerations of the health of the Canadian banking system, and assisting Canadians in curbing their debt load - so we’re told.  But again I cannot help but wonder why there is no consideration to creating provisions for the more impulsive issues in this country by taking notice of the credit card debt that seem to be all to readily available to us.  I’m not asking for the government to NOT consider changing mortgage rules, but I would like to see the government take notice of the elephant in the room.

For now, it remains a wish.

If you have questions about your current mortgage situation, we would love to discuss with you!

Dan and Stacey Mass.

Flaherty criticizes banks’ desire for government mortgage changes

Financial Update

In light of the talks about further mortgage rule changes, I cannot help but tip my hat to Jim Flaherty’s comments about the lenders who chirped about wanting the government to step in and “change the rules for them”.  Below is an excerpt from the Financial Post….and I think it’s worth the read.  (As for the banks that think it’s a good idea for the government to tighten mortgage rules further, IE: change the amortization period down to maximum 25 years…. I think it’s a good question: why don’t you do that with your bank?)

OTTAWA — Finance Minister Jim Flaherty saw irony Thursday in major banks seeking changes to mortgage rules from government, given the control the banks themselves have over the industry.

Flaherty said, however, the possibility of tightening the insured mortgage market — which has been done three times under the current Conservative government — is there. Those decisions, however, result from constant evaluation of the markets.

“I find it a bit odd that some of the bank executives are taking the position that the minister of finance or the government somehow should tell them how to run their business,” Flaherty said during an appearance in Stittsville, Ont., just west of Ottawa.

“We have bank executives in Canada going and saying ‘really, the rules on insured mortgages should be tightened up.’ They must forget that they are actually the ones that issue the mortgages. It’s their market. It’s not my market. They decide what they want to charge in interest rates.

“They’re the ones that make the profits out of this business, so I do find it a bit much when some of the bank executives turn to the government … and say ‘you ought to change the rules and make it tighter.’ It’s very interesting commentary from them.”

Ideally, the finance minister said, the mortgage market will be able to work out its own issues, for which he said he’s already seen positive signs.

“There’s a balance there. The new-housing market produces a lot of jobs in Canada, so there’s a balance that needs to be addressed,” he said. “I’d like the market to correct itself if it can. We’re seeing some evidence of that in the condo market, particularly in Toronto, where there is some softening of the market and that’s a good thing.”

Canada’s household debt-to-income ratio hit a record high of 151.9% last year, largely the result of mortgage borrowing. The ratio dipped slightly in the fourth quarter but at 150.6% was not far off the record.

Since 2008, Mr. Flaherty has lowered the maximum amortization period for new mortgages to 30 years from 40 years, raised minimum down payments required to qualify for government insurance, and required all borrowers to qualify for a five-year fixed-rate mortgage to get insurance.

“We will have modest savings-reductions in order to stay on track to a balanced budget in the medium term,” Flaherty said. “More importantly — and this really is the focus of the budget — if you concentrate on the savings, you’re going to miss most of what the budget is about. (It’s) about long-term sustainability for jobs, growth and prosperity, looking at retirement income, making sure our social programs are sustainable in the long-term for Canada.

“We’re coming back down in our deficits — you’ll see the numbers next Thursday. We’ve done very well this year, we’ll do better next year. We keep reducing the deficit and we’ll get to balance in the medium term.”

Flaherty also defended the government’s Economic Action Plan by referring to a number of infrastructure projects across the country, as well as numerous tax credits, including child fitness credits and those linked to volunteer firefighters.

He said that initiative has help keep unemployment down across the country as well, saying that despite the economic downturn, Canada’s unemployment “never went into double digits.”

Flaherty was particularly critical about provincial spending in Ontario and said change is needed in that province to put it in a better fiscal situation.

“What we’ve basically seen in Ontario is eight, almost nine years of spending mismanagement,” he said. “They need to focus in Ontario, and for the good of the country … on the spending side of the ledger and get things under control. What we’ve seen so far from Ontario — and this is disappointing, but not surprising — is this ‘we’re in a lot of trouble … so we’re going to blame Alberta and other Canadian provinces.’

“Next week I suspect they’ll blame … the federal government, despite the fact our transfers to Ontario are up 77 per cent since we took government in 2006. This year, we’ll transfer $19.2 billion to the government of Ontario, so I forewarn you about that, that we’ll see this ‘blame everyone else, and don’t look in the mirror’ (attitude).”

With files from Reuters

Alberta forecast to be only province with increase in housing starts

Financial Update

Job and net migration growth fuel housing demand

CALGARY — Alberta will be the only province next year to buck the national trend for housing starts across the country.

According to an October 2011 Housing Forecast report released Tuesday by Altus Group, only Alberta is expected to see an increase in housing starts in 2012.

Subdued economic growth will take the “sizzle” out of Canadian housing starts in 2012 and deteriorating global economic conditions leading to lower Canadian growth expectations will constrain housing demand across the country, said the report.

