Thursday, March 28, 2013
RBC and Ipsos Reid left mortgage brokers completely out of the survey.
That’s right. RBC and Ipsos Reid left mortgage brokers completely out of the survey.
RBC has its own survey about who people consult for a mortgage and they forget to mention this?
That’s despite the fact that 61% of Canadians polled by CAAMP consulted mortgage brokers when getting a new mortgage.
It may not surprise people that a bank doesn’t want to promote brokers—it’s competition. But from a research credibility standpoint, we were surprised.
RBC bills itself as “the country's number one source of financial advice on homeownership.” Shouldn’t that title require some degree of research professionalism and objectivity?
Why would a company with RBC’s good reputation omit (intentionally or not) data that provides a fair representation of the marketplace? This makes us wonder what else they left out.
If an organization is going to purport to make newsworthy contributions to the national housing dialog, it better realize that people are watching its every word. One-sided survey results are nothing more than marketing masquerading as news. This example taints RBC’s mortgage-related surveys going forward, for no good reason.
Joel Sida.
Taken from from Rob McLister, CMT
Monday, March 25, 2013
Thursday, March 21, 2013
Wednesday, March 20, 2013
Flaherty Talks Another Bank into Higher Rates
Flaherty Talks Another Bank into Higher Rates
On Friday, Manulife Bank posted its lowest rate ever on a 5-year fixed mortgage, 2.89%. It lasted for four days.
When our big brothers at the Department of Finance (DoF) caught wind of it, they dialed up Manulife and swayed the bank into raising its rate back to 3.09%.
“We don’t want a race to the bottom on mortgage rates by our financial institutions…,” said Finance Minister Jim Flaherty, as quoted by Bloomberg. “I had one of my staff call (Manulife) and indicate my displeasure.”
Manulife responded today by saying:
"After consulting with the Department of Finance, Manulife Bank has withdrawn the (2.89%) promotional campaign and reverted to our previous posted rate."
So now we have Manulife, the 10th largest bank by assets, being told by bureaucrats how to price its mortgages. Two weeks ago, BMO got the same call.
Where does this end? The DoF seems set on breaking the knees of home prices, one way or another. With it so intent on regulating real estate transactions, will the next round of headlines read: "Ottawa Legislates Price Ceilings on the Sale of New Homes?" (Yes, this is an exaggeration...I think.)
Joel Sida
from Rob McLister, CMT
Tuesday, March 19, 2013
Search for the best rate stressful, poll reveals
Some 65 per cent of respondents age 18 – 34 indicated haggling for a rate was among the most stressful part of the mortgage process while over half (56 per cent) agreed researching and comparing offers made the process more difficult.
Most (59 per cent) found that renegotiating for a rate was stressful, while deciding on the right term and payment schedule (55 per cent) and getting customer service help from the lender (35 per cent) were close behind.
More damning of the process itself, 67 per cent of Canadians surveyed who currently have a mortgage feel the process was either too complicated (31 per cent), confusing (20 per cent) or hard to figure out (16 per cent).
“There is a battle for clients out there, and a real lack of knowledge among people looking for a mortgage,” Friesen told MortgageBrokerNews.ca. “That is what we need to do as brokers: move them beyond the ‘low rate gratification’ and spend an hour just to get to know them, and find out what their needs are.”
Joel Sida
http://www.mortgagebrokernews.ca/news/newsletter/173531/
Wednesday, March 13, 2013
Bank of Canada Decision on rates
BoC Decision: Lower for Even Longer
Canadian macro-economists are mostly in agreement that the overnight rate should go nowhere in the next 9-12+ months. And the Bank of Canada gave no indication today that such projections are off the mark.
The Bank left Canada’s core lending rate unchanged at 1% for the 29th straight month, with no change in sight.
Part of the Bank’s reasoning is reflected in these comments from its statement:
“Total CPI inflation has been somewhat more subdued than projected in the January MPR as a result of weaker core inflation and lower mortgage interest costs...”
“The Bank expects…the debt-to-income ratio [to stabilize] near current levels.”
“…Residential investment is expected to decline further from historically high levels.”
“With continued slack in the Canadian economy, the muted outlook for inflation, and the more constructive evolution of imbalances in the household sector, the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required, consistent with achieving the 2 per cent inflation target.”
For an excellent deciphering of the Bank’s press release, click here.
Today’s announcement shed little new light on the timing of the next prime rate change. Of course the BoC is still suggesting that the next rate move is up, but others, like David Madani of Capital Economics, aren’t so sure.
On Sunday, Madani said the "inevitable" rate hikes that so many predict could actually be pre-empted by policy loosening. He noted:
“Given the recent spat of weak economic data, below target range inflation and the presumably widening output gap, the market's ruling out of interest rate cuts makes little sense.”
For now, as long as the 5-year bond yield stays under or within the psychological 1.50% to 1.60% range, there’s little danger of any notable rise in rates. After this morning's rate announcement, bond yields remained flat at 1.32%.
The next BoC rate meeting is April 17.
taken from mortgage trends.
Joelsida.com
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