A report from the Vancouver Courier in Canada. "The dramatic slowdown in the detached home…
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Canada’s top banking regulator is changing the rules that cover certain types of home loans to make sure that lenders and borrowers are able to stay on top of their obligations at a time when the country’s housing market is looking vulnerable.
The Office of the Superintendent of Financial Institutions (OFSI) is implementing new guidelines for certain types of real estate loans, including shared equity mortgages, reverse mortgages and conventional mortgages that are paired with revolving credit lines.
The biggest change targets so-called combined loans, which are conventional mortgage loans paired with revolving lines of credit known as HELOCs that home owners can dip into as they see fit, without being obligated to pay that portion back on any sort of schedule.
The new regulations will kick in once a readvanceable loan exceeds 65 per cent of the underlying home’s value. Currently, an owner can technically borrow up to 80 per cent on such a loan, but the new rules will functionally ratchet that ceiling down to 65 per cent by forcing the borrower to start paying back some of the principal if they go above that line.
Canadians weighed down by lines of credit they don’t understand
Government lays out fine print of new CMHC program that could contribute 10% to price of first home
If that happens, the change will make it so that once the loan’s value exceeds 65 per cent of the home, the loan “will operate more like a traditional mortgage where the borrower makes principal and interest payments until the [loan gets back below] 65 per cent,” an official told CBC News at a technical briefing.
The new rules won’t be in force until late 2023, but OSFI says that as things stand now, data from the Bank of Canada suggests there’s $200 billion worth of HELOC that is currently outside of that 65 per cent threshold. That’s out of $1.8 trillion of total housing debt.
“Prices are determined by two factors, obviously the market demand and supply, but also how much it costs to build,” Ran Elisaf, founder and managing partner at Northwind Group, a real estate private equity firm in Manhattan, New York, told Newsweek.’
“I think for the most part we’ll still see increases, or these prices stabilized or increased. But then you’ll have markets where you have negative population growth areas, in California for example, where people are leaving because of taxation and political reasons, and they’re moving to low tax states. So there you’ll probably see potential decrease in pricing.”
“Prices are determined by two factors, obviously the market demand and supply, but also how much it costs to build,”
… and unless you’re in the construction biz, you don’t know what it costs to build. Construction biz….. not realtors…. not mortgage pimps…. not DebtDonkeys.
Shouldn’t “appraisers” be well trained on estimating M&L?
‘Hannah Anderson was in her obstetrician’s office early on December 6, the day the stock she had received as part of her compensation package at BuzzFeed was finally going to be worth something. Nearly eight months pregnant with her second child, she was only half listening to the doctor, instead thinking of ways she would celebrate. “I was literally refreshing the CNBC web page while the doctor was going over the signs of labor with me,” she says. Anderson’s husband had taken the day off to stay in front of the computer and trade when the time came. They had calculated that the proceeds of the BuzzFeed SPAC would be enough to pay for college for both their kids. “We were so excited,” she says. “And then it just all came crashing down.”
“I was literally refreshing the CNBC web page while the doctor was going over the signs of labor with me,” she says.
LMAO!
It was her second kid.
‘According to SMM, copper prices fell sharply last week (June 20-6.26). The prices of secondary copper continued to fall, and traders suffered greater losses. The inventory was high because traders stood firm to the prices, and they intended to sell some of the inventory due to the downward movement of copper prices. But as the price spread of between copper cathode and scrap narrowed, there has been no profits to sell the secondary copper, leading to less shipments. In addition, the losses of downstream scrap using companies have further expanded. As the price spread of between copper cathode and scrap narrowed, the substitution of copper cathode with copper scrap no long exists. New orders have further declined and the operating rates of copper rods produced with copper scrap dropped by 12% month-on-month. The market demand for secondary copper continued to decline. It is expected that the throughput of secondary copper in East China Nonferrous Metal City will continue to decrease this week (June 27-July 3).’
Canada’s top banking regulator is changing the rules that cover certain types of home loans to make sure that lenders and borrowers are able to stay on top of their obligations at a time when the country’s housing market is looking vulnerable.
The Office of the Superintendent of Financial Institutions (OFSI) is implementing new guidelines for certain types of real estate loans, including shared equity mortgages, reverse mortgages and conventional mortgages that are paired with revolving credit lines.