“Based on recent data, the Canadian housing sector is performing at a very high level, with elevated housing starts, steady prices, and steady resale markets. Interest rates are also no longer expected to increase over the next year,” said Peter Norman, chief economist, Altus Group. “But at the same time a number of risk factors are emerging, especially deteriorating economic conditions and tighter mortgage rules. Canadians can expect lower levels of housing construction in most areas of the country next year.”

But the report said Alberta has seen job conditions and interprovincial migration rise sharply this year at the expense of Ontario and British Columbia, positively affecting housing demand next year.

Alberta will see housing starts in 2012 rise to 27,800 units from 24,881 this year. In 2010, there were 27,088 housing starts in the province.

Across Canada, housing starts will hit 192,000 units this year and dip to 181,600 units in 2012. There were 189,930 starts in 2010.

The Altus Group report said only Calgary and Edmonton, among major markets in Canada, will see a rise in housing starts next year. Calgary will jump to 9,400 units from 8,400 in 2011 while Edmonton will see a rise to 9,400 units as well from 8,900 this year.

In 2010, Calgary had 9,300 housing starts while Edmonton had 10,000.

© Copyright (c) The Calgary Herald

Read more:

Calgary MLS sales jump 22% in August

Financial Update

CALGARY — MLS sales in Calgary rose by 22.1 per cent in August compared with a year ago — a greater year-over-year rate of growth than the rest of the country.

The Canadian Real Estate Association said Thursday that Calgary recorded 1,907 MLS sales for all residential properties during the month for an average price of $394,251, up 2.2 per cent from last year.

New listings in Calgary rose by 11.7 per cent in August to 3,819 and the sales as a percentage of new listings jumped by 4.2 per cent to 49.9 per cent.

In Canada, sales of 39,542 were 15.8 per cent higher than August 2010 and the average sale price of $349,916 was up 7.7 per cent.

New listings in Canada rose by 13.4 per cent to 73,125 and the sales as a percentage of new listings jumped by 1.1 per cent to 54.1 per cent.

“The housing market in Canada remained on a firm footing in August when compared to volatile financial markets,” said Gary Morse, president of CREA. “Through their actions, homebuyers are showing that they remain confident about the stability of the Canadian housing market, and recognize that the continuation of low interest rates represents an excellent opportunity to buy their first home or trade up.”

Gregory Klump, CREA’s chief economist, said economic and financial market headwinds outside Canada are keeping interest rates lower for longer.

“Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved,” he said. “In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.”

© Copyright (c) The Calgary Herald

Read more:

Calgary MLS sales rise in August: Both condos and single-family home increases

Financial Update

CALGARY — Preliminary, unofficial data indicates MLS sales in Calgary in August were up compared with a year ago.

Statistics on the website of realtor Mike Fotiou, of First Place Realty, show single-family sales during the month hit 1,106, up from 865 in August 2010. The average sale price last month was $453,269 compared with $445,814 a year ago. The median price also rose to $402,250 in August from $395,000 last year.

In the condo market, the preliminary data shows 468 sales for an average price of $285,487 in August, up from 362 sales but the average was down from $286,373 in August 2010. The median price in August was $255,000, down from $260,000 a year ago.

Official MLS data for August will be released by the Calgary Real Estate Board today.

Many Calgarians are watching the local real estate market closely these days to determine where it’s headed in the near future for both prospective buyers and sellers.

Alexandria (Ali) Cohen is one of them. She owns a home in Tuxedo, but is considering listing it for sale in the near future, and also looking to purchaser a bigger home.

“I’m a little conscious that the market’s low. However, the interest rates are holding and that should be relatively good for the near term for sellers and buyers. So that’s a good thing,” said Cohen.

With sales up in August from a year ago, that could be a boost for real estate locally.

“It should be but typically the summer months are definitely more active than the winter months. So if I don’t list in September, I’m not going to list until next year sort of thing,” added Cohen, who will be keeping a close eye on the market in the coming weeks.

© Copyright (c) The Calgary Herald

Read more:

Calgary housing sales up 5% over last year

Financial Update

By Kim Guttormson, Calgary Herald August 3, 2011

CALGARY — Calgary’s housing market continues to gradually strengthen, with sales for July and the year-until-now up over last year.

Sales of single-family homes and condos neared 12,000 for the first seven months of 2011, a five per cent increase over 2010, but still 17 per cent below the 10-year average, the Calgary Real Estate Board reported Tuesday.

“I would underline the improvement is gradual and measured,” CREB president Sano Stante said. “We’re getting a good balance of listings and buyers. We’re not seeing too many buyers and no listings or too many listings and no buyers.”

“It’s more of a healthy recovery.”

For Jen Hosie, who will be moving into first home next month with husband Danny, the foray into the real estate market was smooth.

“It was very, very fast,” she said of a process that ended with the possession of a three-bedroom home in New Brighton. “I looked at 15 houses in one day and by the end of the day picked one I loved.”

After her husband had checked it out and also approved, they stopped looking.

“There were lots and lots to choose from,” she said of the housing selection. “And tons within our price range.”

The Hosies spent less than the average price of a single family home in July, which was just over $455,000.

