Entries by Pat Sawler

Sub-prime lender Wells Fargo beats expectations!

Reuters

NEW YORK — — Wells Fargo & Co. [WFC-N], the fifth-largest U.S. bank, reported better-than-expected quarterly results on Wednesday and raised its dividend despite a 23 per cent decline in profit caused by deteriorating credit.

You may be wondering why is this important? Well let me tell you. Wells Fargo is largely an Alt-A or Sub prime lender here in Canada. We need options and Wells Fargo provides that. I have been a broker for over 5 years and many sub prime and Alt-A lenders have come and gone. Wells Fargo has stayed the course. “A” lenders are a dime a dozen, and many offer similar products. 

Let me give you some examples, say you have less than perfect credit, we can most likely find something for you at Wells Fargo,

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Mortgage insurers push to keep zero-down loans!

Garry Marr, Financial Post Published: Tuesday, July 15, 2008

Private mortgage insurers are pushing for ways to keep no-money-down mortgages alive and are set to meet with Department of Finance officials in the next two weeks to discuss possible options, sources indicate.

The move comes after Ottawa cracked down on mortgage practices that allowed consumers to enter the housing market with no money down and amortize their loans over 40 years. New rules that come into effect on Oct. 15 would demand a 5% repayment and shorten the length of amortization from 40 years to 35 years.

Sources indicate the country’s major private insurers, which control about 30% of the market, have told mortgage brokers they are working on a solution which would keep the zero-down option alive and even the 40-year amortization.

One insurer, PMI Canada, which has been

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BoC remains on hold as inflation fears rise

BREAKING NEWS FROM THE GLOBE AND MAIL

 

Tuesday, July 15, 2008

OTTAWA — The Bank of Canada left its benchmark interest rate at 3 per cent and predicted raging oil and food prices would cause inflation to surge past 4 per cent by early next year.

Governor Mark Carney and his five deputies on the governing council also cut their estimate for economic growth for 2008 to 1 per cent, which would be the weakest in almost two decades, citing “protracted weakness” in the U.S. economy and “ongoing turbulence” in financial markets.

The central bank’s decision to leave borrowing costs unchanged suggests Mr. Carney’s biggest concern is keeping a lid on Canadians’ expectations about prices. Policy makers raise and lower interest rates to keep inflation advancing at an annual rate of 2 per cent and are uncomfortable with

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Glad you're not affected by the USA mortgage meltdown? Think again!!

Are you worried because of all the instability in the U.S banking system? The sub prime melt down, foreclosures and the long list of banks closing their doors. Do you think that we are immune up here in Canada? Well we are and we aren’t, let me explain. 

Well thanks to the fact that our banks have large national branch networks, rather than where our American neighbor’s banks are mostly regional focused. We have deposit insurance (provided by CDIC) as do our American friend’s (FDIC), however that will not help the over 10,000 clients of Indy Mac Bank who have deposits or investments in excess of the insured limits. Our strength truly lies in our limited number of charted banks and our national network. 

Have there been effects here in Canada, yes there have. Just in the past year alone, … Read more

Say goodbye to 40-year mortgages!

 
The 40-year mortgage, launched just over two years ago, will probably expire in October.

Back in April 2006, Genworth Financial Canada was the first to insure residential mortgages in Ontario that were paid back over 40 years.

Soon, all of Canada’s mortgage insurers will have to underwrite mortgages paid back over 35 years at most. Ottawa is not killing the long-payback loan because it sees a U.S.-style housing bust coming to Canada.

Canadian financial institutions have been conservative in their lending, says a finance department background paper.

And subprime mortgages make up less than 5 per cent of new loans issued in recent years.

A more urgent reason is to protect taxpayers – you and me – from possible losses if too many stretched borrowers default on their 40-year mortgages.

The federal government is on the hook financially

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Bank of Canada urged to raise interest rates

The Canadian Press

OTTAWA — The Bank of Canada should move to head off inflation in the country by raising interest rates next week for the first time in a year, says a consensus view by a deeply divided panel of nine economists associated with the C.D. Howe Institute.

A closer look suggests the economic think tank’s monetary policy council was almost evenly divided 5-4 between those favouring a rate increase and those who thought the central bank should leave the rate unchanged.

Four members were in favour of the central bank leaving its overnight interest rate unchanged at 3.0 per cent next Tuesday, four others advocated a quarter-point increase and one wanted a half-point increase.

The overnight rate is a benchmark that is used by commercial banks when they set various other

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Ottawa tightens mortgage rules to avoid 'bubble'

 

I just finished reading this on the Globe and Mail site. I am putting it here because I do not agree with it. Please feel free to send me your comments.

Thanks

Pat 

LORI MCLEOD AND KEVIN CARMICHAEL

From Thursday’s Globe and Mail

July 9, 2008 at 8:16 PM EDT

 

 

OTTAWA — The federal government is cracking down on the mortgage industry in a move that could help protect against a U.S.-style housing bubble, but will also make it tougher to borrow money to buy a home.

The Finance Department said Wednesday it will stop backing mortgages with amortization periods longer than 35 years as of Oct. 15.

It will also start demanding a down payment equal to at least 5 per cent of the home’s value, rather than guaranteeing mortgages where they buyer has borrowed the total amount.

“Today’s Read more

Why you will not see mortgage rates on this site!

At least two-dozen times a week we have people call us and ask, “What’s your rate on a 5 year fixed rate?” Most times when we try to get additional information from the potential borrower. Unfortunately, for both the caller, and us they don’t want to tell us anything. “I already know what I want, just give me a rate,” is the usual response.

Now, I’m not encouraging you not to shop-around for the best rate.

But, asking for a rate without giving more information is a bad idea. Why? Because frankly, anybody can give you any rate quote they want to over the phone, there is no way you can hold them to that rate. You see, there are two kinds of mortgage companies out there, those that are only interested in you as a loan customer and Read more

My Favorite Things

These are a few of my favorite things in no particular order.

My wife and I had a 2001 Subaru Forester Ltd, by the time we were forced to trade it in, it had over 175K KM, the only money we had to spend on it were for tires, brakes and oil. You see we had to move to a vechile that could handle 3 children’s car seats. It was fine for our twin girls but when our son arrived we could not fit 3 car seats in the back seat so we had to move to a mini van.

So if you want a nice reliable car, one that also comes with the safety and beauty of all wheel drive, then surf on over to www.subaru.ca and check one out.

People always say the grass is greener on the … Read more