The biggest change targets so-called combined loans, which are conventional mortgage loans paired with revolving lines of credit known as HELOCs that home owners can dip into as they see fit, without being obligated to pay that portion back on any sort of schedule.
The new regulations will kick in once a readvanceable loan exceeds 65 per cent of the underlying home’s value. Currently, an owner can technically borrow up to 80 per cent on such a loan, but the new rules will functionally ratchet that ceiling down to 65 per cent by forcing the borrower to start paying back some of the principal if they go above that line.
Canadians weighed down by lines of credit they don’t understand
Government lays out fine print of new CMHC program that could contribute 10% to price of first home
If that happens, the change will make it so that once the loan’s value exceeds 65 per cent of the home, the loan “will operate more like a traditional mortgage where the borrower makes principal and interest payments until the [loan gets back below] 65 per cent,” an official told CBC News at a technical briefing.
The new rules won’t be in force until late 2023, but OSFI says that as things stand now, data from the Bank of Canada suggests there’s $200 billion worth of HELOC that is currently outside of that 65 per cent threshold. That’s out of $1.8 trillion of total housing debt.
https://www.cbc.ca/news/business/osfi-rule-changes-1.6504148
“Prices are determined by two factors, obviously the market demand and supply, but also how much it costs to build,” Ran Elisaf, founder and managing partner at Northwind Group, a real estate private equity firm in Manhattan, New York, told Newsweek.’
“I think for the most part we’ll still see increases, or these prices stabilized or increased. But then you’ll have markets where you have negative population growth areas, in California for example, where people are leaving because of taxation and political reasons, and they’re moving to low tax states. So there you’ll probably see potential decrease in pricing.”
https://www.msn.com/en-us/money/markets/house-prices-keep-rising-despite-fears-of-market-crash/ar-AAYXwAg
“Prices are determined by two factors, obviously the market demand and supply, but also how much it costs to build,”
… and unless you’re in the construction biz, you don’t know what it costs to build. Construction biz….. not realtors…. not mortgage pimps…. not DebtDonkeys.
Shouldn’t “appraisers” be well trained on estimating M&L?
‘Hannah Anderson was in her obstetrician’s office early on December 6, the day the stock she had received as part of her compensation package at BuzzFeed was finally going to be worth something. Nearly eight months pregnant with her second child, she was only half listening to the doctor, instead thinking of ways she would celebrate. “I was literally refreshing the CNBC web page while the doctor was going over the signs of labor with me,” she says. Anderson’s husband had taken the day off to stay in front of the computer and trade when the time came. They had calculated that the proceeds of the BuzzFeed SPAC would be enough to pay for college for both their kids. “We were so excited,” she says. “And then it just all came crashing down.”
https://www.msn.com/en-us/news/us/the-buzzfeed-spac-fiasco-is-only-getting-worse/ar-AAYXjcm
“I was literally refreshing the CNBC web page while the doctor was going over the signs of labor with me,” she says.
LMAO!
It was her second kid.
‘According to SMM, copper prices fell sharply last week (June 20-6.26). The prices of secondary copper continued to fall, and traders suffered greater losses. The inventory was high because traders stood firm to the prices, and they intended to sell some of the inventory due to the downward movement of copper prices. But as the price spread of between copper cathode and scrap narrowed, there has been no profits to sell the secondary copper, leading to less shipments. In addition, the losses of downstream scrap using companies have further expanded. As the price spread of between copper cathode and scrap narrowed, the substitution of copper cathode with copper scrap no long exists. New orders have further declined and the operating rates of copper rods produced with copper scrap dropped by 12% month-on-month. The market demand for secondary copper continued to decline. It is expected that the throughput of secondary copper in East China Nonferrous Metal City will continue to decrease this week (June 27-July 3).’
https://news.metal.com/newscontent/101876056/Copper-Prices-to-Plummet-Throughput-of-Secondary-Copper-in-East-China-Nonferrous-Metal-City-Dropped-Significantly-/
Colorado Springs, CO Housing Prices Crater 18% As Subprime Mortgage Implosion Accelerates
https://www.movoto.com/co/80903/market-trends/
As one Denver area broker conceded, “Why tell the truth when lying is easier…. and more profitable.”