Condo sales averaged just over $286,000.

Stante said prices remained relatively consistent with where they were last year, but he cautioned that some sellers, viewing the market a little too optimistically, were pricing their homes too high.

“Stuff that’s priced accordingly sells relatively quickly. There seems to be a good bit of product that’s not priced according to the current market that seems to be sitting,” he said.

Cody Battershill, with Re/Max House of Real Estate, said last month was his busiest July in about three years.

“It’s the craziest July I’ve had in years, even though in summer things slow down,” he said. “I think there’s optimism in the business community, in job growth.

“I think more people are buying, but the listing still has to be priced well to sell.”

According to the real estate board numbers, there were 11,798 sales in the first seven months of the year, up five per cent over the same period in 2010. If single-family homes are broken out, they rose eight per cent, while condo sales dropped by three per cent.

While the July numbers jumped over last year — condo sales were 14 per cent higher — Stante cautioned that last year was very slow for that month, as well as June.

He also pointed out that listings so far this year are lower than last year, leading to smaller inventories. That has dropped the condo inventory from a more than six-month supply last year just above four months this year.

© Copyright (c) The Calgary Herald

Read more:

Calgary MLS sales soar in June

Financial Update

Transactions up over 30% from a year ago

CALGARY — Calgary’s residential real estate market experienced a significant upswing in sales in June compared with a year ago.

Single-family MLS sales during the month were 1,398, up 32.01 per cent from June 2010’s 1,059 transactions, according to data released by the Calgary Real Estate Board on Monday.

And for the first time since April 2010, condo sales were up year-over-year, increasing by 30.56 per cent in June to 581 transactions. In June 2010, there were 445 condo sales.

The average sale price for a single-family home in June dropped by 0.33 per cent year-over-year falling to $479,580 from $481,960.

But the condo average rose by 0.79 per cent to $296,501 from $292,182 a year ago.

June’s condo average condo price was the highest since May 2010.

According to CREB, June’s year-over-year increase in single-family home sales was the highest since January 2010’s 38.50 per cent while for the condo market it was the highest since March 2010’s 36.26 per cent.

On a year-to-date basis, single-family home sales for the first six months of this year are up 5.64 per cent from a year ago to 7,231 transactions while condo sales are down 4.91 per cent to 2,965 units.

“Strong monthly increases does not imply a housing boom, as it is important to put into perspective that sales activity remains below long-term averages,” said CREB in a statement.

Sano Stante, president of the Calgary Real Estate Board, said the housing market in Calgary has gradually improved throughout the year as anticipated.

“We had a late spring market this year,” he said. “It’s all starting to come together in June. And last year we had an exuberant market early on and it died in June. So to draw comparisons year-to-year for that month shows an exaggeration of the trend.”

After the first half of the year, it appears the recovery in the housing market is starting to find its footing, he added.

“This gradual levelling has been fuelled by growth in employment, and in particular growth in full-time jobs. Improved job prospects, combined with an increase in the number of people moving to Calgary, will give lift to our housing market for the remainder of this year and into the next.”

Stante said homes that are value-priced are selling and they’re moving relatively quickly. Homes that are over-priced are sitting on the market, he added.

Dan Sumner, economist with ATB Financial in Calgary, said a year-over-year comparison may be a little misleading as to the strength of the Calgary housing market in June specifically. June is often one of the busiest months for sales volumes but sales last June were abnormally slow, he explained.

“Fuelling sales is a stronger economy specifically in Alberta, which feeds through into consumer confidence and that’s making Albertans more comfortable with home purchases again. Very accommodative interest rates are also helping as well,” added Sumner.

He said prices have been stable for quite some time now, despite a fairly strong economy over the past year. Because housing prices have risen so much over the past 10 years in Alberta, they are about as high as they can be, he said.

“However, with the economy fairly strong in Alberta and rates increasing affordability, for the time being at least, that is preventing prices from moving any lower. What you end up with is resistance for prices to move in either direction, and flatness ensues,” said Sumner.

The key economic contributors to the current housing market include a strong energy sector and resource prices as well as an improving labour market and strong wage growth. Also interprovincial migration to Alberta has picked up, said Sumner.

“With economic conditions in Alberta strong and looking up, sales during the second half of 2011 should be higher than last year,” he said.

Richard Cho, senior market analyst for Calgary for Canada Mortgage and Housing Corp., said that although demand for housing has been gradually improving, resale activity this time last year was also moderating.

Read more:


DAN MASS, Mortgage Broker
193 McKenzie Towne Gate SE
Calgary, Alberta, Canada  T2Z 4G2
direct: 403.294.0033  toll free: 1-888-894-0033
403.710.1505 fax: 1-866-902-4910

STACEY MASS, Mortgage Agent
193 McKenzie Towne Gate SE
Calgary, Alberta, Canada  T2Z 4G2
403.294.0033 toll free: 1-888-894-0033
fax: 1-866-902-4910

copyright dan & stacey mass, calgary mortgage brokers, Canada First Mortgage    website designed by media eye studios